Kovacs and Kovacs
[2009] FMCAfam 323
•9 April 2009
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| KOVACS & KOVACS | [2009] FMCAfam 323 |
| FAMILY LAW – Property settlement – credit issues – whether the husband’s conduct amounted to “waste” behaviour – issues of disclosure – contributions – consideration of factors under s.75(2). |
| Family Law Act 1975, s.75(2) |
| Black & Kellner (1992) FLC 92-287 C & C (2005) FCAFC 429 Fosbery (2009) FAMCAFC 51 Hickey and Attorney-General for the Commonwealth of Australia (Intervener) (2003) FLC 93-143 Kowaliw (1981) FLC 92-092 Steinbrenner (2008) FAMCAFA 193 Weir (1993) FLC 92-338 |
| Applicant: | MS KOVACS |
| Respondent: | MR KOVACS |
| File Number: | SYM 8453 of 2006 |
| Judgment of: | Baumann FM |
| Hearing dates: | 16 & 17 July 2008 |
| Date of Last Submission: | 4 February 2009 |
| Delivered at: | Sydney |
| Delivered on: | 9 April 2009 |
REPRESENTATION
| Counsel for the Applicant: | Mr Maiden SC |
| Solicitors for the Applicant: | Holt & Allen |
| Counsel for the Respondent: | Mr Foster |
| Solicitors for the Respondent: | H Danalis & Co |
ORDERS
That the parties shall sign all documents and do all things necessary to place the property situated at and known as Property M in the State of New South Wales being the whole of the land comprised in Certificate of Title Folio Identifier [1] (hereinafter referred to as "the Property M property") for sale by private treaty with [M] First National, at a price of $730,000 and to instruct Messrs Vizzone Ruggero & Associates of Botany Road, Mascot to act on the sale as Solicitors.
That the parties shall sign all documents and do all things necessary to place the property situated at and known as Property V in the State of New South Wales being the whole of the land comprised in Certificate of Title Folio Identifier [9] (hereinafter referred to as "the Property V property") on the market for sale by private treaty with LJ Hooker, at a price as agreed upon between the parties or in default of agreement at a price of $280,000 and to instruct Messrs Morton & Harris of 88 Kinghorn Street, Nowra to act on the sale as Solicitors.
That in the event that either the Property M or Property V properties are not sold by private treaty within sixty (60) days of the date of these orders then the parties shall forthwith do all acts and things and execute all deeds instruments and writings necessary to cause the property to be sold by public auction and in particular to:
(a)Place the Property M and/or Property V property with such Real Estate Agent ('auctioneer') as may be agreed between the parties or in default of agreement with the Real Estate Agent appointed by the President for the time being of the Real Estate Institute of New South Wales;
(b)Execute all documents requested by the auctioneer for the sale of the property;
(c)Instruct the auctioneer to place a reserve price on the property for the purpose of the auction as agreed between the parties or in default of agreement at an amount nominated by the Real Estate Agents appointed by the President for the time being of the Real Estate Institute of New South Wales;
(d)Pay to the auctioneer equally any sums requested for advertising expenses in relation to the auction;
(e)Co-operate in every way with the auctioneers in relation to the auction of the property;
(f)Attend at the auction sale and negotiate with the highest bidder in the event that the reserve price is not reached ;
(g)Execute contracts for sale;
(h)Execute all other documents necessary to complete the sale.
Should the Property M property not be sold by auction the parties shall do all things reasonably required of them by the selling agent to obtain a completed sale and shall at the expiration of three (3) months from the date of such unsuccessful auction or such other period as shall be agreed to by the parties do all acts and things and execute all deeds and documents, instruments and writings necessary to submit the property for further public auction in which event the provisions of this agreement applicable to the sale of the property by public auction shall apply and subject to the expiration of three (3) months from each unsuccessful submission of the property by public auction, the provisions of Order 3 shall apply mutatis mutandis in relation to such further auction.
That the proceeds of sale of the Property M property shall be distributed in the following manner and priority:-
(a)Real Estate Agent's commission and associated expenses;
(b)Legal costs and disbursements on sale;
(c)
The balance forwarded to the solicitor acting for the husband
Mr H Danalis of H Danalis & Co. Solicitors, to be held in trust for the husband and wife pending operation of Clause 6 herein;
That upon receipt of the net proceeds of sale of the Property M property the husband’s solicitor is to pay:
(a)to the wife, or as she directs 50% of the net proceeds of sale of the Property M property together with the sum of $108,133.00.
(b)as to the balance then remaining to the husband.
The proceeds of sale of the Property V property shall be distributed in the following manner and priority:-
(a)Real Estate Agent’s commission and associated expenses;
(b)Legal costs and disbursements on sale;
(c)The balance equally between the parties.
The wife shall be declared the sole legal and beneficial owner of the property in Property R to the exclusion of the husband;
That unless otherwise specified in these Orders each party shall be solely entitled to retain and be declared the sole beneficial owner to the exclusion of the other of all personalty, property and chattels of whatsoever nature and kind including but not limited to superannuation entitlements, shares, bank and building society accounts in the possession custody or control of such party as at the date of these orders and accept responsibility for the liabilities, if any, presently in their name and that they shall indemnify the other party in respect of any such payments;
That in the event that either party refuses or neglects to execute any deed or instrument necessary to give effect to these orders, that the Registrar or a Deputy Registrar of the Family Court of Australia at Sydney be appointed pursuant to a s.106A of the Family Law Act to execute the deed or instrument in the name of that party and do all acts and things necessary to give validity and operation to the deed or instrument.
That either party shall be at liberty to restore the matter for the purpose of enforcement or interpretations of this order upon giving twenty-four (24) hours’ notice to the Court and the other party.
IT IS NOTED that publication of this judgment under the pseudonym Kovacs & Kovacs is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
SYM 8453 of 2006
| MS KOVACS |
Applicant
And
| MR KOVACS |
Respondent
REASONS FOR JUDGMENT
Introduction
When the husband, as he admits, essentially burnt the matrimonial home down in February 2006, not surprisingly the marital relationship which began in 1974 came to an end.
The property trial before me dealt less with this accepted event and more with allegations of non disclosure; wasted funds on gambling and the disputes as to the future earning capacity of the Applicant wife, now aged 50 and the Respondent husband, now aged 61.
Although, as will be seen, the pool of assets is mostly agreed to, by final submissions received by 4 February 2009 (Counsel for the wife having been apologetically slow in providing his submissions), the wife sought an 80% share of the pool whilst the husband contended that a 55/45 division in his favour was a just and equitable result.
Principles
The preferred or usual approach to determining property proceedings under s.79 of the Act was the subject of a succinct summary by the Full Court in Hickey and Attorney-General for the Commonwealth of Australia (Intervener) (2003) FLC 93-143) at [39] where the Court said:-
“39. The case law reveals that there is a preferred approach to the determination of an application brought pursuant to the provisions of s79. That approach involves four inter-related steps. Firstly, the Court should make findings as to the identity and value of the property, liabilities and financial resources of the parties at the date of the hearing. Secondly, the Court should identify and assess the contributions for the parties within the meaning of ss79(4)(a), (b) and (c) and determine the contribution based entitlements of the parties expressed as a percentage of the net value of the property of the parties. Thirdly, the Court should identify and assess the relevant matters referred to in ss.79(4)(d), (e), (f) and (g), (“the other factors”) including, because of s79(4)(e), the matters referred to in s75(2) so far as they are relevant and determine the adjustment (if any) that should be made to the contribution based entitlements of the parties established at step two. Fourthly, the Court should consider the effect of those findings and determination and resolve what order is just and equitable in all the circumstances of the case: Lee Steere and Lee Steere (1085) FLC 92-626; Ferraro and Ferraro (1993) FLC 92-335; Davut and Raif (1994) FLC 92-503; Prpic and Prpic (1995) FLC 92-574; Clauson and Clauson (1995) FLC 92-595; Townsend and Townsend (1995) FLC 92-569; Biltoft and Biltoft (1995) FLC 92-614; McLay and McLay (1996) FLC 92-667; JEL and DDR (2001) FLC 92-075 and Phillips and Phillips (2002) FLC 9.-104.”
Credit
The wife says that the “husband’s evidence throughout was confusing and evasive” and that as a result the Court should accept the evidence of the wife and her witnesses in preference to that of the husband. Rather than making a blanket finding as to credit, as hopefully my reasons demonstrate, there are facts in dispute of importance where I have formed a view based on either my preference as to the evidence led – or, in some cases, by a failure to discharge the evidentiary onus imposed upon a party who seeks to prove a fact in dispute.
Pool
By final written submissions, which as earlier noted were regrettably delayed, it appears that the pool of assets was agreed to amount to $1,231,378, subject to my finding as to a claimed “add back” for the home destruction and for legal expenses. For the reasons which follow I find the pool to be as follows:-
Property M
$700,000
Property V
$270,000
Vacant land, Property R
$19,000
Bank Accounts
- Husband
- Wife
$1,178
$2,100
Contents
- Husband
- Wife
$nil
$500
Motor Vehicles
- Husband
- Wife
$1,500
$12,000
Boat, trailer and personal effects (husband)
$2,600
Superannuation
- Husband
- Wife
$10,500
$37,000
$1,056,378
Add back for diminution of value to house caused by fire
$175,000
Add back for legal fees
$13,940
Add back for funds under the husband’s control
$80,016
TOTAL
$1,325,334
The relative modest superannuation benefits accumulated during the relationship persuade me to incorporate these interests in the one pool notwithstanding the preferred approach identified by the Full Court in C & C (2005) FCAFC 429. Both experienced Counsel agreed to the “one pool” approach. The acceptance of the value of the wife’s superannuation by the husband was given, notwithstanding the fact that no recent Superannuation Statement for the wife’s Health Industry Plan Superannuation was produced.
The submissions for the wife contend (at paragraphs 4 and 5) that rather than to “add back” the sum of $175,000 – the Court should deal with the husband’s conduct in burning down the house as a factor for consideration under s.75(2)(o). Whilst I agree that the authorities referred to by the wife in her submissions (particularly Kowaliw (1981) FLC 92-092), suggest such conduct is usually dealt with within the context of s.75(2)(o), in this case, for the reasons which follow, I have decided to deal with the issue differently.
I am aware of the recognition the Full Court has given to the wide discretion exercisable by a trial adjudicator, shaped and depending upon the circumstances of the particular case, in determining the pool of property (including notional items) available for division. See for example Fosbery (2009) FAMCAFC 51 and the authorities referred to at paragraph [70].
Clearly the husband’s actions were reckless and wanton, and the parties pursuant to an order of the Court made 2 April 2008 and also in July 2008, were to obtain a single expert opinion relevantly as to the current value of the property at Property M “in its current fire damaged state” and an opinion of the current market value “if it remained in its current condition prior to its destruction from fire”. Mr N swore an Affidavit on 9 July 2008 attaching a Valuation Report covering these aspects of his instructions. The expert was not required for cross examination. The report reveals a disparity in value of $175,000 which accounts for the “add back” conceded by the husband.
Often the conduct said to amount to “waste” or behaviour of the nature described and characterised in Kowaliw, is difficult to quantify. In this case, at least, the value of the real property and fixed improvements has been quantified. This provides, in my view, the bridge (often unavailable) to span what would otherwise be the “leap” over the gap between what Coleman J in Steinbrenner (2008) FAMCAFA 193, described as the qualitative evaluation to a quantitative reflection of such evaluation. Although Coleman J was speaking in the context of contributions, I regard his comments as of assistance in adopting the more transparent approach of “adding back” $175,000 rather than an assessment (usually in percentage terms) of assessing the weight for this factor under s.75(2)(o).
I do not ignore the wife’s submissions that there were, unquantified losses for the replacement of goods, furniture and possessions that were contained in the house. That impact of the husband’s conduct will be taken into account under s.75(2)(o).
I regard it as proper to also discuss the allegations of losses from gambling contended for by the wife (see paragraphs 6 to 15 of the written submissions) in the context of s.75(2)(o).
The husband faced serious criminal charges immediately upon the destruction of the home by his hand. He effectively presented himself to the Police on the day of the blaze. His sons [P] and [S] gave him some support through the criminal proceedings. [P] arranged for the retention of a solicitor with experience in criminal matters – William O’Brien. The husband says (at paragraph 70.3 of his trial Affidavit), that he used funds available to him in the St George Account “to pay $12,000 approximately for legal fees in relation to criminal proceedings”. The wife simply does not know how much was paid. Exhibit 11 is an account from Mr O’Brien for $7,040 which appears to be for services from 3 March 2006 until finalisation of the matter. The account is dated 2 August 2006.
The husband said Exhibit 8 showing a withdrawal of $7,400 on 5 April 2006 was a reimbursement to his son of $6,900 for legal fees plus an extra $500. It would have been easy for the husband to procure a statement from his solicitor Mr O’Brian about what he paid. To add confusion Mr S deposes to providing his father with $10,000 as a retainer – which was repaid with some interest.
Doing the best I can, I estimate the legal fees paid were $6,900 plus $7,040 – a total of $13,940. I propose to add this sum back.
Furthermore, although it is open to exclude from the pool the wife’s land in Property R (to which the husband concedes he has made no contribution), the length of the relationship persuades me that adopting even a singular “asset by asset” approach is not appropriate.
The husband controlled the funds of the parties and although he says he discussed matters with the wife, she denies other than limited details of bank transactions were shared with her. I accept the wife’s evidence in preference to that of the husband on this issue.
The husband was cross examined at some length about a number of specific financial transactions. Often his recollection was vague. The wife says that I should find his answers as showing a tendency to be evasive. A number of transactions were explained by other bank entries – amounting to transfers between accounts. This was an exercise undertaken by the husband to maximise interest received. I accept that was a motivation and that it helped the parties for him to do so.
The entry however that causes me the most concern is a withdrawal of $80,016 on 25 February 2004 from the St George account number [8] controlled by the husband. During this part of the cross examination the husband had previously conceded he had operated a bank account in Greece. He confirmed he had sent some documents to his sister
Ms V in Greece. When pressed to explain his failure to produce during discovery any documents relating to his Greek bank accounts, he said he could not get any and didn’t ask his resident sister to do so. He had clearly sent some funds to Greece (see paragraph 68 and his corrected version that he ultimately brought back $20,000), but I found that his attempts to explain a number of transactions unconvincing – especially for a person who had devoted himself to extracting every possible dollar for interest.
Seen within this context, the evidence given by Mr P at paragraph 19 that his father (the husband) acknowledged the existence of funds in Greece; and also the evidence given by Mr S at paragraph 3 of a similar vein exacerbate the Court’s concerns. I am satisfied that it is more likely than not that the husband does have an account with a bank in Greece. The sons were, quite properly and competently cross examined by Counsel for the husband Mr Foster. Whilst it is possible that these conversations, occurring in the psychiatric ward after the husband had burnt down the house, might in such circumstances be treated with significant caution, the husband’s own evidence given under cross examination (and after he had heard and seen both of his sons being cross examined) persuade me, on balance, that the husband still controls an account with a bank in Greece.
When Mr Maiden SC specifically put to the husband the withdrawal of $80,016 the husband said he could have deposited it “anywhere” – but he was unable to produce any Australian bank statement (and many where produced under subpoena) to reveal a similar deposit. When pressed further he said that he had been aware of the withdrawal “yesterday” and can not work out where it went.
He conceded that it was possible he had sent it to Greece. The husband’s passport revealed that the last time the husband had visited Greece was in April/May 2001 – well before the withdrawal being discussed in these reasons.
I am satisfied that the husband, on the balance of probabilities, has not fully and frankly disclosed the existence of a bank account in Greece.
I am satisfied that there are funds in Greece but the amount of those funds is difficult to ascertain.
A long line of authority supports the Court being more robust with the evidence of the husband where the findings as to non disclosure have been made (Weir (1993) FLC 92-338; Black & Kellner (1992) FLC 92-287 for example), and therefore should not be “unduly cautious” in making an order in favour of the “innocent party” – in this case the wife.
At paragraph 22, the wife’s Counsel invites the Court to find that the husband did have monies invested in Greece of possibly $100,000 at around the time of the fire. At paragraph 10 of the submissions as to contributions, it is contended that “…this matter of non-disclosure can only be reflected in the changing of the percentage to which the wife is entitled.”
Because of the clear evidence that $80,016 was withdrawn by the husband in February 2004 from an Australian bank account and was not otherwise credited to another account or otherwise satisfactorily accounted for by the husband, I regard the most transparent manner in which to deal with the evidence is to:-
a)Notionally “add back” as funds still retained by the husband in places unknown (but probably in Greece), the sum of $80,016; and
b)Consider within the context of s.75(2)(o) the husband’s conduct in having access to those funds including likely accrual of interest – without the wife being able to share in those accruals.
I therefore find the pool to amount to $1,325,334.
Contributions
The parties married in Greece, their country of birth in April 1974. The husband was then aged 26; the wife was aged 15 years. The husband had come to Australia in 1964 and in 1971 had commenced work as a [occupation omitted].
Prior to marriage the husband had purchased a home at Property C – he says for $13,200 with a mortgage of $9,000. There is no probative evidence of the value of this home or the equity in the home at the time of marriage; however it is clear the husband’s assets were superior to the wife who immigrated to Australia, post marriage, in May 1974 with no assets. It has to be remembered this is now over 30 years ago.
The parties resided in the Property C home and the wife gave birth to the parties’ eldest son, [P], in January 1975. The wife was just
16 years of age at the time and she devoted herself to the role of mother and homemaker – having really little choice considering the parties’ other children [W] and [S] were born in 1977 and 1979 respectively.
The traditional roles of the husband being the “breadwinner” and the wife “the homemaker” were established early in the marriage and generally maintained throughout this long relationship which spanned 32 years to separation in 2006.
This is not to say that the wife did not work outside of the home – because she did. In 1985, she commenced working as a domestic aid and maintained employment consistently throughout the marriage in various unskilled roles, although to the wife’s credit she has been employed as [occupation omitted] for some time, a position she held at trial.
The husband, as a [occupation omitted], had steady employment with the Department but was interrupted with an injury at work in 1982. This event caused the husband to receive worker’s compensation payments for some years, mixed with employment income until it seems the husband’s employment was terminated in November 1991 because his rehabilitation had not been successful. His group certificate of 30 June 1992 shows an income of $11,208 for the period from 1 July 1991 to 28 November 1991 and a lump sum payment of $80,465.77. It also appears that the work related pressures exacerbated the husband’s underlying anxiety/depressive condition for which he was already medicated.
Notwithstanding the financial constraints upon this family with three young children because of these events, and the wife’s income was certainly of assistance, the husband appears to have been a very competent (if somewhat strict and frugal) money manager. The other significant financial transactions which occurred, and about which there is no significant controversy, are:-
a)In 1986 the parties purchased the property at Property M for $103,000 with a loan of approximately $70,000. This home was subsequently renovated and improved.
b)In 1987 the husband sold the Property C property for a net return of $78,000 with the proceeds used to discharge the debt on the Property M home. A small balance may have been available to the parties.
c)In 1988, the parties acquired a property essentially as an investment/holiday home at Property V for $90,000 with a mortgage from St George Bank in the region of $74,000. The balance of the funds came from savings including some residual funds from the sale of the Property C home. This home was, for the most part, rented although between gaps in tenants the parties spent time in the home and also maintained the home.
d)In about 1987/1988 the wife inherited the property in Property R.
e)In May 1991, just prior to the husband’s termination of employment, he shared in a lotto win – his share being $174,000. I accept this was a “windfall” but as the ticket was purchased during the relationship with funds from the husband’s earnings, it is not a windfall for which he is entitled to claim extra weight as an extraordinary contribution by him.
f)By late 1991, although the husband was then essentially unemployed (he also received a small HIC refund), the parties had funds available of approximately $265,000 at their disposal. Documentary evidence about a number of the transactions at that time – some 17 years ago – appears to have been destroyed in the fire. Although the husband, at paragraph 61 of his Affidavit seeks to explain the use of $234,000, the wife in her submissions at paragraph 11 challenges much of the husband’s evidence. On balance, considering how long ago these transactions occurred, I find that the funds available to the parties from these sources were used to:-
i)Discharge the remaining balance of the mortgage on the Property V property;
ii)Purchase a motor vehicle for the wife;
iii)Pay for renovations on the Property M home;
iv)Invest $80,000 into a unit trust venture in Melbourne;
v)Transfer some funds, perhaps approximately $20,000 to a bank account in Greece.
Not surprisingly, the wife has little confidence that the husband has totally accounted for all the funds available to the husband at that time, which he managed. It is not disputed that the husband travelled to Greece with [S] in 1993 and stayed for two months. Funds transferred to Greece were used to support hat holiday. The parties travelled to Greece in 1998 and funds still available in Greece were expended during that holiday.
I am prepared to accept that the funds received from the lotto win and the termination payment, together with the worker’s compensation commutation in about 1995 for $45,900 were used for the joint benefit of the husband, the wife and the family.
g)The funds from the unit trust investment were returned to the husband’s account in 2001 and the husband gives an explanation for their use in 2001. Some of the funds were expended post separation and included funds provided to his two sons – although the amounts are disputed. Because of the view I have adopted to add back $80,016 for a significant unaccounted withdrawal, no useful purpose in the circumstances is achieved by trying to “audit” the further use of these funds. I am satisfied that fairness to both parties has occurred in respect of a number of confusing and challenging financial transactions by the approach I have adopted.
The husband did assist with the children, particularly when the wife’s work required her to be available on weekends or at night. I also accept that the husband maintained and painted the homes owned by the parties and assisted tradesmen with renovations. Certainly after his employment was terminated his income from his occupation as a [occupation omitted] was modest arising from casual contracting opportunities. A schedule (Annexure A) to the wife’s submissions details the husband’s modest income between 1982 to 2005. The husband says, and I accept he has not worked since June 2005 and is in receipt of Centrelink disability benefits. Apart from his mental health issues, he had other physical challenges arising from the early accident and likely to have been exacerbated by a serious fall from a ladder in May 2003 requiring hospitalisation for 12 days (see paragraph 47).
Had I not “added back” a sum for the unaccounted withdrawal of $80,016 and also included an allowance for the valuation disparity for the Property M home, the wife’s submission for a significant adjustment in her favour for the contribution based entitlements would have had some merit.
However when I consider the totality of the evidence and the many and varied contributions made by each party, of both a financial and non-financial character of the length of this long marriage, I regard a slight adjustment to the wife is indicated by a factor of 2.5% - or a disparity of 5% of the pool between the parties. In circumstances where, of course, the husband will be regarded as having received the benefit of $255,000 of the pool for the two major add backs, if I adopted the wife’s contended approach this would amount to an adjustment of greater than 10% (on the smaller pool) in any event in her favour.
Section 75(2) Factors
The husband is now aged 61 years and does not enjoy good health. The evidence of his unemployment now for over three years coupled with his history of psychiatric and physical challenges support a finding that his earning capacity is limited. This is not to say the husband may not be able to find some small casual work. However it seems likely that his income will comprise essentially government benefits like his current disability pension.
The wife is now 50 years old, and although I could accept the end of the marriage, the fire and this litigation have all created stress for her, she has now maintained a steady job and, although not possessing formal qualifications, has attained a responsible position as a [occupation omitted]. Her income is modest – about $41,000 pa. As a result she has the opportunity to add to her superannuation benefits (at least at the current occupational contribution rate of 9%) where the husband will not.
Although the wife says that where she currently works is “being restructured” and that she is concerned that she may lose her employment, the fact remains that at her age and with her relative good health and recent employment skills her earning capacity is superior to that of the husband. I also note she has been employed with her current employer (in one form or another) for 24 years. It is therefore reasonable to infer she has some accumulated entitlements (such as long service) and also, if her employment was terminated, she may be entitled to a redundancy benefit. No evidence was offered in this respect.
This disparity in positions between the parties would justify in my view an adjustment of not less than 5% in the husband’s favour as contended for by his Counsel.
Apart from a consideration of the matters earlier alluded to in these reasons under s.75(2)(o), the other s.75(2) factors would not disturb an adjustment in the husband’s favour. For completeness I find that:-
a)The parties’ current entitlements to superannuation is quite modest. The husband does continue to enjoy the benefits of an allowance from Centrelink;
b)The parties will each, as result of the contribution based assessment have available a reasonable capital sum, and little debt, to either reaccommodate themselves or invest as they wish;
c)The adult children are all self supporting.
The only other relevant factor is s.75(2)(o) described as any other circumstance of relevance.
The wife alleges in her material that the husband has a “gambling problem”. Although it is not disputed the husband (at times accompanied by the wife) attended casinos, clubs and the like generally to play poker machines, I am not satisfied on the totality of the evidence, and the long relationship, that the husband has “wasted” significant funds on this form of entertainment. The evidence of a couple of $500 withdrawals the same day, or regular withdrawals from an ATM at a venue (where the husband says often he was accompanied by the wife or family and had a meal) is insufficient to persuade me any allowance should be made in favour of the wife. I also note the wife’s prior inconsistent statement to Police and her own evidence under cross examination that she did not say the husband had a gambling problem; she said he spent “significant sums of money”; and that, importantly she does not assert his “habit” had any adverse impact on the family.
The issue of some of the non financial or unquantified losses arising from the destruction of the home calls for some consideration. Although I have “added back” what, on the unchallenged expert evidence, represents the difference in the market value of the Property M home, it is proper to speculate and infer that when a house is destroyed the contents and many other things are lost forever. Clearly the insurance indemnity could not be called upon (even by the “innocent party”) by the wife. Exhibit 10 confirms that all the parties received from the insurance claim was $3,289.00 for some removal expenses. That exhibit represents that the buildings were insured for $446,000 – but it is not proper to adopt that figure as the extent of the loss. As already observed the valuation evidence is the best evidence of the loss at trial.
The wife at “Annexure A” to her trial Affidavit gives details of the “furniture, furnishings and personalty that I recall was in the former matrimonial home at the time of the fire”. She was not seriously challenged on her list – but the value of these second hand items is not known. Certainly, at least, the wife would have been entitled to retain about 50% of the items on separation. Furniture and the like can be, and I infer, has to some extent been replaced.
The replacement cost of those items is likely to be greater than the market value of the items at the time of the fire. Some items are, distressingly, unable to be replaced such as family photographs and articles inherited or handed down.
In my view the conduct of the husband calls for an adjustment to the wife in the order of 2-3% - which on a pool calculated at $1,325,334 amounts to a payment by the husband to the wife of about $33,000.
On the basis that I regarded the adjustment to the husband for the findings under s.75(2)(a) and (b) to be slightly higher than 5% and allowing the wife some adjustment for s.75(2)(o) findings, I would regard an adjustment to the husband of 2.5% on balance as reasonable.
This adjustment creates a disparity between the parties of 5% or approximately $65,000.
Just and Equitable Order
The Court must finally consider whether a division of the pool found by me to amount to $1,325,334, in equal proportions creates an order which is just and equitable.
In a case like this, where there are significant “notional” add backs which will be regarded as having been received by the husband, the need to look at the actuality of the order is obvious.
If the wife receives 50% of the pool, then this computes to a sum of $662,667 made up as follows:
Land in Property R
$19,000
Bank Account
$2,100
Contents
$500
Motor Vehicle
$12,000
Superannuation
$37,000
$70,600
Additional funds for the sale of Property M property
$592,067
TOTAL
$662,667
The husband’s 50% share of the pool also amounts to $662,667 which could be made up as follows:-
Property V
$270,000
Bank Account
$1,178
Contents
Nil
Motor Vehicle
$1,500
Boat, trailer & effects
$2,600
Superannuation
$10,500
$285,778
Add backs
- Dimunition in value
- Legal fees
- Undisclosed funds
$175,000
$13,940
$80,016
$268,956
$554,734
Share of proceeds of sale of Property M
$107,933
TOTAL
$662,667
The husband seeks that both properties be sold and that the proceeds nett of expenses, be divided. The wife also seeks that the properties be sold. As neither party seeks to retain the Property V property to live in, then an order for the sale of both properties and distribution of the nett proceeds as set out in these reasons after allowance for the other findings as to “assets” constituting the pool and the value attributed to them, is likely to achieve a just and equitable result for both parties.
In circumstances where neither party nominates a particular agent, sale process, or timetable for sale of the two real properties I will invite the solicitor for the Applicant wife to prepare a minute of order and provide same to the solicitors for the husband by Friday 17 April 2009, and if the parties are unable to agree on the form of order which reflects these delivered reasons, I propose to list the matter before me at 9:30 a.m. on 24 April 2009 in Brisbane at which time I intend to hear any further submissions as to the form of the order, and make a determination as required to enable me to pronounce the order. The parties, who are all Sydney based, shall have leave to appear by telephone.
If there are to be any costs applications arising from my order, then I will set a timetable for delivery of written submissions in respect of such applications, on the next occasion.
I certify that the preceding fifty-eight (58) paragraphs are a true copy of the reasons for judgment of Baumann FM
Associate: L Parke
Date: 8 April 2009
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