Kearney and Kearney

[2007] FamCA 300

FAMILY COURT OF AUSTRALIA

KEARNEY & KEARNEY [2007] FamCA 300

FAMILY LAW - PROPERTY - Settlement in relation to marriage

Family Law Act 1975 (Cth) - s 75(2), s 79

Hickey and Hickey (2003) FLC 93-143; 30 Fam LR 355
Coghlan and Coghlan (2005) FLC 93-220; 32 Fam LR 414

APPLICANT: Mrs Kearney

RESPONDENT: Mr Kearney

FILE NUMBER: SYF 4183 of 2005

DATE DELIVERED: 4 April 2007

PLACE DELIVERED: Sydney

JUDGMENT OF: Johnston JR

HEARING DATE: 15 December 2006

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Livingstone

SOLICITOR FOR THE APPLICANT: Macedone Christie Willis Solari Partners

COUNSEL FOR THE RESPONDENT: Mr Serisier

SOLICITOR FOR THE RESPONDENT: McBride Harle & Martin

Orders

1. That within 42 days the husband pay to the wife the sum of $133 048.

2. That simultaneously with the payment referred to in order 1:

   (a)The wife do all things and sign all documents necessary to transfer to the husband her interest in the property situate at and known as A (“the home”) being the whole of the land contained in Folio Identifier …; and

   (b)The husband do all acts and things and sign all documents necessary to discharge the line of credit secured against the home with the Commonwealth Bank and the timeshare levies.

3. That pending compliance with orders 1 and 2, the husband continue to make and maintain payments pursuant to the line of credit with the Commonwealth Bank, council rates, water rates and household insurances in respect of the home and indemnify the wife in that regard.

4. That in the event the husband fails to comply with order 1, the husband and the wife do all things and sign all documents necessary to place the home on the market for sale by private treaty at a price agreed or determined by a valuer appointed by the President of the Australian Institute of Valuers and Land Economists (INC) NSW Division and the husband and the wife shall do all things necessary and sign all documents necessary to:-

   (a)Place the home with an agreed agent for the sale of the home by private treaty at the earliest possible date, or in default of agreement, such agent as may be nominated by the President for the time being of the Real Estate Institute of NSW;

   (b)Execute all documents requested by the agent for the sale of the home;

   (c)Pay to the agent equally any sums reasonably requested for advertising expenses in relation to the sale;

   (d)Co-operate in every way with the agent in relation to the sale of the home;

   (e)Execute Contracts for Sale;

   (f)Execute all other documents necessary to complete the sale.

5. That in the event the home is not sold by private treaty within three months from the date of these orders, the husband and wife may extend the sale period by agreement or, failing agreement, forthwith do all acts and things necessary, including the execution of all documents necessary for the sale of the home by public auction and, in the event that the home is not sold by public auction when first offered for sale by auction, the home shall thereafter be resubmitted for sale by public auction pursuant to the provisions of these orders at intervals of not less than two months until such property shall eventually be sold.

6. That the husband and the wife do all acts and things necessary to procure that upon the sale of the home the proceeds of sale shall be paid in the following manner and priority:-

   (a)In payment of agent’s commission and auction expenses (if any) due on the sale;

   (b)In payment of legal costs on the sale

   (c)In payment of all liabilities as listed at paragraph 48 of the Reasons for Judgment in these proceedings;

   (d)In payment of 65.51 percent of the balance to the wife and 34.49 percent thereof to the husband.

7. That within 28 days of the date of these orders the wife do all acts and things and sign all documents necessary to transfer to the husband all of her right, title and interest in the I shares.

8. That within 28 days of the date of these orders the wife do all acts and things and sign all documents necessary to transfer to the husband all of her right, title and interest in Time Share … at M, NSW.

9. That except as otherwise provided in these orders, the husband and the wife are entitled to be the sole legal and beneficial owners of all items of property including money, motor vehicles, insurances, equities, superannuation interest and entitlements and personal effects currently in the possession or control of each of them respectively.

10. That the parties do all things, sign all documents and give all consents necessary to give full force and effect to these orders.

11. That save and except these orders provide to the contrary, each of the parties shall by this order mutually release the other from all debts owing from one to the other.

12. That if either party refuses or neglects to sign or execute any document, as required by these orders within seven days of being required to do so, pursuant to Section 106A of the Family Law Act 1975 the Registrars of this Court at Sydney shall be empowered to sign and execute such document on behalf of either party as may be necessary to give full force and effect to these orders.

13. That leave be granted to either party to apply further in respect of the implementation of any or all of these orders.

14. That the above orders not commence operation until 23 April 2007.

15. That both parties have liberty to re-list these proceedings by arrangement with the Associate to Judicial Registrar Johnston at any time prior to 23 April 2007 for further submissions in relation to the form of the orders only.

16. That all exhibits be released.

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYF 4183  of 2005

Mrs Kearney

Applicant

And

Mr Kearney

Respondent

REASONS FOR JUDGMENT

Introduction and Applications

1. Mrs Kearney, to whom for convenience I shall refer as “the wife” seeks orders to the following effect:

   (1)That within 28 days of the date of these orders the husband pay to the wife the sum of $372 000.

   (2)That simultaneously with the payment referred to in order 1:

   (a)The wife do all acts and things and sign all documents necessary to transfer to the husband all of her right, title and interest in the property situate at and known as A (“the home”) being the whole of the land contained in Folio Identifier … ; and

   (b)The husband do all acts and things and sign all documents necessary to discharge the line of credit secured against the home with the Commonwealth Bank and the timeshare levies.

   (3)That pending compliance with orders 1 and 2, the husband continue to make and maintain payments pursuant to the line of credit with the Commonwealth Bank, council rates, water rates and household insurances in respect of the home and indemnify the wife in that regard.

   (4)That in the event the husband fails to comply with order 1, the husband and the wife do all acts and things and sign all documents necessary to place the home on the market for sale by private treaty at a price agreed or determined by a valuer appointed by the President of the Australian Institute of Valuers and Land Economists (INC) NSW Division and the husband and the wife shall do all things necessary and sign all documents necessary to:-

   (a)Place the home with an agreed agent for the sale of the home by private treaty at the earliest possible date, or in default of agreement, such agent as may be nominated by the President for the time being of the Real Estate Institute of NSW;

   (b)Execute all documents requested by the agent for the sale of the home;

   (c)Pay to the agent equally any sums reasonably requested for advertising expenses in relation to the sale;

   (d)Co-operate in every way with the agent in relation to the sale of the home;

   (e)Execute Contracts for Sale;

   (f)Execute all other documents necessary to complete the sale.

   (5)That in the event the home is not sold by private treaty within three months from the date of these orders, the husband and wife may extend the sale period by agreement or, failing agreement, forthwith do all acts and things necessary, including the execution of all documents necessary for the sale of the home by public auction and, in the event that the home is not sold by public auction when first offered for sale by auction, the home shall thereafter be resubmitted for sale by public auction pursuant to the provisions of these orders at intervals of not less than two months until such property shall eventually be sold.

   (6)That the husband and the wife do all acts and things necessary to procure that upon the sale of the home the proceeds of sale shall be paid in the following manner and priority:-

   (a)In payment of agent’s commission and auction expenses (if any) due on the sale;

   (b)In payment of legal costs on the sale

   (c)In payment to the Commonwealth Bank to discharge the line of credit;

   (d)In payment of the amount required to discharge the timeshare levies;

   (e)In payment of the sum of 84% to the wife;

   (f)In payment of the balance to the husband.

   (7)That within 28 days of the date of these orders the wife do all acts and things and sign all documents necessary to transfer to the husband all of her right, title and interest in the I shares.

   (8)That within 28 days of the date of these orders the wife do all acts and things and sign all documents necessary to transfer to the husband all of her right, title and interest in Time Share … at M, NSW.

   (9)That except as otherwise provided in these orders, the husband and the wife are entitled to be the sole legal and beneficial owners of all items of property including money, motor vehicles, insurances, equities, superannuation interest and entitlements and personal effects currently in the possession or control of each of them respectively.

   (10)That the parties do all things, sign all documents and give all consents necessary to give full force and effect to these orders.

   (11)That save and except these orders provide to the contrary, each of the parties shall by this order mutually release the other from all debts owing from one to the other.

   (12)That if either party refuses or neglects to sign or execute any document, instrument or writing or comply with any order contained herein after seven days of being required to do so, pursuant to Section 106A of the Family Law Act 1975 that the Registrar of the Family Court of Australia at Sydney be empowered to sign and execute such document, instrument or writing on behalf of either party as may be necessary to give full force and effect to these orders.

   (13)That leave be granted to either party to have liberty to apply further in respect of the implementation of any or all of these orders.

   (14)That the husband pay the wife’s costs of and incidental to these proceedings.

2. On the other hand, Mr Kearney to whom for convenience I shall refer as “the husband” seeks orders to the following effect:

   (1)That within three months of the date of these orders the husband pay to the wife the sum of $120 000.

   (2)That simultaneously with the payment referred to in order 1, the wife do all acts and things and sign all documents necessary to transfer to the husband all of her right, title and interest in the real property situate at and known as A (“the home”) being the whole of the land contained in Folio Identifier … .

   (3)That the husband indemnify the wife against all payments and liability in relation to bank loans secured on the home and all rates and taxes with respect to the said property.

   (4)That within 28 days of the date hereof the wife do all acts and things and sign all documents necessary to transfer to the husband her interest in the jointly owned I shares.

   (5)That within 28 days of the date hereof the wife do all acts and things and sign all documents necessary to transfer to the husband her interest in the M, NSW time share.

   (6)That except as otherwise provided in these orders the husband and the wife are entitled to be the sole legal and beneficial owners of all items of property including money, motor vehicles, insurances, equities, superannuation interest and entitlements and personal effects currently in the possession or control of each of them respectively.

   (7)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 such 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.

Background

1. The husband was born in October 1947 and he is therefore 59 years of age.  The wife was born in November 1953 and she is therefore 53 years of age.

2. The parties married in May 1976 and they separated in June 2001.

3. There are four children of the marriage, J born in August 1980 who is therefore 26 years of age, K born in March 1983 who is therefore 24 years of age, D born in August 1986 who is therefore 20 years of age and L born in September 1990 who is therefore 16 years of age.

4. At the time of marriage, the husband’s property consisted of a caravan, a panel van and personal effects.

5. At the time of marriage the wife’s property consisted of her savings of $2000 being the proceeds of sale of her motor vehicle.

6. After their wedding the parties travelled around Australia in the caravan for approximately three years on a working holiday.

7. The parties purchased the land at A in 1978 for $18 250.  This was funded from savings and a personal loan of $6000 from the State Bank.

8. In May 1979 the parties returned to Sydney and lived in the caravan in the husband’s mother’s backyard at G.  They continued living in these circumstances for approximately 12 months.  They then lived in rented accommodation for approximately 14 months.

9. In 1980 they engaged a builder, H, to build a home on their land.  The parties moved into their new home in September 1981.  The construction was funded by a loan of $32 500 from the Commonwealth Bank of Australia on mortgage.

10. In 1981 the parties and their young child J moved into their new home.

11. At this time the husband was working with W as a toolmaker full time.  He also had a second job as a toolmaker with M 6 nights a week.  The husband continued in his second job for approximately 3 and a half years.

12. By 1985 the husband had started to develop early symptoms of a repetitive strain condition in his wrists.  He decided to endeavour to find employment which would enable him to better manage this condition.  He commenced working in a management position with F at K.

13. In 1988 the parties had another level built onto their home.  This was funded by a loan on mortgage from the Commonwealth Bank.

14. In 1989 the husband was retrenched from F.  He commenced working full time with A and continued in their employment for the next 10 months.

15. In late January 1989, the husband commenced working as a tool room manager for S at C.  In April 1989 the husband set up a company R Pty Limited and subsequently contracted his services to S through the company.  The husband and the wife were the shareholders and directors of the company.  The parties obtained an overdraft for $15 000 from the Commonwealth Bank for business purposes.

16. In mid-1989 the company leased a new Mitsubishi Nimbus wagon for business purposes and to enable the wife to have the use of a motor vehicle.

17. In approximately 1990, the company entered into an agreement with the company H Pty Limited to produce baby seats.  Unfortunately this venture failed and the parties’ company lost approximately $2000.

18. In 1991 the husband broke his leg.  He was unable to work for some months and he was uninsured for such misfortune.  The wife earned some income during this period from selling homewares.

19. At approximately this time the parties purchased a time share at M near B for approximately $8000.  This was funded from the parties’ savings.

20. In 1992 the company paid out the lease of the Mitsubishi Nimbus and this was swapped for a Mitsubishi Star Wagon.

21. In 1996 the wife commenced working in a permanent part time position.  This involved 20 hours per week with T.  At approximately this time the parties purchased an old Honda Accord motor vehicle for the wife’s use.

22. During the same year the parties also purchased an investment property at Y for $231 000.  They borrowed the entirety of the required funds from the Commonwealth Bank apart from approximately $1000 given to them by the wife’s father Mr L.

23. The husband ceased contract tool making for the company and commenced designing truck parts for a company P Pty Limited. 

24. In August 1997 the parties purchased a Jensen Interceptor motor vehicle for approximately $20 300.  The wife’s father, Mr L, gave the parties $300 for the deposit.

25. In 2001 the husband and his brother inherited the property at L from their late Aunt Mrs C.  The following year the husband purchased his brother’s interest in this property for $60 000.  The husband borrowed $72 000 from the St George Bank to fund this purchase and to pay out a National Australia Bank credit card liability.

26. In April 2001 the parties sold their investment property at Y for $392 000.  After paying costs of sale, capital gains tax and discharging the mortgage the net proceeds were $42 200 which the parties deposited to their N account.

27. On 20 May 2001 the parties paid the remaining instalment on the home loan for the former matrimonial home.

28. As indicated above, the parties separated in June 2001.  The wife left the former matrimonial home and commenced residing with her current partner.  The husband and the 4 children continued living in the home.

29. For some time, the wife returned to the former matrimonial home each day to assist the children.

30. In July 2002 the company made an agreement with C Pty Limited under the terms of which the husband would manufacture tools for this entity.  Unfortunately a couple of years later C Pty Limited suffered a severe downturn in demand for its product.

31. In 2003, the wife was notified that she had been overpaid family payment for the financial year 2000/2001.  The parties withdrew $5 100 from their I account and paid this to Centrelink.  The wife repaid the balance by instalments.

32. In July 2004 the parties closed their I account.  In effect they split the net proceeds of sale of their investment property equally.  But the wife received approximately $17 200 because she paid the husband approximately $3800 for the Honda Civic motor vehicle.

33. In August 2004 R Pty Limited purchased a beauty salon called “D” for $180 000.  The husband asked the wife to agree to sign a mortgage to assist him to borrow funds to purchase the salon.  The wife declined.  The husband borrowed $131 000 from the St George Bank secured over his property at L.  He also used $20 000 from his St George Bank credit card, $21 500 from the I account and the balance was charged to his Commonwealth Bank Bankcard.

34. The husband’s mother died in 2004 and left him $10 000.  The husband applied this inheritance to costs of the beauty salon. 

35. In September 2004, the parties’ child K ceased living with the husband.  In January 2005, J also ceased living with the husband.  But the two younger children remained living with the husband.

36. The beauty salon business was not successful and kept losing money.  In August 2005, the husband borrowed $25 000 from V Pty Limited to enable him to pay rent arrears on the salon.  This loan was secured over the former matrimonial home.  When the husband failed to repay the loan in the required three months, V Pty Ltd took enforcement action in the Supreme Court of New South Wales against the husband and the wife.

37. The husband continued to design truck parts for P Pty Limited until November 2005.  Prior to this time, the husband had been suffering from cellulitis which is an inflammation of cellular tissue.  His left leg swelled up.  The husband had to take time off work and when he returned to work he had to try and keep his leg elevated.  The upshot was that he left work and started to receive a Centrelink benefit until he was able to resume employment in February 2006.  This was a very difficult time for the husband and the two children.

1. In February 2006 the husband commenced full time employment as a project engineer with HB.

2. In April 2006 V Pty Limited obtained judgment against the husband.  In these circumstances, the husband made an application to borrow $122 000 from a home loan company to be secured over the former matrimonial home.  The husband proposed to use such funds to repay the Commonwealth Bank, V Pty Limited and the overdraft of the company.  The husband asked the wife to sign the required documents on his assurance that he would take sole responsibility for repayment of the borrowings.  The wife declined.

3. The husband therefore borrowed $46 000 from his friend Mr P and used this to pay most of the outstanding liability to V Pty Limited and part of their legal costs.  He also borrowed $2342 from his employer Mr R.  He subsequently paid a further approximately $16 000 to V Pty Limited and their lawyers which discharged his liability to them.  This money came from the proceeds of sale of the L property which had been sold on 2 March 2006 for $235 000.  The husband received no part of these proceeds the totality of which was used to pay liabilities.

4. In August 2006, the company sold the beauty salon business for $80 000.  The entire proceeds of sale were applied to the payment of liabilities.  Clearly the business represented a very substantial loss to the husband.

The Applicable Law

1. The Court must be satisfied that in all the circumstances it is just and equitable to make an order. This is provided by s.79(2) of the Family Law Act 1975.

2. The Full Court of this Court in its decision in the case of Hickey and Hickey (2003) FLC 93-143; 30 Fam LR 355 said as follows:

   “The case law reveals that there is a preferred approach to the determination of an application brought pursuant to the provisions of s.79.  That approach involves four inter-related steps.  Firstly, the Court should make findings as to the identity and value of the property, liabilities and financial resources of the parties at the date of the hearing.  Secondly, the Court should identify and assess the contributions of the parties within the meaning of ss.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.  Thirdly, the Court should identify and assess the relevant matters referred to ss.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.  Fourthly, the Court should consider the effect of those findings and determination and resolve what order is just and equitable in all the circumstances of the case:  Lee Steere and Lee Steere (1985) FLC 91-626; Ferraro and Ferraro (1993) FLC 92-335 (and various other well known authorities).”

3. Despite some criticism of this decision by the majority of the Full Court in Coghlan and Coghlan (2005) FLC 93-220; 32 Fam LR 414, see for example paragraphs 36 and 37 at page 79 641 and paragraph 63 at page 79 646, in my view it is not incorrect to take the approach to the hearing of property proceedings as described in Hickey above.

Property available for division

1. The property available for division between the parties consists of the following:-

$
1.         Former matrimonial home at A	500,000
2.         Time Share M	2,500
3.         Husband’s 1973 Jensen motor vehicle	15,000
4.         Husband’s 1981 Range Rover	2,000
5.         Husband’s 1986 Honda motor vehicle	1,500
6.         Husband’s household contents	5,000
7.         Husband’s antiques and collectables	1,600
8.         Husband’s superannuation	12,039
9.         Joint 224 I shares	1,200
10.      Wife’s Q Credit Union	6,600
11.      Wife’s 415 Q shares	2,282
12.      Wife’s 1996 Honda motor vehicle	4,400
13.      Wife’s jewellery	1,500
14.      Wife’s Q superannuation	42,500
15.      Wife’s X superannuation	6,800
___________
$604,921

1. Leaving aside the parties’ respective liabilities for their legal costs the liabilities are as follows:-

$
1.         Mortgage on former matrimonial home	54,976
2.         Australian Tax Office (2004 and 2005 financial years)	51,124
3.         ANZ Credit Card	7,620
4.         HSBC Credit Card	2,728
5.         Citibank Credit Card	5,009
6.         St George Credit Card	30,593
7.         Commonwealth Bank Credit Card	23,836
8.         The husband’s brother	49,259
9.         A cosmetic company	1,940
10.      ADT	92
11.      Mr P	46,000
12.      Holiday Club	872
13.      M, NSW	861
14.      AM (Accountants)	13,153
15.      Council Rates	2,593
16.      Water Rates	1,319
17.      Mr R	2,342
18.      G Company	2,588
_____________
$296,905
Surplus	$308,016

1. A couple of these items require comment.  Few details about the wife’s superannuation were before the Court.  In particular there was no evidence of the value of the wife’s superannuation at the time the parties separated.  The wife estimated such value at $8500.  Yet there was no issue that the wife’s superannuation had a value of $49 300 at the time of the hearing.

2. This is somewhat unsatisfactory.  Doing the best that I can in the circumstances, I propose to take into account during my consideration of the parties’ contributions, that the wife’s superannuation increased considerably in value after separation.

3. There was also an issue about some of the liabilities asserted by the husband.  In particular learned counsel for the wife challenged the alleged liability of the husband to his brother of $49 259.  Counsel also challenged the $2342 alleged by the husband to be owed to Mr R.

4. It is true that neither the husband’s brother nor Mr R filed affidavits in support of these assertions.  Yet the view I have formed is that it is more likely than not that these liabilities are real.  There is no question that the husband has had a very difficult time financially in recent years.  I am satisfied that the beauty salon business operated at a significant loss.  In any event, I was impressed with the manner in which the husband gave his evidence and I regard him as having been truthful.

Contributions

1. I have referred to the history of the husband’s employment.  As also indicated above the wife earned some modest income from selling homewares and party plan work prior to 1996 when she commenced part time work.  The major financial contributions have been made by the husband.  Having said this, particularly from 1996, the wife also made significant financial contributions by way of income earned by her.  The wife also said that during the course of the marriage her father made gifts of various amounts to assist the parties, the wife asserting that the total of these was approximately $25 000.  I accept that this was the case.

2. I have also referred to the inheritance of the husband, at approximately the time of separation, of an interest in his late aunt’s home.  As I have also indicated, the husband also inherited approximately $10 000 from his mother’s estate although this was some years after separation.

3. In relation to the parties’ contributions to the welfare of the family constituted by themselves and their children, each of them have made such contributions.  There is no issue, however, that the wife was the primary parent of the children.  The husband conceded that up to the time of separation, the wife made a greater contribution by way of home maker and parent than he did.  This was consistent with the way that the parties arranged their responsibilities.  The husband was the major breadwinner and the wife was the primary parent. 

4. But all this changed upon the separation of the parties.  As indicated the wife left the former matrimonial home and commenced residing with her current partner.  On the other hand the husband remained in the home with the four children who were then aged almost 21, 18, 16 and 10 years respectively. 

5. As also indicated above, initially the wife returned to the home each day for some six months or so to assist the children and undertake some household chores which the children and husband benefited from.  Having said this, the overwhelming contribution to the children following the parties’ separation has been by the husband.  He has borne almost the entirety of the financial cost of the children.  True it is that the wife has made some modest contributions including paying some of the children’s school costs.  But the husband never sought child support and the wife never paid any form of regular financial contribution.  The husband said that he did not make an application for child support because, at least in the early period following separation, he was hopeful that the parties would be able to reconcile. 

6. On the other hand, the husband has had the benefit of occupancy of the former matrimonial home since separation and the wife has had to pay rent.

7. If matters stopped here, there would be no question that the overwhelming financial contributions would have been made by the husband.  Unfortunately, the situation has become somewhat complicated by the fact that the husband decided to purchase the beauty salon business.  This involved a very considerable capital outlay which, as indicated above, he raised by way of borrowings secured against his inherited property at L as well as other borrowings.  This was not a matter that he had consulted the wife about let alone had received her blessing for.  Unfortunately, as also indicated above, this was a disastrous investment.  The salon never made money and the consequence was that the husband continued to borrow funds from various sources in order to pay rental arrears and the costs of maintaining the business.  During the time of the business’s operation the husband continued to earn some income from his other engineering type work.  But this was nowhere near sufficient to be able to provide for household costs as well as pay for recurrent losses due to the business.  When he was sued, he approached the wife for her agreement to secure further borrowings against the former matrimonial home which, as indicated above, she declined.

8. The unfortunate consequence of the failure of the business is that what had been a significant amount of property mostly in the form of the unencumbered former matrimonial home has been reduced by approximately half its value due to the very considerable indebtedness sustained by the husband. The question for determination is how should the Court deal with these debts vis-a-vis each of the parties in order to arrive at a just and equitable order as required by s 79(2) of the Act?

9. On the one hand it is submitted on behalf of the wife that the investment in the business was entirely a “frolic of his own” by the husband and that no part of the disastrous financial consequences should be borne by the wife.  In particular, learned counsel for the wife pointed to the fact that when the husband asked the wife to assist facilitation of the further borrowings by him she was very clearly of the view that they should not increase their indebtedness.  In these circumstances it is said that this was a very clear signal to the husband that the wife’s interests should not be prejudiced in this way.  On the other hand it was submitted on behalf of the husband that all the husband was doing by purchasing the business was trying to supplement his income for the overall benefit of the children and himself.  It was submitted that this was simply part of the vicissitudes of life and that the wife should share in the responsibility for the consequences of this activity.  It was submitted that in the event that the husband’s business had been successful then the wife would expect to be able to share in any increase in value of the parties’ property attributable to such success.  In such circumstances it was submitted that the parties should share responsibility for the liabilities.

10. In my view, the husband should bear the responsibility for the major part of the liabilities, although not the entirety thereof.  This is because he ventured into the purchase of the business in the knowledge that there was risk involved, particularly as he had no experience in managing a beauty salon.  But also because he knew that the wife did not support his endeavours to increase indebtedness.  Having said this, in my view to attribute the entire responsibility for the debts to the husband would be to ignore the difficult responsibility he had after the wife left to fund almost the entirety of the costs of the children.  Clearly this was extremely burdensome for him and their costs must have contributed to the husband’s indebtedness, at least in part.

11. Had it not been for the liabilities, in my view, the assessment of the parties’ contributions would have favoured the husband and to a considerable degree.  But I propose to subtract the liabilities (except for legal costs) from the property available for division and then determine the appropriate contributions.  On the basis that the husband should, in effect, be required to take responsibility for the major part of the liabilities the assessment of contributions will have to favour the wife.  On this basis, in my view, the wife’s contributions have been slightly more than double those of the husband.  Accordingly, I assess overall contributions as having been 68 percent by the wife and 32 percent by the husband.

s 75(2) matters

1. The husband is 59 years of age.  There are some problems with his health.  He suffers from hyper-tension, osteo arthritis and macullar degeneration of his eyes.  He has been working as a project engineer with HB since February 2006.  His income is $1400 per week.

2. The husband has the major responsibility for caring for the parties’ youngest child L.  On present indications this responsibility will continue for the next couple of years and possibly longer.  The wife is unlikely to pay any child support.  The parties’ daughter D also lives with the husband.

3. On the basis of the above finding concerning contributions the wife will enjoy more of the available property than the husband.

4. On the other hand the wife is 53 years of age and she is in reasonable health.  Her income is $686 per week.  The wife lives with her partner and they share the costs of their household.

5. In my view, on the basis of the relevant s 75(2) matters there should be an adjustment of property in favour of the husband.  In my view the appropriate adjustment is 4 percent.

Conclusion and fourth step

1. The wife is to have 64 percent of the available property.  This is property with a value of $197 130.  The wife has the following property:

$
1.         Savings in Q Credit Union	6,600
2.         Q shares	2,282
3.         1996 Honda motor vehicle	4,400
4.         Jewellery	1,500
5.         Q superannuation	42,500
6.         X superannuation	6,800
___________
$64,082

1. For the wife to achieve property with a value of $197 130 the wife would require further property with a value of $133 048 ($197 130 - $64 082 = $133 048).

2. On the other hand the husband is to have 36 percent of the available property.  This is property with a value of $110 886.  The husband has the following property:

$
1.         M, NSW	2,500
2.         1973 Jensen motor vehicle	15,000
3.         1981 Range Rover	2,000
4.         1986 Honda motor vehicle	1,500
5.         Household contents	5,000
6.         Antiques and collectables	1,600
7.         Superannuation	12,039
_________
$39,639

1. If the husband was also to have the I shares this would be a further $1200 making property in the hands of the husband to a value of $40 839.

2. For the husband to have property with a value of $110 886 the husband would require an additional $70 047 of property ($110 886 - $40 839 = $70 047).  This could only come from the former matrimonial home.

3. As indicated above the home has a value of $500 000.  But the liabilities totalling $296 905 will have to be paid. This would leave equity in the home of $203 095 ($500 000 - $296 905 = $203 095).  If the wife was to have $133 048 of this, the balance would be available for the husband.  This would be $70 047 ($203 095 - $133 048 = $70 047).

4. The husband wishes to have the opportunity to endeavour to pay the wife for her interest.  This would be $133 048 as I have said. 

5. If the husband is unable to pay the wife this amount the former matrimonial home will have to be sold.  On the basis of a sale price of $500 000 and taking no account of costs of sale the relevant percentages of proceeds to be enjoyed by the parties would be 65.51 percent in the case of the wife ($133 048 is 65.51 percent of $203 095) and 34.49 percent in the case of the husband ($70 047 is 34.49 percent of $203 095).

6. The parties will each have to bear their outstanding legal costs.

7. The orders proposed will not affect the capacity of either party to earn income.

I certify that the preceding seventy-three (78) paragraphs are a true copy of the Reasons for Judgment of Judicial Registrar W P Johnston.

Associate:     _____________________

Date:              4 April 2007

IT IS NOTED that this judgment for all publication and reporting purposes be referred to as KEARNEY & KEARNEY