Klemson and Winter (No.2)
[2019] FCCA 2011
•26 July 2019
FEDERAL CIRCUIT COURT OF AUSTRALIA
| KLEMSON & WINTER (No.2) | [2019] FCCA 2011 |
| Catchwords: FAMILY LAW – Property – contributions – modest asset pool – real estate owned overseas. |
| Legislation: Family Law Act 1975 (Cth), ss.75(2), 79 |
| Cases cited: Stanford & Stanford [2012] HCA 52 Lee Steere & Lee Steere (1998) FLC 91-626 In the Marriage of Omacini (2005) 33 Fam LR 134 |
| Applicant: | MS KLEMSON |
| Respondent: | MR WINTER |
| File Number: | ADC 3502 of 2012 |
| Judgment of: | Judge C Kelly |
| Hearing dates: | 28 and 29 March 2018 |
| Date of Last Submission: | 11 February 2019 (written submissions) |
| Delivered at: | Adelaide |
| Delivered on: | 26 July 2019 |
REPRESENTATION
| The Applicant: | In Person |
| Counsel for the Respondent: | Ms A Horvat |
| Solicitors for the Respondent: | Nelson & Co |
ORDERS
In full and final settlement of any claim that either party may have against the other for property settlement or alteration of property interests
The wife do retain the following assets for her sole use and enjoyment absolutely:
(a)the property in Country B, in the Town of City A, Country B as described in Deed …, Volume … ;
(b)all households goods and personal effects in her possession or control;
(c)any motor vehicle in her possession;
(d)any bank accounts or investments in her sole name;
(e)her superannuation entitlements.
The husband do retain the following assets for his sole use and enjoyment absolutely:
(a)the property situate at C Street, Suburb D, in the State of South Australia, being the whole of the land described in Certificate of Title Register Book Volume … Folio …;
(b)all households goods and personal effects in his possession or control;
(c)any motor vehicle in his possession;
(d)any bank accounts or investments in his sole name;
(e)his superannuation entitlements, subject to these orders.
Within seven (7) days of this order, the husband’s solicitors forward a Withdrawal of Caveat to the wife in relation to her Caveat No … and the wife shall sign and return this document to the husband’s solicitors within seven (7) days thereafter.
In the event the wife does not return the Withdrawal of Caveat within seven (7) days, then the husband is at liberty to file an Application to Remove the Caveat.
Each party retain responsibility for all debts and liabilities in their sole name.
The Court allocate, as required by s.90XT(4) of the Family Law Act 1975, as amended, a base amount of $28,276 to the wife out of the husband’s interest in E Super Fund.
Pursuant to s.90XT(1)(a) of the Family Law Act 1975, as amended, whenever the Trustee of E Super Fund makes a splittable payment out of the husband’s interest in E Super Fund the Trustee shall:
(a)pay to the wife or to her legal personal representative the amount calculated in accordance with Part VI of the Family Law (Superannuation) Regulations 2001 using the base amount of $28,276;
(b)make a corresponding reduction in the entitlement of the husband.
Paragraphs (6) and (7) have effect from the operative time.
The operative time for these Orders shall be four (4) working days after the date of service of these Orders upon the Trustee.
The Trustee of E Super Fund shall do all such acts and things and sign all documents as shall be necessary so that, in accordance with the obligations as set out under the Family Law Act 1975 and the Family Law (Superannuation) Regulations 2001, the Trustee can calculate the entitlement of, and make payments to, the wife in accordance with paragraph (6).
The payments from the husband’s superannuation interest made after the Trustee has rolled over or transferred the transferrable benefits to a fund of the wife’s choosing are not splittable payments.
The husband’s solicitors notify the wife as to the address and contact details for the Trustee of E Super Fund within seven (7) days of this Order.
The wife serve a sealed copy of these Orders upon the Trustee for E Super Fund within a further seven (7) days thereafter and request that the Trustee implement these Orders.
Each party sign all documents and do all things necessary to give effect to these Orders.
In the event a party fails to sign or execute any document after seven (7) days of being required to do so by the other party, then a Registrar of the Federal Circuit Court is empowered to sign and execute such document on behalf of the defaulting party.
All proceedings are dismissed as finalised.
IT IS NOTED that publication of this judgment under the pseudonym Klemson & Winter (No.2) is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT ADELAIDE |
ADC 3502 of 2012
| MS KLEMSON |
Applicant
And
| MR WINTER |
Respondent
REASONS FOR JUDGMENT
Introduction
The parties married in … 2004 and separated in September 2012. Final parenting Orders were pronounced in relation to their daughter X on 8 August 2014, following extensive litigation.
In July 2016 the wife filed an Initiating Application seeking orders for property settlement. The parties have been unable to resolve these matters by negotiation and it now falls to the Court to determine a just and equitable property settlement between the parties.
Background
The husband was born on … 1971 and is 48 years of age. The wife was born on … 1970 and is also 48 years of age.
The parties met on line in early 2004 when the wife was living in Country B. Their relationship progressed over the subsequent months and the husband travelled to Country B on … 2004. The parties were married two days later on … 2004. At that time the wife was living in an apartment that she had purchased from her parents, described as Apartment P in the town of City A, Country B (hereinafter referred to as “Apartment P”). The parties then made arrangements for the wife to obtain an Australian Visa and the wife arrived in Australia in … 2005.
The husband was employed as a Professional with Employer Q at the commencement of the relationship. He then changed careers and obtained employment as a Professional where he works alternating shifts on an “eight days on/four days off” roster. The husband continues in that employment to the present time.
The wife was an office worker in Country B and upon her arrival in Australia undertook English language courses and other training opportunities before obtaining limited part time employment.
At the commencement of the relationship the wife owned her apartment in Country B but otherwise brought assets of limited value to Australia. The husband owned a property at F Street, Suburb G (“the Suburb G property”) with an equity of approximately $58,000. He also owned a Motor Vehicle R and superannuation with S Superannuation with an estimated value of $75,000.
The Suburb G property was sold on … 2006 and the parties purchased the former matrimonial home situate at C Street, Suburb D, (“the C Street, Suburb D property”). The net proceeds of sale from the Suburb G property were effectively retained by the Commonwealth Bank in partial discharge of the mortgage, which was transferred to the C Street, Suburb D property with a balance of $147,388. The property was purchased in the husband’s sole name and he has remained living in the property since separation.
The parties’ child, X. was born on … 2006 after which the wife took on the role of primary parent and caregiver for X. The father also participated in X’s day to day care when he was available.
The parties’ relationship became increasingly unhappy and separation occurred on 5 September 2012 when the wife left the former matrimonial home with X.
The husband commenced parenting proceedings shortly after separation, seeking to resume his regular relationship with X. The parenting proceedings were protracted and very difficult. X was completely alienated from her father and ultimately the Court found it was not in the child’s best interest to make further attempts to re-establish and re‑engage her relationship with her father. Final parenting Orders were pronounced by the Court on 8 August 2014 granting the mother sole parental responsibility for X and making no order for X to spend time with her father.
These proceedings
The wife filed her Initiating Application seeking property settlement orders on 7 July 2016 and the husband filed his Response on 26 August 2016.
The first return date took place on 1 September 2016 and the parties were directed to provide informal discovery, clarify the asset pool, including any necessary valuations and to attend a Conciliation Conference on 10 January 2017.
On 4 January 2017 the parties jointly requested that the Conciliation Conference be adjourned, to allow the wife further time to undertake relevant searches in Country B regarding Apartment P. The Conciliation Conference eventually proceeded on 7 June 2017 but the parties were unable to resolve financial issues.
The parties disagreed about the status and relevance of the wife’s ownership of Apartment P in Country B. The wife’s initial Affidavit acknowledged her ownership of this apartment but did not include it in the assets of the marriage.[1] At various times during the proceedings the wife suggested that she no longer owned the property, or did not hold a legal interest that she could now enforce.
[1] Wife’s Affidavit filed 6 July 2016, para. 44
Further orders were made for Apartment P to be valued, without success. The parties eventually agreed to place the property on the market for sale, however they were unable to progress that order as apparently the wife no longer held the relevant Country B identity documents. She needed to travel to Canberra to update those records and neither she nor the husband could afford to fund her travel to Canberra in this regard.
The proceedings were listed for a two day trial commencing on 28 March 2018. On 2 February 2018 the wife’s solicitors filed a Notice of Ceasing to Act and the wife has represented herself since that time.
The trial
The trial commenced before me on 28 March 2018. The husband was represented by Ms Horvat of Counsel. He relied upon the following documents:
a)Amended Response filed 15 March 2018;
b)Husband’s trial Affidavit filed 15 March 2018;
c)Financial Statement filed 15 March 2018;
d)Affidavit of Mr H, Certified Practising Valuer with J Valuers Property Valuers, filed 23 March 2018.
Mr H was available for cross-examination. The husband was also granted leave to call evidence from Mr K, a Country B lawyer with the firm K Lawyers & Partners, who gave evidence by telephone.
The wife found herself in a difficult position at trial, given that her solicitors had recently ceased to represent her. In light of these difficulties, the Court granted the wife leave to rely upon her earlier Affidavits filed on 7 July 2016 and 1 June 2017. The wife was also permitted to rely upon Affidavits filed by her on 22 February 2018 and 8 March 2018 and her Financial Statement filed 8 March 2018, notwithstanding the format of the Affidavits was not in strict compliance with the Rules of Court.
Both parties gave evidence and were cross-examined, as were Mr H and Mr K. Both of the husband’s witnesses gave evidence in a calm, professional manner and I accept their evidence.
Turning to the parties, the wife was cross-examined at some length, a process that was drawn out as a result of the wife’s unco-operative demeanour in the witness box. The wife gave conflicting evidence on a number of topics, particularly in relation to her ownership of Apartment P in Country B. The wife also refused to concede that the husband had sent funds to her in Country B in 2004/2005, despite being presented with documentation in that regard.[2]
[2] Exhibit H2, Bundle of Western Union transfer documents
The wife’s credibility as a witness was undermined when she was cross-examined in relation to two documents that she had relied upon. The first document was a letter from a Country B Attorney-at-Law, L Attorneys to Pascale Legal dated 6 April 2016. The wife then presented the same letter from Ms M but with the date changed, to read “Country B\2017” and with the final sentence of the penultimate paragraph altered.[3]
[3] Husband’s trial Affidavit filed 15 March 2018, Annexures O and N
The second document is entitled “Translation from Country B” of a document described as “Information on Person” printed 25 February 2015 in the Registry Office in City A and relating to the period 01 01 1992 until 02 25 2015. As with the letter, the wife presented another version of this document, altered such that it refers to “the period 01 01 1998 until 02 25 2016”.[4]
[4] ibid, Annexures P and Q
The altered documents had been provided by the wife to the Court during an earlier hearing on 5 March 2018, to support her contention that she did not own any property in Country B. The wife denied any responsibility for these alterations and the husband then sought leave to call the wife’s previous solicitor to clarify whether the altered documents formed part of her file. The wife agreed to waive legal professional privilege to enable Ms N to give evidence. Ms N confirmed that the two original documents had been received by her in the course of representing the wife. She gave further evidence that she could not locate the altered documents on her file.
I am satisfied that original documents obtained by the wife’s solicitors have been altered and the wife is the only party who could have done so. Insofar as the wife sought to rely upon the altered documents referred to above, this was misleading and she continued in this approach up to the date of trial. In light of these matters, the Court receives the wife’s evidence with a high degree of caution.
Turning to the husband, he generally gave his evidence in a straight forward manner. Where the parties’ evidence is in conflict the husband was generally able to provide supporting documentation. The husband tended to minimise the wife’s overall contributions to the family during their married life together but aside from that topic, I conclude that he was a more reliable witness.
The evidence concluded on 29 March 2018. The Court then directed the husband to file and serve Closing Submissions within 21 days with the wife to file her Closing Submissions within a further 14 days thereafter.
The husband subsequently sought an extension of time for Closing Submissions while he investigated further evidence regarding Apartment P in City A. He eventually filed an Application in a Case on 12 July 2018 seeking to re-open the trial. On 8 August 2018 leave was granted for the husband to re-open his case, provided that Affidavit evidence could be presented from a firsthand witness in Country B, with the witness to be available for cross examination by telephone. The husband and his legal representatives made enquiries in this regard but ultimately notified the Court that they were unable to make the necessary arrangements and the husband withdrew his Application.
This process caused a considerable delay in finalising the trial. The wife filed her “Closing Submissions” on 10 January 2019 and the husband ultimately filed his Closing Submissions on 24 January 2019. The wife then filed a further Affidavit on 11 February 2019 responding to the husband’s Closing Submissions.
Legal principles
The relevant legal principles governing any application for property settlement are set out in Part VIII of the Family Law Act 1975. Section 79(1) authorises the Court to make such orders between the parties as it considers appropriate. Section 79(2) makes it clear that the Court cannot make an order for property settlement unless it is just and equitable to do so. The High Court noted in Stanford & Stanford[5] that this condition is generally met where the parties have separated, because “the common use of property” by the parties is no longer viable.
[5] Stanford & Stanford [2012] HCA 52 at para.42
In considering the terms of any such order, s.79(4) requires the Court to take into account the parties’ contribution to the maintenance and acquisition of the asset pool during the marriage, including direct and indirect financial contributions, direct or indirect non-financial contributions and any contribution to the overall welfare of the family, including in the capacity of homemaker or parent.
Section 79(4)(d) directs the Court to consider the impact of any proposed order upon the earning capacity of either party. Section 79(4)(e) refers the Court to the matters set out in s.75(2), factors that generally relate to each party’s future needs.
The High Court in Stanford & Stanford went on to identify three “fundamental propositions” to guide trial Judges determining property settlement proceedings. These propositions were summarised by the Full Court in Bevan & Bevan[6] as follows:
“1.Determination of a just and equitable outcome in an application for property settlement begins with the identification of the existing legal and equitable interests (as determined by common law and equity);
2.The discretion conferred by the statute must be exercised in accordance with legal principles and must not proceed on an assumption that the parties’ interests in the property are or should be different from those determined by common law and equity;
3.The determination that a party has a right to a division of property fixed by reference only to the matters in s.79(4), and without separate consideration of s.79(2), would erroneously conflate what are distinct statutory requirements.”[7]
[6] Bevan & Bevan [2013] FamCAFC 116
[7] ibid, at para.73
In determining any application for property settlement, the Court is not embarking upon an arithmetical exercise but rather an examination of all the relevant factors set out in s.79(4). Earlier Full Court authorities have identified a four step process that can assist the Court in reaching a just and equitable decision.[8]
[8] Lee Steere & Lee Steere (1998) FLC 91-626;
Assuming the Court is satisfied that it is just and equitable to make an order for property settlement, the Court must identify the parties’ legal and equitable interests in the assets arising from their relationship, together with their liabilities. The Court should then assess each party’s contributions during the relationship in accordance with s.79(4)(a)-(c).
The third step requires the Court to consider the range of factors set out in s.79(4)(d)-(g), including the future needs factors identified in s.75(2). The Court should then consider its findings and, if the Court is satisfied that it is just and equitable to do so, make orders adjusting the parties’ property interests.
The Full Court in Bevan reminded trial Judges that the “four step process” is not legislatively mandated. Rather, it provides a structured process towards the ultimate requirement, which is to ensure that a property settlement order is only made when the Court is satisfied that it is just and equitable to do so and that the terms of the order itself are also just and equitable.[9]
[9] Bevan & Bevan, supra, para.86
The relevant matrimonial asset pool
The value of the husband’s superannuation is significant and I conclude it is appropriate to address the superannuation as a separate pool.
The parties are in general agreement regarding the identity of the matrimonial assets held in Australia but do not agree upon the value of those assets. The husband also argued that the wife’s property in City A should be included as part of the matrimonial asset pool but the wife disagreed. I will determine this issue first before turning my attention to the assets held in Australia.
Should Apartment P in City A form part of the matrimonial asset pool?
The wife purchased Apartment P from her parents in 1994, for the sum of … 390,000. In 2007 the wife instructed a real estate agent in relation to the property and says that the agent has unlawfully occupied the property since that time. Therefore she believes that the agent may have established a right of ownership by adverse possession by occupying the property for over ten years. I note the wife has not presented any evidence to the Court to confirm the agent has wrongfully occupied the property.
The husband’s witness, Mr K, confirmed that legal principles akin to the concept of adverse possession exist under Country B law, but gave evidence that this must be established through a formal process. The registered proprietor does not simply lose their legal ownership after a ten year period, or any period.
In the absence of any reliable evidence to the contrary, I conclude that the wife still holds the full legal and equitable ownership of Apartment P. I further note that the wife had previously agreed to co-operate in selling the property, which would indicate that the wife considered she was the legal and equitable owner of Apartment P at the time she consented to those orders.
I conclude that Apartment P should form part of the matrimonial asset pool. While the husband may have made no direct financial contribution to this property, it has continued to be owned by the wife throughout the marriage. Regarding the value of this property, the husband obtained an expert real estate appraisal in July 2017 which appraised the value of the property at €85,600 or approximately $139,000 and I accept this figure.[10]
[10] Husband’s trial Affidavit, Annexure J, Expert Real Estate Appraisal of Apartment P located in City A, Country B prepared by Mr C 2 July 2017
Matrimonial assets held in Australia
The C Street, Suburb D property is registered in the husband’s sole name. The parties obtained a joint valuation from Mr H dated 28 September 2016 at which time he valued the property at $210,000.[11] Subsequently the husband instructed Mr H to update his valuation and a second valuation report was prepared on 14 March 2018.
[11] Affidavit Mr H filed 23 March 2018, Annexure B, first valuation report for C Street, Suburb D dated 28 September 2016
Mr H gave evidence that the property value had not increased since his original valuation of $210,000. The wife cross-examined Mr H and drew his attention to similar properties listed for sale in the Suburb D area for substantially higher prices.
Mr H considered the wife’s documentation in this regard but pointed out that the properties she referred to may sell for less than their listed price. Mr H acknowledged that the valuation had not increased since his first report in September 2016 but was confident in his opinion, based on recent sales analysed by him in his second report.[12]
[12] Affidavit Mr H filed 23 March 2018, Annexure B, first valuation report for C Street, Suburb D dated 28 September 2016 and Annexure D, second valuation report for the said property dated 14 March 2018
Mr H rejected the wife’s suggestion that the property was “a filthy pig-sty”. He did not consider the property looked deliberately neglected, as the wife alleged, but agreed that the property could be “spruced up” for sale, which might achieve a better sale price for the parties, in the region of $220,000. It is reasonable to assume that a “willing seller” would prepare the property for sale and taking into account all of Mr H’s evidence, I find the value of the C Street, Suburb D property is $220,000.
Mr H was also asked to provide a professional opinion in relation to the value of the furnishings and personal effects in and around the property, including the husband’s Motor Vehicle O. He valued the motor vehicle in the sum of $1,200 and the remaining items at a total value of $4,900. This included items contained in storage boxes that the husband claimed were owned by the wife, which Mr H valued at approximately $350.
The wife does not accept Mr H’s valuation of these goods and argues that the husband’s furnishings and his collectable toys and dolls are worth substantially more. She was further concerned that the husband had not disclosed all of the collectible items to Mr H.
Based on my assessment of the husband in the witness box, I conclude that he is unlikely to have withheld items from the valuation process. On the evidence before me, I find the value of the Motor Vehicle O is $1,200 and the value of the personal effects and household goods is $4,900. While the husband attributes ownership of certain of the memorabilia and goods to the wife, the items nonetheless remain in his possession and that situation is unlikely to change.
Superannuation
The husband’s E Super Fund interest is presently valued at $188,344, but he argues that the portion of his superannuation that was accumulated during the marriage is the more relevant figure. He calculated that figure to be the sum of $21,218, based on the increase in value of his superannuation from the commencement of the marriage ($75,410) compared to the value at the date of separation in 2012 ($96,628).
These figures will be relevant in assessing the ultimate superannuation splitting order but I conclude the relevant superannuation figure for the purposes of the asset pool is the value as at the date of trial. I will address issues in relation to the parties’ contributions elsewhere in these reasons.
The wife’s superannuation entitlements were of minimal value and do not affect my determinations in this matter.
Liabilities
Turning to the parties’ liabilities, the husband seeks to include a range of personal debts including his current Visa credit cards, a Commonwealth Bank personal loan and a debt to relatives. I conclude that it would be unjust and inequitable to include those liabilities as matrimonial liabilities now, given that the husband has had the sole benefit of those credit facilities in the years following separation. I accept that he has taken responsibility for the credit card debts that were in existence at separation and will include those figures as matrimonial liabilities.
I conclude the relevant matrimonial asset pool is as follows:
Former matrimonial home at C Street, Suburb D, (H) $220,000
Motor Vehicle O (H) $1,200 Furniture, personal effects and collectibles retained by the husband (H) $4,900
Apartment P in City A, Country B (W)
E$139,000
Total tangible Assets
E$365,100
Visa credit card debt at separation (H) $6,024 Credit card debt at separation (H) $4,091 ANZ Visa credit card debt at separation (H) $6,169 Mortgage secured against C Street, Suburb D property (H)
$112,227
Total Liabilities
$128,511
NET TANGIBLE ASSETS
E$236,589
Husband’s E Super Fund
$188,344
Contributions
The wife brought her interest in Apartment P into the marriage. There is no reliable evidence regarding the value of this property at the time of marriage, but it represented a substantial direct financial contribution made by her.
The husband brought into the marriage his equity in the Suburb G property, which he estimated at approximately $58,000. This is reflected in the purchase of the C Street, Suburb D property, as the husband deposited the net proceeds from the Suburb G property into the Commonwealth Bank home loan account, in the sum of $45,000. This is a significant direct financial contribution made by the husband.
I accept that the husband transferred approximately $10,000 to the wife in Country B before she emigrated. I am satisfied that most of these funds were used for the parties to pay for their wedding and for the necessary expenses involved in obtaining the wife’s Australian Visa, including her travel to Country T. The husband says the wife used a portion of the funds to update the kitchen in her apartment, but it is unclear how much may have been spent in this regard and I disregard this.
The husband worked full time during the marriage and continued to make a direct financial contribution to the family finances in this regard. The wife worked part time and made a more modest financial contribution by way of her earnings but she made a substantially greater contribution in the role of home maker and parent. I am satisfied both parties made significant non financial contributions during the marriage. While the wife was the primary caregiver for the child X during the marriage, the husband also actively participated in their daughter’s care.
The husband argues that any funds earned by the wife or received by her from Centrelink were retained by her and deposited into a separate bank account. The wife disputes this and says that all income received by her was used for the benefit of the family. Even if the wife did retain control over her earnings, I consider it likely that the funds were used by her for family expenditure.
Taking into account all of the parties’ contributions, including their direct financial contributions at the commencement of their marriage, I conclude that the parties’ contributions during the marriage, both financial and non financial, should be assessed as equal.
In relation to the superannuation pool, the wife has not made any direct contribution to the husband’s superannuation, but has made an indirect non-financial contribution by virtue of her role as primary caregiver to X. The husband argues that this contribution can only have arisen during their married life together but that approach undervalues the extent of the wife’s indirect non financial contribution after separation, insofar as she has continued to provide primary care for X.
This contribution must be acknowledged, but there is no doubt that the husband’s contributions to the superannuation pool are overwhelming. I conclude the wife’s contribution to the superannuation pool should be assessed at 10% and the husband’s contribution should be assessed at 90%.
Section 75(2) factors
This discussion relates to both the tangible asset pool and the superannuation pool.
Both parties are now 48 years of age. The husband is in reasonably good health. The wife claims to suffer from scoliosis but there is no recent medical evidence regarding this diagnosis, or its impact upon her.
As mentioned previously, the husband works full time and earns approximately $64,000 per annum. He will retain the assets and financial resources attributed to him through this judgment. The wife is not presently working and relies upon Centrelink benefits. She also will retain those assets and financial resources allocated to her through this judgment.
The wife has the capacity to undertake paid employment, but her day to day parenting responsibilities for X affect her availability, to some extent. The wife wishes to continue her role as primary caregiver but I note X is now thirteen years old. Those parenting responsibilities do not prevent the wife from seeking part time employment in the short term and ultimately pursuing full time employment.
Both parties live a modest lifestyle and endeavour to live within their means. The wife is responsible for meeting the financial commitments necessary to support X. She is assisted in this regard by the husband’s child support payments, presently assessed at $151.00 per week.
The wife has previously undertaken training courses to improve her employment prospects and it may be that she will need to undertake further training or study as she prepares to re-enter the workforce in the future. It must be acknowledged that the wife has limited qualifications and her income command will be modest.
Taking into account all of these findings, I conclude that the s.75(2) considerations and the wife’s future needs would lead to an adjustment in the range of 8 – 10% in her favour, at this point.
I now turn to s.75(2)(o), which requires the Court to consider any other factor that is relevant to the justice of the matter. In that regard the wife’s conduct is a highly relevant factor. In the course of the litigation and trial she was unwilling to make any concessions, even when presented with documentary evidence, such as with the transfer of funds to Country B prior to the marriage. Equally concerning were the wife’s attempts to exclude Apartment P from the asset pool and her attempt to mislead the Court by presenting fraudulent documents. Her actions required the husband to incur significant legal expense in presenting additional evidence on this topic. This would not have been necessary had the wife adopted a more reasonable position.
Accordingly I conclude that the adjustment in the wife’s favour on account of s.75(2) factors should be reduced to an adjustment of 5% in her favour, in relation to both the tangible assets and the superannuation pool. To do otherwise would lead to an outcome that is unjust and inequitable.
Conclusion
I am satisfied that it is just and equitable to make orders for property settlement, given the breakdown of the parties’ relationship. Based on my findings in these Reasons, I conclude that the tangible asset pool arising from the marriage should be divided 55% to the wife and 45% to the husband. The superannuation pool should be divided 85% to the husband and 15% to the wife.
The net tangible asset pool is valued at $236,589 and accordingly the wife should retain assets to the value of $130,124 and the husband should retain assets to the value of $106,465. The superannuation pool is valued at $188,511 and the wife will receive a superannuation split in the sum of $28,276. I conclude that this outcome reflects a just and equitable settlement as between the parties.
The Court must then consider how to implement this outcome. Presently the wife holds her interest in Apartment P, which is valued at approximately $139,000. The husband retains his equity in the C Street, Suburb D property, together with modest assets and significant debts, to a net value of approximately $91,500. I note the husband’s actual debt burden is greater than the sum of the matrimonial debts discussed in these Reasons.
One approach would be to allocate each party’s entitlement to Apartment P separately to the assets based in Australia. This would result in the husband paying to the wife a cash adjustment equivalent to 55% of the net tangible assets in Australia and both parties receiving their respective share of the net proceeds of sale from Apartment P. However, I note the Court is limited to pronouncing orders in personam in relation to assets held overseas, which may work to the husband’s disadvantage. In addition, an order for sale of the apartment and division of the net proceeds would require ongoing interaction between the parties regarding the process, which would be problematic.
Alternatively, the husband could retain the assets in Australia and the wife retain Apartment P in City A. This would result in the wife retaining an asset valued at $139,000, slightly more than her entitlement. The wife argues this outcome would be unjust, as she cannot realise this asset due to the practical difficulties associated with selling the property.
Clearly there are some practical impediments to placing Apartment P on the market. I accept that the parties’ earlier joint attempts to sell Apartment P were unsuccessful, but I am not satisfied the wife was truly co-operating with that process at the time. I consider that the wife is likely to make a greater effort in achieving the sale of Apartment P in the event the proceeds of sale are retained by her alone.
I conclude that the most appropriate outcome is that each party retain the assets held in their name or in their possession. The wife should retain the full value of Apartment P, given that she will incur expenses associated with organising the sale of the apartment. The husband is retaining assets with a value lower than his entitlement, but with the knowledge that the parties’ financial relationship is finalised. I am satisfied this outcome is just and equitable, in all the circumstances.
I now make final orders as published at the commencement of these reasons.
I certify that the preceding eighty-one (81) paragraphs are a true copy of the reasons for judgment of Judge Kelly
Date: 26 July 2019
Hickey v Hickey & Attorney General of the Commonwealth of Australia (Intervenor) 2003 FLC 93-143;
In the Marriage of Omacini (2005) 33 Fam LR 134
Key Legal Topics
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