Karr and Karr
[2010] FMCAfam 53
•29 January 2010
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| KARR & KARR | [2010] FMCAfam 53 |
| FAMILY LAW – Property – marriage of thirteen years in duration – calculation of asset pool – whether appropriate to use valuation certificates of jewellery to ascribe a value to items of jewellery purchased for the wife – appropriate date to calculate amount due on mortgage in circumstances where husband has unilaterally extended mortgage in period following separation – add backs – reasonable living expenses – duty to make full and frank disclosure – assessment of contributions – assessment of section 75(2) factors – just and equitable. |
| Family Law Act 1975, ss.75(2); 79(4); Federal Magistrates Court Rules: Order 24.03 |
| Lee Steere v Lee Steere (1998) FLC 91-626 Ferraro v Ferraro (1993) FLC 92-335 Clauson v Clauson (1995) FLC 92-595 Wardman & Hudson (1978) FLC 90-466 Biltoft & Biltoft (1995) FLC 92-614 Russell v Russell (1999) FamCA 187 Waters & Jurek (1995) FLC 92-635 D & D [2003] FamCA 473 Briese & Briese (1986) FLC 91-713 Black & Kellner (1992) FLC 92-287 Weir & Weir (1993) FLC 92-338 Luciano & Luciano [2000] FamCA 401 Re NHC & RCH (2004) FLC 93-204 Jones & Jones [2003] FamCA 617 AJO v GRO (2005) 33 Fam LR 134 In the Marriage of DJM and JLM (1998) 23 Fam LR 396 In the Marriage of Townsend (1994) 18 Fam LR 505 In the Marriage of Kowaliw (1981) FLC 91-092 In the Marriage of Browne & Green (1999) 25 Fam LR 482 Hickey v Hickey and Attorney General for Commonwealth of Australia (2003) FLC 93-143 |
| Applicant: | MR KARR |
| Respondent: | MS KARR |
| File Number: | ADC 2602 of 2008 |
| Judgment of: | Brown FM |
| Hearing dates: | 4 August & 17 December 2009 |
| Date of Last Submission: | 17 December 2009 |
| Delivered at: | Adelaide |
| Delivered on: | 29 January 2010 |
REPRESENTATION
| Counsel for the Applicant: | Mr McQuade |
| Solicitors for the Applicant: | All Family Law |
| Counsel for the Respondent: | Ms Lewis |
| Solicitors for the Respondent: | Tindall Gask Bentley |
ORDERS
In full and final settlement of all claims for settlement of matrimonial property between the parties:
The proceeds of sale of the parties’ former matrimonial home situated at Property W in the State of South Australia be distributed as follows:
(a)The sum of $316,300.00 to the wife;
(b)The balance to the husband.
The wife pay all capital gains tax incurred in her name in respect of the shares owned by her during the marriage.
Pursuant to section 90MT(1)(a) of the Family Law Act there be a splitting order in respect of the husband’s [M] super fund and pursuant to section 90MT(4) of the Act a base amount in the sum of $55,250.00 be allocated to the wife out of the husband’s interest in such fund.
The solicitor for the wife serve a copy of these orders on the trustee of the [M] super fund by 10 February 2010 and thereafter the aforesaid trustee has liberty to relist the matter before the court in the event that the trustee is unable to comply with order (3) hereof, but otherwise the operative time for the aforementioned splitting order shall be 17 February 2010.
The Trustee of the [M] super fund, the husband and the wife, in accordance with the Family Law (Superannuation) Regulations 2001 shall do such acts and things and sign all necessary documents as may be necessary to calculate the payment entitlement of the wife in accordance with order (3) hereof.
The wife retain as her sole property without any claims from the husband:
(a)Her personal effects and clothing currently in her possession;
(b)Her jeweller currently in her possession;
(c)The Holden Viva motor vehicle currently in her possession; and
(d)All insurance policies, superannuation entitlements, shares and moneys standing in her name in any bank or financial institution.
The husband retain as his sole property without any claims from the wife:
(a)His personal effects and clothing currently in his possession;
(b)His furniture, furnishings and household effects currently in his possession;
(c)All insurance policies, superannuation entitlements (subject to the splitting order made pursuant to order (3) hereof), shares and moneys standing in his name in any bank or financial institution.
All applications be herein otherwise dismissed.
IT IS NOTED that publication of this judgment under the pseudonym Karr & Karr is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT ADELAIDE |
ADC 2602 of 2008
| MR KARR |
Applicant
And
| MS KARR |
Respondent
REASONS FOR JUDGMENT
Introduction
These proceedings relate to the division of matrimonial property.
Mr Karr “the husband” and Ms Karr “the wife” began to live together in 1993. They married, in Mildura, [in] 1994. They finally separated, in Adelaide, in late December of 2007.
The marriage produced three children. They are [X] born [in] 1993; [Y] born [in] 1996; and [Z] born [in] 1998.
When the parties separated, the wife left the former family home situated at Property W and moved to rented accommodation close by. The Property W property was registered in the husband’s sole name, although subject to a mortgage in favour of the Westpac Bank.
When the parties separated, the three children concerned moved with their mother to her new premises, although initially they spent regular periods of time in the company of their father. On 6 August 2008, consent orders were made, which provided for the children to live with the wife and spend regular weekend periods with the husband. However, in the case of [X], these periods were to be subject to his views and wishes from time to time.
Increasingly thereafter, arrangements for the care of the children have become fraught with more and more difficulty. There was an incident, between the parties, at the wife’s home, on 23 May 2009. Since that time, the children have not seen their father.
It is the wife’s case that the children were traumatised by what happened and, as a consequence, are currently unwilling to spend any time whatsoever with Mr Karr. The husband’s position is that the wife is manipulating the children to satisfy her own emotional ends, which arise from her antipathy for him and her need to set the children against him.
Sadly, the impasse regarding the children remains unresolved and they continue to be estranged from their father. Efforts to reach some form of reconciliation, between the father and the children, through a process of therapeutic counselling, have not borne fruit.
Recently, the parties have agreed on a regime for the children to spend time with their father “subject to their wishes”. Accordingly, these orders represent a statement of intent rather than any concluded outcome. The parties hope that time may play a part in mending the rifts which have appeared. However, it remains uncertain if and when the children will resume any form of relationship with their father.
What happened in the aftermath of the parties’ separation seems to have precipitated an extreme emotional reaction in each of them, which has been intensified by what occurred in May of 2009 and the subsequent attitude of the children. These factors have impacted on the property proceedings and made them more difficult than the complexity of the parties’ financial situation would seem to warrant.
The wife’s position is that the end of the parties’ marriage has left her financially vulnerable. She is an [administrative employee] receiving a salary of around $40,000.00 per annum. Since separation, she has been living in rented accommodation, with day to day responsibility for the care of the parties’ three children aged eleven to sixteen.
In these circumstances, she was anxious to proceed with the property aspects of the proceedings as expeditiously as possible. It being her case that the only viable resolution to the case involved the sale of the Property W property and the division of its proceeds between the parties. On the other hand, the husband was desirous of retaining the property for himself.
The husband is [employed in the Sales Industry]. There has been controversy between the parties as to what his level of income has been since separation and particularly whether he has been fully utilising his income earning capacity. Initially, child support was calculated on an annual salary of around $120,000.00 for Mr Karr. More recently, the assessment has been based on income for him of around $88,000.00 per annum.
Mr Karr’s position is that the end of the parties' marriage has left him emotionally depleted and the recent financial downturn has much reduced sales and eroded his commission income. Ms Karr suggests that other factors are at play.
The proceedings began in July of 2008. Initially the parties sought orders in respect of both financial and children’s issues. A trial was scheduled for early August 2009 in respect of both matters.
Due to what happened in May of 2009, which led to criminal charges being laid against him and the estrangement of the children from him, Mr Karr believed that the August trial date was premature. He wanted the trial delayed to after the criminal proceedings had been finalised and in the hope that there might be some breakthrough, so far as his relationship with the children was concerned.
Ms Karr did not agree, particularly as from her perspective her financial situation was strained, whereas, on the other hand, the husband remained in sole occupation of the parties’ most significant asset, the Property W home.
Ultimately, I determined that the property aspect of the proceedings should go ahead in August 2009, as I was persuaded of the pressures arising from the wife’s financial circumstances at the time. I fear this decision intensified rather than reduced the tensions and controversies between the parties.
Regrettably, the property aspects of the proceedings could not be finalised on 4 August 2009 and the case went over to 17 December 2009. From the wife’s perspective, one positive thing came out of the fact that the case was part-heard.
It was that the parties agreed that the Property W property should be sold, at a price of not less than $542,500.00, with the proceeds of sale, after payment of necessary selling expenses and the payment of $69,500.00 on account of the mortgage to Westpac, to be held in an interest bearing account pending resolution of the proceedings between the parties.[1]
[1] See orders of 4 August 2009
Later, the parties agreed that [X], [Y] and [Z] should attend therapeutic counselling, once per week, with a view to seeing if relations with their father could be resumed. In the face of opposition from Mr Karr, I ordered that he should bear the costs of this counselling.[2] Again, I suspect that this decision fuelled rather than reduced the tensions between the parties.
[2] See orders of 24 September 2009
As indicated earlier, the counselling has not been successful and has been discontinued. More recently again, the parties have agreed on a number of orders in respect of the children, in the hope that they will come around to the idea of spending time with their father in future.[3]
[3] See orders of 18 December 2009
I hope that, once the property proceedings have been resolved one way or other, the high level of tension between the parties will start to dissipate and things will become easier for all concerned, including [X], [Y] and [Z]. However, up to this stage, certainly since their separation, the parties’ relationship with one another has been one categorised by high levels of mutual suspicion and mistrust.
The most obvious manifestation of this suspicion concerns the mortgage secured against the Property W home. At separation, on 24 December 2007, it stood at $69,500.00,[4] a state of affairs reflected in the orders made by consent on 4 August 2009.
[4] See exhibit 1
When the property was actually sold on 15 December 2009, realising the sum of $615,000.00, the actual amount secured against it, in favour of Westpac, was $170,678.63.[5]
[5] See exhibit 7
The husband concedes that he considerably extended the loan, following separation, largely so that he could purchase shares in the hope of making a profit. For her part, the wife also concedes that around $13,000.00 was drawn down from the mortgage account between 24 December 2007 and 4 January 2008, being the period immediately after separation.
This sum was used by Ms Karr to finance her rented accommodation and to purchase furniture for herself and the children. It being her case that the husband was uncooperative and obstructive of her need to re-house herself and the children, in the aftermath of the parties’ separation. Accordingly, she felt compelled to take the extreme step of withdrawing this sum against the mortgage, so that she could support herself and the children.
The husband elected to discharge the mortgage on the Property W property on 9 January 2008 and refinance the property on different terms, particularly so that he could engage in share market trading. He also concedes that this decision was made without any prior consultation with the wife.
However, it is the husband’s case that, for the sake of these proceedings, the mortgage owing on the property should be regarded as being $82,206.37, which was the sum which he discharged on 9 January 2008.
On the other hand, the wife asserts that the appropriate sum should be $69,582.00, which was the sum actually owing on the date of the parties’ physical separation, when she actually left the Property W property with the children.
Ms Karr contends as follows:
“… faced with these relocation and maintenance costs for the children and I, the only avenue available to me was withdrawing $12,902.00 from our Westpac Bank redraw facility … attached to the Westpac home loan. As a consequence of this withdrawal the home loan increased from $69,000.00 to $81,902.00.
I ask [the court] to treat the moneys withdrawn by me as being in the nature of spousal maintenance. The funds were used entirely for the support and maintenance of the children and I at a time when the husband refused to release furniture and appliances which he retained in the matrimonial home for his sole use.”[6]
[6] See wife’s affidavit of evidence filed 21 July 2009 at paragraphs 64-65
Mr Karr does not agree. He asserts that he has paid out the amount, which the wife alone took at separation and it would be unfair to him if this sum of around $13,000.00 was not treated as a joint marital liability. This is the major issue in dispute between the parties.
The parties began to live together when they were both in their mid-twenties. Neither can be described as being wealthy at the time. Their marriage was around thirteen years in duration. It produced three children. Neither party seriously contends that it was not a marriage of equals, in which its participants pooled their resources and shared their efforts.
During their marriage, the parties divided their responsibilities along conventional lines. The husband was the family’s main breadwinner and the wife was more engaged in home duty and parenting the parties’ children, although since 2005, she has returned to the paid workforce, initially on a part-time basis.
In these circumstances, the parties accept, perhaps with some reluctance, that their various contributions during the marriage, although different in nature, should be regarded as essentially equal for the sake of these proceedings.
The parties have different views about their likely prospective needs and the implications of those needs in the ultimate outcome of these proceedings. The wife’s position is that she is likely to remain a modest salary owner for the foreseeable future and, in the short to medium term, her likely sole responsibility to parent [X], [Y] and [Z] will represent a significant drain on her finances.
On the other hand, Mr Karr identifies himself as a PAYG tax payer, who has never shirked his responsibilities, so far as child support has been concerned. In these circumstances, he believes the wife is likely to have overstated her prospective needs and he urges the court to be cautious in this regard.
Accordingly, although these proceedings were bitterly contested and evinced considerable emotion from both the husband and the wife, there are few issues of the real moment between them. The areas of dispute being centred on the net extent of property available to be distributed between them, in dollar terms, and what allowance, if any, should be made in respect of their prospective needs.
The wife has calculated the parties’ net pool of assets in a sum of $552,268.00. The husband’s calculations lead him to fix a sum of $540,242.32, so far as the marital assets are concerned.
When expressed in terms of a percentage, the wife seeks to receive sixty percent of her nominated pool whereas the husband proposes she receives fifty-five percent of the pool, as nominated by him. On my calculations, in dollar terms, the difference is $34,227.59.
Due to the differences in the parties’ prior working history, there is a marked discrepancy in the current level of their accumulated superannuation, which favours the husband. The parties agree that there should be a split, from the husband’s superannuation, in the wife’s favour, so as to bring about equality in their respective levels of superannuation, at the conclusion of these proceedings.
These proceedings are designed to resolve the various disputes between the parties and, as far as possible, finalise their financial relationship with one another.
The documents relied upon
The husband relies on the following documents:
i)An affidavit of himself filed 29 July 2009;
ii)A statement of his financial circumstances filed 1 July 2008;
The wife relies on the following documents:
i)An affidavit of herself filed 21 July 2009;
ii)A statement of her financial circumstances filed 27 July 2008.
The parties themselves were the only witnesses in the case and each was extensively cross-examined by counsel for the other party. In addition, a number of documents were tendered into evidence. For the most part, these documents were financial in nature.
These documents, the affidavits of the parties themselves and their additional oral depositions form the evidence on which the decision in this case is made. In these reasons for judgment, findings of fact are made on the balance of probabilities, following my observations of each of the parties concerned and my consideration of the evidence as a whole.
The legal principles to be applied and the issues in the case
The process to be followed for the division of the parties’ property is well established by law.[7] The relevant legal principles are primarily contained in sections 79 and 75(2) of the Family Law Act 1975. I am required to follow a number of specific steps.
[7] See Lee Steere v Lee Steere (1998) FLC 91-626; Ferraro v Ferraro (1993) FLC 92-335;
In the first step, I must ascertain what are the parties’ assets and liabilities available to be divided between them. The normal rule is that those assets are to be determined as at the date of trial.[8]
[8] See Wardman & Hudson (1978) FLC 90-466; and Biltoft & Biltoft (1995) FLC 92-614
This poses difficulties, so far as the calculation of the amount owed in respect of the mortgage secured against the Property W property. Both parties seek to utilise a date well prior to the date of these proceedings to establish this sum.
The wife wishes to nominate the exact date of separation. The husband wishes to nominate a date a few weeks later, to bring into account the wife’s drawings from the relevant mortgage account concerned.
Both scenarios create a level of artificiality. The artificiality arises from the fact that the amount actually discharged on the mortgage, on the settlement of the sale of the property concerned on 15 December 2009, bears no resemblance to the mortgage amount proposed by either of the parties.
Other disputes exist between the parties regarding whether a number of items of the wife’s jewellery should be included in the pool. These comprise her engagement ring; her wedding ring; a padlock bracelet; a chain; and an opal ring. The husband places a value of $7,257.60 on these items.
The husband reaches this figure by adding together the sums indicated on valuation certificates provided by the jewellers who supplied the various items concerned on their sale. The dates of sale are between 29 December 1992 and 25 September 2005.[9] The husband asserts that these certificates are the only evidence of value for the jewellery and, as such, the court should utilise them.
[9] See exhibit D to the husband’s affidavit
The wife does not agree. It is her position that these valuations are both artificial and unreliable. In any event, she says the items were given to her as gifts and considerations of equity should dictate that they are not taken into account in these proceedings.
During the parties’ marriage, they acquired a number of shares in various publically listed companies on the Australian Stock Exchange. More of these shares were held in the wife’s name, no doubt for tax purposes, although the husband seems to have been the controller of the various transactions concerned.
The wife calculates the values of the shares at $74,628.30.[10] It is common ground that the vast majority of these shares have been sold, although the wife is perplexed that shares to the value of $57,387.41, standing in her name alone, were sold without her obvious consent.
[10] See wife’s affidavit at paragraphs 45-46
Documents reveal that the various shares were sold between October 2007 and 7 December 2007, which was prior to separation, for $71,852.30. $67,500.00 of this sum was used to repatriate joint matrimonial debt, again prior to separation.
The wife asserts that these various transactions reveal a short-fall of $4,352.30, between the two sums, which the husband has not accounted for and which should accordingly be “added back” notionally into the parties’ asset pool and be allocated in the husband’s asset settlement.
Another area of contention regarding shares concerns a parcel of 400 Telstra shares, which were registered in the husband’s name and valued at $1,400.00. Documents obtained by the wife reveal that a contract for the sale of these shares was reversed on 5 December 2007.[11]
[11] See Annexure D to the wife’s affidavit
The husband asserts that the shares are no longer in his possession, as they have been sold. The wife, having seen no documentation to prove the sale, asserts that they should be taken into account and allocated to the husband, in any settlement devised by the court.
The final issue in contention between the parties, so far as the asset pool is concerned, arises from bank accounts in each of the children’s names. The parties are listed as trustees for the accounts concerned and it is common ground that the husband has utilised these accounts, through the agency of internet banking, both before and after the parties’ separation.
This being the case, it is the wife’s position that the accounts need to be taken into account, in some way, in these proceedings. As at 23 June 2008, the following sums stood in accounts in the names of each of the children:
[Z] $2,750.27
[Y] $558.84
[X] $195.69
Total $3,505.80[12]
[12] See Annexure G to the wife’s affidavit
It is the wife’s case that the husband’s utilises these funds currently as his own moneys and, as such, they should be attributed to him as his property. It is her position that the moneys in these accounts currently amount to a total of $2,789.71. In the alternative, she invites the court to make a declaration that these sums are to be held in trust for the benefit of each of the children concerned.
The husband opposes either such course. It is his position that the evidence concerning these accounts is too imprecise and uncertain for the court to make any specific orders in respect of these various accounts.
In the second step, I must ascertain the contributions, which each party has made towards the matrimonial pool of assets, as I have found them, following the first step. Contributions fall into two broad categories.
The first kind is contributions to the property: financial contributions and non-financial contributions, made directly or indirectly, by or on behalf of a party to the marriage to the acquisition, conservation or improvement of any of the property.
The second kind is contributions to the welfare of the family: in the words of the section, “the contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage, including any contribution made in the capacity of home maker or parent.”[13]
[13] See Family Law Act s.79(4)(c)
It is clear from the authorities that this second kind of contribution must be given appropriate weight and is not to be treated as a token matter or as a contribution which is inherently less valuable or important than a financial contribution to property.
Pursuant to section 90MC of the Family Law Act 1975, superannuation interests are to be treated as property. Specifically, pursuant to section 90MS of the Act, superannuation interests may attract the operation of section 79 of the Act. Accordingly the court is required to assess spousal contributions to superannuation, although the actual realisation of that superannuation may be many years in the future.
As previously indicated, the second step of the process does not create controversy between the parties. In general terms, they agree that their various contributions, during their marriage, are to be regarded as equal. In addition, they agree that a splitting order should be made, in the wife’s favour, from the husband’s superannuation, to bring about an equalisation in their respective superannuation holdings.
The third step involves the assessment of the parties’ prospective needs, by reference to the factors set out in section 75(2) of the Family Law Act 1975. Pursuant to section 75(2)(o), the Court is entitled to take into account “any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account”.
In the main, section 75(2) deals with the prospective needs of the parties concerned. This area too occasions controversy between the parties in the following areas:
·The wife points to the fact that she is currently earning around $40,000.00 per annum, whilst the husband is earning at least double that and has the potential to earn more [section 75(2)(b)].
·In addition, she points to the fact that she has the care of the parties’ three children [section 75(2)(c)].
·Finally, she contends that the husband has not been completely frank about his asset and ongoing financial position [section 75(2)(o)].
·For his part, the husband concedes a disparity between his and the wife’s earning capacity. However, he contends that he has been reliable to date so far as the provision of child support for the children is concerned and is likely to remain so [section 75(2)(na)].
At the end of the third stage, it is the wife’s position that she should be allowed another ten percent of the parties’ non-superannuation assets by virtue of the relevant section 75(2) factors, which favour her.
On the other hand, the husband’s position is that the court should adopt a more cautious approach and allocate the wife, at best, a sum of five percent of the parties’ non-superannuation assets, chiefly to recognise her lesser income.
Finally in determining what order the court should make under section 79, the court must be satisfied that in all the circumstances, it is just and equitable to make the relevant orders. Overall, it is the justice and equity of the actual orders that the court must consider.[14]
[14] See Russell v Russell (1999) FamCA 187
Accordingly the fourth step is for the court to take a step back and examine whether the orders it proposes are just and equitable. These considerations must also inform each of the preceding steps.
The “overriding requirement” of section 79 is that considerations of justice and equity should inform each step of the process. The exercise I must undertake is not a “process of social engineering”[15] or of equalisation of assets or financial resources.
[15] See Waters & Jurek (1995) FLC 92-635
At the outset, I am at pains to point out to the parties that the task I must undertake is not a simple accounting or arithmetical task. In the jargon of the times, I cannot “crunch the numbers” to come up with a division of their property, which is not open to challenge or incapable of different interpretation.
Marriage is by and large a joint enterprise. How much buffer spouses must give one another, when financial set backs occur, must depend on the degree of consultation and acquiescence in their relationship.[16]
[16] See D & D [2003] FamCA 473 at paragraph 49
The task, set out for me in this case, requires me to balance and compare contributions, which are by their nature different, within the framework of a marriage. Many contributions in a marriage, such as being a homemaker, do not result in the direct acquisition of assets. They are also difficult to value. The discretion I have is a wide one.
The evidence
The wife presented as a pleasant and honest witness, who did her best to provide the parties’ financial history together as accurately as she could. She did not give her evidence with any great sense of animus against the husband, which was in contrast to Mr Karr. My impression was that she was in a frame of mind where she wanted to get on with the next stage of her life as quickly as possible. As such, she was keen to achieve her fair entitlements from these proceedings and nothing more.
Ms Karr, although an intelligent and articulate person, did not present as a financial sophisticate. It would seem to be the case that she left most of the parties’ financial transactions, during the marriage, to the husband. He, in contrast to the wife, seemed to be more financially experienced and more adventurous, in money matters, than she.
The husband presented as being not greatly concerned about the actual outcome of these proceedings. But, in my view, this belied his real feelings. He seemed to me to be greatly affected by the end of the parties’ marriage. He was moved to tears, on occasions, when the case touched on issues to do with the children. As I remarked at the outset, I am concerned that the proceedings became more complicated than the overall financial issues warranted.
In my impression, the husband continues to bear some considerable level of resentment against the wife and this attitude, perhaps readily understandable, has informed much of his stance in these proceedings. Although I would not characterise Mr Karr as dishonest, much of his evidence was opaque and, at times, designed to be unhelpful in the speedy resolution of these proceedings.
It was not helpful that Mr Karr deposed, in his affidavit material, as to having made a substantial “loan” to an unnamed “mate”[17]. It can only have added to the wife’s suspicions that the husband was intent on obtaining some sort of financial advantage over her that he has provided scant information regarding financial transactions in the period post-separation. As has already been indicated, the proceedings were hard fought and very little was conceded.
[17] See husband’s affidavit at paragraph 60
The husband acknowledges that he acted unilaterally in regards to the home mortgage and share transactions in the pre and post-separation period. He described himself as being something of a “share trader” and in the past, albeit when the market has been more bullish, he has made a considerable portion of his income from share trading.
Yet the husband has not as yet filed his income tax return for the financial year ending 30 June 2009 and accordingly his current level of income is shrouded with uncertainty, particularly what, if anything, he has made from share trading.
The parties to property proceedings, brought under the Family Law Act 1975, in this court, are under a duty to make a “full and frank disclosure” of their financial circumstances.[18] This duty has been described as being “fundamental to the whole operation of the Family Law Act in financial cases…”.[19]
[18] See Federal Magistrates Court Rules at Rule 24.03
[19] Per Smither J in Briese & Briese (1986) FLC 91-713 cited with approval by the Full Court in Black & Kellner (1992) FLC 92-287 at 79,133
In Weir & Weir the Full Court of the Family Court said as follows:
“…the failure to disclose undermines the whole process of adjudication of proceedings for a settlement of property in that the court is unable to identify the property of the parties, to properly assess contributions, or to properly assess section 75(2) factors.”[20]
[20] Weir & Weir (1993) FLC 92-338
Accordingly, the duty to make a full and frank disclosure, in financial matters brought under the Family Law Act 1975, does not arise merely by virtue of the rules or practice of the court but rather is a fundamental rule of law, which arises because of the necessity for the court, in each property proceeding, to consider all aspects of the financial circumstances of the parties concerned.[21]
[21] See Luciano & Luciano (unreported) Family Court [2000] FamCA at paragraph 373 per O’Ryan J
In appropriate cases, there may be adverse consequences for a party, if it can be shown that he or she has deliberately failed to make a proper disclosure of some material financial fact. Such a non-disclosure may result in the court drawing an adverse inference against the party, who has not made a proper disclosure.
In Weir & Weir[22] the Full Court said as follows:
“It seems to us that once it has been established that there has been a deliberate non-disclosure…then the court should not be unduly cautious about making findings in the favour of the innocent party. To do otherwise might be thought to provide a charter for fraud in proceedings of this nature…We should have thought that the courts jurisdiction to make an order going beyond the identified property arises once there is sufficient evidence to support a finding that the party has not made a full disclosure of his or her assets.”
[22] See Weir & Weir (supra) at 79,593
I raise these matters because it is the tenor of the wife’s case that she asserts the husband has deliberately chosen not to disclose his true financial position, either to her or the court. I have difficulty in reaching the conclusion that the husband’s actions have been so deliberately disingenuous.
Rather, I prefer to characterise his behaviour, in this litigation, as being passively unhelpful. However, regardless of how that behaviour is characterised, there may nonetheless be penalties for a litigant unwilling to demonstrate active candour in the pursuit of property applications before the court.
Accordingly, overall, the wife’s evidence is to be preferred over that of the husband. In particular, considerations of this kind militate in favour of the court drawing adverse inferences, against the husband, in regards to the extent of the matrimonial pool of assets available to be distributed between the parties.
a) Chronology
The husband was born [in] 1967. The wife was born [in] 1968. The parties began to live together in 1993, when the wife was pregnant with [X]. They married [in] 1994.
Mr Karr purchased a diamond ring for the wife for the sum of $1,995.00 on 29 December 1992. He purchased another diamond ring on 19 September 1994 for $575.00. He purchased a gold padlock bracelet on 20 January 1996 for $970.00.
The other items of jewellery in dispute between the parties – the opal ring and the gold chain were purchased on 24 October 1998 and 25 September 2005 for the sums of $3,060.00 and $657.60 respectively.
The wife’s employment history, prior to the parties' marriage, was in an administration, accounts and payroll. She ceased employment around about the time of [X]’s birth.
The husband has qualifications as a [tradesman]. When the parties married, he was employed [in the Sales Industry]. The family moved to Adelaide in 1994, when the husband took up a position as [omitted].
When the parties began their relationship, the husband had life insurance worth around $6,000.00; a motor vehicle and a boat; and some savings.
The wife owned a motor vehicle, which was subject to a considerable level of finance. She did not have any significant savings. Both parties had other household goods.
The parties purchased the Property W property in February of 1996. The purchase price was $100,000.00 and the parties paid a deposit of $10,000.00.
The wife asserts she sold her motor vehicle and realised a sum of around $5,000.00. The husband says he cashed in his life insurance realising around about $6,000.00. Other moneys were contributed from savings, which must have come from the husband’s income largely.
When the Property W property was purchased, around $88,000.00 was owing on the mortgage secured against it. At this point, neither party asserts that he or she provided a significant initial contribution of capital at the outset of their relationship. This is undoubtedly the case.
The wife was primarily responsible for caring for the parties’ three children following each of their respective births and in looking after the parties’ household. It is not suggested that she was anything other than a capable and conscientious parent and homemaker.
The husband was the family’s main breadwinner. He left [employer omitted] in 2002 and went to work for [company omitted]. He moved to his current employment, with [omitted], in around 2006.
I accept that the husband worked very hard. He worked long hours and frequently travelled for his employment. During the latter years of the marriage, by dint of his endeavours, the husband was able to earn a comfortable income, which was utilised for joint family purposes. His income tax returns indicate that he derived the following levels of income:
Financial Year Ending
$
30/6/2004
131,643.00
30/6/2005
129,413.00
30/6/2006
118,109.00
30/6/2007
116,916.00
30/6/2008
E85,788.56[23]
[23] This figure is based on an average weekly income, for Mr Karr of $1,649.78 and comes from his statement of financial circumstances
When the parties separated, the wife made application for child support. Initially the Agency assessed the husband as being liable to pay child support at the rate of $2,623.00 per month. This was based on a child support income of $119,388.00 for the husband and one of $23,676.00 for the wife.[24]
[24] See husband’s affidavit of evidence at paragraph 50
More recently again, the Agency has calculated the husband as being liable to pay child support of $1,742.25 based on a child support income of $92,624.00 for Mr Karr and $37,745.00 for Ms Karr. The husband’s income is provisional, given that he has not as yet filed an income tax return. The wife’s is based on her income tax return.[25]
[25] See exhibit 4
The wife returned to the workforce in 2005. At this stage, as the parties’ youngest child [Z] had turned seven, she believed the children were old enough to cope with her employment. She began employment [omitted].
Initially, the wife worked on a part-time basis, fitting in her hours of work at times when the children were at school. She has gradually extended her hours. Currently she is the [occupation omitted]. She is paid $25.36 per hour. She works four or five days per week, depending upon the level of work to be done. At times, she is required to travel overseas for training.
Ms Karr enjoys her work and has no plans to change her employment. It is unlikely that she will secure any promotion in the foreseeable future. At the present time, it seems likely that she has a capacity to earn an income in the low $40Ks.
From the husband’s perspective, the end of the parties’ marriage was totally unexpected to him. I accept that this was so. I also accept his evidence that he suffered a severe emotional set back as a result of the separation.
The parties’ separation coincided with a general downturn in the economy. This downturn effected the industry in which Mr Karr is involved. Mr Karr’s evidence is that he receives a base salary of $57,500.00 per annum but also earns commission on the [omitted] which he sells.
In all these circumstances, I do not think that there is anything unduly sinister in the marked reduction in the husband’s income, in the period following the parties’ separation. However, I find that the husband was not particularly well disposed towards the wife in this period and certainly felt disinclined to assist her financially in its aftermath.
The Property W property was registered in the husband’s sole name. The reason for this was that the wife had owned a piece of real property prior to the parties’ relationship and was ineligible to receive any government assistance for first home buyers. In 1996, the husband was eligible for this assistance and, for these pragmatic reasons the property was purchased in his name alone.
On separation, it is the wife’s evidence, which I accept, that it was untenable for her to remain living in the property, as the husband was unwilling to vacate it given its legal status and because of his antipathy towards her. In these circumstances, she was compelled to rent alternative accommodation for herself and the children.
It is also her evidence that the husband was disinclined to let her take any significant items of property or furniture from the home to equip her new premises. In these circumstances, it is her evidence that financial necessity compelled her to draw down around $13,000.00 from the Property W mortgage to ensure her and the children’s financial security. I accept this evidence.
The wife utilised $1,800.00 of the moneys withdrawn from the mortgage account to pay a rental security deposit on her new premises. She also had to pay some rent in advance. At the present time, she is paying rent of around $330.00 per week.
In addition, it is the wife’s evidence that she paid the vast majority of the children’s expenses arising from their extra curricular and sporting activities. She estimates these costs in the period since separation in the sum of just under $12,000.00.[26]
[26] See wife’s affidavit of evidence at paragraph 82
Although the husband has been reliable and regular in respect of all his child support responsibilities and so has made an indirect contribution towards the funding of these expenses, it seems to be more likely than not that the wife has assumed a heavy financial responsibility in respect of funding the children’s various activities.
The husband discharged the mortgage on the Property W property in the early part of 2008. The extended mortgage took the form of two loans. The first was a home loan. The second was used to trade shares.
Of the monies made available, $96,850.00 was used to purchase AWB shares and $27,500.00 was “lent” to Mr M, who apparently has expertise in trading in shares on the London Stock Exchanged.
The husband has deposed that he expended a weekly sum of around $150.00 in respect of the first mortgage secured on the Property W property. As has previously been indicated, it was his decision alone to secure the second equity loan, against the property, which funded the acquisition of his share portfolio.
In all the circumstances of the case, it seems to me clear that the husband was in a far more secure financial position than the wife, in the period following separation. He had more secure accommodation than she, which cost less to maintain than the wife’s accommodation. In addition, although his income had reduced, it still remained far greater than that of the wife.
It seems to me to be more likely than not that the husband discharged the mortgage on the Property W property, in the period after the parties’ separation, in order to prevent the wife making any other withdrawals against the equity in the property. I can understand why he would form such an attitude.
However, in the period thereafter, he displayed a cavalier disregard for the wife’s interest in the property by extending the mortgage secured against it and making a significant investment in other assets – a large parcel of AWB shares – without any consultation whatsoever with her.
I am also satisfied that, in the period since separation, he has made inadequate disclosure regarding these investments, particularly the so-called “loan” made to Mr M, which was almost certainly invested on his behalf to be traded on the London Stock Exchange.
In all these circumstances, it seems fair to me to treat the moneys withdrawn from the mortgage account by the wife as being analogous to spousal maintenance. After all, apart from the furniture purchased by the wife, which she still retains and which has been recently valued in the modest sum of $2,172.00, the moneys concerned have been fully expended and cannot be traced into other assets.
In asking the court to approach the issue of the drawings from the mortgage account, in the way which she does, the wife seems to impliedly relied on what was said by the Full Court in the case of Re NHC & RCH[27] where the court quoted from an earlier Full Court decision of Marker, where the following was said:
“There seems to be no appropriate basis for notionally adding back moneys that existed at separation but which have been subsequently spent on meeting reasonably incurred necessary living expenses. Neither the Family Law Act nor the case law require that parties go into a state of suspended economic animation once their marriage breaks down pending the resolution of their financial arrangements. Parties are entitled to continue to provide for their own support. Whether any expenditure so incurred is reasonable or extravagant is a matter that can be determined by the trial Judge.”
[27] Re NHC & RCH (2004) FLC 93-204
It does not seem to me that the wife was unreasonably extravagant in utilising funds to pay her security deposit; rent in advance; and to purchase furniture and white goods for herself; in circumstances where she had been effectively excluded from the former family home and had been provided with negligible financial assistance by the husband.
On the other hand, the husband remained in control of the vast majority of the parties’ financial resources and chose to utilise them in at least two speculative ventures, without consulting the wife whatsoever and subsequently he has failed to account in any meaningful way to her in respect of them. In my view, these are relevant matters to take into account in calculating the extent of the asset pool available for division between the parties.
The only significant asset, which the wife took with her on separation, was her motor vehicle – a Holden Viva. The parties agree that this vehicle is currently valued at $11,250.00.
As a result of the sale of the various shares, registered in the wife’s name, prior to the parties’ separation, the wife has incurred a capital gains tax liability in the sum of $1,869.00. She is paying off the debt at the rate of $50.00 per week, a significant commitment for her. The parties agree that this debt should be regarded as a joint matrimonial liability.
Step one – the pool of assets
The most difficult aspect of this case is crystallising the parties’ level of matrimonial debt, so that an appropriate and fair division of their matrimonial property can occur. As previously indicated, this is a somewhat artificial exercise, given what has occurred since separation and the manner in which the case has been conducted.
The most logical way to undertake this exercise would be to utilise values as at the date of trial. Any injustices arising from such values being capable of rectification by the considerations arising under the operation of principles applicable at the second stage of the process of matrimonial property division.
That is not possible in the present case, as the amount discharged on the Property W property mortgage bears no resemblance to the situation vis a vis that mortgage during the period of the parties’ marriage. For that reason, neither party advocates the use of the actual mortgage discharge figure.
More importantly, assets purchased by the husband unilaterally with a significant portion of the post separation mortgage advance have not been brought into account in the current proceedings. Accordingly, to use the actual discharge figure, would hopelessly and unfairly skew the subsequent application of the required property division steps to the resulting asset pool.
The fact that subsequently acquired assets have not been able to be taken into account is attributable largely to the husband’s conduct. I concede that the AWB shares are readily able to be valued. However, the so called loan to Mr M remains a mystery both to the court and the wife. In addition, it would seem unfair to saddle the wife with possible losses resulting from the acquisition of shares, the purchase of which she did not authorise and which occurred after the parties’ separation.
In these circumstances, the fairest time to crystallise the parties’ joint mortgage debt appears to me to be the date of separation and thus the appropriate figure to be utilised by the court to be $69,582.00.
Obviously, this figure does not take into account the wife’s withdrawals from the mortgage in the days following the parties’ separation. As such, the husband contends that it is fundamentally unfair to him. I do not agree.
As previously indicated, the process which the court must follow is not analogous to an accounting exercise. The moneys taken by the wife were mainly used by her in living expenses and are largely gone. I do not consider her activities to have been either unreasonable or extravagant. Financial necessity compelled her to do what she did so that she and the children could be properly accommodated.
In any event, it is my view that the wife’s contributions, in the period since separation, have been superior to those of the husband and this, of itself, justifies an arrangement in regards to the property pool, which favours the wife, particularly given the husband’s lack of complete candour and full engagement with the court’s processes.
The valuation certificates in respect of the wife’s jewellery are many years out of date. In the most extreme case the valuation is over sixteen years old. I have received no evidence regarding the expertise of the unnamed persons, who provided the purported valuations, which in several instances are expressed to be for the purposes of insurance or replacement.
The figures on the various certificates concerned would appear to represent the price paid for the items of jewellery concerned. It is generally recognised that the price paid for a particular item is not always indicative of its actual value. This is particularly so in respect of consumer items, such as furniture, white goods and motor vehicles, which very often rapidly depreciate from the price paid for them when new.
As I pointed out to the parties, prior to them embarking on having their household contents professionally valued, it is invariably a depressing exercise when the second hand value of such items subsequently materialises.
In my view, jewellery is not in a different category to other consumer purchases, unless its manufacture or composition makes it in some way either unique or particularly exclusive. The evidence concerning the wife’s jewellery does not suggest a special level of craftsmanship, in its manufacture, or indicate the use of metals or stones of special intrinsic value.
Given the items concerned are likely to have sentimental or emotional value for the wife and given that they were gifts to her by the husband, it seems to me to be inherently inequitable to direct the sale of the wife’s jewellery in order to crystallise its value, particularly given the likelihood that both parties are likely to find the result of such an exercise produces trifling results.
In Jones & Jones[28] Coleman J said as follows:
It is ultimately unclear to this Court precisely how the learned Federal Magistrate reached the figure of $10,000 in relation to the valuation of the wife’s jewellery. To the extent that he did so by reference to the evidence of what was paid for the jewellery, that was not a sound or adequate basis for his conclusions in the circumstances as his reasons reveal them. To the extent that the learned Federal Magistrate’s conclusions involved reference to “insurance valuations”, that was not a sound basis, as his reasons for judgment correctly and logically explain.
[28] See Jones & Jones [2003] FamCA 617 at paragraph 40
In all these circumstances, I do not believe that the certificates, on which the husband seeks to rely, provide a safe evidentiary basis on which to reach a valuation for the items in question. That being so, there is no evidence available to me to value the wife’s jewellery. Given the nature of those items and their provenance – gifts from the husband – I do not think that it results in an injustice if the wife’s jewellery is not specifically taken into account in this matter.
The wife’s case regarding the existence on the Telstra shares rests on inference alone. She can point to no documentation, which establishes irrefutably that the husband continues to possess the shares in question. She suspects that he does so.
The wife’s case rests on the statement of account, from the husband’s stockbroker for the period ending 10 April 2008, which indicates a contract reversal in respect of the sale of the Telstra shares, which occurred on 5 December 2007.[29]
[29] See annexure D to the wife’s affidavit
The husband has denied on oath that he retains the shares. I do not now disbelieve his evidence, as there is no cogent evidence to contradict it. In those circumstances, I do not propose to include the parcel of Telstra shares in the parties’ pool of assets.
I do not think it would be equitable to notionally “add back” the sum of $4,352.00, which the wife ascribes to the husband as being the unaccounted for shortfall between the sum realised on his shares between October and December of 2007 and the amounts which he paid to reduce the parties’ debts.
The wife cannot identify where the some is located now. In the greater scheme of the parties’ finances, it is not a significant sum. It would be seen to be the wife’s case that the sum should be regarded as a premature distribution of assets, in the husband’s favour. I am not persuaded that it is so.
The Full Court of the Family Court[30] has identified three areas where it is appropriate to notionally “add back”, into a pool of matrimonial property, assets which do not exist or cannot be proved to be still existing. The circumstances are as follows:
·Where matrimonial assets have been utilised to pay the parties’ legal fees, thus diminishing the pool of assets available to be distributed between them and so creating a situation where the normal rule whereby each party should bear his or her own costs is defeated.[31]
·Where there has been a premature distribution of matrimonial assets.[32]
·Where one of the parties has embarked on a course of conduct, either recklessly or with the direct intent to reduce or minimise the effective value of some item of matrimonial property.[33]
[30] See AJO v GRO (2005) 33 Fam LR 134 at 144
[31] See In the Marriage of DJM and JLM (1998) 23 Fam LR 396
[32] See In the Marriage of Townsend (1994) 18 Fam LR 505
[33] See In the Marriage of Kowaliw (1981) FLC 91-092 at 76,644
In regards to the third of these categories, it has been pointed out by the Full Court that this principle represents a guideline for the court rather than a fixed code, bearing in mind the discretionary nature of the jurisdiction created by section 79 of the Family Law Act.[34]
[34] See In the marriage of Browne & Green (1999) 25 Fam LR 482
In my view, each of these categories, regarding the notional adding‑back of assets, is to be regarded in the same way. Accordingly, whether an item of property is to be notionally added into a pool of matrimonial assets, in circumstances where the value of that asset cannot be definitively established because it no longer exists or the situation relates to an alleged wastage of an asset, must depend on the circumstances of the case concerned and on an overall consideration of the justice and equity of the situation.
Although, I consider that the husband has had an easier situation financially, in the period post-separation, than the wife has had, I accept that the parties’ separation also inaugurated a period of financial austerity for him. As is the case with the wife, in this period, he was not required to place his financial affairs into a state of “suspended animation”. As such, it does not seem to me to be unreasonable that he would utilise the sum in question to fund recurrent expenses. In those circumstances, I do not propose to add back the sum in question.
The final issue, so far as the pool of property is concerned, is the children’s bank accounts, particularly the account in [Z]’s name, were in a state of constant flux during the parties’ marriage. The accounts concerned seem to have been used to meet recurrent expenses from time to time. Given these circumstances, I do not propose to take the accounts specifically into account in the parties’ pool of assets available for distribution, particularly given the comparatively modest sums involved.
For all these reasons, I find that the assets of the parties available to be distributed between them to be as follows:[35]
[35] These figures are agreed between the parties and are the values ascribed by each of them as at the date of final hearing. See wife’s amended Outline of Case document dated 17 December 2009.
NON SUPERANNUATION ASSETS
$
$
Property W
615,000.00
Household contents (husband)
2,880.00
Household contents (wife)
2,172.00
Holden Viva motor vehicle (wife)
11,250.00
TOTAL
631,302.00
LIABILITIES
Mortgage on Property W property
69,582.00
Capital Gains Tax (wife)
1,869.00
Agent’s Commission on sale and selling expenses
12,428.16
Conveyancer’s fees
907.50
TOTAL
84,786.66
NET ASSETS
546,515.34
SUPERANNUATION
Husband’s superannuation
125,513.00
Wife’s superannuation
15,006.00
TOTAL SUPERANNUATION
140,519.00
Step 2 – Assessment of contributions
The relationship between the parties was one of significant length, being around 14 years in duration. The relationship produced three children. I am satisfied that overall both parties have made significant financial and non-financial contributions, during their marriage, both as wage earners and as parents.
This is not a case where one party brought into the marriage significantly more assets than the other. The parties married in their mid-20s. As such, neither had been in a position to acquire assets of such value prior to their relationship so that the contribution represented by those assets now requires “special recognition” by the court in its deliberations.
In all these circumstances, I see no reason to depart from the parties’ mutual position that their various contributions, during their marriage, should be regarded as essentially equal.
The position is different regarding the parties’ post separation contributions. In my view, these have been marginally greater, on the part of the wife. She has had to be the major carer for the parties’ three children, whilst also holding down paid employment. During this period, her financial circumstances have also been straightened.
The husband’s circumstances have been easier because he has been able to retain control of the vast majority of the parties’ matrimonial assets, particularly their former family home. However, I must not overlook the fact that he has paid the recurrent mortgage payments on the property and contributed child support in the sum of around $36,000 in the period concerned.[36]
[36] See Exhibit 6
In all these circumstances, bearing in mind the findings which I have made in respect of the parties’ pool of assets, particularly the amount allowed in respect of the mortgage, I do not propose to make any further adjustments by way of either party’s post separation contributions.
Step 3 – Section 75(2) factors – the prospective needs of the parties
The parties are each in their early 40’s. Neither contends that they currently suffer any serious health problems. Accordingly, both can anticipate many active and productive years of life before them. These are not significant factors in the case [s.75(2)(a)].
The wife has secure employment with [omitted]. She enjoys this employment. It provides her with an income of around $40,000 per annum, at which level her salary is likely to remain for the foreseeable future.
Accordingly, the wife’s employment provides her with a significant measure of financial security. Given the ages of the children concerned, she is not significantly reliant on child care. She is likely to remain in her current position, enjoying the same level of remuneration, for many years to come.
The husband has worked hard, in the same industry, for many years. It would seem to be the position that he is well connected, in his line of work and is good at it. It has provided him with a comfortable income of around $120,000 per annum in the past.
More recently, his income has reduced. I accept that this has been as a result of the recent financial crisis but also because he has been affected by the parties’ separation.
I would expect that, with the conclusion of these proceedings, he will be able to return to his previous levels of remuneration, notwithstanding the uncertainty necessarily existing in predicting his level of salary because much of his income derives from the commission on truck sales.
However, notwithstanding the husband’s recent employment difficulties, he has nonetheless been able to derive an income, which has been twice that of the wife’s income. For obvious reasons, this is a major factor which militates in favour of the wife [s.75(2)(b)].
I accept that the most valuable “asset” a party can take out of a marriage is “a substantial, reliable income-earning capacity”.[37] In this case, it seems to me that fortunately both parties have such an asset but that the husband’s is likely to be worth at least twice as much as that of the wife and quite possibly more.
[37] See Clauson & Clauson (1995) FLC 92-595 at 81,911
[X] is currently sixteen years of age; [Y] is thirteen; and [Z] is ten. Accordingly, all of the children are at an age, most likely, when their financial demands will be at their greatest. [X] and [Y] are attending secondary school. [Z] will move to secondary school in the next couple of years. The children will have expensive educational, sporting and other interests, which they will need to pursue.
In her affidavit material, the wife has alluded to those expenses and the costs involved. [X] and [Y] play soccer. [Z] plays netball. [X] is learning the guitar. These are potentially expensive activities and it will be difficult for Ms Karr to deny them to the children.
Regrettably, for all manner of complex reasons, the children have elected not to spend any time whatsoever with the father. Accordingly, the burden of providing financially for the children will rest heavily with the wife. In my view, this is a factor which significantly favours the wife [s.75(2)(c)].
The wife, of course, does not bear the financial responsibility for maintaining the children alone. She is and will remain entitled to claim child support from the husband, as indeed she has done. However, it must not be forgotten that the payment of child support, in no way compensates the principle care providing parent for the loss of career opportunity and the inevitable restrictions upon working hours and choice of work, which the obligation to care for children entails.[38]
[38] See Clauson & Clauson (supra) at 81,911
The husband is largely a PAYG tax payer, although it may well be the case that he will earn income from share trading in future. His tax status has resulted in him being assessed to pay significant amounts of child support.
The application of the relevant formula recognises that the wife has the sole care of the three children concerned. Accordingly, it cannot be said that Mr Karr is not making a financial contribution towards the support of his three children nor can it be concluded that he will attempt to avoid his financial obligations for them in the future [s.75(2)(n)(a)].
The weight to be attached to a child support assessment will vary in the circumstances of each particular case concerned. The court is directed to look at the amount of the assessment, the financial circumstances of each of the parties, the needs of the children concerned and whether child support is likely to be paid regularly and at an adequate rate in future.[39]
[39] See Clauson (supra) at 81,911
For the reasons already provided, I do not accept that the evidence currently indicates that Mr Karr is likely to be an unreliable payer of child support for the three children in future. Although he does not seem to be particularly well disposed towards the wife, his capacity to manipulate his financial circumstances to avoid child support seems to be limited.
In addition, I would not assess him as being a person who would wish his children to be disadvantaged financially. It seems to me to be likely that the Child Support Agency will be able to gauge accurately
Mr Karr’s level of income and so properly assess his liability for child support for [X], [Y] and [Z].
Due to his longer involvement in the paid workforce, the husband has been able to accumulate significantly more superannuation than the wife has. The parties, to their credit, have been able to agree on an outcome which sees them with equal amounts of superannuation at the conclusion of these proceedings, namely an amount of around $70,000 each.
Given their respective ages and likely future employment history, both parties have sufficient time to accumulate further superannuation and make preparation for their permanent retirement from the workforce. Accordingly, this is not a significant factor in the case [s.75(2)(f)].
As I have already indicated, it is my apprehension that the husband has not been particularly amenable to the Court’s processes. The most glaring example of this is his evidence regarding the “loan” to his “mate”, Mr M. The husband has not disclosed to the wife what was the result of this transaction of $27,500, particularly whether it resulted in a profit or otherwise.
In all the circumstances of this case, I am only able to take into account the husband’s failure to be more candid in his disclosure in an inchoate manner [s.75(2)(o)].
The wife seeks a further distribution to her of a further 10% of the parties’ net non superannuation assets, as a result of the application of the relevant s.75(2) factors.
Having considered those various factors, particularly the discrepancy in the parties’ current and likely future levels of remuneration, this seems to me to be both a modest and reasonable position. Accordingly, I propose to allow the wife a further 10% of distribution of the parties’ non superannuation assets by reason of the applicable factors arising under s.75(2) of the Act.
Conclusions – s.79(2) – is this a just and equitable outcome?
The final step in determining property proceedings is to stand back and consider whether the proposed result represents a just and equitable outcome. Considerations of justice and equity must inform each step of the court’s process and the overall result.
It is all very well to talk in percentage terms, so far as property orders are concerned, but at the end of the day what matters to the parties is what the orders mean in dollars and cents and what effect they will have on their respective long term aspirations and living standards.
I have calculated the parties net non-superannuation assets as being represented by the sum of $546,515.34. Sixty percent of this sum is $327,909.20 and forty percent is $218,606.14.
The wife has currently in her possession property to the value of $13,422.00, in the form of her household contents and motor vehicle. She is liable for a capital gains tax debt of $1,869.00. Therefore it will be necessary for her to receive the sum of $316,356.20, from the proceeds of sale of the Property W property, to bring about the property settlement which I propose. I propose to round down this figure to $316,300.00.
Such a sum will enable the wife to put down a sizeable down payment, if she wishes, on some form of accommodation for herself and the children. It would seem to me likely that she will be able to service some form of mortgage in the future, given her employment. Such a payment will also most likely provide the wife with sum nest egg to cover future exigencies.
The husband will receive a more modest sum from the proceeds of sale of the Property W property. He will receive around $114,600.00. Of itself, such a sum will represent a reasonable down payment on accommodation of a modest value. However, the husband also leaves the marriage with his unspecified share portfolio and the liability in respect of its purchase, as far as I know, fully discharged.
More importantly, he leaves the marriage with his capacity to earn a significant and comfortable income intact. As such, it seems to me likely that he will be able to restore himself to a state of financial equilibrium and comfort relatively quickly.
In order to bring about an equalisation in each party’s superannuation, it will be necessary for a split of $55,253.50 to be made from the husband’s superannuation. I will round this sum down to $55,250.00 in making the necessary steps.
In all the circumstances of this case, I am satisfied that the division of the parties’ assets, which I propose, represents a just and equitable outcome.
For all these reasons, the orders of the court will be as set out at the commencement of these reasons for judgment.
I certify that the preceding one hundred and ninety-nine (199) paragraphs are a true copy of the reasons for judgment of Brown FM
Associate: P Smith
Date: 29 January 2010
Clauson v Clauson (1995) FLC 92-595; Hickey v Hickey and Attorney General for Commonwealth of Australia (2003) FLC 93-143 at 78,386
0
3
2