Konicka & Winski
[2022] FedCFamC1F 705
Federal Circuit and Family Court of Australia
(DIVISION 1)
Konicka & Winski [2022] FedCFamC1F 705
File number(s): SYC 2007 of 2018 Judgment of: CHRISTIE J Date of judgment: 16 September 2022 Catchwords: FAMILY LAW – FINAL PARENTING – where the single expert was cross-examined and the parties settled by consent.
FAMILY LAW – FINAL PROPERTY – where the husband made substantial financial contributions – where the inclusion of notional property was controversial.
Legislation: Family Law Act 1975 (Cth) ss 75, 79, Part VIII
Marriage Act 1961 (Cth) ss 88, 88C
Cases cited: Bonnici & Bonnici [1991] FamCA 86
Chorn and Hopkins (2004) FLC 93-204
In the Marriage ofPellegrino (1997) FLC 92-789
Jacombe v Jacombe (1961) 105 CLR 355
Kowaliw & Kowaliw (1981) FLC 91-092
Lin and Nicholl [2016] FamCA 401
Pierce & Pierce (1999) FLC 92-844
Trevi & Trevi (2018) FLC 93-858
Division: Division 1 First Instance Number of paragraphs: 88 Date of hearing: 29 August – 2 September 2022 Place: Sydney Counsel for the Applicant: Ms Seric Solicitor for the Applicant: De Saxe O’Neill Family Lawyers Counsel for the Respondent: Mr Fermanis Solicitor for the Respondent: Drayton Sher Lawyers Counsel for the Independent Children's Lawyer: Ms Messner on 29 and 30 September 2022 Solicitor for the Independent Children's Lawyer: Legal Aid NSW ORDERS
SYC 2007 of 2018 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS KONICKA
Applicant
AND: MR WINSKI
Respondent
order made by:
CHRISTIE J
DATE OF ORDER:
16 September 2022
THE COURT ORDERS THAT:
1.Within 60 days of the date of this order Mr Winski (“the husband”) pay to Ms Konicka (“the wife”) or as she may direct the sum of $522,038.
2.Simultaneously with the husband’s compliance with Order 1, the wife provide to the husband a properly executed Withdrawal of Caveat Registered Number … and the requisite lodgement fee in relation to the Caveat registered over the title of B Street, Suburb C (“the Suburb C property”).
3.Within 14 days of the husband’s compliance with Order 1 the wife vacate the Suburb C property.
4.In the event that the husband fails to comply with Order 1, then within seven days of the husband’s non-compliance, the husband and wife (“the parties”) shall list for sale the Suburb C property on the following terms:
(a)The parties shall instruct such lawyer as the parties agree upon to have the conduct of the sale, or in the absence of agreement reached within seven days, the wife shall propose three names and the husband shall select one within 48 hours;
(b)The parties shall appoint such agent as the parties agree upon to have the conduct of the sale and in default of agreement as to agent, within seven days the wife shall propose three names and the husband shall select one within 48 hours (“the agent”);
(c)The property will be sold in a manner as agreed between the parties, and failing agreement, as recommended by the agent;
(d)Should the parties agree for the property to be sold at auction then the reserve price for the sale of the property shall be as agreed between the parties in writing and failing agreement, as advised by the agent.;
(e)In the event that the bidding at the auction does not reach the reserve price the parties may negotiate with the highest bidders or any other interested person and effect a sale of the property at a price which is not more than 5 per cent below the reserve price;
(f)If the property goes to auction and remains unsold after seven days of the auction, the parties will do all acts and things and sign all documents necessary to immediately re-list the property for sale by way of a second public auction, at a price which is not more than five per cent below the reserve price from the previous auction;
(g)If the property remains unsold after seven days of the second auction the parties shall continue to comply with Order 4(f) until the property is sold;
(h)The parties shall co-operate in every way with the agent including (without limiting the generality of the foregoing):
(i)making the key available to the agent;
(ii)signing all documents requested by the agent to sell the property;
(iii)executing a contract for sale in a form prepared by the lawyers having the conduct of the sale, at the sale price;
(iv)allowing inspections at all reasonable times as requested by the agent;
(v)ensuring the property is in a neat and clean condition at the time of inspection by the agent and prospective purchasers;
(vi)not doing or saying anything to hinder or prevent a sale being effected; and
(vii)giving vacant possession of the property upon completion of the sale.
5.Pending compliance with the terms of these orders:
(a)Neither party shall sell, dispose of, further encumber or otherwise deal with the Suburb C property without the prior written consent of the other party; and
(b)The husband shall continue paying the mortgage repayments and any outgoing expenses associated with the Suburb C property when they fall due.
6.On settlement of the sale of the Suburb C property pursuant to these orders:
(a)The parties shall do all acts and things and sign all necessary documents to direct the proceeds of the sale in the following manner and priority:
(i)In payment of the real estate agent, auctioneer and Solicitor/Conveyancer’s costs;
(ii)In payment of the usual adjustments between vendor and purchaser in accordance with the sale contract including but not limited to all statutory rates and charges due at that time;
(iii)In discharge of the registered first mortgage to the National Australia Bank;
(iv)In payment to the wife by such sum as was required to be paid to the wife pursuant to Order 1 above plus interest at the rate prescribed under the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) from the date upon which payment ought to have been made pursuant to Order 1 to the date upon which payment is made; and
(v)The balance then remaining to the husband.
7.Within 28 days of the date of this order, the parties divide equally the items of furniture and effects as agreed in writing and, failing agreement as follows:
(a)Within 14 days, the wife prepare two lists setting out approximately 50 per cent of the furniture and effects on each list;
(b)Within seven days of receipt of the list, the husband choose one of the two lists and from the date the choice is made the husband be entitled to retain the items on the list and the wife be entitled to retain the items on the other list; and
(c)If the husband fails to choose a list in the time provided, the wife will choose a list and from the date the choice is made, the wife be entitled to retain the items on the list and the husband be entitled to retain the items on the other list.
8.The wife to do all acts and things to ensure that all the furniture and effects in the husband’s chosen list remain at the Suburb C property before she vacates and are in good condition and order.
9.The wife is to ensure that when she vacates the Suburb C property, that she take with her all items of furniture and effects in her chosen list and if any items are left behind, the husband is authorised by this order to deal with or dispose with any such items as he sees fit.
10.Except as otherwise provided herein, the wife shall retain all of her interest as against the husband in the following:
(a)Her Superannuation entitlements; and
(b)Monies standing in credit in her bank accounts.
11.Except as otherwise provided herein, the husband shall retain all of his interest as against the wife in the following:
(a)Real property registered in his sole name;
(b)His share portfolio;
(c)His Superannuation entitlements; and
(d)Monies standing in credit in his bank accounts.
12.Each party shall indemnify the other party with respect to any liabilities whatsoever in the name of the indemnifying party and which relates to any property to be retained or received by the indemnifying party under these orders, including but not limited to any credit card debt, tax liabilities and personal loans from parents, other family members and third parties.
13.In the event that either party refuses or neglects to sign any document required to be signed to comply with this Order, a Registrar of the Federal Circuit and Family Court of Australia (Division 1) is hereby appointed to execute all Deeds and documents in the name of the husband or the wife and do all acts and things necessary to give validity and operation to this order pursuant to s 106A of the Family Law Act 1975 (Cth).
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Konicka & Winski has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
CHRISTIE J:
The parties to these proceedings sought final parenting and property orders. On the second day of the trial, after completion of the cross-examination of the single expert psychologist Dr D, the parents, with the assistance of the independent children’s lawyer, reached final agreement about parenting matters and I made orders by consent, in relation to their children: X born in 2014, aged eight, and Y in 2015, aged six.
That left the competing applications for property adjustment to be determined by the Federal Circuit and Family Court of Australia (Division 1) (“the Court”).
Background
Ms Konicka (“the wife”) says the parties commenced full time cohabitation in about early 2012, Mr Winski (“the husband”) says late 2012.
The husband and wife participated in a wedding ceremony in 2012 in Country E.
The husband had savings at the time of the ceremony and bought F Street, Suburb G (“the Suburb G property”) in late 2012.
The husband and his brother inherited the following real property from the estate of their father in late 2015:
(a)B Street, Suburb C (“the Suburb C property”) and
(b)H Street, City J, Country E (“the Country E property”).
The parties separated on 1 July 2017 but remained living under the same roof until the husband moved into his brother’s home in late 2018. Since that time the children have lived with the mother and spent time with the father. The father pays child support as assessed.
The wife said she intends to obtain new accommodation in reasonable proximity to her family and work after the conclusion of these proceedings.
The wife has a new partner but each has their own home.
The law
The Family Law Act 1975 (Cth) (“the Act”) confers power to adjust the property interests of parties to a marriage and parties to a de facto relationship. However, it is important to understand the source of power to make any orders sought. In this case the parties were, at least initially, at issue about whether their ceremony in Country E meant that they were validly married in Australia.
Section 88 of the Marriage Act 1961 (Cth) (“the Marriage Act”) recognises foreign marriages in Australia. Section 88C of the Marriage Act states:
(1) This Part applies to and in relation to every marriage solemnised, whether before or after the commencement of this Part, in a foreign country where:
(a) under the local law, the marriage was, at the time when it was solemnised, recognised as valid; or
(b) if the marriage was solemnised by or in the presence of a diplomatic or consular officer of another foreign country:
(i) under the law of that other foreign country, the marriage was, at the time when it was solemnised, recognised as valid; and
(ii) at the time when it was solemnised, the solemnisation of the marriage was not prohibited by the local law.
This was a case in which ultimately both parties asked that I find that they were validly married notwithstanding the husband’s initial equivocal evidence. The principles which apply are set out in Jacombe v Jacombe (1961) 105 CLR 355 and referred to in Lin and Nicholl [2016] FamCA 401.
In approaching the competing applications for property adjustment it is useful to begin by finding what assets, liabilities, superannuation and financial resources the parties or either of them have at the time of hearing.
In some cases, such as this case, one or other of the parties will ask the Court to have regard to assets that no longer exist either because the funds have been spent, the assets transferred, legal fees paid or there is no proper explanation for the absence of funds which it is agreed existed at a point in time.
The principles which apply to cases in which a party seeks an “addback” or alternatively asks the Court to take into account notional assets are set out in Chorn and Hopkins (2004) FLC 93-204 (“Chorn”) and Trevi & Trevi (2018) FLC 93-858 (“Trevi”).
Having identified the asset pool, the Act requires consideration of the parties’ direct and indirect financial contributions and also their non-financial contributions (generally the performance of the unpaid labour that keeps a household running and ensures children receive care).
The approach to the assessment of contribution is not an accounting exercise but a holistic consideration of the myriad potentially different contributions each party has made.
Some contributions appropriately receive greater scrutiny in aid of making an order which is just and equitable as between the parties. In this case it is material to appreciate that the husband had assets prior to the parties’ marriage and accordingly it is expected that in the assessment of contribution, such initial contributions will be given proper consideration: Pierce & Pierce (1999) FLC 92-844.
In a similar vein the husband in this case received an inheritance in the course of the parties’ marriage and as a matter of general principle this would ordinarily be considered a contribution on his behalf: Bonnici & Bonnici [1991] FamCA 86.
Consideration
The issues which arose for determination were:
(a)Were the parties validly married?
(b)When did the parties commence to reside together?
(c)What assets, liabilities, superannuation and financial resources did the parties have at the beginning of their relationship?
(d)How should the transfer of funds from the husband to his brother during the relationship be characterised?
(e)Were there surplus funds from the sale of the Suburb G property and if so what happened to them?
(f)Is the wife cohabiting with another person?
(g)Should there be an adjustment to the contribution based entitlements of the parties?
I find that the parties had a wedding ceremony conducted by a priest. The ceremony took place in a church and the parties exchanged rings and vows. The husband thereafter described himself as married. The presumption in favour of the parties being validly married being demonstrated on the basis of cogent evidence, I do not find that there was anything in the husband’s evidence which was capable of rebutting that presumption. Accordingly, I will treat the application for property adjustment as an application invoking the provisions of Part VIII of the Act.
The parties were at issue about the commencement of their cohabitation. The husband said that the parties started living together around late 2012. The wife said they started to live together on a full-time basis in early 2012. Accordingly the parties are only at issue about a period of approximately nine months. During that nine months, the parties were married in Country E in 2012. I decline to make a finding about the dispute in circumstances where it is not material to the assessment of matters under the Act. The husband’s net asset position was similar at all relevant points in 2012.
Before I turn to consider the parties’ respective contributions it is appropriate to make a determination about the assets, liabilities, financial resources and superannuation available for adjustment as between the parties at the time of trial.
The parties reached agreement about the identity and value of the assets, liabilities and superannuation available for adjustment between them (as set out in exhibit D):
ASSETS B Street, Suburb C J $1,500,000 $1,500,000 H Street, City J, Country E H $38,193 $38,193 Total: $1,538,193 $1,538,193 SUPERANNUATION Superannuation Fund 1 W $43,645 $43,645 Superannuation Fund 2 W $25,736 $25,736 Superannuation Fund 3 H $166,069 $166,069 Total: $235,450 $235,450 LIABILITIES Mortgage J $295,096 $295,096 Total: $295,096 $295,096 NET ASSETS: $1,478,547 $1,478,547
In addition, the wife submitted that the Court would either include as notional property of the husband (or otherwise make an adjustment to take into account):
(a)K Company shares sold and applied to the husband’s legal fees - $10,799;
(b)Proceeds from the sale of the Suburb G property not accounted for on settlement - $194,726; and
(c)Monies paid by the husband to his brother (other than to acquire interest in the Suburb C & Country E properties) - $196,714.
The husband sold the K Company (by then L Company) shares he had acquired from his father’s estate in mid-2018 and received net $10,680.04. He applied those funds to payment of his lawyers. The husband’s counsel said, and I accept, that having regard to the source of those funds – inherited from the estate of the husband’s father - it was open to the Court not to include them as notional property having regard to the wide discretion and the principles which emerge from decisions such as Chorn and Trevi.
At [56] Chorn makes clear that the treatment of funds used to pay legal costs is a matter of discretion but in determining how to exercise that discretion, regard should be had to the source of the funds. At [57] the Full Court of the Family Court (“the Full Court”) (as it then was) says:
If the funds used existed at separation, and are such that both parties can be seen as having an interest in them (on account, for example, of contributions), then such funds should be added back as a notional asset of the party, who has had the benefit of them.
Submissions were made by counsel for the husband that the funds used to fund his legal expenses (those derived from the sale of the L Company shares) were not a result of a joint venture between the husband and wife but came into the husband’s hands by way of inheritance. He therefore contended that, in exercising its discretion, the Court should not categorise these funds as a notional asset and it would follow that they would also not count as a contribution of the husband’s.
At [58] their Honours say the following:
If funds used to pay legal fees have been generated by a party post-separation from his or her own endeavours or received in his or her own right (for example, by way of gift or inheritance), they would generally not be added back as a notional asset; nor would any borrowing undertaken by a party post-separation to pay legal fees be taken into account as a liability in the calculation of the net property of the parties. Funds generated from assets or businesses to which the other party had made a significant contribution or has an actual legal entitlement may need to be looked at differently from other post-separation income or acquisitions.
In Trevi, the principles discussed above in Chorn were reiterated at [31] and described as “guidelines” rather than “binding principles of law” at [33].
I accept that the paid legal fees of the husband should not be considered notional assets because they derived directly from the husband’s inheritance.
Money paid to Mr M by the husband
The wife did not dispute that it was necessary for the husband to pay his brother funds to acquire his interest in the inherited assets (the Suburb C property and the Country E property).
The wife said that the funds paid to the husband’s brother exceeded the amount necessary to acquire the interest in the inherited assets by about $196,714.
The husband and his brother agree, and the transfer documents annexed to the husband’s affidavit support, that $662,500 was paid by the husband to his brother to acquire the brother’s half interest in the Suburb C property.
The husband also received his brother’s interest in the Country E property. The parties agreed for the hearing (following receipt of single expert evidence) that the Country E property had a value of AUD $38,193 in 2022. The husband and his brother say that the amount paid to the husband’s brother was based on an agreement as to the value of the Country E property, namely $50,000 in 2017.
In addition to the $662,500 the husband transferred an amount of $46,000 to his brother in late 2017. Both the husband and his brother say this was $25,000 for the half share in the Country E property and $21,000 for a debt owed by one brother to the other.
At no point in the affidavits of the husband or his brother (both of which were sworn in August 2022) do either of them mention that there were any other financial transactions between them.
On 26 August 2022 (exhibit G) the lawyers for the husband wrote responding to correspondence from the lawyers for the wife and set out their instructions:
(a)In addition to the $662,500, the husband had also paid his brother “the sum of $200,000” being money he “owed [Mr M]”. The payment was said to be related to the husband’s brother having, according to Country E tradition, cared for their aged father including provision of financial support;
(b)The funds were paid directly towards the acquisition of a property being purchased by the husband’s brother;
(c)These transactions were omitted in the husband’s affidavit due to “oversight”; and
(d)It was asserted that these transactions were undertaken with the knowledge of the wife.
I cannot find, as the husband would urge, that the transactions occurred with the knowledge of the wife. If she was aware of them, then it is not conceivable that the wife and the husband and his brother would omit all references to them in their material. In addition, if she were aware, it would make no sense that she raised the inquiries by correspondence in an effort to determine why the funds borrowed did not match the borrowings.
The wife says it follows that the Court would include the funds paid by the husband to his brother as notional property on the basis that, had the husband not paid those funds to his brother, they would otherwise have formed part of the pool of assets available for adjustment as between the parties.
The husband says the payment of those sums to his brother was a legitimate transaction arising out of their agreement and so those funds, having been spent, should not be further considered by the Court.
I raised with the parties during submissions one path namely that – if I formed the view that the husband had indeed given those funds to his brother during the parties intact relationship (for whatever reason) - it may be appropriate to take that into account, not as a premature distribution of the parties’ assets but as diminishing the contributions of the husband. By that I do not mean that the transaction was waste as that term has been understood since the decision in Kowaliw & Kowaliw (1981) FLC 91-092, but rather that the husband could not argue he contributed those funds to the assets of the parties.
I accept that monies were paid to the husband’s brother over and above those referred to in the affidavit evidence. I find that the payments occurred prior to the parties’ separation. Those sums were paid to the husband’s brother at a time when they were jointly represented by a conveyancer acting for each of the brothers in respect of separate transactions (sale of the Suburb G property by the husband and purchase of a property by the husband’s brother). The husband’s funds were applied to his brother’s purchase (including to stamp duty and purchase price).
From the evidence (particularly exhibit G), the following payments appear to have been made by the husband to the benefit of the husband’s brother:
(a)23 December 2015 $75,882.83;
(b)24 December 2015 $35,000;
(c)24 December 2015 $692,339.63;
(d)24 December 2015 $55,992.50;
(e)24 December 2015 $782; and
(f)24 December 2015 $226.72.
The above amounts total $860,224 in circumstances where the amount necessary to acquire the interest was $662,500. Accordingly, the difference is $197,724.
The explanation by the husband’s lawyers in exhibit G was that the husband owed his brother $200,000. The husband and his brother were both asked in cross-examination how the figure to be paid was calculated and whether there were any records to support it. Both confirmed that there were no documents and neither provided a satisfactory account of how the figure was determined. Doing the best I could, I formed the view that the financial arrangements between the brothers were informal and while the husband had certainly provided the funds to his brother it was not necessarily because there was a debt and certainly not a debt in the sum of $200,000. What then is the impact of the fact that the husband has provided funds to his brother (without the knowledge of the wife) before separation? There is no prohibition on the provision of money by one spouse to a relative nor is there any assumption that all monies which at one time belonged to the husband or wife thereafter belong to the husband and wife. The difficulty here was that the affidavit evidence did not address the issue at all. The conclusion I reach is that the issue is best addressed by recognition that the husband’s payment to his brother means his contributions were not as significant as would otherwise have been the case.
Proceeds from sale of the Suburb G property
There was an additional sum that the wife submitted was not accounted for in the evidence concerning the proceeds of sale of the Suburb G property.
It is necessary to understand the timeline to determine whether the submission is made out on the evidence.
The original purchase price of the Suburb G property in 2012 was $485,000 as against which the husband said he took out a mortgage of $250,000. Exhibit I suggests that the husband did draw down the whole of the $250,000 but it is accepted that his savings may have been placed in an offset account.
When the Suburb G property was sold in early 2016 the husband says the sale price was $868,000 and the mortgage approximately $120,000. These figures make sense in light of the fact that the husband would have had savings remaining after the purchase, according to exhibit H, of about $135,000. Allowing for costs of the real estate agent acting on the sale of the Suburb G property, it should be assumed that the net proceeds would have been about $748,000 minus the costs of sale.
In early 2016 the amount of $466,474.04 was transferred into the parties’ joint bank account (exhibit E). In early 2016 a further amount of $75,452 was deposited in the parties’ joint bank account by the agent acting on the sale of the Suburb G property (presumably the deposit less their commission). This means that the net proceeds after commission should be calculated by deducting from the sale price the mortgage of $120,000 and the commission of $11,348. Accordingly, the amount that seems on these figures to have been the anticipated net payment should have been in the vicinity of $736,652.
The total amount deposited to the parties’ joint account referrable to the sale of the Suburb G property was $541,926.04. That leaves about $194,726 unaccounted for by the evidence.
Since the loan to acquire the interest of the husband’s brother in the Suburb C property was raised ahead of the Suburb G property sale, it is possible that some of the monies were placed against that loan.
I note that the joint bank account operated by the husband and wife contained $586,327 on 31 May 2016 (exhibit E) so presumably the transfer was made after that date.
Unfortunately the evidence before me did not include a settlement statement in respect of the Suburb G property or full statements for the mortgage secured against the Suburb C property.
There seem to be two potential answers – the funds have been spent or the funds remain with the husband (or some combination). The evidence does not allow me to resolve this aspect. Counsel for the wife submitted that I should find that the funds exist because the husband has not explained how it is that he will be able to pay his lawyers or repay funds he says are owed to his brother. More than this is required to enable me to find that the monies do indeed exist. I can comfortably find that the husband was (as between husband and wife) responsible for the finances of the couple. I can comfortably find that he has not made disclosure of documents which, if not in his possession, would have been in his control and finally, I can find that he has failed to adequately explain what occurred. It is appropriate that I take into account the fact that the disclosure is less than would be expected and cannot be explained by the effluxion of time. I do not propose to add a notional sum since I cannot be confident that the funds (or part of them) were not applied to family expenses. I propose to consider the issue pursuant to section 75(2)(o) of the Act.
Financial contributions
It is appropriate when considering the various contributions of the husband and wife in this case to note that, in assessing contribution, it will be appropriate to take into account any relevant contributions made by the husband before the relationship, the contributions of both parties during the relationship (including contributions made on their behalf) and any contributions either party may have made since separation. As is clear from what follows, the parties’ disagreement about dates is not material to the assessment of contribution.
The husband says he had the following assets, liabilities and superannuation at the commencement of the parties’ relationship:
(a)Approximately $390,000 in savings; and
(b)Approximately $50,000 in superannuation.
The wife accepted that the husband had those assets but indicated she was not in a position to offer evidence about their quantum at the time.
I find that the husband’s evidence should be accepted. It is consistent with the information provided to N Bank to obtain the mortgage for purchase of the Suburb G property (exhibit H).
In late 2012 the husband bought the Suburb G property. The purchase price was $485,000. The husband obtained a mortgage in the sum of $250,000. Surplus funds were placed in a mortgage offset account.
The parties sold the Suburb G property in early 2016. The husband says the sale price was $868,000 and the mortgage at the time was $120,000.
Significantly, the husband received an inheritance on the death of his father. The husband’s father left his estate to the husband and his brother. The estate consisted of:
(a)the Suburb C property;
(b)the Country E property; and
(c)K Company shares.
The husband and his brother reached an agreement and the husband acquired his brother’s interest in the Suburb C and Country E properties. The husband borrowed $775,000 from the National Australia Bank secured against the Suburb C property.
The husband paid his brother $662,500 to acquire the half share in the Suburb C property. The transfer attracted stamp duty in the sum of $25,322.50.
The husband paid his brother money and acquired his brother’s interest in the Country E property.
The husband’s direct financial contributions, apart from income, are accordingly: savings of $390,000 and $50,000 in superannuation at the beginning of the relationship; then, in 2015 $662,500 (the Suburb C property) plus $25,000 (the Country E property) less $200,000.
Both the husband and wife were in paid employment during the relationship. The husband made the greater financial contribution from his personal exertion earnings as the wife had periods out of the paid workforce. I accept that the husband and wife applied their income to the expenses of the parties and the children.
Non-financial contributions
There are four broad categories of non-financial work that were the subject of evidence and submissions:
(a)Homemaking tasks;
(b)Parenting tasks;
(c)Work to the Suburb G property; and
(d)Work undertaken by others on behalf of the parties.
The period of time during which the Court is being asked to conduct an assessment of the parties’ various contributions is between 2012 and the date of hearing (2022).
I find that both parties undertook unpaid work in the home but that the wife was responsible to a greater extent than the husband for parenting tasks, particularly as she took time out of the workforce for maternity leave and returned on a part time or casual basis thereafter.
While the parties disagreed about the extent of the unpaid work undertaken by the wife’s family on the Suburb G property, I accept that there was unpaid labour which assisted the parties with the renovations of the Suburb G property. The property purchased for $485,000 in 2012 was sold for $868,000 in 2016. It is not possible on the evidence before me to conclude what efforts on the part of the various individuals (if any) were responsible for the increase in value but, considered globally, it is plain that the efforts of the parties and those who assisted them are likely to have contributed to the improvement of the property. This is a contribution in kind of the type referred to In the Marriage ofPellegrino (1997) FLC 92-789.
Since separation the wife has undertaken the majority of the care for the parties’ children.
Against the above findings I conclude that the husband’s contributions were significant. He had both savings such that he was able to purchase the Suburb G property and somewhat less than a third of his current superannuation balance. In addition, he inherited further funds such that the pool of assets available for distribution is due in large part to the husband’s direct and indirect financial contributions. I take into account the fact that from those funds the husband has provided money to his brother during the relationship and after separation. Overall, I assess the contributions of the parties as favouring the husband 70/30.
Sections 79(4) and 75(2) of the Act
It is necessary to have regard to the various factors contained in ss 79(4)(d) – (g) and as directed by s 79(4)(e) those relevant matters in 75(2) of the Act and I do. Both parties are employed. The wife is 41 years of age and her evidence did not raise any issues concerning her health. The husband is 50 years of age and has had some worker’s compensation claims relating to workplace injuries. He says he intends to continue to financially support his children until they are 18 years old and accordingly it may be expected that he intends to remain in the paid workforce for at least the next 12 years.
The husband is employed in the transport industry. He says recent restructuring by his employer has had an impact on his rate of pay such that the evidence at trial was that he works four shifts per week and earns $61,880 per annum.
The husband annexed the current child support assessment demonstrating an amount of $717.50 per month by way of child support payable by him to the wife. The wife’s affidavit in reply did not place this in issue.
The wife is employed as an educator. Her annual income at the time of the hearing was $53,144 or $53,664 (depending on whether the figure in her financial statement or the figure in her affidavit is accurate). She is also in receipt of Family Tax Benefits.
Given the parties’ age disparity the small difference in their current earnings does not appear to require an adjustment on that account.
The husband asked that the Court to consider the fact of the wife having commenced another relationship as relevant to the assessment of matters under section 75(2)(m) of the Act. The evidence does not establish that the wife is cohabiting with her partner Mr O (“Mr O”) on a full-time basis. I accept that the two share a bank account. The wife explained it as a convenient way to pay for expenses such as joint holidays. The intention of s 75(2) of the Act is to have regard to the financial circumstances of a party’s cohabitation. If, as here, the wife and Mr O are, from time to time, spending time in one another’s homes but otherwise have their own residences, the section is not engaged. If the wife and Mr O were sharing premises then I accept there may be financial benefits to the wife – shared rent, shared expenses etc. Here the evidence does not establish that there is any financial consequence of her new relationship (certainly not one which would assist the case the husband seeks to make out).
The wife had time out of the workforce for maternity leave in respect of each of the parties’ children. During that period she did not accrue superannuation entitlements. When she returned to the workforce it was on a casual basis. It is important to recognise the impact of this on her income, earning capacity and superannuation entitlements.
The parties have final parenting orders made by consent on 30 August 2022. Those orders provide for the children, who are aged eight and six at the time of the orders, to live with the mother and spend time with the father during term time – initially 10 nights with the mother in term time and four nights with the father but ultimately, in 2026, five nights with the father and nine nights with the mother. The school holiday time is also graduated. Each of the parents will have responsibility for the children but the care will be undertaken by the mother to a larger extent as a consequence of those orders.
As discussed above the husband was not able, by affidavit evidence or disclosure of documents, to provide an account of how the proceeds of sale from the former home at Suburb G were ultimately disbursed. This is unsatisfactory and I accept it is a relevant factor in the exercise of my discretion when considering what overall adjustment will be just and equitable. I take this into account under s 75(2)(o) of the Act.
Neither party sought an order which would have the effect of splitting the superannuation interests of either of the parties and so each party will retain his or her own superannuation. I have already taken into account the disparity in the parties’ superannuation entitlements by inclusion of the superannuation in the net pool of items against which an adjustment will be made by reason of my orders.
It is also relevant to consider that the husband’s contribution based entitlements mean that, on any view, he will have a greater share of the assets than will the wife and at the end of their relationship it is appropriate that each have a standard of living that, in all the circumstances, is reasonable.
Accordingly, having regard to the competing considerations and relevant findings discussed above it will be appropriate to adjust the contribution based entitlements such that the wife receive a further 10 per cent of the assets.
Consequently, the parties should share the assets such that the husband receives 60 per cent and the wife 40 per cent. The husband will retain his superannuation and the Suburb C property and the Country E property. Accordingly, the husband should pay the wife $522,038 to effect the division. If the husband is unable to pay the wife the sum set out in the orders then default orders will provide for sale of the Suburb C property.
No party made any submissions about the treatment of other assets including furniture (which items were removed from the agreed balance sheet). I propose to make the order sought by the husband about division of furniture as it is, on its terms, an equitable solution.
I certify that the preceding eighty-eight (88) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Christie. Associate:
Dated: 16 September 2022
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