Kasiopoulos and Garapiperis (No 2)

FAMILY COURT OF AUSTRALIA

KASIOPOULOS & GARAPIPERIS (NO. 2)

[2010] FamCA 1184

FAMILY LAW – PROPERTY SETTLEMENT – Contributions – Adjustment for other matters
FAMILY LAW – PRACTICE AND PROCEDURE – Leave to commence proceedings
FAMILY LAW – SPOUSE MAINTENANCE

Family Law Act 1975 (Cth) ss 44, 72, 74, 75 & 79

In the Marriage of Hickey(2003) 30 Fam LR 355
Mallett v Mallett (1984) 9 Fam LR 449
In the Marriage of Ferraro (1992) 16 Fam LR 1
In the Marriage of Shewring (1987) l2 Fam LR 139
In the Marriage of Lenehan (1987) 11 Fam LR 615
In the Marriage of Norbis (1986) 10 Fam LR 819; FLC 91-712
In the Marriage of Zyk (1995) 19 Fam LR 797
In the Marriage of Coghlan (2004) 33 Fam LR 414
In the Marriage of Whitford (1979) 4 FLR 754
In the Marriage of Althaus (1979) 8 Fam LR 169; (1982) FLC 91-233
In the Marriage of Carlon (1982) 8 Fam LR 729; [1982] FLC 91-272
In the Marriage of Neocleous (1993) 16 Fam LR 557; (1993) FLC 92-377
In the Marriage of Kowaliw (1981) FLC 91-092
In the Marriage of Clauson (1995) 18 Fam LR 693; [1995] FLC 92-595
West & Green (1993) FLC 92-395; 16 Fam LR 811
C and C [1998] FamCA 143
In the Marriage of Omacini (2005) 33 Fam LR 134
In the Marriage of DJM and JLM (1998) 23 Fam LR 396; (1998) FLC 92-816

APPLICANT:

Mr Kasiopoulos

RESPONDENT:

Ms Garapiperis

FILE NUMBER:

SYC

6432

2008

DATE DELIVERED:

2 December 2010

PLACE DELIVERED:	Sydney
PLACE HEARD:	Sydney

JUDGMENT OF:

Justice Loughnan

HEARING DATES:

2 & 3 September 2010

REPRESENTATION

COUNSEL FOR THE APPLICANT:	Mr T. Hodgson
SOLICITOR FOR THE APPLICANT:	Hancock Alldis & Roskov Lawyers & Notaries

COUNSEL FOR THE RESPONDENT:	Mr A. Givney
SOLICITOR FOR THE RESPONDENT:	Vizzone Ruggero & Associates

Orders

Within forty-two (42) days of the date of these Orders, the Respondent wife pay to the Applicant husband the sum of $91,070.85 (“the sum”).
Forthwith upon that payment:-
a.the Applicant husband shall transfer to the Respondent wife the whole of his right, title and interest in and to the matrimonial home at B being formally known as Folio Identifier … (“the matrimonial home”); and
b.the Respondent wife shall discharge, at her cost, the loan encumbering the matrimonial home and indemnify the Applicant husband in respect of all of the parties’ obligations under the said loan.
Should the wife fail to pay the sum and to discharge the mortgage on the matrimonial home within forty-two (42) days or such other period as the parties agree in writing, the husband and wife shall sign all documents and do all things necessary to list the matrimonial home for sale in accordance with the terms and conditions set out in Order 4 below and upon completion of the sale, the proceeds of sale be applied as follows:-
a.Payment to the Real Estate Agents for their proper commission and expenses;
b.Payment to the conveyancing Solicitors for their proper fees and disbursements;
c.Payment of appropriate adjustments of Council and Water Rates;
d.Payment of the amount required to discharge the mortgage loan encumbering the matrimonial home; and
e.Payment of the balance to the husband and wife in the following shares:-
i.As to the Applicant husband, 9.4 per cent;
ii.As to the Respondent wife, the balance.
That the matrimonial home shall be sold as follows:-
a.The agent to act on the sale of the matrimonial home shall be an agent agreed upon by the parties and in the absence of agreement for a period in excess of fourteen (14) days, the agent shall be the person nominated by the President for the time being of the Real Estate Institute of New South Wales on the application of either of the parties.
b.The Solicitor to act in respect of the sale shall be Messrs. Hancock Alldis & Roskov.
c.The Contract for the sale shall be the standard form Law Society Contract and shall provide for settlement, in the absence of agreement to the contrary, to take place forty-two (42) days from the date of exchange.
d.The reserve price for the matrimonial home shall be that amount agreed upon between the parties and in the absence of agreement for a period in excess of fourteen (14) days, the reserve price shall be set by the valuer appointed by the President for the time being of the Australian Property Institute Inc. New South Wales Division, on the application of either of the parties.
e.The parties shall use their best endeavours to sell the matrimonial home by private treaty within two (2) months of the date of listing.
f.If the matrimonial home is not sold within the period referred to in sub-paragraph e. above, the parties shall list the matrimonial home for auction, with the sale to take place within a further period of two (2) months, or such other time as the parties may agree in writing. During this period and the period referred to in sub-paragraph e. above, the parties shall accept any price offered for the matrimonial home in excess of, equal to, or within 2.5 per cent below, the reserve price.
g.If the matrimonial home is not sold at the auction referred to in sub-paragraph f. above, the parties shall list the matrimonial home for sale at a further auction to take place a further two (2) months from the date of the first auction and during this period the parties shall, unless otherwise agreed in writing between them, accept any offer made for the matrimonial home which is in excess of, equal to, or within 5 per cent below, the reserve price of the matrimonial home.
h.The wife and husband shall do all things to permit the inspection of the matrimonial home by the real estate agent and prospective purchasers at any reasonable time.
Other than as herein provided, the husband and wife each be declared the sole legal and beneficial owners of all other items of property presently in their respective possession or control including but not limited to money, shares, real property, motor vehicles, entitlements to superannuation, furniture, furnishing and personal effects.
The oral application of the wife for leave to bring proceedings for spousal maintenance out of time is dismissed.
The parties shall execute all documents and do all things necessary to give effect to these Orders.
In the event that either party refuses or neglects to execute any deed or instrument, the Registrar of the Court be appointed pursuant to Section 106A to execute any deed or instrument in the name of such party and to do all acts and things necessary to give validity to the operation to the deed or instrument.

IT IS NOTED that publication of this judgment under the pseudonym Kasiopoulos & Garapiperis is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYC 6432 OF 2008

MR KASIOPOULOS

Applicant

And

MS GARAPIPERIS

Respondent

REASONS FOR JUDGMENT

These are proceedings for property settlement. By way of an application to review a decision of a Judicial Registrar, the husband seeks other orders for property settlement. The wife also seeks property settlement orders, together with orders for spouse maintenance and for leave to bring those proceedings. The parties are divorced but for convenience I will refer to them as the husband and wife.
Applications
The husband seeks orders in accordance with a Minute of Orders attached to his Case Outline document as follows:
1.   That within forty-two (42) days of the date of these Orders, the Respondent wife pay to the Applicant husband the sum of $425,000.00 (“the sum”).
2.   That simultaneous with the payment of the sum referred to in Order 1 above:-
a.   the Applicant husband shall transfer to the Respondent wife the whole of his right, title and interest in and to the matrimonial home at [B] being formally known as Folio Identifier […] (“the matrimonial home”); and
b.   the Respondent wife shall discharge at her cost the loan encumbering the matrimonial home and indemnify the Applicant husband in respect of all of the parties’ obligations under the said loan.
3.   That should the wife fail to pay sum within forty-two (42) days or such other period as the parties agree in writing, the husband and wife shall sign all documents and do all things necessary to list the matrimonial home for sale in accordance with the terms and conditions set out in Order 4 below and upon completion of the sale, the proceeds of sale be applied as follows:-
a.   Payment to the Real Estate Agents of their proper commission and expenses;
b.   Payment to the conveyancing Solicitors of their proper fees and disbursements;
c.   Payment of appropriate adjustments of Council and Water Rates;
d.   Payment of the amount required to discharge the mortgage loan encumbering the matrimonial home; and
e.   Payment of the balance to the husband and wife in the following shares:-
i.     As to the Applicant husband – 44%
ii.     As to the Respondent wife - 56%
4.   That the matrimonial home shall be sold as follows:-
a.   The agent to act on the sale of the matrimonial home shall be that person agreed upon by the parties and in the absence of agreement for the period in excess of fourteen (14) days, the agent shall be the person nominated by the President for the time being of the Real Estate Institute of New South Wales on the application of either of the parties.
b.   The Solicitor to act in respect of the sale shall be Messrs. Hancock Alldis & Roskov.
c.   The Contract for the sale shall be the standard form Law Society Contract and shall provide for settlement, in the absence of agreement to the contrary, to take place forty-two (42) days from the date of exchange.
d.   The reserve price for the matrimonial home shall be that amount agreed upon between the parties and in the absence of agreement for a period in excess of fourteen (14) days, the reserve price shall be set by the valuer appointed by the President for the time being of the Australian Property Institute Inc. New South Wales Division, on the application of either of the parties.
e.   The parties shall use their best endeavours to sell the matrimonial home by private treaty within two (2) months of the date of listing.
f.   If the matrimonial home is not sold within the period referred to in sub-paragraph e. above, the parties shall list the matrimonial home for auction, with the sale to take place within a further period of two(2) months, or such other time as the parties may agree in writing. During this period and the period referred to in sub-paragraph e. above, the parties shall accept any price offered for the matrimonial home in excess of, equal to, or within 2.5% below, the reserve price for the matrimonial home.
g.   If the matrimonial home is not sold at the auction referred to in sub-paragraph f. above, the parties shall list the matrimonial home for sale at a further auction to take place a further two (2) months from the date of the first auction and during this period the parties shall, unless otherwise agreed in writing between them, accept any offer made for the matrimonial home which is in excess of, equal to, or within 5% below, the reserve price of the matrimonial home.
h.   The wife and husband shall do all things to permit the inspection of the matrimonial home by the real estate agent and prospective purchasers at any reasonable time.
5.   Subject to the above Orders and save for the purposes of enforcing any monies due under these or any subsequent Orders, each party shall be solely entitled to the exclusion of the other, to all other property of whatsoever nature in the possession or ownership of such party as at the date of these Orders, and for this purpose:-
a.   Bank Accounts are deemed to be in the possession or ownership of the person whose name appears on the bank record thereof.
b.   Superannuation entitlements are deemed to be in the possession or ownership of the person who is named as the worker whose age or working future provides the conditions for the payment out of such entitlements; and
c.   The furniture and household effects situated in the matrimonial home are deemed to be in the possession or ownership of the wife.
6. It is hereby declared pursuant to Section 81 of the Family Law Act, that the parties intend these Orders to finally determine all financial relations and issues between them and to avoid further proceedings between.
7.   That each party shall do all things necessary including providing all necessary consents to give effect to these Orders in the time periods prescribed in these Orders.
8. That in the event that either party refuses or neglects to execute any deed, document or instrument necessary to give effect to all or any of these Orders, then the Registrar of the Court 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.
9.   That the Respondent wife pay the Applicant’s costs of and incidental to these proceedings.
I take it that the husband also seeks that the orders of 29 January 2010 be set aside.
On 27 August 2010 the wife filed a Response to an Application in a Case. By that document the wife seeks:
1.That the husband shall within twenty-eight (28) days, sign all documents writings and do all acts and things necessary to transfer to the wife all of his right, title and interest in the property situation at and known as [B] being property comprised in Folio Identifier […].
2.That the husband shall within twenty-eight (28), discharge and or refinance the mortgage secured over [B property] into his own name and indemnify the wife and keep the wife indemnified in relation to all outgoings in respect of the property including all payments in respect of the rates, taxes, charges, insurance and expenses in relation to repairs and improvements and any other sums due or accruing in respect of the said property.
3.That the husband pay $350.00 per week spousal maintenance to the wife up until the youngest child turns 18 years of age being […] September 2017.
4.That (pursuant to s 90MT) the percentage to be allocated is 50% to the wife in respect of the superannuation interest of the husband (“the husband/member”) in AMP Superannuation Limited Plan No: […], and that (pursuant to s90MT), whenever a splittable payment becomes payable in respect of that interest, the wife is entitled to be paid the amount calculated in accordance with the Family Law (Superannuation) Regulations in respect of that base amount, and there is a corresponding reduction in the entitlement of the husband/member.
5.That the wife indemnify and keep indemnified the husband in respect of any tax which might be payable in respect of or upon her receipt of any amount pursuant to Order 4 hereof.
6.That for purpose of Order 4 hereof, the operative date is the fourth (4^th) business day after the day on which a sealed copy of these orders are served on the Trustee of AMP Superannuation Limited Plan No: […].
7.That the wife shall cause a sealed copy of the Orders to be served on the Trustee of AMP Superannuation Limited Plan No: […] on or before 14 days of these orders.
8.That each party and the trustee of AMP Superannuation Limited Plan No: […], have liberty to apply in relation to the implementation of the Orders affecting the superannuation interest.
9.That having been accorded procedural fairness in relation to the making of this Order, this Order binds the Trustee of the AMP Superannuation Limited Plan No[…].
10.The Trustee has 28 days to advise of any objections, otherwise, the parties can after that date seek an order from the Court in accordance with the proposed Orders above.
11.That other than as herein provided, the husband and wife each be declared the sole legal and beneficial owners of all other items of property presently in their respective possession or control including but not limited to money, shares, real property, motor vehicles, entitlements to superannuation, furniture, furnishing and personal effects.
12.That the parties shall execute all documents and do all things necessary to give effect to these Orders.
13.That in the event that either party refuses or neglects to execute any deed or instrument, the Registrar of the Court be appointed pursuant to Section 106A to execute any deed or instrument in the name of such party and to do all acts and things necessary to give validity to the operation to the deed or instrument.
On 7 September 2010, some days after the hearing, the wife’s barrister lodged a Proposed Minute of Orders on behalf of the wife. By that minute the wife no longer sought a superannuation splitting order, nor an order for spousal maintenance. In the latter regard I accept that the wife seeks spousal maintenance but has respected a ruling I made indicating that leave sought under section 44(3) to bring proceedings for that relief, would be refused. The wife seeks:
1.That the wife shall within 3 months of the date of these orders cause the discharge of the mortgage registered against the property situate at and known as [B] (the [B] property).
2. That, upon and simultaneous with the wife causing the discharge of the mortgage on the [B] property, the husband shall:-
2.1   Transfer to the wife his right title and interest in the [B] property.
2.2    Pay to the wife the sum of $9,396.00.
3.That, pending the wife’s compliance with Order 1, the wife shall indemnify and keep indemnified the husband in respect of the mortgage registered against the [B] property.
4.That the wife be declared sole and beneficial owner of:-
4.1 Bank accounts.
4.2 Furniture.
4.3 Nissan motor vehicle.
4.4 Sale proceeds of MLC Income Builder  $21,595.00
4.5 Sale proceeds of MAN Investments              $16,835.00
4.6 Sale proceeds NIB shares   $944.00
4.7 Superannuation entitlements.
5.The husband be declared sole and beneficial owner of:-
5.1 Furniture in his possession.
5.2 ANZ Bank Account.
5.3 Centro Property Fund.
5.4 Sale proceeds of items numbered 8-29 of Balance Sheet submitted by the wife.
5.5 Legal fees paid.
5.6 Superannuation entitlements.
Affidavits
The written evidence of the parties is:
Affidavit of Husband sworn 16 July 2009.
Affidavit of Husband sworn 15 September 2009.
Affidavit of Ms N sworn 15 September 2009.
Affidavit of Husband sworn 12 June 2010.
Financial Statement of Husband sworn 12 June 2010.
Affidavit of Mr K sworn 23 June 2010 (Single Expert Valuer).
Affidavit of Ms N sworn 12 August 2010.
Affidavit of Mr Y sworn 30 August 2010.
Affidavit of Husband sworn 1 September 2010.
Response to an Application in a Case of Wife filed 27 August 2010.
Affidavit of Wife sworn 17 July 2009.
Affidavit of Wife sworn 16 July 2010.
Affidavit of the wife’s mother sworn 16 July 2010.
Financial Statement of Wife sworn 30 August 2010.

Issues for determination

The following issues were identified in the Case Outline document prepared on behalf of the husband:
1.Whether there should be a number of add backs in order to determine the asset pool and most significantly whether legal fees paid by the husband from post separation earnings should be included as an add back. The husband also asserts that there should be add backs of assets sold by the wife and monies drawn down by her without his consent post separation.
2.Whether the wife has a liability of $12,000.00 to her mother, [Mrs Garapiperis Senior] and whether this should be deducted in determining the asset pool.
3.The quantum of the tax liability of the husband as a consequence of the equity awards by […], the parent company of the husband’s employer, [F Company] and the subsequent sale of the shares by the husband which he had received by way of such awards. The husband has presented evidence by an accountant, Mr [Y] that this liability is $315,142.00.
4.How the parties’ contributions should be evaluated and the extent to which the husband’s initial contribution and the benefit received by the parties as a consequence of monies advanced by his father should increase his contribution entitlement.
5.The nature and extent of the financial contributions made by the husband post separation and the extent to which these financial contributions should increase his overall contribution entitlement.
6.The assessment of relevant section 75(2) factors and the extent to which such factors should be assessed to favour the wife. In particular, the wife’s capacity for gainful employment should be assessed and also the fact that the husband now has an obligation to support his partner, [Ms N] and their child, [L].

The wife included an application for spousal maintenance in her Response and that raised the issues:
7.Whether the wife requires leave to file an application for spousal maintenance.
8.If the wife requires leave, whether the wife can show hardship.
9.If so, whether the court should exercise its discretion to grant leave.

Short History

As at the date of the hearing the husband and wife were 44 and 45 years of age, respectively. They started living together upon marriage in 1990 and separated on 1 March 2008. The parties’ divorce was granted on 9 July 2009 and became final on 10 August 2009.

Children

There are three children of the marriage:
P who was born in February 1993 and as at the date of the hearing was 17 years of age;
Jwho was born in December 1996 and as at the date of the hearing was 13 years of age; and
Cwho was born in September 1999 and as at the date of the hearing was 10 years of age.

Background Facts

From 1984 to 1987 the wife attended TAFE and obtained a Diploma.
The parties met in 1986. The husband was in his second year of a Bachelor degree. The wife was studying part-time and working full-time at a professional firm.
From 1988 to 1989 the husband was employed as a part-time Waiter.
From 1988 to 1990 the wife was employed as an Assistant earning approximately $25,000 pa.
In February 1989 the parties set up a joint account at the St George Bank into which they deposited their respective incomes.
The parties purchased the property situated at H for an amount of $135,000. Each of the parties contributed $30,000 towards the purchase of this property. The husband asserts that a further $10,000 was provided by his father. The balance of the purchase price, of approximately $65,000 or $75,000, was obtained by a loan from the St George Bank.
The husband says that his father lent the parties $65,000, interest free, to pay out the loan. The property was leased and the parties used the rental proceeds to make periodic payments to repay the husband’s father.
In December 1989 the husband commenced working part time at T Company where he earned $20,000 per annum, plus superannuation contributions.
In May 1990 the husband received a $4,000 per annum increase in his salary.
In June 1990 the husband commenced a second job as a Cleaner, earning approximately $200 per week. He worked for about four (4) months in that job.
In September 1990 the parties married and commenced to reside at the H property.
In November 1990 the husband completed a Bachelor degree.
In January 1991 the husband commenced working full time at T Company.
In February 1991 the husband commenced a Masters degree, attending lectures on two nights per week for three hours per night. He completed that degree in December 1992.
In January 1993 the husband commenced working for G Company as a supervisor. From 1993 to 2008 the wife was employed as a Book keeper. Her salary changed over this period depending on the hours she worked.
The parties’ daughter P was born in February 1993. The wife took 12 months maternity leave and returned to work in early 1994. The wife then worked at J Company earning approximately $20,000 p.a.
In March 1993 the parties paid off the loan to the husband’s father.
In June 1994 the parties sold the H property for $165,000. In October 1994 they bought the property situated at B for $248,000. This purchase was financed by utilising the net proceeds of sale of the H property and borrowing the sum of about $75,000 or $80,000 from ANZ Bank Limited.
In December 1994 the husband commenced working for D Company as a Manager.
In mid 1995 or at the end of 1996/1997 the husband’s father lent the husband $40,000 which was deposited into the mortgage loan account, thereby reducing the outstanding principal to approximately $40,000.
In 1996 the husband carried out renovations to the B property. While these renovations were carried out, the parties and P lived with the husband’s parents, rent free, for a period of two (2) months.
In July 1996 the husband commenced the Marketing Certificate III course at TAFE.
The parties’ second child, J was born in December 1996. The wife took three months maternity leave.
In March 1997 the husband commenced working for F Company.
In 1997 the husband repaid his father $20,000.00.
In June 1997 the husband completed the Marketing Certificate III course.
At the end of 1997 the wife inherited $4,000 from her father.
In April 1999 the parties borrowed $220,000 or $240,000 through an ANZ Bank line of credit facility in order to carry out renovations to the B property.
During a six week or six month period, when the renovations were being carried out, the parties resided rent free with the husband’s parents. It is not possible to resolve the dispute about the period involved.
The husband acted as an owner builder and engaged a builder to carry out the substantive works.
C was born in September 1999.
In early October 1999 the parties moved back into the B property.
In February 2000 the parties obtained an investment loan from the ANZ Bank and purchased MLC Income Builder, Perpetual Investments, ABN Amro and Centro shares in the husband’s name and an international share portfolio in the wife’s name.
In August 2000 the parties travelled to Europe for two weeks.
In August 2000 the husband was promoted to Sales Manager at F Company on a salary of approximately $65,000 per annum, plus superannuation. He was then involved in overseas travel for work purposes.
In January 2002 the husband commenced a Master of Business Administration at a Sydney University. The fees were paid by F Company.
In March 2003 the husband was promoted to Sales and Marketing Manager on a salary of approximately $84,700 per annum, plus superannuation.
In September 2003 the parties travelled to Europe. The husband worked and the wife went sightseeing.
In June 2005 the husband completed the Master of Business Administration and was promoted to Director, earning a salary of approximately $155,000 per annum, plus superannuation.
In July 2005 the husband became eligible to participate in and receive rewards under a long term incentive plan of F Corporation, a US-based corporation which is the holding company of F Company.
In September 2005 the parties travelled to Europe to celebrate their 40^th birthdays, 15 year anniversary and the husband’s MBA.
In January 2006 the parties and the children travelled to Fiji for a holiday.
In July 2006 the husband’s annual salary was increased to $164,300, plus superannuation.
In April 2007 the husband’s father gives the husband some IAG shares. He sold the shares for $3,024.00. The husband subsequently sold Resmed shares for $17,148.99 and paid this entire amount on the line of credit loan to reduce the interest being charged.
In September 2007 the husband stopped depositing his income into the joint bank account and set up a bank account in his sole name with the ANZ Bank. The husband says he had become increasingly concerned about the extent of the wife’s credit card expenditure.
In December 2007 the husband paid an amount of $5,000 to his brother, as part of the repayment of the outstanding loan to his father. The husband says that his father thereupon forgave the balance of the loan, being an amount of $15,000.
In January 2008 the parties and the children travelled to the United States.
The husband met Ms N on 20 February 2008.
On 1 March 2008 the parties separated under one roof.
In April 2008 the husband received a salary increase at F Company and was then earning $197,600 per annum, plus superannuation contributions.
On 15 or 16 May 2008 the husband moved out of the B property and moved into his parents’ home where he resided for the following three (3) months. P has largely resided with the husband since that time and he has been largely responsible for her financial support. From this time onwards, the husband reduced his hours of work. In about May 2008 Ms N commenced living with the husband.
When the husband left the B property, the outstanding mortgage stood at $15,108. Shortly thereafter the wife redrew $13,000, without the husband’s knowledge or permission, leaving a balance of $28,108.00. Thereupon the husband ceased paying the mortgage. The husband paid all interest charges in relation to the line of credit loan facility. He sold IAG shares for $7,955.05 and deposited those funds to the loan facility.
In July 2008 the husband sold a parcel of F Corporation shares. At around that time, the wife withdrew $5,000 from the investment loan account, without the husband’s knowledge or consent.
In mid August 2008 the husband commenced renting a property. On 14 August 2008 the husband entered the B home with his brother and removed furniture, including $5,000 in cash which the wife had hidden in a hall stand.
On 26 May 2009 orders were made by consent by the Family Court at Sydney in relation to parenting issues. In addition to arrangements for birthdays and other special days, the effect of those orders is:
·The parties have equal shared parental responsibility for the children;
·During each fortnight of school term:
·P is to live with the husband for 9 nights and with the wife for 5 nights;
·J and C are to live with the wife for 9 nights and with the husband for 5 nights. They spend 3 hours with the husband on alternate Thursdays;
·During school holidays the children are to live together and week about with each parent.
The parties’ divorce was granted on 9 July 2009 and became final on 10 August 2009.
On 27 August 2009 the husband sold shares he held in Westinghouse Air Brake Technologies Corporation.
On 29 October 2009 the property settlement proceedings were heard by Judicial Registrar Johnston (as he then was) and judgment was reserved.
On 12 January 2010 the husband and Ms N settled the purchase of the property situated at Q. The total cost to acquire this property was $1,074,406.50. A mortgage of $823,503 was obtained from the ANZ Bank. Ms N contributed $10,000 towards the purchase of this property. The balance of the purchase moneys came from the husband’s resources and from the sale of his investments. In particular the husband deposes that he used:
$56,566.39from the sale of MLC Income Builder Investments
$42,481.89from the sale of Perpetual Investments Fund
$25,686.25from the sale of Fortis Investments
$102,544.05from the sale of F Corporation shares
$10,000from Ms N
$13,624.92from his savings
On 29 January 2010 orders were made by Judicial Registrar Johnston by way of property settlement after a defended hearing. The orders were:
(1)That within 42 days the wife shall pay to the husband the sum of $89 077 and discharge the mortgage on the former matrimonial home known as [B property] being the property in Folio Identifier […].
(2)That upon compliance by the wife with the above order the husband shall do all things and sign all documents necessary to transfer to the wife his interest in the said home.
(3)That in the event that the wife fails to comply with order 1 above both parties shall forthwith do all things and sign all documents necessary to place the said home on the market for sale and to sell it at the best price reasonably able to be obtained.
(4)That upon the sale of the said home the proceeds of sale shall be paid as follows:
(a)     To pay agent’s commission and costs of sale including legal costs
(b)     To discharge the mortgage and
(c)     To pay 88.09 percent of the balance to the wife and the balance to the husband.
(5)That pursuant to s 79 of the Family Law Act 1975 the husband and wife are declared the sole owners respectively of all other property in their possession and / or control including superannuation entitlements.
(6)That in the event that either party refuses or neglects to sign any document required to give effect to these orders the Registrars of this Court are appointed pursuant to s 106A of the Act to sign such document in the name of such party and to do all things necessary to give validity to the operation of such document.
(7)That both parties have leave to re-list these proceedings on 7 days notice in relation to the implementation of these orders.
(8)That all exhibits are released.
(9)That the above orders not commence operation until 16 February 2010.

(10)That both parties have leave to re-list these proceedings for further submissions in relation to the form of the orders only at any time until 16 February 2010.

In March 2010 the husband received an annual bonus from his employer of $127,467.00 gross. He utilised those funds to reduce the home loan debt on the Q property and to purchase an engagement ring for Ms N for $15,000. The husband says that some of those moneys were spent on maintenance costs for the Q property, school fees and other miscellaneous living expenses.
In March 2010 L was born to the husband and Ms N.
Also in March 2010 the husband received an allocation of 1,829 F Corporation shares from the Economic Profit Bonus scheme.
In April 2010 the husband’s Child Support liability increased to $332.00 per week.
In a number of transactions in April 2010 the husband sold his Australian shares for $52,632.49 and deposited the proceeds of sale to his mortgage loan account.
On 28 April 2010 orders were made by consent setting out a process whereby the values of the B and Q properties could be agreed or established by experts.
On 31 July 2010 the husband sold F Corporation shares for $162,962 and deposited the proceeds into his mortgage loan account. As at September 2010 the Q property loan stood at $630,732.

Credit and Submissions

The evidence of the witnesses

The only witnesses called for cross-examination were the parties and the husband’s partner, Ms N. There are relevant factual disputes and therefore credit findings are appropriate.
The husband gave his evidence directly and appeared to have a good memory. He contradicted himself on occasions but not as to matters of great moment. On the first day of the hearing he said in cross-examination that his partner had accompanied him on only one overseas trip since September 2009, a trip that included China. On day two he agreed that she had also accompanied him on a trip that included Egypt. He initially agreed that a police officer had told him about his former wife withdrawing $5,000 in cash and hiding it at the B property and then immediately said that the police officer had not told him those things. He made concessions against his interest, such as agreeing that his representation to the wife after separation that he could not afford to meet all of the repayments on the joint line of credit, was false. He readily and repeatedly conceded that his lifestyle expenditure increased after separation. He was taken to expenditure on accommodation, restaurants and wine since separation and conceded that his expenditure was at a rate greater than those types of expenditure during the marriage. The husband conceded that the major parenting and homemaker contributions were made by his former wife. Unfortunately he repudiated his evidence about his living expenses in the form of Part N to a Financial Statement which he annexed to his affidavit of September 2010. It is his evidence that the estimates were made without reference to various categories of expenditure on travel, accommodation, food and household supplies and gifts. In addition, he offered the remarkable testimony that he had referred to his former wife’s Financial Statement in deciding what evidence he should give about his own expenditure. I take it that he did not diligently approach that task of financial disclosure.
In re-examination the husband was asked about his capacity to take up share options from his employer and his (non responsive) reply was to the effect that he had decided to focus on reducing his debts. In those circumstances, I take it that the husband did have capacity to take up the share options.
The credit of Ms N was not challenged during her cross-examination.
As with the husband, the wife was not an ideal witness. She was obliged to concede in cross-examination that her evidence, to the effect that she was in difficult financial circumstances immediately following separation, was wrong. On the other hand the wife readily conceded that at a time during the marriage when she says the husband criticised her level of expenditure, her level of expenditure did increase. She was not asked “by how much” or for any reason for such an increase and so the concession has little effect. Nevertheless, it was readily given.
The wife got into trouble trying to explain how she was able to make ends meet since separation, given her reported income and expenditure. Her evidence did not make sense. In claiming a contribution made after separation towards the preparation of the B property for sale, the wife included an amount for her own labour at $200 per day. But for cross-examination that representation would have lead the Court to believe that she paid someone else to do that work. The wife was thereafter able to concede that some claims she made in relation to expenses, such as painting at $3,500, were excessive and should not be allowed. Although not much turns on it, the wife’s explanation was not convincing in respect of inconsistencies between her evidence and that of her mother, as to whether her mother or her brother were the source of funds advanced to her.
Although not to her credit in a general sense, the wife readily conceded that she destroyed reference and text books belonging to the husband and that they had a value of about $4,000. It was her evidence that she was hurt and angry at the time.
Neither of the parties was a good witness. That is not to say that they set out to mislead the court. They each display bitterness in respect of the other party and in my view, their evidence has been affected by that. They are not entirely reliable. In those circumstances, disputed issues of fact cannot be determined by reference to the uncorroborated testimony of either party but fall to be determined issue by issue.
Mrs Garapiperis Senior is the wife’s mother. She gave her evidence through an interpreter and I accept that process is inefficient. The wife’s case about the way money was advanced from her mother/brother is confusing and that was not assisted greatly by the cross-examination of her mother. That said, I detected no artifice about the evidence of the wife’s mother, nor an intention to deliberately mislead the Court. I accept the gravamen of her evidence.

Submissions

The written submissions on behalf of the wife are:
ASSET POOL

ASSETS
Ownership		Description	Wife’s Value	Husband’s Value
1	Joint	[B property]	1,000,000.00	1,000,000.00
2	Husband	Furniture	30,000.00	15,000.00
3	Husband	ANZ Bank Account	1,315.00	2,112.00
4	Husband	Centro Listed Property Fund	3,120.00	3120.00
5	Wife	Bank Accounts (Wife’s)	6,510.22
6	Wife	Furniture	15,000.00
7	Wife	Nissan Pulsar Motor Vehicle	10,000.00
Total			$1,065,945.22	$1,065,945.00

ADDBACKS
Ownership		Description	Wife’s Value	Husband’s Value
8	Husband	Tax refund for year ended 30 June 2008	10,089.78
9	Husband	Tax refund for year ended 30 Jun 2009	11,352.66
10	Husband	Bonus paid in 2008 for work performed 2007 (26,129 Less 46.5% tax)	12,150.00
11	Husband	Bonus paid in 2009 for work performed 2008 (121,487 Less 46.5% tax)	56,492.00
12	Husband	Bonus paid in 2010 for work performed 2009 (127,467 Less 46.5% tax)	59,272
13	Husband	Sale of IAG shares (2009)	7,950.00
14	Husband	Sale of Resmed shares (2009)	17,149.00
15	Husband	Sale of [F Corporation] shares (August 2009)	404,697
16	Husband	Sale of [F Corporation] shares (July 2010)	162,961.52
17	Husband	Sale of APG shares (not known when sold)	458
18	Husband	Sale of VPG (not known when sold)	1,003
19	Husband	Sale of OZL (not known when sold	14,616
20	Husband	Sale of AWE	5,727.00
21	Husband	Sale of KZL (not known when sold)	2,550.00
22	Husband	Sale of MCR (not known when sold)	7,619.00
23	Husband	Sale of PAN (not known when sold)	10,167.00
24	Husband	Sale of BPT (not known when sold)	6,890.00
25	Husband	Sale of IMD (not known when sold)	1,992.00
26	Husband	Sale of JML (not known when sold)	1,607.00
27	Husband	Sale of MLC Income Builder (December 2009)	56,556.00
28	Husband	Sale of Perpetual Investments (December 2009)	42,481.00
29	Husband	Sale of Fortis (December 2009)	25,686.00
30	Husband	Legal fees paid	77,291
31	Wife	Sale of MLC Income Builder	21,595.31
32	Wife	Sale of MAN Investments	16,835.00
33	Wife	Sale of NIB Shares	944.00
Total			$958,839	$77,291

LIABILITIES
Ownership		Description	Wife’s Value	Husband’s Value
34	Joint	Mortgage Home Loan ([B] property)	26,453.00	26,453.00
35	Husband	Credit cards	7,186.00
36	Husband	Taxation liability for [F Corporation] shares	315,142.00	315,142.00
37	Wife	Credit cards	6,096.00	6,096.00
38	Wife	Monies owing to [wife’s mother]	12,000.00
Total			$359,691.00	$354,877.00

LIABILITIES (ADD BACKS)
Ownership		Description	Wife’s Value	Husband’s Value
39	Discharge of line of credit	300,000.00
Total			$300,000.00

1.The major controversy with the asset pool so far as the wife is concerned is the assessment of the husband’s taxation liability of $315,142.00 from the sale of the [F Corporation] shares.
2.On or about 22 August 2010 the husband’s solicitors served upon the wife’s solicitors a report prepared by Ernst & Young Accountants calculating the estimate of the husband’s taxation liability in respect of the sale of [F Corporation] shares which has occurred post separation.
3.The wife has not had the opportunity of having an expert inspect the report which is presently occurring.
4.The wife has taken the view that for the matter to proceed she too should obtain an adversarial expert to check the assessment made by Ernst & Young and whether the husband could have defrayed the tax liability by not selling the shares when he did.
5.In evidence before Judicial Registrar Johnston the husband conceded that at the time that he sold the first parcel of [F Corporation] shares the purpose was to crystallise the liability, so that both the parties shared the tax liability.
6.Bearing in mind the husband’s substantial income it is not unreasonable for the wife to require that the share sales be added back into the pool as clearly it is a dissipation of an asset which the husband did not require to dissipate because of his substantial income.
CONTRIBUTIONS
7.The wife submits that as at the date of hearing the parties’ contribution to the asset pool was equal. The husband asserts that his contributions are greater than that of the wife’s apparently because of his substantial income and that further the husband has continued to earn a substantial income post separation to which the wife has made little or not contribution to.
8.It is clear that the parties’ initial contributions were equal. The husband continued studying post the marriage in the context of the wife also continuing to work and being the parent more available to the children and being the principal homemaker.
9.During the whole course of the marriage the wife was in employment working two days per week. The wife only had three months off following the birth of the children. The reality of this household was that the wife was the major carer of the children due to the husband’s study commitments, hours of employment and necessity to regularly travel away from the home.
10.There is nothing to indicate with respect to the husband that would take this matter outside anything other than an equal contribution.
SECTION 75(2) ADJUSTMENT
11.The most compelling concept of the adjustment case is the husband’s income. During the 2009 year the husband sold the [F Corporation] shares that he had for $420,000.00. It seems likely that he received $202,000.00 worth of shares in 2008 and 2009 which he sold during the 2009 year [totalling $404,000.00]. On this basis his income during the 2009 year would have been as follows:-
11.1.          Base income     $210,000.00
11.2.          Bonus                 121,000.00
11.3.          Shares                202,000.00
$533,000.00

12.Accordingly an estimate of his income after tax is $277,160.00 or $5,300.00 per week.
13.The wife works part-time and has the care of the two younger children nine nights per fortnight and one half of school holidays and the elder child five nights per fortnight and one half of school holidays.
14.The wife will never earn anywhere near the vicinity of the income earning capacity of the husband.
15.The husband has the benefit of a generous incentive scheme which provides shareholding of substantial value. There is no indicator that such incentive scheme will not continue and not withstanding the husband’s indications in the past due to the global financial crisis he has still obtained shareholding from the incentive scheme.
16.The husband will because of his substantial income be able to save substantial monies by way of superannuation and has already salary sacrificed to boost superannuation entitlements. The wife has no such capacity.
17.The husband has since separation enjoyed a lifestyle or standard of living of a higher level than that enjoyed by the wife. The wife submits pursuant to Section 75(2)(o) that the husband’s expenditure during the period post separation should also be taken into account under Section 75(2).
18.The wife submits that the adjustment in her favour should be 15 per centum.
SPOUSAL MAINTENANCE
19.The wife has filed an Amended Response seeking an order for spousal maintenance in the sum of $350.00 per week until the youngest child attains the age of 18 years. The husband has the capacity to meet a spousal maintenance order as a substantial part of his income is expended on lifestyle matters.
20.The husband’s child support is “capped” and as such the standard of living that the wife might enjoy by virtue of child support being greater because of the husband’s greater income is not available.
21.The husband will have the benefit of shares and the income from shares and monies from the sale of shares in the future which obviously the wife also would not have the benefit of.
22.The wife is entitled to a reasonable standard of living commensurate with the standard of living enjoyed by the parties or capable of being enjoyed by the parties by virtue of the income received by the husband in the later years of the marriage and post separation.
23.In the event the husband is receiving $5,300.00 per week after tax although there might be some criticism of the husband expending $3,000.00 per week on his living expenses that still leaves excess over expenditure of $2,000.00.

The written submissions on behalf of the husband are:
ASSET POOL

ASSETS
Ownership		Description	Wife’s Value	Husband’s Value
1	Joint	[B property]	1,000,000	1,000,000
2	Husband	Furniture	15,000	15,000
3	Wife	Furniture	15,000	15,000
4	Husband	[Q property]	1,000,000	1,000,000
5	Husband	Husband’s investment in Centro Listed Property Fund	3,120	3120
6	Husband	ANZ Bank Account	2,112	2,112
7	Husband	Motor Vehicle VW Touareg	---	---
8	Wife	Bank Accounts	8,183	8,183
9	Wife	MLC Masterkey Unit Trust	---	---
10	Wife	Shares in NIB Health Insurance	---	---
11	Wife	Shares in OMIP	---	---
12	Wife	Motor Vehicle Nissan Pulsar	10,000	10,000
Total			$2,053,415	$2,053,415

ADDBACKS
Ownership		Description	Wife’s Value	Husband’s Value
13	Husband	Sale of IAG shares (2009)	7,950.00	NIL
14	Husband	Sale of Resmed shares (2009)	17,149.00	NIL
15	Husband	Legal fees paid	46,555.40	NIL
16	Wife	Legal fees paid	8,048.80	NIL
17	Wife	Redraw from home loan	NIL	13,000.00
18	Wife	Redraw from investment loan account	NIL	5,000.00
19	Wife	Jewellery sold by wife without consent	1,700.00	1,700.00
20	Wife	Furniture sold by wife without consent	NIL	3,500.00
21	Wife	Reference and text books destroyed by wife	NIL	4,000.00
22	Wife	Sale of Australian shareholdings	39,374.00	39,374.00
Total			$120,777.00	$66,574.00

LIABILITIES
Ownership		Description	Wife’s Value	Husband’s Value
23	Joint	Mortgage Home Loan	26,440.00	26,440.00
24	Husband	Mortgage Loan on [Q property]	630,732.00	630,732.00
25	Husband	Credit Cards	775.00	775.00
26	Husband	Holden Leasing	---	---
27	Husband	Taxation liability for [F Corporation] shares	Not agreed	315,142
28	Wife	Credit cards	6,807.00	6,807.00
29	Wife	Monies owing to [wife’s mother]	12,000.00	NIL
30	Husband	Tax liability for interest earned	NIL	166
Total			$676,754.00	$980,062.00

CONTRIBUTION ENTITLEMENT:
1.The husband made an initial contribution of the assets, which he owned at the commencement of cohabitation.
2.The husband was in employment throughout cohabitation and earned a significant income, which he used for the benefit of the family in the payment of outgoings and household expenses and in the acquisition, conservation and improvement of the property of the parties.
3.The husband’s father assisted the parties to pay off the mortgages in respect of the [H] and [B] properties by providing interest free loans of $65,000.00 and $40,000.00 respectively. The husband’s father forgave an amount of $15,000.00 of the latter loan.
4.The husband through his physical endeavours was engaged in carrying out significant renovations to the [B] property.
5.The parties lived rent free with the husband’s parents for two (2) separate periods, being two (2) months and six (6) months.
6.The husband’s father gave the husband […] IAG shares which he sold for $3,024.00 and contributed for the benefit of the parties.
7The husband after separation, in September 2009, sold [F Corporation] shares for $404,697.23. The total number of [F Corporation] shares sold was 8,998, of which 4,748 were issued to the husband pre-separation and 4,250 shares were issued to the husband post-separation. The husband transferred $300,969.92 to the investment loan and discharged that liability.
8.The husband since the time of separation has reduced the parties’ mortgage and line of credit by making payments from the sale of shares and provided monies for the benefit of the wife, including paying child support. In addition, he has paid school fees and incidental educational expenses for the children.
9.The husband made a contribution to the welfare of the family in his role as a parent and homemaker.
10.Since the time of separation, the husband has received a bonus of $127,467.00 from his employer which he utilised to reduce the home loan debt in relation to the [Q] property. The husband also received an allocation of 1,829 [F Corporation] shares from his economic bonus scheme. The husband sold these shares and also contributed the proceeds of sale of $162,962.00 into the mortgage loan account.
11.The husband’s superannuation entitlement has also increased significantly since the time of separation. The husband as a consequence of salary sacrifices has made a contribution of $36,000.00 and his employer has made contributions of $32,728.00 for the same period. Accordingly the total increase in the husband’s superannuation entitlement is $68,728.00.

I. RELEVANT SECTION 75(2) FACTORS:
1. The husband is aged 44 years.
2. The wife is aged 45 years.
3.Cohabitation was for a period of some seventeen and a half (17½) years.
4.The parties are in good health.
5.The husband has the capacity for gainful employment and earns a significant income.
6.The husband has had the primary responsibility for the care of the child, [P] and the wife has had the primary responsibility of the two younger children of the marriage, [J] and [C]. This shall continue for a further seven (7) years in the case of the youngest child. The husband asserts that the children over the course of the year would spend some 46% of their time in his care.
7.The wife has the capacity for gainful employment and has an income earning capacity of at least $70,000.00 and the support of her mother to take care of the children.
8.The husband has the responsibility to support his partner, [Ms N] and the child of their relationship, [L].
9.The wife has without the husband’s knowledge and consent, drawn down on the mortgage loan and the line of credit since the time of separation and the used the monies for her own purposes.
J.THE EFFECT OF THE ORDERS FOR PROPERTY SETTLEMENT SOUGHT BY HUSBAND:
1.The husband contends that having regard to his contributions and in particular his contributions since the time of separation, that contribution should favour him as to 55% to 60%.
2.The husband contends that having regard to Section 75(2) factors there should be an adjustment in favour of the wife of 5% to 10%.
3.Accordingly, the husband contends that a just and equitable result would be for essentially there to be an approximate equal division of the net asset pool available for distribution between the parties.
K.ISSUES IN DISPUTE BETWEEN THE PARTIES RE PROPERTY SETTLEMENT:
7.Whether there should be a number of add backs in order to determine the asset pool and most significantly whether legal fees paid by the husband from post separation earnings should be included as an add back. The husband also asserts that there should be add backs of assets sold by the wife and monies drawn down by her without his consent post separation.
8.Whether the wife has a liability of $12,000.00 to her mother, [Mrs Garapiperis Senior] and whether this should be deducted in determining the asset pool.
9.The quantum of the tax liability of the husband as a consequence of the equity awards by [F Corporation], the parent company of the husband’s employer, [F Company] and the subsequent sale of the shares by the husband which he had received by way of such awards. The husband has presented evidence by an accountant, Mr [Y] that this liability is $315,142.00.
10.How the parties’ contributions should be evaluated and the extent to which the husband’s initial contribution and the benefit received by the parties as a consequence of monies advanced by his father should increase his contribution entitlement.
11.The nature and extent of the financial contributions made by the husband post separation and the extent to which these financial contributions should increase his overall contribution entitlement.
12.The assessment of relevant section 75(2) factors and the extent to which such factors should be assessed to favour the wife. In particular, the wife’s capacity for gainful employment should be assessed and also the fact that the husband now has an obligation to support his partner, [Ms N] and their child, [L].

The approach in proceedings for a review of a decision of a Judicial Registrar

The effect of section 26C and rule 18.10 of the Family Law Rules 2004 is that a review of a decision of a judicial registrar must proceed by way of fresh hearing.
In particular subrule 18.10(2) provides:
(2) The court may receive as evidence:
(a) any affidavit or exhibit tendered in the first hearing;
(b) any further affidavit or exhibit;
(c) the transcript (if any) of the first hearing; or
(d) if a transcript is not available, an affidavit about the evidence that was adduced at the first hearing, sworn by a person who was present at the first hearing.
Thus the hearing is conducted on the basis of the evidence as at the date of the review hearing.

The approach in proceedings under section 79

The case law reveals that there is a permissible approach to the determination of an application brought pursuant to the provisions of s 79. That approach involves four inter-related steps. First, I am to make findings as to the identity and value of the property, liabilities and financial resources of the parties at the date of the hearing. Second, I should identify and assess the contributions of the parties within the meaning of s 79(4)(a), (b) and (c) and determine the contribution based entitlements of the parties expressed as a percentage of the net value of the property of the parties. Third, I should identify and assess the relevant matters referred to in s 79(4)(d), (e), (f) and (g), (the other factors) including, because of s 79(4)(e), the matters referred to in s 75(2) so far as they are relevant and determine the adjustment (if any) that should be made to the contribution based entitlements of the parties established at step two. Fourth, I should consider the effect of those findings and determination and resolve what order is just and equitable in all the circumstances of the case.[1]

[1] This summary of the effect of the authorities is paraphrased from the comments of the Full Court in In the Marriage of Hickey (2003) 30 Fam LR 355 at 370.

The property of the parties at the date of the hearing

The Court is required to make findings as to the property of the parties and the value of that property.

General approach to the Pool

The parties were not able to agree on the net pool of assets.
The parties have proposed fundamentally different approaches to establishing the relevant pool.
It is the wife’s argument that:
·since separation and without consulting her, the husband has applied matrimonial assets in a way that reduced their value and (unnecessarily) crystallised contingent liabilities;
·she is not satisfied that the reduction in the matrimonial pool was necessary;
·at all relevant times the husband enjoyed a substantial salary and benefits and had no need to rely on matrimonial capital;
·for those reasons it is argued on her behalf that the pool should be calculated on the basis of the assets as they existed at separation, that the husband should be deemed to still have the bonuses, income tax refunds and proceeds of share sales received by him since separation; and
·in an effort to avoid double counting, the purchase of the Q property should be ignored, nothing should be added back for paid legal fees and the husband should be credited with the discharge of a line of credit.
It is the contention on behalf of the wife that the net assets have a value of $1,644,621 calculated as follows:
Assets$1,066,750
Add backs$1,036,130
Superannuation $208,618
Sub total$2,311,498
Liabilities$366,877
Add backs$300,000
Sub total$666,877
Net assets $1,644,621
For the husband it is argued that the assets and liabilities should be largely assessed as they stand as at the date of the hearing. Surprisingly, he also argues for the value of assets disposed of by the wife to be included as notional assets, but not the value of all of the assets disposed of by him. In particular it is the husband’s case that the sale of IAG and Resmed shared should not be added back into the asset pool, as the net proceeds of the sale were utilised by him to reduce the joint debt of the parties on the investment loan account.
The husband puts the net pool at $1,348,545, calculated as follows:
Assets$2,053,415
Add backs$66,574
Superannuation $208,618
Sub total$2,328,607
Liabilities$980,062
Net assets $1,348,545
The two approaches create a very substantial difference in the pools contended for by the parties. The difference is exaggerated by the percentage divisions proposed by each of the parties. The husband argues that the resultant pool be divided evenly. The wife seeks 65 per cent of the pool identified by her. The wife’s approach would leave her with a net $1,069,003 from her pool and the husband’s approach would leave her with a net $608,238 from the pool he proposes.
The approach advanced on behalf of the wife is not without precedent. There have been circumstances in other cases whereby assets were included in the list for division although they no longer existed. Similarly, debts that exist at the date of the hearing have been excluded from the relevant list of liabilities, debts. In In the Marriage of Omacini (2005) 33 Fam LR 134 the Full Court noted:
[30]     To date, three clear categories of cases have emerged where the court has determined that it is appropriate to notionally add back to the pool of assets, that is, assets that no longer exist. They are:
(a)      Where the parties have expended money on legal fees. In In the Marriage of DJM and JLM (1998) 23 Fam LR 396; (1998) FLC 92-816; [1998] FamCA 97 the Full Court said at [11.6]:
[11.6] For reasons set out in Farnell, s 117 provides that each party to proceedings under the Family Law Act shall bear their own costs unless the Court otherwise orders. Failing to add back monies expended by parties on costs frequently has the effect of defeating the policy of s 117 by permitting the pool of available assets for distribution between the parties to be diminished by any monies that either of the parties have managed to spend on their costs up to the date of trial. We are of the view that the normal approach ought be to add costs already paid back into the pool. Whilst there may be cases where that approach is inappropriate, the reasons why it is not taken ought normally be spelt out.
(b)      Where there has been a premature distribution of matrimonial assets. In In the Marriage of Townsend (1994) 18 Fam LR 505; (1995) FLC 92-569 Nicholson CJ as he then was with whom Fogarty and Jordan JJ agreed, said at Fam LR 509; FLC 81,654:
In my view, what occurred in this case, as I said during the course of argument was, in fact, a premature distribution of a proportion of the matrimonial assets. What the husband did was to distribute to himself an asset in which the wife had a legitimate interest. In such circumstances I consider that it would be unjust in the extreme to simply treat such conduct by the husband as a matter to which regard should be had under section 75(2). It seems to me that the husband has had the benefit of that money. Had he retained, for example, the taxi licence instead of selling it, that would have been brought into account as an item of property which would have been dealt with in the same way as the remaining items of property in this case. Accordingly, I am of the view that the correct way in which to deal with the husband’s receipt of those moneys is to bring them into the pool of assets on a notional basis and make a distribution accordingly.
(c) In the circumstances outlined by Baker J in In the Marriage of Kowaliw (1981) 7 Fam LN N13; (1981) FLC 91-092 at FLC 76,644:
As a statement of general principle. I am firmly of the view that financial losses incurred by parties or either of them in the course of a marriage whether such losses result from a joint or several liability, should be shared by them (although not necessarily equally) except in the following circumstances:
(a)      where one of the parties has embarked upon a course of conduct designed to reduce or minimise the effective value or worth of matrimonial assets, or
(b)      where one of the parties has acted recklessly, negligently or wantonly with matrimonial assets, the overall effect of which has reduced or minimised their value.
Conduct of the kind referred to in para (a) and (b) above having economic consequences is clearly in my view relevant under s 75(2)(o) to applications for settlement of property instituted under the provisions of s 79.

It is not the role of the non-contribution elements of paragraph s 79(4) to equalise or balance the parties’ financial circumstances. For example, it has been said in relation to s 79(4)(e) that the provision does not invite a process of social engineering;[18] and in Mallett, above, at Fam LR 472, Wilson J said that:
“The objective of the section is not to equalise the financial strengths of the parties. It is to empower the court, following a dissolution of a marriage, to effect a redistribution of the property of the parties if it be just and equitable to do so…”
[18] In the Marriage of Clauson (1995) 18 Fam LR 693 at 711; [1995] FLC 92-595 at 81,912.
There is no risk of social engineering here. Nothing I could do in the context of the available pool would equalise the financial strengths of the parties. In the current circumstances the wife will struggle to retain the B property. She cannot aspire to a self funded retirement. Even if the husband earns no more than the taxable income of $303,000 he declared for the 2009 tax year and even if the wife worked full time and earned $70,000 per annum, the disparity in the parties earning and earning capacities will make short work of any adjustment I could conceivably make.
An adjustment of 20 per cent is proper in this case.

Just and Equitable

Based on their contributions and the other matters in s 79(4), the appropriate division of property is 70 per cent to the wife and 30 per cent to the husband. I must consider whether it would be just and equitable within the context of s 79 if the net assets of the parties were divided in those proportions.
Neither of the parties seeks a splitting order in relation to the husband’s superannuation. Given that superannuation interests have different characteristics to non-superannuation assets, it is often unfair to require one party to retain a disproportionate amount of the superannuation interests and the other to retain a disproportionate amount of the non-superannuation assets. The different characteristics are both positive and negative. For example, there are restrictions on accessing superannuation interests. On the other hand, superannuation interests receive favourable income tax treatment. Here the superannuation interests are not a significant proportion of the pool. On that basis I will adopt the approach favoured by the parties.
The net assets have a value of $1,390,420.33 ($2,382,482.33 - $992,062). If the net pool of assets, including superannuation, was divided in the proportions 70 per cent to the wife and 30 per cent to the husband they would receive about $973,294 and $417,126, respectively. The wife has or will have the benefit of :

Wife’s assets and liabilities

Value

Wife’s Furniture

$15,000

Wife’s Bank Accounts

$8,183

Wife’s Motor Vehicle Nissan Pulsar

$10,000

Add-back for husband’s text books destroyed – Wife

$4,000

Add-back for the wife’s paid legal fees – Wife

$39,157.18

MLC Masterkey Superannuation – Wife

$33,272

Wife’s Credit cards

-$6,807

Wife’s debt to her mother

-$12,000

Total

$90,805.18

In order to bring her to 70 per cent overall, the wife should receive about $882,489 ($973,294 - $90,805) from the remaining asset – the net value of the B property.
That will leave the husband with:

Husband’s Assets and Liabilities

Value

Q property – Husband’s

$1,000,000

Husband’s investment in Centro Listed Property Fund

$3,120

Husband’s ANZ Bank Account

$2,112

Husband’s Furniture

$15,000

Add-back for the husband’s paid legal fees – Husband

$77,292.15

AMP Superannuation Fund - Husband

$175,346

Mortgage Loan on Q property

-$630,732

Husband’s Credit Cards

-$775

Husband’s Taxation liability for F Corporation shares

-$315,142

Husband’s Tax liability for interest earned

-$166

Total

$326,055.15

In order to bring him to 30 per cent overall, the husband should receive about $91,071 ($417,126 - $326,055.15) from the remaining asset – the net value of the B property.
The B property has the following agreed value:

Bexley

Amount

B property – joint

$1,000,000

B property Mortgage Loan

-$26,440

$973,560.00

The wife seeks to retain the property. To do so she would need to pay the husband $91,071. If she cannot then the property will be sold and in order that the parties share in any loss or profit arising from any difference between the eventual net sale proceedings and the agreed net value the net proceeds will be divided in the proportions 882,489 : 91,071 which I will round out to 90.6 per cent to the wife and 9.4 per cent to the husband.

Conclusion under Section 79

The parties’ marriage involved cohabitation spanning 17 years and contributions over about 20 years. They each made valuable contributions and their contributions should be recognised as equal. It is agreed that there should be an adjustment in the wife’s favour. Such is the impact of the non-contribution factors I am to consider because of paragraphs (e) to (g) inclusive of section 79(4), that a considerable adjustment is required. The orders I propose are just and equitable. On the basis of the form of orders sought on behalf of the wife it is not clear that the proposed orders have been served on the trustee of the AMP Superannuation Fund. I will give the parties leave to relist the matter in relation to the drafting of the orders and any other machinery issues within 14 days.

The approach in proceedings for spousal maintenance

About a week before the hearing of the review, the wife first raised the issue of spousal maintenance as part of final orders. By her Response to an Application in a Case filed 27 August 2010 the wife sought:
1.The husband to pay $500 per week spousal maintenance to the wife up until the youngest child turns 18 years of age, being […] September 2017.
Subsections 44(3) and 44(4) of the Family Law Act provide:
(3) Where, whether before or after the commencement of section 21 of the Family Law Amendment Act 1983 :
(a) a divorce order has taken effect; or
(b) a decree of nullity of marriage has been made;
proceedings of a kind referred to in paragraph (c), (caa), (ca) or (cb) of the definition of matrimonial cause in subsection 4(1) (not being proceedings under section 78 or 79A or proceedings seeking the discharge, suspension, revival or variation of an order previously made in proceedings with respect to the maintenance of a party) shall not be instituted, except by leave of the court in which the proceedings are to be instituted or with the consent of both of the parties to the marriage, after the expiration of 12 months after:
(c) in a case referred to in paragraph (a)--the date on which the divorce order took effect; or
(d) in a case referred to in paragraph (b)--the date of the making of the decree.
The court may grant such leave at any time, even if the proceedings have already been instituted.
….
(4) The court shall not grant leave under subsection (3) or (3A) unless it is satisfied:
(a) that hardship would be caused to a party to the relevant marriage or a child if leave were not granted; or
(b) in the case of proceedings in relation to the maintenance of a party to a marriage--that, at the end of the period within which the proceedings could have been instituted without the leave of the court, the circumstances of the applicant were such that the applicant would have been unable to support himself or herself without an income tested pension, allowance or benefit.
Here, the parties’ divorce became effective on 10 August 2009. The wife’s application for spousal maintenance was filed on 27 August 2010. The submission on behalf of the wife is in the alternative - that leave is not required as there was a prayer for interim maintenance in the wife’s Response to an Application for Final Orders filed 30 December 2008 or that leave should be granted on an oral application made now. The period by which the wife was out of time was less than 3 weeks.
I refused the wife’s application for leave and told the parties that I would provide reasons for doing so when giving reasons in the property matter. What follows is those reasons.
As to whether leave is required - the order sought in 2008 was:
1.That the husband pay spousal maintenance for the wife on an interim basis of $250.00 per week commencing from 24 December 2008.
No application was made for final orders in relation to spousal maintenance in the context of the final hearing on 29 and 30 October 2009. By the conclusion of the financial proceedings - on the delivery of judgment on 29 January 2010, any interim application was effectively dismissed. Therefore as at 29 January 2010 there was no application on foot in respect of spousal maintenance. In those circumstances, in my view, the wife requires leave to bring proceedings for spousal maintenance.
As it relates to these proceedings, the effect of s 44(3) of the Act is that neither of the parties can institute proceedings for spousal maintenance except by the leave of the Court or with the consent of both parties. The section goes on to say that the Court may grant leave at any time, even if proceedings have been instituted.
The next subsection, s44(4) says:
“The Court shall not grant leave unless it is satisfied that hardship would be caused to a party to the relevant marriage or a child if leave were not granted."
In In the Marriage of Whitford (1979) 4 FLR 754 the issue of hardship was discussed. Hardship means not being able to make an arguable case. Generally, the claim must be more than a trifling one. It should not be such that the costs of pursuing the claim would be as much or more than the claim itself. If the Court finds that there is no hardship then the application will be dismissed. If the Court finds hardship then there are discretionary matters to be considered which include any prejudice to the other party if leave is granted, the prejudice to the applicant if leave is not, the strength of the applicant's case, the extent of delay and whether there is an adequate explanation for delay. Again from In the Marriage of Whitford. Those matters will influence the exercise of discretion enlivened in the event that hardship exists.
A finding one way or the other on any of those discretionary matters is neither necessary nor sufficient for the granting of leave. For example: leave may be granted notwithstanding the absence of an adequate explanation for delay. That is discussed in a case of In the Marriage of Althaus (1979) 8 Fam LR 169; (1982) FLC 91-233 and In the Marriage of Carlon (1982) 8 Fam LR 729; [1982] FLC 91-272.
Power to grant leave should be exercised liberally (see Whitford) but not so as to render nugatory, the requirement for leave. An application for leave simpliciter is often conducted on the papers and indeed that is what happened here. That is normally appropriate because an applicant for leave is not required to make the substantive case, for the purposes of seeking leave. He or she is only required to identify the case that is sought to be made. For that reason there is no need for consideration of the case of the respondent and no need for the testing of the applicant's evidence. There may be cross-examination in relation to whether there is a prima facie case identified or in relation to the matters going to the exercise of discretion (see In the Marriage of Neocleous (1993) 16 Fam LR 557; (1993) FLC 92-377). Before me, neither of the parties sought to cross-examine the other on this issue.
These proceedings are somewhat different because the application for leave was made on the first day of the hearing at which the spousal maintenance was to be determined. Therefore the wife was obliged to have her evidence in chief already filed, there would be no other opportunity.
In In the Marriage of Whitford there was a discussion about the value of the potential claim. The Full Court said that, depending on the circumstances of the case, hardship may be caused by the loss or deprivation of something which is of comparatively small money value. The Court speculated that the inability to pursue a claim for a thousand dollars or less in a property case or for a few dollars a week in maintenance may be enough to establish hardship in some cases.
Here, the leave and maintenance issues could be rolled up together with property settlement proceedings and it is not suggested there would be additional legal costs associated with the proceedings.
In determining the question of hardship, my task is to assess on a prima facie basis the wife's claim for spousal maintenance. The wife’s maintenance claim was not before Judicial Registrar Johnston and was made very late in the piece. The relevant order was sought in the wife’s Response to an Application in a Case on 27 August 2010 (3 working days prior to this hearing). I assume that was the reason the issue was not addressed in the Case Outline document filed on behalf of the husband.

The approach to spousal maintenance

Spouse maintenance is a remedy available between parties to a marriage, whether the marriage is on foot or not. Section 72 of the Family Law Act 1975 (Cth) says as follows:
(1)A party to a marriage is liable to maintain the other party, to the extent that the first‑mentioned party is reasonably able to do so, if, and only if, that other party is unable to support herself or himself adequately whether:
(a)by reason of having the care and control of a child of the marriage who has not attained the age of 18 years;
(b)by reason of age or physical or mental incapacity for appropriate gainful employment; or
(c) for any other adequate reason;
having regard to any relevant matter referred to in subsection 75(2).
(2)The liability under subsection (1) of a bankrupt party to a marriage to maintain the other party may be satisfied, in whole or in part, by way of the transfer of vested bankruptcy property in relation to the bankrupt party if the court makes an order under this Part for the transfer.
The first matter to be determined is whether the wife is unable to support herself adequately, by reference to the matters referred to in Section 75(2) which are set out above.
If the Court determines that the wife is unable to adequately maintain herself, having regard to those matters, then the husband has an obligation to maintain her to the extent that he is reasonably able to do so.

The wife’s capacity to adequately maintain herself

In considering whether a party is unable to support themselves, the Court is required to consider the income, earning capacity and financial resources of that party, and their reasonable expenses, having regard to the matters in section 75(2). I refer to the findings in relation to section 75(2) set out earlier in these reasons, and in particular – paragraphs (a), (b), (c), (g), (h), (j), (k) and (l). I will not repeat the findings made above save to note that:
·Section 75(3) says:
In exercising its jurisdiction under section 74, a court shall disregard any entitlement of the party whose maintenance is under consideration to an income tested pension, allowance or benefit.
·The combined effect of section 4 of the Family Law Act 1975, regulation 12A of the Family Law Regulations 1984 and section 23 of the Social Security Act 1991, is that the Parenting Allowance payments received by the wife fall within the definition of “income tested pension, allowance or benefit” and must be ignored by me insofar as the wife’s income is concerned;
·The child support payments both voluntary and pursuant to the current assessment are not income for the wife’s support;
·I have found above that the wife has unexercised earning capacity. As to the extent of that capacity, for a period in 2008, the wife earned at the rate of about $70,000 per year. The wife has the primary care of the younger girls. Their need for close supervision is likely to diminish with the passage of time.
·Pursuant to the orders I will make, the wife will receive a property settlement in the form of a substantial equity in the B property or a payment of the order of $880,000. No part of that sum is earmarked for the wife’s support. It is likely that she will apply that sum to her need for secure accommodation and to other expenses, including any outstanding legal fees.
Because of the way the wife ran her case, her arguments needed to be fully developed in respect of her maintenance claim. She has not fully addressed all of the issues in respect of her capacity for self support. This is not a case where the wife has been out of the paid workforce for many years. She conceded unexercised earning capacity. In my view the wife cannot make a case for spousal maintenance.
In the case of leave to bring proceedings for spousal maintenance there is a second basis on which leave can be granted - that, at the end of the period within which the proceedings could have been instituted without the leave of the court, the circumstances of the applicant were such that the applicant would have been unable to support himself or herself without an income tested pension, allowance or benefit.[19] That case was not alluded to in submissions. According to her Financial Statements the wife had a deficit of $80 in her weekly budget in August 2010. By comparison she disclosed a weekly deficit of $500 in July 2009. There is no evidence on the basis of which I can make the required finding. Perhaps that is why the argument was not made.
[19] Section 44(4)(b) above.

The husband’s reasonable capacity to provide support

It is not necessary to turn to this issue. If it was necessary, there is no doubt the husband has the capacity to provide some support.

Conclusion as to leave

Given the property settlement orders I propose and the state of the evidence about her earning capacity, the wife cannot make a case for spousal maintenance. Therefore she cannot establish hardship in not being able to make that case. She cannot establish the alternate ground in Section 44(4)(b). In that event it is not necessary to turn to the discretionary matters, such as the competing prejudices and whether there is an adequate explanation for delay. The wife’s application for leave to bring proceedings for spousal maintenance out of time, will be dismissed.

I certify that the preceding two hundred and sixty eight (268) paragraphs are a true copy of the reasons for judgment of Justice Ian Loughnan.

Associate:

Date: 2 December 2010

[2010] FamCA 1184

2 December 2010

Key Legal Topics

Areas of Law

Family Law

Civil Procedure

Property Law

Legal Concepts

Costs

Remedies

Jurisdiction

Procedural Fairness

Limitation Periods

Res Judicata

Wife’s assets and liabilities	Value
Wife’s Furniture	$15,000
Wife’s Bank Accounts	$8,183
Wife’s Motor Vehicle Nissan Pulsar	$10,000
Add-back for husband’s text books destroyed – Wife	$4,000
Add-back for the wife’s paid legal fees – Wife	$39,157.18
MLC Masterkey Superannuation – Wife	$33,272
Wife’s Credit cards	-$6,807
Wife’s debt to her mother	-$12,000
Total	$90,805.18

Husband’s Assets and Liabilities	Value
Q property – Husband’s	$1,000,000
Husband’s investment in Centro Listed Property Fund	$3,120
Husband’s ANZ Bank Account	$2,112
Husband’s Furniture	$15,000
Add-back for the husband’s paid legal fees – Husband	$77,292.15
AMP Superannuation Fund - Husband	$175,346
Mortgage Loan on Q property	-$630,732
Husband’s Credit Cards	-$775
Husband’s Taxation liability for F Corporation shares	-$315,142
Husband’s Tax liability for interest earned	-$166
Total	$326,055.15

Bexley	Amount
B property – joint	$1,000,000
B property Mortgage Loan	-$26,440
$973,560.00