Kertz and Kertz
[2009] FamCA 1310
•23 December 2009
FAMILY COURT OF AUSTRALIA
| KERTZ & KERTZ | [2009] FamCA 1310 |
| FAMILY LAW – PROPERTY – inclusion of add backs – work undertaken on the former matrimonial home by the husband - whether to include post-separation liabilities on the balance sheet – issue of alleged money given to the parties by the wife’s mother – one adult child of the marriage with ongoing health problems – whether full and frank disclosures made during the proceedings |
| Family Law Act 1975 (Cth) Family Law Legislation Amendment (Superannuation) Act 2001 (Cth) |
| Ascot Investments Pty Limited v Harper (1981) 148 CLR 337 Best and Best (1993) FLC 92-418 Chorn and Hopkins (2004) FLC 93-204 Duff and Duff (1977) FLC 90-217 Coghlan & Coghlan (2005) FLC 93-220 Ferraro and Ferraro (1993) FLC 92-335 Gollings and Scott (2007) FLC 93-319 Hickey and Hickey (2003) FLC 93-143 Jones v Skinner (1835) 5 LJ Ch 90 Mallett v Mallett (1984) 156 CLR 605 McLay and McLay (1996) FLC 92-776 Morris v Morris [1982] 1 NSWLR 61 Norbis v Norbis (1986) 161 CLR 513 |
| APPLICANT: | Ms Kertz |
| RESPONDENT: | Mr Kertz |
| FILE NUMBER: | SYF | 2503 | of | 2005 |
| DATE DELIVERED: | 23 December 2009 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | Justice Le Poer Trench |
| HEARING DATE: | 2, 3, 4, 5, 6, March 2009 20, 21, 22, 23 July 2009 and by written submissions |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Mater |
| COUNSEL FOR THE RESPONDENT: | Mr Connor |
Orders
Within twenty eight (28) days from the date hereof the wife is to provide the husband (by service on his solicitors) with a copy of a written loan approval document together with a letter from her solicitor which specifies the sources of the funds she will have to complete the acquisition of the husband’s share in the property at L, being the whole of the land contained in certificate of title folio identifier … (“the property”), should she elect to so acquire that interest.
In the event of the wife serving the document required under Order 1 hereof she is to pay to the husband the sum of $543,339 on or before the expiration of three (3) calendar months from the date hereof.
Simultaneously with the payment by the wife to the husband of the sum of $543,339 the husband shall do all acts and things and sign all documents necessary to transfer to the wife the whole of his right title and interest in the property and shall not later than such payment being made vacate the said property.
Simultaneously with such transfer in Order 3 hereof the wife shall forthwith cause to be discharged the mortgage in the name of the husband and the wife in favour of the Community First Credit Union over the said property.
In the event that the wife does not comply with Order 1 hereof or with Orders 2 and 4 hereof then each of the parties shall forthwith do all acts and things and sign all documents necessary to firstly, place the property on the market for sale with real estate agents as agreed in writing between the parties (or failing such agreement within fourteen (14) days, to be chosen by the President of the Australian Property Institute on the joint request of the parties) for sale by private treaty at a price agreed in writing between the parties (“reserve price”) (or failing such agreement within fourteen (14) days, at a price determined as a fair market price by a valuer nominated by the President for the time being of the Australian Institute of Valuers at the cost of the parties equally) (“valuer’s reserve price”) and in particular they are to:
(a)place the property for sale with the real estate agents by private treaty at the earliest possible date;
(b)execute all documents requested by the real estate agents for the sale of the property;
(c)equally pay to the real estate agents any sums requested for the advertising expenses in relation to the sale;
(d)execute contracts of sale;
(e)co-operate in every way with the real estate agents in relation to the sale of the property including, but not limited to, providing keys to the property, ensuring that the property is clean and tidy when inspected by possible purchasers and allowing the real estate agents access to the property at all reasonable times;
(f)negotiate with any purchasers in the event of the reserve price or valuer’s reserve price not being reached; and
(g)execute all other documents necessary to complete the sales;
In the event that the property is not sold by private treaty after three (3) months of the first listing of the property for private sale then the parties are to place the property on the market for sale by public auction within a period of a further eight (8) weeks and in this regard they are to accept the advice of the real estate agents as to the appointment of auctioneers to conduct the auction(s) and in particular they are to:
(a)appoint the auctioneers;
(b)execute all documents requested by the auctioneers for the sale of the property;
(c)pay to the auctioneers equally, any sums requested for the advertising expenses in relation to the auction(s);
(d)set a reserve price as agreed in writing between them and in the absence of such agreement, at such figure as the auctioneers shall recommend;
(e)execute contracts of sale;
(f)co-operate in every way with the auctioneers in relation to the auction of the property;
(g)negotiate with the highest bidder(s) in the event of the reserve price or valuer’s reserve price not being reached at the auction(s); and
(h)execute all other documents necessary to complete the sale;
That in the event of contracts for the sale of the property not being exchanged within fourteen (14) days of the said auction, the parties shall forthwith do all such acts and things and sign all such documents as may be necessary to immediately release the property for sale by second public auction on a date to be nominated by the said auctioneers and at a reserve price of 5% less than the reserve price specified for the property for the first public auction conducted in accordance with Order 6 herein.
That the husband and the wife shall do all acts and things necessary upon the sale of the property to cause the proceeds of sale be paid in the following manner and priority:
(a)in payment of all moneys necessary to procure the discharge of the mortgage secured over the property by Community First Credit Union;
(b)in payment of all outstanding municipal and water rates and taxes;
(c)in payment of the agents and/or auctioneers expenses due on the sale;
(d)in payment of all legal costs and proper and usual expenses of sale;
(e)in payment to the husband of 43.75% of the balance;
(f)payment of any balance thereafter to the wife.
The wife shall indemnify the husband against all actions, claims, suits and demands which may hereafter be brought against him by or on behalf of Mrs B concerning funds provided by her associated with her occupation of portion of the property.
The husband be declared to be the legal and beneficial owner of the following:
(a)his savings;
(b)his shares in C Pty Ltd, P Pty Ltd, W Pty Ltd and Kertz Pty Ltd;
(c)the Jeep motor vehicle, registration number …;
(d)any furniture/furnishings/personalty in his possession;
(e)the husband’s superannuation savings;
(f)all other property in his possession, custody and/ or control.
The wife be declared to be the legal and beneficial owner of the following:
(a)her savings;
(b)any shares held in her name;
(c)any furniture/ furnishings/personalty;
(d)the wife’s superannuation savings;
(e)all other property in her possession, custody and/ or control.
Save as otherwise herein provided each of the parties shall indemnify and keep indemnified the other party in respect of all claims, actions, suits and demands made in respect of any debt associated with any personal loans, car loans, lease agreements, finance agreements, rental agreements, credit cards or the like incurred in the name of the first mentioned party.
The husband indemnify the wife in relation to any claim brought against her by the husband’s mother seeking repayment of a loan of $15,000.
The husband indemnify the wife against any claim brought against her by the husband’s parents for repayment of any monies said to be advanced to either of the parties prior to the date of these orders.
The Husband and the Wife shall do all acts and things promptly and they shall give all consents and execute all documents in writing promptly that may be necessary to give effect to these Orders.
In the event that the Husband or the Wife, for any reason, refuses or neglects to execute any deed, document or instrument necessary to give effect to all or any part of these Orders made herein within seven (7) days of being requested in writing to do so, each party consents to any application being filed by the other party seeking orders pursuant to Section 106A of the Family Law Act 1975 that a Registrar of the Family Court of Australia 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 these Orders.
Each party have liberty to apply to have this matter re-listed within 48 hours for the purposes of implementation of these Orders.
Otherwise all outstanding applications and responses which seek orders are dismissed.
IT IS NOTED that publication of this judgment under the pseudonym Kertz & Ketrz is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)
| FAMILY COURT OF AUSTRALIA AT SYDNEY |
FILE NUMBER: SYF 2503 OF 2005
| MS KERTZ |
Applicant
And
| MR KERTZ |
Respondent
REASONS FOR JUDGMENT
Introduction
This matter was listed for 5 days to commence on 2 March 2009. It did not finish in those days and was listed for a further 4 days commencing on 20 July 2009. It did not finish in the 4 further days allocated and it became necessary to require written submissions. Orders were made on 24 July 2009 requiring the wife to file submissions by 31 July 2009. The husband was to file his submissions within 14 days thereafter and the wife had a further 14 days to file a reply.
The wife’s submissions were received on 4 August 2009. The husband’s submissions were received on 24 August 2009. The last of the submissions were made by the wife and received on 16 October 2009.
The Parties’ Proposals
The orders sought by the wife are contained in a Minute of Order which became Exhibit “W4”. That Minute is as follows:
MINUTES OF ORDER SOUGHT BY WIFE
Lump Sum payment to the Husband
1.That, within 90 days of the making of this order, the Applicant Wife shall cause to be paid to the Respondent Husband’s solicitors The Argyle Partnership on behalf of the Husband, by cash or bank cheque, the sum of $ [to be determined by the Court] (hereinafter referred to as “the principal sum”)
Interest
2.That the Wife pay interest on the said principal sum, or on any part thereof which remains unpaid, ninety (90) days from the date of the making of these orders such interest to be charged at the rate applicable from time to time as specified in the Family Law Rules or any Rules in substitution thereof, and calculated on the monthly balances on the amount outstanding ninety (90) days from the date of the making of these orders to the date of payment in full.
Transfer of Former Matrimonial Home to the Wife
3.That simultaneously with the payment by the Wife to the Husband of the principal sum together with any interest owing pursuant to Order 2 herein the Husband shall do all acts and things and sign all documents necessary to transfer to the Wife the whole of his right title and interest in the property situate and know as property known as [sic] [L] (“the property”) and shall not later than such payment being made vacate the said property.
4.Simultaneously with such transfer the Wife shall forthwith cause to be discharged the mortgage in the name of the Husband and the Wife in favour of the Community First Credit Union over the said property.
5.In the event that Orders 1 to 4 inclusive are put into effect the Wife shall indemnify the Husband against all actions, claims, suits and demands which may hereafter be brought against him by or on behalf of [Mrs B] concerning funds provided by her associated with her occupation of [sic] portion of the property.
Default sale of Former Matrimonial Home
6.That in the event that the Wife does not pay the principal sum and any interest owing pursuant to Order 2 herein within one hundred and twenty (120) days of the date of this Order each of the parties shall forthwith do all acts and things and sign all documents necessary to firstly, place the property on the market for sale with real estate agents as agreed in writing between the parties (or failing such agreement within fourteen (14) days, to be chosen by the President of the Australia [sic] Property Institute) for sale by private treaty at a price agreed in writing between the parties (“reserve price”) (or failing such agreement within fourteen (14) days, at a price equivalent to the mean of two valuations by registered valuers being members of the Australian Institute of Valuers, one obtained by and at the expense of the Husband and one obtained by and at the expense of the Wife, such valuations to be made not more than two weeks apart from each other) (“valuer’s reserve price”) and in particular they are to:
(a)place the property for sale with the Real estate agents by private treaty at the earliest possible date;
(b)execute all documents requested by the Real estate agents for the sale of the property;
(c)pay to the Real estate agents equally, any sums requested for the advertising expenses in relation to the sale;
(d)execute contracts of sale;
(e)co-operate in every way with the Real estate agents in relation to the sale of the property including, but not limited to, providing keys to property, ensuring that the property is clean and tidy when inspected by possible purchasers and allowing the Real estate agents access to property at all reasonable times;
(f)negotiate with any purchasers in the event of the reserve price or valuer’s reserve price not being reached;
(g)execute all other documents necessary to complete the sales;
7.That in the event that the property is not sold by private treaty after three (3) months after the listing of the property for private sale the parties are to place the property on the market for sale by public auction within a period of a further eight (8) weeks and in this regard they are to accept the advice of the real estate agents as to the appointment of auctioneers to conduct the auction(s) and in particular they are to:
(a)appoint the auctioneers;
(b)execute all documents requested by the Auctioneers for the sale of the property;
(c)pay to the Auctioneers equally, any sums requested for the advertising expenses in relation to the auction(s);
(d)set a reserve price as agreed in writing between them and in the absence of such agreement at such figure as the auctioneers shall recommend;
(e)execute contracts of sale;
(f)co-operate in every way with the Auctioneers in relation to the auction of the Former Matrimonial Home;
(g)negotiate with the highest bidder(s) in the event of the reserve price or valuer’s reserve price not being reached at the auction(s);
(h)execute all other documents necessary to complete the sale;
8.That in the event of contracts for the sale of the property not being exchanged within fourteen (14) days of the said auction, the parties shall forthwith do all such acts and things and sign all such documents as may be necessary to immediately release the property for sale by second public auction on a date to be nominated by the said auctioneers and at a reserve price of 5% less than the reserve price specified for the property for the first public auction conducted in accordance with Order 6 herein.
9.That the Husband and the Wife shall do all acts and things necessary to procure that upon the sale of the Former Matrimonial Home the proceeds of sale be paid in the following manner and priority:
(a)in payment of all moneys necessary to procure the discharge of the mortgage secured over the property by Community First Credit Union;
(b)in payment of all outstanding municipal and water rates and taxes;
(c)in payment of the agents and/or auctioneers expenses due on the sale;
(d)in payment of all legal costs and proper and usual expenses of sale;
(e)in payment to the [sic] [Mrs B] of the sum of $65,000;
(f)in payment to the Wife of an amount from the net proceeds such that, together with the other assets retained by the Wife pursuant to these Orders, the Wife shall obtain 70% of the total net property of the parties, as ascertained by the Court, calculated as follows:
A + B = C + D x 70
------
100
Where:
Ais the amount to be paid to the Wife from the net proceeds of sale of the Former Matrimonial Home.
Bis the value the property already retained by the Wife pursuant to the Final Orders of the Court.
Cis the total of the net proceeds of sale of the property after payment of the items in sub-paragraphs (a) – (e) hereof inclusive;
Dis the sum of the total value of all other property held by the Husband and the Wife as determined by the Court.
(g)Subject to Orders 9 and 10 hereof, in payment of the balance remaining to the Husband.
10.Pending transfer of the property to the Wife pursuant to Orders 1 to 4 hereof or to a purchaser pursuant to Orders 5 to 8 hereof the Husband shall maintain the said property at his own expense in good repair and shall pay as an when they fall due
(a)All instalments payable under the mortgage referred to in Order 8.(a) including all arrears presently due;
(b)All rates and taxes and utility service charges levied in respect of the said property including all arrears;
(c)All building insurance premiums including all arrears.
11.In the event that the Husband shall not for any reason make as and when they fall due the payments referred to in Order 9, all arrears in such payments shall be calculated as at the date of transfer of the said property and a sum equal to the total thereof shall be deducted from the Husband’s entitlement pursuant to Order 1 or Order 8 hereof and paid to the Wife who shall forthwith pay such arrears as are owing to the appropriate creditor(s).
Transfer of other Property
12.That save as otherwise herein provided –
(a)the Husband shall forthwith do all acts and things and sign all documents necessary to transfer to the Wife the whole of his right title and interest in all property and financial resources presently standing in the name, control or possession of the Wife.
(b)the Wife shall forthwith do all acts and things and sign all documents necessary to transfer to the Husband the whole of her right title and interest in all property and financial resources presently standing in the name, control or possession of the Husband.
Indemnities as to Liabilities
13.That save as otherwise herein provided each of the parties shall indemnify and keep indemnified the other party in respect of all claims, actions, suits and demands made in respect of any debt associated with any personal loans, car loans, lease agreements, finance agreements, rental agreements, credit cards or the like incurred in the name of the first mentioned party.
Registrar to sign pursuant to s106A
14.That the Husband and the Wife shall do all acts and things promptly and they shall give all consents and execute all documents in writing promptly that may be necessary to give effect to these Orders.
15.That in the event that the Husband or the Wife, for any reason, refuses or neglects to execute any deed, document or instrument necessary to give effect to all or any part of these Orders made herein within seven (7) days of being requested in writing to do so, each party consents to any application being filed by the other party seeking orders pursuant to Section 106A of the Act that a Registrar of the Family Court of Australia 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 [sic] these Orders.
Liberty to Apply
16.Each party have liberty to apply to have this matter re-listed within 48 hours for the purposes of implementation of these Orders.
Costs
17. That the Respondent Husband pay the Applicant Wife’s costs of and incidental to this Application.
The husband sought orders which were contained in a Further Amended Response to an Application for Final Orders filed 24 February 2009. That document sought the following orders:
1.That within 28 days from the date of these orders, the husband and wife shall do all acts and things and sign all documents as may be necessary to sell the property situated at and known as [L] being the whole of the land contained in certificate of title folio identifier […] (the former matrimonial home) for sale by auction on terms and conditions pursuant to Schedule 1 herein.
2.That on settlement of sale of the former matrimonial home in accordance with the provisions of order 1 herein; the proceeds of sale shall be applied in the following manner and priority:
2.1.Firstly, in payment of an amount sufficient to discharge the mortgage secured against the former matrimonial home to the Community First Credit Union.
2.2.Secondly, in payment of agent’s fees and legal costs in respect of the sale.
2.3.Thirdly, to pay [C Kertz] the sum of $180,245.83.
2.4.Fourthly, to pay [G Kertz] the sum of $19,749.55.
2.5.Fifthly, in payment of the debt of $14,678 to Esanda Finance Corporation Ltd.
2.6.Sixthly, in payment of $5,060.00 to [H] Accountants.
2.7.Seventhly, the balance remaining shall be divided equally between the husband and wife.
3.That the husband be declared to be the legal and beneficial owner of the following:
3.1.his savings;
3.2.his shares in [C] Pty Ltd, [P] Pty Ltd, [W] Pty Ltd and [Kertz] Pty Ltd;
3.3.the Jeep motor vehicle, registration number […];
3.4.any furniture/ furnishings/ personalty in his possession;
3.5.the husband’s superannuation savings;
3.6.all other property in his possession, custody and/or control.
4.That the wife be declared to be the legal and beneficial owner of the following:
4.1.her savings;
4.2.any shares held in her name;
4.3.any furniture/furnishings/personalty;
4.4.the wife’s superannuation savings;
4.5.all other property in her possession, custody and/ or control.
5.That the wife pay the husband’s costs of and incidental to the proceedings.
The Issues
At the commencement of the trial there were a plethora of issues identified in a document which was called “List of Issues which will Require the Court’s Determination”. That document was marked as Exhibit “X2”. That list significantly reduced as the hearing progressed. On the last day of the trial the parties agreed that the list of issues of fact had been reduced to those specified in Exhibit “X10”. That exhibit provided as follows:
[KERTZ] ISSUE [sic] of FACT TO BE DETERMINED BY THE TRIAL JUDGE.
GENERAL ISSUES
1. What were the parties’ assets and liabilities at the date of
separation?2. Has each party made a full and frank disclosure of relevant fact?
3. Should the wife have made any contribution towards the payment
of the mortgage on the FMH post separation? (is this an
assessment of a negative contribution?).4. What, if anything, is likely to be each parties future involvement
in the care of their son [D]?5. Did the wife’s mother, Ms [B] provide $40,000 to the
husband as she alleges?6. Is there an equitable interest that Ms [B] has in the
FMH, or any other equitable interest which can be pressed
against the parties?BALANCE SHEET ITEMS
7. Should there be any balance sheet item for “contents”?
8.Should the husband’s interest in [C] Pty Limited be treated as an asset on the balance sheet or as a resource only?
9.Should there be an add back of $20,000 to the husband arising from a dividend paid to him by [P] Pty Ltd on 28/3/2006?
10. Should any part of the husband’s debt to his parents be included
as a balance sheet item?11. Should any of the parties post separation debt (including
borrowing for payment of legal fees) be included on the balance
sheet? In particular the husband’s debt to his accountants, to
[S Accountants] and for the repair of the Ford Utility.
Background Facts
The parties agreed on a “Chronology of Non Contentious Facts”. The document containing those facts was marked as Exhibit “X1” in the proceedings. A summary of that document is as follows:
Chronology of Non Contentious Facts
DATE EVENT
[…].1954 Husband’s birth (54 years).
[…].1956 Wife’s birth (52 years).
[…].1977 Parties marry.
Husband has —
300 ordinary shares in [C] P/L and 1 Z class share and 1 RDPD share in [Kertz] Pty. Limited;
A half share in five acres of land at [LP] worth about $12,500;
Some savings;
Holden Monaro motor vehicle;
Superannuation estimated to be worth $1,800;
AMP Society insurance policy redeemed in 1981 for $938;
Prudential Insurance Co. Limited Policy;
National Mutual Policy redeemed in 1981 for $250.
Wife has 1975 Toyota Corona motor vehicle.
Husband employed with [V Company] as [Supervisor].
Wife employed as clerk with [T Company].
20.10.1977The Husband’s brother, [J Kertz], sells his half interest in the [LP] property to the Wife for $12,500. The purchase price was paid by the Husband’s father.
00.11.1977Wife’s personal loan secured on Toyota Corona Sedan paid out by parties.
00.11.1978Parties move to [central coast] where Husband takes up employment with [V Company] following promotion to Sub-Area Manager, NSW.
Wife ceases her employment shortly prior to parties move to [central coast]
Late 1978Parties purchase [F] (“[F] property”) $30,500 financed by:
Deposit $3,050 paid by Husband’s father;
First home savings grant $1,333;
Mortgage loan $22,000 from Commonwealth Bank in joint names;Balance purchase money $4,117 from joint savings.
28.11.1978Husband’s father purchases vacant block of land at [R] $2,230 which he gifts to the parties. This land was later given unencumbered to the local council as no development permitted.
10.04.1979Parties lease the [F] property to tenants for $50 per week for one year.
00.04.1979Parties move to [regional New South Wales].
Husband continues to be employed by [V Company] following further promotion to Area Manager, NSW.
[…].1979 Birth of [M Kertz] (29 years).
25.05.1980Parties purchase land at [A in regional New South Wales] (“[A] property”) for $13,350 financed by $1,335 joint savings and $12,000 from a legacy received from the Husband’s grandmother. The total legacy was $20,000.
14.11.1980Parties sell the [F] property for $37,500. Balance $11,500, after discharge of mortgage $21,884 to the Commonwealth Bank, was invested in a joint CBFC account. A further $2,500 was deposited in joint savings account.
.11.1980Parties sell [LP] property to Husband’s brother [J] for $38,000.
1980 to 1981 Parties build two-storey home on [A] property for approximately $84,500. Building costs financed as follows:
$7,700 balance $20,000 legacy from Husband’s grandmother mentioned above;
Net proceeds of sale [F] property $11,500;
Net proceeds of sale [LP] property $38,000;
Joint savings of $3000, including AMP and National Mutual policies redeemed for $938 and $250;
$15,000 loan to Wife from Husband’s mother;
$8,500 gift from Husband’s parents.
[…].1981 Birth of [D Kertz] (27 years).
1982 Husband ceases to work for [V Company].
00.04.1982Husband commences work at [MD Company] in [A] as Supervisor and later as Store Manager.
[…].1984Birth of [P Kertz] (24 years).
00.03.1985Husband ceases to work for [MD Company]. Husband takes up employment as salesman with [CT Company].
[…].1986Birth of [K Kertz].
Husband ceases working for [CT Company] shortly after birth of [K].
June/July 1986 The parties cease living in [A] NSW and return to live in Sydney.
01.07.1986Parties live with Husbands parents. Husband commences to work as Manager for [DR Company], Sydney NSW. The Wife performs home duties.
[…].1986Death of [K Kertz] (aged 17 weeks).
20.11.1986Parties lease [A] property for $160 per week. The property had been listed for sale after the parties left [A], and was vacant until this time.
00.12.1986Parties purchase [U property] for $150,000 (“[U] property”).
Parties become involved in litigation over purchase of [U] property and are unable to move into the [U] property (litigation continued until determination by Supreme Court in about late 1990).
28.04.1987Parties sell [A] property for $125,500.00, parties receive net balance approximately $124,000, of which $112,310was deposited into an interest bearing account with Advance Bank. The balance of $12,500.00 was deposited in the parties joint savings account.
1987Parties cease living with Husband’s parents and rent a house at [U] for $160 per week.
03.03.1989 Parties purchase [X property] (“[X] property”) for $190,000 financed by $78,000 loan from Husband’s parents and approximately $112,399 from joint savings deposit acquired from the sale of the [A] property.
[…]1988Date of birth of [N Kertz] (20 years).
1995Parties purchase [L property] (“the property”) for $188,000. The property at the time of purchase had a partially built dwelling and a large four car garage thereon. Parties do not take up immediate residence at the property but remain living at the [X] property. On the sale of the [X] property approximately three months after this date of purchase, the parties are required to vacate the [X] property, and commence to live in caravan on the property (the [L] property) as home only partially built. Parties also reside at Husband’s parents’ home due to electricity problem at [L]. Purchase price of the property is financed by bridging finance from [Kertz] Pty Ltd (Husband’s father’s business) of $115,000 loan and an $80,000 loan from Husband’s parents , totally [sic] $195,000.
.06.1989[X] property sold for $370,000. Net proceeds distributed as to:
$78,000 loan repayment to Husband’s parents ([X property]);
$80,000 loan repayment to Husband’s parents ([L property]);
$115,000 loan repayment from [Kertz] Pty. Limited;
$4,000 interest on loans to [Kertz] Pty. Limited;
$112,780 invested with SWBCCU.
1990First part of construction of former matrimonial home completed, relative to the first of two [L] Council building permits. (Originally two bedrooms only, later extension included four bedrooms and rumpus room, which was the second part of the construction process and which also required a separate building permit).
Late 1990 the litigation relating to the [U] property is determined by the Supreme Court and parties required to pay substantially more to settle the purchase of the [U] property.
18.03.1991 [U] property sold for $283,000, proceeds of sale
applied as to:$217,858.53 repayment of SWBCCU loan;
$65,525.67 deposited with SWBCCU.
[…]04.1991Husband causes [P] Pty. Limited to be incorporated and becomes a Director as does his accountant [Mr H] and the Husband subscribes to 99 ordinary shares and [Mr H] subscribes to one ordinary share.
1991/1992[P] Pty. Limited (company owned by Husband) purchases [DR] business for $65,000 in late 1991. [P] Pty. Limited, borrowed the $65,000 purchase price from [Kertz] Pty. Limited. The Husband ceases working for [DR Company] and commences to run the business as a franchise pursuant to a Franchise Agreement, and is paid an income as an employee of [P] Pty Limited.
04.05.1993Husband and [Mr O] incorporate [SC] Pty. Limited. The company imports […] motor vehicles for sale in Australia.
1994[P] Pty. Limited sells [DR] business for $66,000 to company [WR] Pty. Limited ([P] P/L acquires, about this time of sale, 50% of [WR] P/L, with the other 50% being owned by a Mr. [DG]). The Husband commences to be employed by [WR] Pty. Limited.
.00.041995Wife’s mother comes to live at the property (then intended permanently) and pays $50,000 to the Wife by way of cheque. Handwritten document executed at this time. $40,000 repaid shortly afterwards.
00.10.1995Second part of construction at [L], former matrimonial home completed.
15.01.1997[RT] Pty. Limited is incorporated with the Directors being [Mr CR] and the Husband and both were equal shareholders.
24.02.1997[Mr CR] resigns as Director of [RT] Pty. Limited, and transfers his share in that company to the Husband. [RT] Pty Limited commences the business of importing motor vehicles […], after which it sold the vehicles. The company also engineered [parts for the vehicles].
1998Wife resumes part time casual employment as teachers aide.
1998[P] Pty. Limited purchases for $66,000 Mr. [DG’s] 50% share of [WR] Pty. Limited. The Husband remains employed by [WR] Pty. Limited.
1998Parties borrow $251,451 from Community First Credit Union against the security of the property (‘the Community First Credit Union mortgage’) of which $66,000 is used for the purchase of Mr. [DG’s share in [WR] Pty. Limited. (The Husband provides an account (H 31/5/2006 #79) as to the disposition of the balance of funds borrowed which may be the subject of some issue).
1998[Mr O] transfers his share in [SC] Pty. Limited to Husband for no consideration.
00.01.1999 [WR] Pty. Limited, through the Husband, sells [DR franchise for $225,000. Proceeds of sale were
applied as to:$65,000 repayment to [Kertz] Pty. Limited for loan acquired to originally purchase the [DR] franchise;
$46,991 repayment of lease payout on vehicles not taken over by new owner;
$66,000 repayment of part of the loan to CFCU, being for the amount to purchase Mr. [DG’s] share in [WR] Pty. Limited in 1998;
$27,736, being fees and disbursements.
1999[DR] franchise sold by [WR] Pty. Limited for $225,000. (Husband gives an account of the disposition of these funds (H #81) about which there may be some issue). The Husband’s employment with [WR] Pty. Limited ceases.
00.04.1999The Husband commenced to be employed by [P] Pty. Limited.
00.08.1999[SC] Pty. Limited (whose shares were owned by the Husband) purchased by Mr [WD] for $200.00.
[…].11.1999[WR] Pty. Limited changes its name to [AL] Pty. Limited.
00.07.2000The Husband, whilst continuing to be employed by [P] Pty. Limited, has about five months of employment […] during the Sydney Olympics.
2002Wife employed part time as teachers aide at [Z] school.
2003Wife employed as part time teachers aide at various schools in […].
[…].06.2003[RT] Pty. Limited ceases trading. The company was the [sic] acquired by [M and P Kertz].
[AL] Pty. Limited (formerly [WR] Pty. Limited
changes its name to [W] Pty. Limited..07.2003[W] Pty. Limited (formerly [WR] P/L and formerly [AL] Pty. Limited) purchased [TJ Franchise] for $103,000. [Mr WD] loaned [W] Pty. Limited $50,000 towards the purchase price of $103,000, [Kertz] Pty. Limited lent [P] Pty. Limited $40,000 to facilitate the purchase of the franchise.
The Husband commences to be employed by [W] Pty. Limited.
2004Wife employed in full time position at [AN] School earning approximately $1,046 per fortnight.
00.07.2004The parties separate finally when the Wife leaves the property. [P] and [N] remain living with the Husband about 00.03.2005.
10.03.2005The Wife commences proceedings in the Family Court of Australia.
13.03.2005[P and N Kertz] leave the former matrimonial home where they have been living with their father.
2005It appears that the [TJ] franchise was sold by [W] Pty. Limited to [SC] Pty. Limited for $130,000 (H #94). (The Husband provides an account of the disposition of the proceeds of sale (H #95) but the Wife does not concede its accuracy).
23.04.2006 [P] Pty. Limited purchases the shareholding of [MN] Pty. Limited in [W] Pty. Limited.
The Evidence
There are other matters of fact about which there does not appear to be any real dispute. One such fact is that on 17 February 2009 the husband vacated the former matrimonial home.
Following 10 March 2009, which was the last day of the first group of hearing days, the husband’s solicitor wrote to the wife’s solicitor advising that the husband could no longer afford to pay the mortgage and outgoings on the house. Thereafter, and until 17 July 2009, there were exchanges of correspondence between the solicitors which sought to effect, by agreement, the husband vacating the property and the wife occupying the property and being financially responsible for paying the outgoings on the property during her occupation. Exhibit “X6” is an accumulation of the relevant correspondence on the issue.
I conclude from reading that correspondence that each party was being unreasonable in aspects of the terms upon which the agreement might be implemented. In the result, the house was unoccupied at the time the hearing resumed before me at the end of July 2009.
Credit
The wife provided extensive submissions on the issue of credit. She submitted that where there was a conflict between the evidence of the husband and that of either the wife or her mother, Mrs B, I should prefer the evidence given by the wife and her mother.
The wife addressed the conflict in the evidence between the husband and her mother Mrs B. I have set out my summary of that evidence in these reasons.
The husband submitted that the wife’s credit was substantially put in question by the manner in which she ran the litigation. In particular, the husband submitted that the wife’s credit should be suspect because of her endeavour to involve P Kertz, one of the parties’ sons, in the proceedings. Further, in relation to the contrast in the evidence between the husband and Mrs B, the husband submitted that Mrs B’s evidence about the payments totalling $40,000 alleged to have been paid to the husband is not clear and without question. He points out that no record of the withdrawals from Mrs B’s bank accounts was able to be provided.
The husband submitted that Mrs B said the husband had asked her for money for bricks. However, Annexure “O” to the husbands’ affidavit shows the last purchase of bricks occurred in May 1994. In relation to that submission I did not see Mrs B as saying in her evidence that she had been asked for money for bricks. My conclusion was that she was giving an example of the type of conversation which took place between the husband and she at the time the husband was requesting funds from her. I formed the view that her recollection was not good enough to recall the precise content of particular requests for money which the husband had made in 1995 however she did seem to be able to remember some specifics.
The husband submitted that, although Mrs B said she had provided $65,000 towards the house, it was difficult to see how her evidence led to the conclusion that $65,000 was spent in the way she contended.
The husband makes many criticisms of the evidence of Mrs B which I have read, however I do not repeat those here. The husband is critical of the wife in her evidence about the advance of funds by Mrs B to the parties and, in particular, the payment of the $40,000. The husband submits that the wife offers no corroborative evidence that the husband took Mrs B to the bank from time to time in about 1995. However, it is hard to see how the wife could give acceptable evidence about that matter if she was at no times present when any withdrawal took place. The best she could do would be to recite a statement attributed to the husband which could, in the circumstances, be seen as an admission by him. Given that the husband was solely responsible for the expenditure of all of the funds necessary to complete the home it seems unlikely that the financial aspects of the purchase of items for the house were discussed between the parties over the many years they were involved in building the home.
The Wife
The wife gave her evidence in what appeared to be a straightforward and honest manner. For the vast majority of her oral evidence I thought the wife was being honest and open with the Court. There were however some occasions when I doubted that the wife was being totally disclosive to the Court. As the issues arise for determination I will specify when I had reason to doubt the wife’s evidence.
The wife was asked a number of questions in cross-examination about her son P’s litigation and disputes with the husband. In particular she was asked about how P obtained a copy of the husband’s Financial Statement filed in these proceedings which was then used in the “cheque litigation” in the Local Court against the husband. The wife denied all knowledge of how P obtained the document.
Over a range of questions which dealt with the disputes between P and his father, the wife generally gave answers to the effect that she stayed out of the disputes between P and his father and professed disinterest and a lack of knowledge about the disputes. I find the wife’s evidence in relation to these matters not credible.
It is clear from all the evidence that the wife and P have a close relationship. It is clear that P has involved himself in these proceedings in support of his mother. He has sworn an extensive affidavit which was filed by the wife and subsequently withdrawn. He provided her with a car shortly after separation and the wife lent him $15,000 which she had borrowed from a friend. P paid money for her in relation to experts engaged for the purpose of these proceedings. The wife said in evidence that following the separation, and for some time thereafter, she would meet with all her sons and their partners for dinner once per week.
There is no doubt in my mind that there was a battle between the parents for the support of their children in the marital dispute following the separation. So much is evident from the material which has been relied upon by each party.
As the wife was asked questions about her knowledge of P’s disputes with the husband and how P obtained a copy of the husband’s Financial Statement, I observed a “smugness” in the wife’s responses. She appeared to me to have a degree of discomfort and a change in her body posture to that I had observed throughout the balance of her oral evidence.
As a result of all which I have set out here, I conclude that the wife was being untruthful in her answers to the Court about her knowledge of the disputes between P and the husband and also about her knowledge of the circumstances in which P came to have a copy of the husband’s Financial Statement which was used in the Local Court proceedings between them.
The Husband
The husband gave his evidence in what appeared to be an open and honest manner. There was nothing about his appearance in the witness box which caused me to be concerned about his veracity.
Having considered all of the evidence and the detailed submissions of the husband on the issue of credit, I conclude, however, that he was untruthful in his evidence about Mrs B. I do accept all of the evidence of Mrs B. I just don’t believe, based on the balance of probabilities, that Mrs B could have been mistaken about the payment of the $40,000 to the husband. I conclude that the husband must have been deliberately untruthful in relation to the $40,000 which Mrs B says was paid to him in varying amounts, at his request.
Whereas I could possibly accept that his memory may have failed him in relation to the conversations he had with Mrs B at about the time she commenced to reside with the family in 1995 and possibly even the reason for the payment of the $50,000 and the repayment of the $40,000 to her, I could not accept he would forget repeated trips taking Mrs B to the ANZ Bank to withdraw amounts of cash which were then given to him to meet expenses associated with the building of the family home.
Mr Mater, counsel for the wife, submitted in relation to the husbands’ oral evidence that it appeared at times to be not responsive to the question asked and quite discursive, as opposed to immediately answering the question asked. I agree there were examples of that behaviour.
Mr Mater submits that the husband’s evidence in paragraph 67 of his affidavit filed 7 June 2006, that: “[t]he cornice work was completed in April 1995 and the kitchen was one of the last items to be installed [sic] July 1995 together with the carpeting” is inconsistent with his oral evidence that this work was completed before the $40,000 was returned to Mrs B. The evidence being there that the funds were returned to her in May 1995. Further, Mr Mater refers to Annexure “O” to the husband’s affidavit which particularises expenditure on the family home. He says the expenditure there attested to, post 11 April 1995, is greater than $40,000. Thus, the husbands’ attempt to suggest that there was very little expenditure applied to the house after Mrs B paid the $50,000 is proved false by his own detailed evidence.
In the husband’s affidavit at paragraph 41(a) he says that in January 1995 he sold his Wesgo shares and received $40,700. Thus, there is a fund which would have been available to him to meet the expenses associated with the building of the house which were paid out after the end of 1994 as evidenced by Annexure “O” to the husband’s affidavit. The annexure shows that between January 1995 and 11 April 1995 the husband paid out about $28,000. No document was provided to verify that the Wesgo shares were sold in January 1995 as alleged. No other documents were made available to establish what the state of the parties savings or borrowings were at the relevant time in 1995.
Although the husband has provided evidence which would establish he may have had other money available to him in the early months of 1995 apart from the $50,000 which Mrs B says she paid him, it does not conclusively resolve the facts in issue between them for the reasons stated.
Mr Mater further points out that in the husband’s own evidence he says that after Mrs B sold the A property she owned and paid the parties $50,00 she retained $34,836 from the sale proceeds. Thus, any notion that Mrs B had no source of funds to meet the cash payments alleged to have been paid to the husband other, than from the $40,000 fund, must be erroneous.
Mr Mater further submits that the husband’s denial in cross-examination that he had sought to have Esanda Ltd repossess the lawnmower which was in P Kertz’s possession and also commence legal action are proved false by the documents contained in Exhibit “W6”. I accept that submission.
I should also note that I do accept the evidence of Mrs B that she was told to vacate the “granny flat” by the husband. To the extent that such circumstance is denied by the husband I find he is being deliberately untruthful. The event in question was much more proximate to the hearing date and the date of swearing of the husband’s affidavit. I find it most unlikely that the husband would have a lapse in memory over that short time when his memory in respect of events far more distant appears to be adequate.
Having found that the husband has been deliberately untruthful with the Court, at least in relation to his evidence about the $40,000 paid by Mrs B, I must have doubt about the veracity of other evidence where that conflicts with the wife and other of her witnesses whose evidence I have not had cause to doubt. In these reasons I therefore will prefer the version of the evidence provided by the wife and her witnesses unless I specifically state to the contrary in relation to particular issues of fact.
Mrs B
Mrs B is the wife’s mother and gave evidence by affidavit and orally. In the witness box she presented as an honest and credible witness. There was nothing about her presentation or the content of her evidence which lead me to have any doubt about her veracity or the reliability of her evidence.
Mr Kertz Snr
Mr Kertz (Snr.) is the father of the husband in these proceedings. He provided affidavit and oral evidence in the proceedings. I found him to be a credible and apparently honest witness. There was nothing about his presentation in the witness box or the content of his evidence which led me to believe he was other than a truthful witness.
Mrs Kertz Snr
Mrs Kertz (Snr.) is the mother of the husband in these proceedings. She gave evidence in an affidavit and orally. There was nothing about her manner in the witness box or the content of her evidence which led me to believe she was other than a truthful and credible witness.
Property: General Principles
Section 79 of the Family Law Act 1975 (“the Act”) enables the Court to make orders with respect to the property of the parties to the marriage. In considering what order, if any, should be made the court is required to take into account the s 79(4) matters.
It is now well established that the determination of a s.79 application requires a four step process (Ferraro and Ferraro (1993) FLC 92-335; McLay and McLay (1996) 92-776) and Hickey and Hickey (2003) FLC 93-143). The Court must:
1. firstly, identify and value the net property, liabilities and financial resources of the parties at the date of the hearing;
2. assess the contributions of the parties pursuant to s 79(4);
3. consider the relevant s 75(2) factors; and
4. lastly, consider whether such an order, in all the circumstances, is just and equitable. The final consideration is a reflection of the requirement under s 79(2).
There has developed, throughout the history of property settlement matters in this Court, two approaches to determining the division of property: (1) the global approach; and (2) the asset-by-asset approach. It is proper to consider these not as competing approaches but as alternative approaches. In the High Court of Australia, Mason and Deane JJ in Norbis v Norbis (1986) 161 CLR 513 held (at 524) that:
“It has not been suggested that there is any fundamental difference between the two competing approaches which we have considered, in the sense that one will yield more just and equitable entitlements than the other. The general preference which has been expressed for the global approach is not by reason of any notion that it is the only approach authorised by the Act, but by reason of considerations of convenience. Accordingly, quite apart from the fact that its status as a prescribed approach is that of a guideline and not that of a principle of law, the application of the asset-by-asset approach does not of itself amount to an error of law.”
As foreshadowed by the High Court of Australia in this matter, although both approaches are legitimate the most common practice in this Court is to adopt the global approach.
Identification and valuation of the net property, liabilities and financial resources of the parties at the date of the hearing
In determining the value of the property, the Court;
“…must take the property of a party to the marriage as it finds it. The Family Court cannot ignore the interests of third parties in the property, nor the existence of conditions or covenants that limit the rights of the party who owns it.” (per Gibbs J (as he then was) in Ascot Investments Pty Limited v Harper (1981) 148 CLR 337 at 355).
The quantum is determined by deducting from the value of the assets the value of the liabilities to reach a net value.
As the initial step of the process I must first identify the property of the parties. There is general acceptance that ‘property’;
“…is the most comprehensive of all terms which can be used inasmuch as it is indicative and descriptive of every possible interest which the party can have.” (Lord Langdale MR, Jones v Skinner (1835) 5 LJ Ch 90 approved by the Full Court, Duff and Duff (1977) FLC 90-217 at 76128)
Under s 4(1) of the Act, property is broadly defined as:
“…in relation to the parties to a marriage or either of them, means property to which those parties are, or that party is, as the case may be, entitled, whether in possession or reversion.”
There is no argument that any of the interests contested by the parties should not be properly identified as property under s 4(1). I therefore proceed on this basis.
It is, however, necessary at this point to note that under s 90MC of the Act it is now provided that “a superannuation interest is to be treated as property...”
Section 90MC of Part VIIIB of the Act confers upon the Court an extended jurisdiction to make orders with respect to superannuation interests in property settlement proceedings: Coghlan & Coghlan (2005) FLC 93-220. More broadly, Part VIIIB operates to allow certain payments of superannuation interests to be allocated between the parties to a marriage either by agreement or by Court order. Under this Part, either a ‘splitting order’ or ‘flagging order’ may be made.
The wife in this instance seeks a splitting order.
Part VIIIB applies only if the matter falls within the ambit of s 5 of the Family Law Legislation Amendment (Superannuation) Act 2001, which commenced operation (the ‘startup time’) on 28 December 2002. Section 5(1) states that:
Subject to this section, the superannuation amendments apply to all marriages, including those that were dissolved before the startup time.
As there is no dispute as to whether Part VIIIB applies to this matter, it is unnecessary to detail further the exceptions to the general provision of s 5(1).
The four step approach to determining property settlement outlined previously applies.
Assessment of the s79(4) contributions
In considering the alteration of property interests I am required to consider the contributions made by the parties in accordance with the matters outlined under s 79(4). Section 79(4) provides:
(4) In considering what order (if any) should be made under this section in property settlement proceedings, the court shall take into account:
(a) the financial contribution made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last‑mentioned property, whether or not that last‑mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(b) the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last‑mentioned property, whether or not that last‑mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(c) I the contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage and any children of the marriage, including any contribution made in the capacity of homemaker or parent; and
(d) the effect of any proposed order upon the earning capacity of either party to the marriage; and
(e) the matters referred to in subsection 75(2) so far as they are relevant; and
(f) any other order made under this Act affecting a party to the marriage or a child of the marriage; and
(g) any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage.
Section 75(2)
In making a decision in relation to property, s 79(4)(e) requires a consideration of relevant s 75(2) matters. I here incorporate s 75(2):
(2) The matters to be so taken into account are:
(a) the age and state of health of each of the parties;
(b) the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment;
(c) whether either party has the care or control of a child of the marriage who has not attained the age of 18 years;
(d) commitments of each of the parties that are necessary to enable the party to support:
(i) himself or herself; and
(ii) a child or another person that the party has a duty to maintain;
(e) the responsibilities of either party to support any other person;
(f) subject to subsection (3), the eligibility of either party for a pension, allowance or benefit under:
(i) any law of the Commonwealth, of a State or Territory or of another country; or
(ii) any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia;
and the rate of any such pension, allowance or benefit being paid to either party;
(g) where the parties have separated or divorced, a standard of living that in all the circumstances is reasonable; and
(h) the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income; and
(ha) the effect of any proposed order on the ability of a creditor of a party to recover the creditor’s debt, so far as that effect is relevant; and
(j) the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party; and
(k) the duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration; and
(l) the need to protect a party who wishes to continue that party’s role as a parent; and
(m) if either party is cohabiting with another person—the financial circumstances relating to the cohabitation; and
(n) the terms of any order made or proposed to be made under section 79 in relation to:
(i) the property of the parties; or
(ii) vested bankruptcy property in relation to a bankrupt party;
…
(na) any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage; and
(o) any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account; and
(p) the terms of any financial agreement that is binding on the parties.
It making my findings on these matters I acknowledge the statement of Wilson J in the High Court of Australia’s decision of Mallett v Mallett (1984) 156 CLR 605 (at 638):
“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...”
the balance sheet
The parties had largely agreed upon the balance sheet at the commencement of the trial. Marked as Exhibit “X3(A)” and “X3(B)” were the draft balance sheets, and extracts from those documents are as follows:
BALANCE SHEET – 20th July 2009
ASSET OWNERSHIP VALUE 1. L property (FMH) Joint 1,300,000.00 2. 1995 Nissan motor vehicle Wife 5,000.00 3. Current debt owed by P Wife 3,000.00 (wife’s value) 4. 1975 Jeep Husband 1,000.00 5. Shares:-
- Interest in PT Pty Ltd
- Interest in C Pty Ltd
- Interest in Kertz P/L
Husband 1,876.00
225,536.00
-6. Add Back – Dividend of $20,000 received from PT Pty Ltd – 28.3.06
- Loan repaid to Mrs G Kertz
- Abbott Tout
- Living expenses
- Credit card
- Bank account
Husband (wife’s values)
11,750.00
6,431.00
500.00
779.00
540.007. Add Back – Sale of Ford Utility ? 9,000.00 (wife’s value) SUPERANNUATION 8. Wife’s superannuation – First State Super Wife 22,270.00 9. Husband’s Colonial Wealth Superannuation Husband 81,665.00 TOTAL ASSETS AND SUPERANNUATION:
$1,669,347
LESS LIABILITIES:
10. Community First Credit Union
- Mortgage on FMHWife & Husband (82,459.81) 11. Mrs B (65,000.00) (wife’s value) TOTAL ALL LIABILITIES: (147,459.81) TOTAL OF NET ASSETS OF PARTIES
- INCLUDING SUPER$1,521,887.19
ASSET OWNERSHIP VALUE LIST OF WIFE’S POST SEPARATION LIABILITIES
1. Loan from Mr KG Wife E(18,448.00) (wife’s value) 2. Visa Teachers Credit Union Wife (6,865.84) 3. HSBC Visa Credit Union Wife (6,932.08) 4. Overdraft Teachers Credit Union Wife (1.947.53) 5. Centrelink debt Wife (2,416.00) 6. Loan from Ms RR Wife (20,000.00) TOTAL
($56,609.45)
LIST OF HUSBAND’S POST SEPARATION LIABILITIES
7. Loan from G Kertz Husband (19,749.55) (husband’s value) 8. Loan from C Kertz Husband (180,245.83) (husband’s value) 9. ANZ Visa card Husband (946.00) 10. Accountants fees Husband (5060) (husband’s value) 11. Esanda Finance Husband (14,678) (husband’s value) 12. Repairs and RGN for Jeep Husband (1,000) (husband’s value) TOTAL
(946.00) (wife’s total value)
(221,579.38) (husband’s total value)
issues on the balance sheet
The parties agreed at the conclusion of the trial that the issues for determination on the balance sheet items were as follows:
1.Should there be any balance sheet item for “contents”?
No submission was made to support there being any balance sheet entry for contents. The parties appear to be in agreement that the contents of the matrimonial home were divided by agreement at some time following separation.
2.Should the husband’s interest in C Pty Limited be treated as an asset on the balance sheet or as a resource only?
The husband submits that, having regard to the evidence of Mr L, the Court would not include the husband’s interest in C Pty Limited as an asset but rather treat it as a resource.
The husband’s father is the governing director of the company. The governing director has control of the company. He can veto the transfer of shares.
The wife opposes the husband’s shares in this company being treated as a resource when clearly they are assets. She points out that upon the demise of each of the husband’s parents the husband will become the governing director of the company.
I am referred to the decisions of the court in Best and Best (1993) FLC 92-418.
I agree with the submission of the wife that I should not call an asset a resource when clearly it is an asset. I can take into account under section 75(2) all of the matters raised by the husband in his submission which raise issues as to the value of the asset to the husband at this time. I propose to do so.
3.Should there be an add back of $20,000 to the husband arising from a dividend paid to him by PT Pty Ltd on 28/3/2006?
The husband’s submission is that the amount should not be added back. It is submitted that this is post separation income of the husband and in accord with the authorities of the Full Court of the Family Court of Australia should not be added back as a balance sheet item. I am referred to Gollings and Scott (2007) FLC 93-319.
It is further submitted that PT Pty Ltd already appears as a balance sheet item in that the husbands interest in the company has been the subject of a valuation, about which there is no issue.
The wife argues that as the income was earned by the company pre-separation the distribution should be included as an asset. She says that the funds were used to meet post separation expenses.
I am not attracted in this case by the argument of the wife. Firstly, by adding back the full $20,000 no allowance is made for any taxation incidence which might have attached to the receipt of the payment. Further I am entitled, should the case so warrant, to take into account the income and expenses of the parties post separation. Had the husband not received the money post separation, the reality of this case is that he would probably have borrowed the funds from his parents to meet the expenses paid with the $20,000 dividend. The husband would then be seeking to include in the balance sheet the amount of debt incurred by him with his parents.
In all of the circumstances I consider the $20,000 should not be included in the balance sheet.
4.Should any part of the husband’s debt to his parents be included as a balance sheet item?
The evidence establishes to my satisfaction that the husband’s debt to his parents is $327,283. The submissions on behalf of the husband explain that he is seeking to have the sum of $180,245 included as a balance sheet item. He says part of that sum is $135,909 which was paid for costs associated with the cheque proceedings in the Local Court with his son P. The husband says this is not a claim to include legal costs associated with the Family Court proceedings and would therefore not be caught by the authority of Chorn and Hopkins (2004) 93-204.
The wife submits that there should be no inclusion of post separation debt. She says that the matter can be adequately dealt with under s 75(2).
The issue of the payment of the $135,909 as costs resulting from the lost action by the husband against P is a difficult one and I propose to consider that under section 75(2). I do find that it should not be a debt which the wife should be required to contribute to directly by having the debt included on the balance sheet. There are other aspects to the whole sorry story and the role each party played which I propose to refer to when I deal with section 75(2).
It is not clear to me to what the balance ($44,336) of the claimed $180,245 is attributed. In the absence of some clear explanation I am unable to add the sum as a liability and will deal with it as part of section 75(2).
5.Should any of the parties’ post separation debt (including borrowing for payment of legal fees) be included on the balance sheet? In particular the husband’s debt to his accountants, to S Accountants and for the repair of the Ford Utility.
The husband submitted that his loan from his mother of $19,749 should be included in the balance sheet. These are monies which are included in Annexure 24 to the husband’s affidavit. He also seeks to include his ANZ visa debt of $946, His accountant’s fees of $5,060, his liability to Esanda Finance of $14,678 and the repairs to his Jeep of $1,000. The husband further seeks also to include the cost of repairs to his Ford Utility of $7,343.48. This last sum was not included in Exhibit “X3”.
The debt of $5,060 to the accountants arose because the husband was required to have tax returns prepared for the company by order of this Court. Had that order not been made the husband would have had to cause the company to have the work done, albeit at a more leisurely pace. I can see no reason why this expense should be included in the balance sheet as a liability of the husband.
No particular submission was made to support the contention that the husband’s debts should be included in the balance sheet.
There are a variety of reasons why the wife opposes these expenses being added to the balance sheet. I propose to deal with these debts when I address the section 75(2) matters. There are a number of reasons why, in my view, these debts should not be added to the balance sheet. I will explain why later in these reasons when I address section 75(2).
Other matters re balance sheet
The wife submitted that the balance sheet to be adopted was that dated 20 July 2009 and being Exhibit 3A. She submitted that the value of the husband’s interest in C Pty Limited should be $298,017 in accordance with the latest valuation and evidence of Mr L. She also argues there should not be any an entry for a debt owed to her by P.
I agree with the submission of the wife that the debt owed by P to her of $3,000 should not be included in the balance sheet as the wife’s own liability to Mrs RR of $20,000 is not included. These matters should be considered under section 75(2).
The balance sheet should, however, reflect the debt to P arising from the purchase of the wife’s 1995 Nissan car which was purchased post separation.
The wife submits that the liabilities of the parties which appear in Exhibits “X3B” and “X3C” should be taken into account under section 75(2). I agree with that submission.
Following the conclusion of the hearing and shortly before the judgment was given I sought the parties jointly provide me with an update of the balance owing on the mortgage and also the agreed cost of sale. The parties advised that the mortgage balance was $57,495.63. The advised the selling costs would be $30,000. I have included the mortgage update figure in the balance sheet.
determined balance sheet
ASSET OWNERSHIP VALUE 1. L property (FMH) Joint 1,300,000.00 2. 1995 Nissan motor vehicle Wife 5,000.00 4. 1995 Jeep Husband 1,000.00 5. Shares:-
- Interest in PT Pty Ltd
- Interest in C Pty Ltd
- Interest in Kertz P/L
Husband 1,876.00
298,017.00
-6. Add Back – Dividend of $20,000 received from PT Pty Ltd –
28.3.06Husband (see s 75(2))
7. Add Back – Sale of Ford Utility Husband 9,000.00 SUPERANNUATION
8. Wife’s superannuation – First State Super Wife 22,270.00 9. Husband’s Colonial Wealth Superannuation Husband 81,665.00 TOTAL ASSETS:
$1,718,828.00
LESS LIABILITIES:
10. Community First Credit Union
- Mortgage on FMHWife & Husband (57,495.63) 12. Wife’s car debt to P Kertz Wife 5,512 TOTAL ALL LIABILITIES:
($63,007)
TOTAL OF NET ASSETS OF PARTIES
- INCLUDING SUPER$1,655,821
the issues
When the trial commenced I was presented with a list of issues of fact which would need to be determined in the trial. That list was marked as Exhibit X2. At the end of the trial the parties were able to substantially reduce the issues and to identify the issues of fact which then were required to be addressed (other than those referrable to the balance sheet). Those issues were defined in Exhibit X10. The document spelt out the issues as:
“GENERAL ISSUES
1.What were the parties’ assets and liabilities at the date of separation?
2.Has each party made a full and frank disclosure of relevant fact?
3.Should the wife have made any contribution towards the payment of the mortgage on the FMH post separation? (is this an assessment of a negative contribution?).
4.What, if anything, is likely to be each parties’ future involvement in the care of their son [D]?
5.Did the wife’s mother, Ms [B], provide $40,000 to the husband as she alleges?
6.Is there an equitable interest that Ms [B] has in the FMH, or any other equitable interest which can be pressed against the parties?”
the evidence
Affidavit Evidence of the Husband
In August 1983 the husband’s father gave him 6000 shares in Wesgo Holdings Pty Ltd.
In relation to the property which the parties owned and developed in A, the husband made the following improvements to the property.
a.He dug by hand and removed several tons of dirt to make a storage area under the home;
b.Bricked up the walls of the storage area;
c.Installed a central vacuum system;
d.Installed a concrete footpath around the home;
e.Installed a water irrigation system (80 metres);
In addition, the husband and the parties’ son, M, constructed retaining walls and carried out landscaping on the property.
Towards the end of 1986 when the parties purchased U property, the husband’s parents lent the parties $10,753.65. In addition, the husband’s parents gifted to him the following:
a.$1,500 towards painting the premises;
b.$10,500 for Counsel’s fees connected with the litigation; and
c.$996 for Council rates.
One month after the purchase of the former matrimonial home, the husband obtained an owner-builder permit.
The husband says that the entire cost for the completion of the fourcar brick garage, the single story and the two story building and landscaping work on the former matrimonial home was $260,000. The husband says those monies were sourced as follows:
a.$40,700 being the proceeds of sale of Wesgo shares owned by the husband and sold in January 1995;
b.$66,000 from PT Pty Ltd arising from the sale of DR Business;
c.$28,100 from savings;
d.$112,780 being the proceeds of the X property sale; and
e.Approximately $12,420 from joint savings with the ANZ Bank.
There were some payments made by the husband’s parents by way of assistance during the construction of the buildings.
Annexure O to the husband’s affidavit filed 7 June 2006 is a schedule of the cheques and all amounts paid in respect of the building costs.
The husband was responsible for overseeing the building of the dwellings on the former matrimonial home. In April 1989 he modified the original plans. In May 1989 the brick walls in the main section of the house were completed. Thereafter, roof trusses were ordered and appropriate contractors engaged.
The husband installed three roller doors with the help of his father who had paid for the roller doors. The husband personally tiled the shower and toilet area and installed a vanity and hot water system in the bathroom of the house.
The husband levelled the land near the foundations of the house by borrowing a neighbour’s bobcat and bulldozer. He changed the fall of the drainage line for the single story home. The husband carted by wheelbarrow 40 tonnes of coal wash and in-filled an area prior to concrete being laid. The husband assisted with the installation of the roof trusses on the single story home. He supervised the electrical and plumbing work on the single story home and he assisted a plasterer to line the internal walls of the single story home and installed insulation in the ceiling. The husband collected and installed the kitchen cupboards and cut out, fixed and stained all door and architraves inside the single story home.
On 15 June 1993 the husband was granted an owner-builder’s license in respect to the construction of the two storey building/extension on the property. The husband operated and drove a tip truck, which was used to excavate and move 1,400 tonnes of earth to the parties’ land and the neighbouring block.
After the excavations had taken place for the footings for the two storey building, there was a storm and the husband spent many hours cleaning out the soil that had fallen into the trenches.
The husband collected and delivered to the property 1,500 feature bricks, which were a gift from his father. The husband installed ducting for the central vacuum system.
The husband assisted in the lifting and installing of gyprock for the main house. He worked long days from Boxing Day 1994 until 5 January 1995.
The front retaining wall is 70 metres long and was planted out with plants, gifted by the husband’s mother. They were planted either by her or the husband.
The husband has calculated that the totality of the time he spent working on the construction and landscaping of the former matrimonial home amounted to 546 hours. That time was carried out outside of normal working hours. The husband concedes that during the time he was heavily involved in the construction, supervision and landscaping of the property, a greater burden fell on the wife in caring for the children.
After the acquisition by PT Pty Ltd of the DR business in 1992 the husband worked usually five and a half days per week at the Sydney office of the business.
When the husband sold the DR franchise in January 1999 for $225,000 he applied the proceeds as follows:
a.repayment to Kertz Pty Ltd of $65,000 being the amount PT Pty Ltd had borrowed to initially acquire the DR franchise;
b.repayment of lease payout on vehicles not taken over by the purchaser $46,992;
c.repayment of part of the loan from the CFCU being approximately $66,000;
d.business agent selling fees, solicitors fees, accountant fees and taxes of $27,736; and
e.$19,272 applies to the business bank account of WR Pty ltd, being the company retained by the husband after the sale of the DR franchise.
Following the sale of TJ franchise in December 2005, PT Pty Ltd repaid $40,000 loan owing to Kertz Pty Ltd, which had been obtained to purchase the franchise initially. It also repaid $5,600 in interest on the loan and another $1,292, that being the balance remaining of interest on a July 2003 loan.
Since the sale of the TJ franchise in December 2005, the husband says he has been attending to preparing for this hearing. He was also involved in litigation with his son, P.
A considerable amount of time in the proceedings was taken up with cross-examination relating to the action between the husband and his son P. This action related to a cheque in the sum of $10,000 which, when presented, was declined. I refer to this litigation later.
All of the parties’ children are now over the age of 18. The parties’ son D is disabled and receives a disability pension. He suffers from Velo-Cardio-Facial Syndrome. It is a congenital and permanent condition and it impacts on his mental processing and concentration.
D has a child of his own, namely Y.
In his affidavit material, the husband sets out all of his contributions to the care of the children and to the family. The children’s primary care giver was the wife. During the later years of the marriage, the wife worked part-time and there was a cleaner engaged one day a week.
Following the incident on 14 June 2004, where the husband broke Mrs B’s table, he was taken to Campbelltown hospital. The next day he saw Dr I.
The husband described his usual work pattern whilst working DR Company. That included leaving home at 6.30am and arriving home between 8 pm and 8.30 pm. Then between 10.00 pm and 12 midnight he would do account work and other bookwork associated with the business. Alternatively, he would carry out renovations. The husband said he also worked long hours at TJ Franchise.
The husband holds a motor vehicle dealer’s license, which he has used to purchase and sell vehicles through PT Pty Ltd or W Pty Ltd.
On 9 February 2009 the husband filed an updated affidavit. At that time he was residing in the former matrimonial home at L. In that affidavit the husband said the parties’ son D was residing with his partner, their child Y and D’s partner’s daughter. The parties’ son N was residing with the wife. He had completed a course at TAFE at the end of 2007.
The husband annexed copies of his tax returns for the years ending 30 June 2006, 30 June 2007 and 30 June 2008. His taxable income in the year 30 June 2006 was $57,574. His taxable income as at 30 June 2007 was NIL, and his taxable income as at 30 June 2008 was $23,100. His 2008 income was derived from W Pty Ltd.
The husband said his total average weekly income is approximately $455. He derives that from a Newstart Allowance, which he commenced to receive on 16 September 2008. The husband annexed to his affidavit and marked as Annexure “23” a schedule of expenses relating to the former matrimonial home between 12 March 2006 and 31 December 2008 paid by his parents. That totalled $12,537. The husband also annexed a schedule of loans from his parents between 19 July 2006 and 23 January 2009, which totalled $327,000. In addition to those loans, the husband says that his father has assisted him with paying for airfares to holiday in Thailand.
The mortgage on the former matrimonial home has been paid by the husband through borrowing monies from his parents. The husband annexed and marked as Annexure “26” a schedule of payments made on the first mortgage between 3 November 2003 and 24 January 2009 and showing the source of the monies to meet that payment. The total repayments were $90,555 of which $65,955 had been borrowed from his parents. Other sums of money have been borrowed by the husband from his parents to meet expenses associated with the former matrimonial home, his legal costs in these proceedings, his legal costs in the “cheque case” against P Kertz and personal expenditure of the husband. Those borrowings form part of the monies which total $327,000 as borrowings from the husband’s parents.
I have weighed in favour of the wife a very high level of contribution, as against that of the husband, in the area of homemaker and parent. I have also taken into account in a substantial way the contribution of $50,000 by the wife’s mother in 1995. Notwithstanding those very considerable contributions, I am convinced the pendulum still swings heavily in favour of the husband as is seen by the concluded assessment.
relevant section 75(2) matters
The husband is 55 years of age and currently in receipt of a means tested benefit. In relation to his unemployment the husband said that he is on a training program waiting list.
The husband was asked about his friend Ms KA, he said her name is KA. She was born in Thailand. He met her in Australia. She has accompanied him on three occasions to Thailand. She has family in Thailand. There is no other evidence to suggest the nature of his relationship with her.
I take into account the evidence of Dr BT in relation to the husband’s health. The husband attends upon his GP Dr BT. He sees a psychologist, Ms RS. He sees her once a fortnight; he commenced seeing her on 18 April 2008. Approximately once a fortnight he sees Dr BT. In August 2008 he saw Dr HI, consulting psychiatrist. For the preparation of a single expert report. He has been referred by his general practitioner to a psychiatrist, Dr AV, who he first saw on 27 October 2009. The husband has continuing shoulder pain. He has had treatment as recently as December 2008. He is unable to lift heavy weights. Dr BT said that the husband’s state of health is likely to significantly improve with the resolution of the Court proceedings.
The husband is receiving treatment for his right knee for intermittent pain.
The husband has managed significant commercial enterprises. He has skills which in the past have earned him a good income. I consider it reasonable to predict that the husband will probably return to employment or the ownership of a business which will provide him with an income of about $50,000 per annum. I base that prediction on the husband’s past earning capacity.
The wife is 53 years of age and in full time employment with the Department of Education, NSW. She earns $784 per week before tax and superannuation deductions are made.
In April 2005 the wife suffered an injury whilst at work. It was a cartilage injury in her left knee. She has undergone surgery and appears from her doctor’s report to be making good progress. She will probably have to have knee replacement surgery in the future.
At the end of 2006 or the beginning of 2007 the wife commenced to experience problems with her bladder. She now has to catheterise herself four times a day. The catheters cost $63 every three months. She takes antibiotics almost constantly. That costs about $30 per month.
On 16 July 2007 the wife had a hysterectomy.
The wife describes herself as emotionally fragile, easily moved to tears. I accept her evidence in this regard.
The wife is living in a de-facto relationship with Mr KG. Mr KG has full time employment as a stores person. The wife said she commenced to live with her fiancé, Mr KG, in June 2005. He pays $315 a fortnight and he pays half of everything.
The wife has borrowed $18,448 from Mr KG post separation. It appears it was probably used to meet everyday living expenses. That debt remains unpaid.
In relation to her re-marrying Mr KG, the wife is unsure when that will occur. The wife said Mr KG has an investment fund of $80,000, which he could put towards any acquisition of the husband’s interest in the former matrimonial home. Mr KG’s evidence is that he receives an income of $963.40 each week before tax is deducted. He has $82,348 on term deposit and had $6,261 in the Teachers Credit Union. He has advanced by way of loan to the wife $16,448. He has superannuation worth $6,799. He has $14,727 in liabilities.
The parties’ son N currently lives with the wife. He does not contribute financially to the household. He was paying $150 per week until January 2009. He is in regular employment. The wife says that N is welcome to move to the former matrimonial home with her if she is able to do so.
The wife agreed that at the time of separation she had a vehicle. Further, in August 2005 the husband paid registration and insurance for the car. She agreed that she caused the vehicle to be delivered to the husband’s parents. She denied that it was in very poor condition and damaged at the time. She said she returned it because she understood it was a business vehicle. Apart from that, she could not recall why she had returned it. She thought he had asked for it. It had been in her possession for well over a year post-separation.
Following the separation the husband remained living in the former matrimonial home until February 2009. Since that time he has resided with his parents whilst he is in Australia. The wife has rented accommodation since the separation.
The husband understood he was vacating the home so that the wife could take up occupation of same and be responsible for the payment of outgoings on the property. There were negotiations between the parties through their solicitors which led to a circumstance where the wife did not take up the occupation nor did she pay any outgoings on the property. The evidence does not allow me to determine if the husband has paid any outgoings on the property since about February 2009. The failure for the parties to be able to reach an agreement which allowed the wife to occupy the property after February 2009 reflects poorly on the parties and their legal representatives. This is especially so in circumstances where it is the wife who seeks orders for the home to be transferred to her.
Although the wife’s mother made a contribution of at least $50,000 to the parties in about 1995 the parties equally provided accommodation for her until the parties’ separation in 2004. Mutual services were provided between the parties and the wife’s mother during that period. This included the parties meeting the expenses associated with the occupation of the property as a whole and the wife’s mother was not required to contribute to utility expenses. The wife acknowledged that the parties had taken her mother on a holiday to the United State of America on one occasion. I have assumed this was funded by the parties. The wife and her mother also had a trip to the UK, however, it was not suggested to the wife or Mrs B that this was at the cost of the parties.
The husband annexed copies of his tax returns for the years ending 30 June 2006, 30 June 2007 and 30 June 2008. His taxable income in the year 30 June 2006 was $57,574. His taxable income as at 30 June 2007 was NIL, and his taxable income as at 30 June 2008 was $23,100. His 2008 income was derived from W Pty Ltd. The husband last worked full-time when employed by TJ Franchise. He has done some clerical consulting type work for W Pty Ltd. I take into account that the husband received a dividend from PT Pty Limited of $20,000 on 28 March 2006.
The husband was cross-examined about the tax loss in the company W Pty Limited of $110,206. Although this company does not presently trade there seems no reason why the husband might not in the future use this company as a vehicle to trade and thereby take advantage of the tax losses as against future tax commitment for the company.
On 8 February 2006 the husband commenced proceedings in the Local Court against the parties’ son P and/or his company EP Pty Ltd to recover $10,601 arising from a dishonoured cheque supplied by P to the husband. The payment was related to repairs to a family motor vehicle, which P had severely damaged in an accident and other expenses including airfare expenses. The husband failed in the proceedings in the Local Court to recover the debt and he was ordered to pay the costs of P and EP Pty Ltd in the sum of $72,432. Including his own costs, the husband incurred $135,909 in legal fees associated with those proceedings.
The issue of the payment of the $135,909 as costs resulting from the lost action by the husband against P is a difficult one. The husband, I conclude, should not have taken the action against P. He should have negotiated with P about the debt. If he could not have reached a settlement then he was best advised to leave the matter and deal with it in another fashion.
On the other hand, the wife was clearly at the time on good terms with P. She chose to do nothing about this inter family conflict. She must equally be seen as bearing some of the responsibility for the circumstances which unfolded. I conclude that she did nothing because it suited her emotional purposes at the time to have P “in her camp” and in conflict with the husband. She could have taken a number of steps in the matter within the family. If necessary she could have sought an order in this Court restraining the husband taking any action against P until the conclusion of the Family Court proceedings.
In the course of the hearing before me I heard that P had available to him a copy of documents filed in these proceedings by the husband. I heard that those documents were used by P in the Local Court proceedings. The wife denied any connection with P having possession of those documents. On the balance of probabilities I don’t accept the wife’s evidence in relation to that matter. I conclude that the wife probably provided an avenue to P to obtain those documents.
I propose to take into account therefore that the husband has a liability to his parents arising from the advance of about $135,909 to complete the proceedings against P and his compliance with costs orders arising there from.
The sum of $135,909 is part of a larger sum of $327,283 which is owed by the husband to his parents. I have carefully considered the evidence in relation to that debt and I do accept the husband owes his parents that sum. Apart from funds being advanced in relation to the husband’s liabilities arising from the litigation in the Local Court with P, the debt includes payments made to the mortgagee on the home, legal costs and disbursements associated with these proceedings and other expenses associated with the maintenance of the home post separation. I do accept that the husband will be required to repay his parents this money.
Collectively, the husband has paid for costs and disbursements associated with these Family Court proceedings $208,938. He still owes $45,242. There is still unbilled legal costs and Counsels fees relating to the July hearing days. Considerable sums of money paid to his lawyers for fees came to the husband as loans from his parents.
The wife has paid legal fees of $15,340.99. She owes $259,702.
Included in the balance sheet as against the husband is his interest in C Pty Limited. That interest has been included in the balance sheet as having a value of $298,017. The husband submitted that it was quite unfair and unrealistic to consider that interest as an asset rather than regarding it as a resource. The evidence supports a finding that on the balance of probabilities the husband will not be able to realise that interest until each of his parents have died and the company is would up. The share holders other than the husband’s parents are his siblings.
Although I have included the husband’s interest in C Pty Limited as an asset in the parties’ balance sheet I do here take into account the husband’s submission as to the restrictions on his use of the asset, which I consider, has merit.
I here take into account that each party has a credit card liability which arose post separation. The husband’s debt is $969 and the wife’s is $6,932 on one credit card and $6,865 on another.
The husband incurred accountants’ fees of $5,060 (still unpaid) during the course of the proceedings to obtain account for relevant companies. I take this into account at this point.
The husband has a liability to Esanda Finance of $14,678 arising from a transaction where he acquired a lawn mower for P. This transaction took place just before separation however there is no evidence that the wife knew of or consented to the arrangement (although it is hard to se that she would not have done so had she been consulted). There is a wealth of evidence about this debt and the whereabouts of the mower. It has been suggested that P would take over responsibility for the debt upon the husband transferring the title to the mower to him. The husband denies he has had any offer put to him in this regard. The mower has been housed by the wife at some time post separation. She has chosen to not involve herself in this dispute. Again I consider that to be part of the conflict between she and the husband and to promote the partisanship of the children to her cause. I consider the wife could well have resolved this issue given she has a good relationship with P and was involved in these proceedings with the husband. I consider it unlikely that there will be any resolution of this matter and accordingly I consider it probable that the husband will have to pay the debt himself. I take that into consideration here.
Post separation the husband paid for repairs to his Jeep of $1,000.
Post separation the husband paid for repairs to his Ford Utility of $7,343.48. These repairs were necessary as a result of damage caused to the car by P. He was unable to recover these costs from P.
The husband has travelled to Thailand between 12 and 13 times since the separation. Since March 2009 he had travelled twice. The first time for six weeks and the second for 10 days. His father has accompanied him on four occasions in 2007. The husband says that in Thailand he teaches children as part of a foundation to support children. The husband agreed that it could be somewhere in the order of 280 days that he has spent in Thailand since the separation. This indicates a standard of living which has not been available to the wife post separation. I propose to take that into account here.
I take into account on behalf of the wife that she has a liability to Ms RR of $20,000. I also accept she has an overdraft in debit $1,947 and a Centrelink debt of $2,416.
The wife had the use of a Nissan car owned by the husband’s mother for a period of about 12 months post separation.
I take into account that P owes the wife $3,000.
The parties’ son D is disabled and receives a disability pension. He suffers from Velo-Cardio-Facial Syndrome. It is a genetic and permanent condition and it impacts on his mental processing and concentration.
D has a child of his own, namely Y.
Each of the parties considers that they will have to contribute to the care of D and his family in some manner. I accept that is a reasonable matter for them to be concerned about. I do consider that the wife is more likely to have to contribute in this regard than the husband. I am satisfied on the evidence that D has a more dependant relationship with his mother than his father and she is likely to be the first port of call should he need assistance.
D is entitled to receive funds from a company, MN Pty Limited. This is a company established by the husband’s parents for the benefit of the children. D’s current entitlement, which the husband’s father says he can have immediately provided he collects it from his grandfather, is $39,000.
The husband’s father gave evidence saying if the husband needs further funds, he will assist him. He agreed that he and his wife were reasonably well off. He agreed that he and his wife’s assets were worth several million dollars. It was put to him that he did not expect that the husband would repay him the money advanced. He said, “He will repay it. If he can, he will repay the money.” He confirmed that he had provided money to his other two children.
The parties ought to be able to maintain a moderate standard of living. That is not a modest standard nor a lavish standard.
The marriage was for 27 years.
A division of the parties net assets 62.5% to the husband and 37.5% to the wife would result in the husband receiving $1,034,888 and the wife $620,933. That means the husband receives $413,955 more than the wife.
conclusion on section 75(2) adjustment
The husband submitted that I should make an adjustment in his favour of 5%. The wife submitted the 75(2) matters warranted an adjustment in her favour of 15% to 20%.
The most significant matters in my view from the above list are:
·The parties’ comparative income earning capacity into the future.
·The wife’s resource in her partner, Mr KG.
·The husband’s occupation of the home from mid 2004 until February 2009 (4.5 years).
·The husband’s debt to his parents of $327,000.
·The fact that the husband’s interest in the significant asset of shares in C Pty Limited is unlikely to be available to him until his parents have both died.
·The resource the husband has in his parents and their generosity to him through the marriage and since.
·The wife’s debt to Ms RR and on her credit cards.
·My conclusion that the support of D will fall more to the wife than the husband into the future.
·The fact that the husband receives $407,714 more than the wife in net assets as a result of assessment of contribution.
Considering all those matters I consider there should be an adjustment in favour of the wife of $100,000. The result will be that the wife receives $720,933 of net assets and the husband receives $934,888
just and equitable
If the wife is to receive $720,933 in assets it seems unlikely she will be able to acquire the husband’s interest in the property which has a balance sheet value of $1,300,000. The wife would need to borrow about $600,000. That would seem on the evidence before me, to be unlikely. Nonetheless I propose to afford her a short amount of time to canvass possibilities before the property is listed for sale. The husband has sought a sale of the property for a considerable period of time now and the wife has steadfastly resisted a sale.
In the circumstances of this case I conclude that the result which sees a division of assets between the parties as determined by me is just and equitable.
The husband will retain the following assets from the balance sheet:
1995 Jeep $ 1,000
Interest in PT Pty Limited $ 1,867
Interest in C Pty Limited $ 298,017
Proceeds of sale of Ford Utility $ 9,000
Superannuation $ 81,665
Total Assets retained $ 391,549
The husband has no liabilities on the balance sheet.
As the husband is entitled to $934,888 from the asset pool as determined by me he will need to receive an additional $543,339 from the L property. That is the sum the wife will need to pay the husband in order to retain the home.
The Orders
I propose to allow the wife a short period of time (28 days) to provide written confirmation to the husband that she has received a loan approval from a financial institution or body which would give her sufficient funds when added to her own resources and those of Mr KG to be able to pay the current mortgage encumbrance on the property and the husband the sum he is required to receive through this determination.
Should she supply such an approval then she will need to complete the transaction within a further period of two months.
If the wife is unable to raise the funds to pay out the husband the L property will need to be sold and the proceeds divided.
The equity in the property is $1,242,504. It is not unreasonable to allow $30,000 (as agreed between) to meet the selling costs however including that figure at this stage could give rise to a slight injustice and so I will not deduct it. The husband’s share of that fund expressed as a percentage would be 43.73%. Thus, if the property is to be sold then the husband should receive 43.73% of the net sale proceeds.
The orders should reflect a percentage adjustment rather than a fixed sum of money to be paid to the husband as the value of the property may have changed since it was valued for the purpose of this hearing.
As referred to earlier there should be an indemnity provided by the husband to the wife in relation to the debt of $15,000 between the husband’s mother and the wife. There should also be an indemnity by the wife to the husband against any requirement of the husband to repay to the wife’s mother any of the funds she provided to the parties associated with her occupation of the former matrimonial home.
The husband should indemnify the wife against any claim brought by his parents against either party seeking payment of monies advanced to the parties prior to these orders.
Otherwise each party should retain the property in their sole name or in their possession and control. The husband is to retain the corporate entities PT Pty Limited and W Pty Limited.
I certify that the preceding four hundred and thirty six (436) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Le Poer Trench
Associate:
Date: 23 December 2009
Key Legal Topics
Areas of Law
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Family Law
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Property Law
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Equity & Trusts
Legal Concepts
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Remedies
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Costs
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Injunction
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