Kurzawa & Kurzawa
[2022] FedCFamC1F 1013
Federal Circuit and Family Court of Australia
(DIVISION 1)
Kurzawa & Kurzawa [2022] FedCFamC1F 1013
File number(s): ADC 2026 of 2020 Judgment of: MEAD J Date of judgment: 19 December 2022 Catchwords: FAMILY LAW – PROPERTY – contribution assessment – advance of funds by wife’s mother towards purchase of former matrimonial home eight years prior to separation – funding of contribution on behalf of wife. Legislation: Family Law Act 1975 (Cth) ss 79, 75(2) Cases cited: Stanford & Stanford [2012] HCA 52 Division: Division 1 First Instance Number of paragraphs: 156 Date of hearing: 13 & 14 October 2022 Place: Adelaide Counsel for the Applicant: Ms Fuda Solicitor for the Applicant: Salisbury Lawyers Counsel for the Respondent: Ms Lee Solicitor for the Respondent: The Law Offices of Elizabeth Temnoff ORDERS
ADC 2026 of 2020 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MR KURZAWA
Applicant
AND: MS KURZAWA
Respondent
order made by:
MEAD J
DATE OF ORDER:
19 December 2022
THE COURT NOTES THAT:
A.The Court is unable to make Final Orders in circumstances where such orders will involve a superannuation splitting order from the husband’s superannuation entitlements in favour of the wife and where procedural fairness has not been afforded by the parties’ solicitors.
THE COURT ORDERS THAT:
1.Directions be adjourned to 13 February 2023 at 9:15am as a face to face hearing.
2.The parties’ solicitors be at liberty to request Final Orders be made in chambers in terms of those referred to in paragraphs 154 and 155 of these reasons.
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 Kurzawa & Kurzawa has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
Introduction
These reasons relate to the property settlement aspect of proceedings between Mr Kurzawa (“the husband”) and Ms Kurzawa (“the wife”) initiated by the husband on 18 May 2020.
In the husband’s Initiating Application he sought both parenting and property settlement orders.
In the wife’s Response filed on 22 July 2020 but amended and refiled on 23 August 2022 she also sought parenting and property settlement orders.
The matter was listed for trial on 22 August 2022 with respect to both aspects of the competing applications.
On 22 August 2022 an extensive order was made by consent with respect to parenting issues.
The property settlement aspect of the matter commenced on Thursday 13 October 2022.
The husband and the wife commenced a relationship in or about mid-2011 and married in early 2012.They separated on 16 August 2019.
The husband is aged 36 years and the wife is aged 33 years.
The parties’ three children are X aged 8 years, Y aged 7 years and Z aged 5 years. All three children have special needs and are eligible for funding from the National Disability Insurance Scheme (“NDIS”). X and Y attend upon a psychologist, Ms B.
The parenting orders of 22 August 2022 provided for X, Y and Z to live in the primary care of their mother and spend four nights per fortnight with their father during school term time, with extensions to that time during school holidays.
In addition, the order provided for the times the children are to spend with each of their parents on special occasions, as well as telephone communication between the children and their parents. The order otherwise contained what might be described as common “specific issues” orders relating to the children’s health and education arrangements, and the parties were mutually restrained from abusing, criticising, denigrating or speaking negatively about the other party in the presence or hearing of the children and discussing any issues relating to the proceedings with the children.
Background
During the course of the relationship both parties worked on a fulltime basis, with the wife taking modest maternity leave leading up to and following the birth of each of the children.
The wife worked as an assistant in various offices after completing her secondary studies, and continued to do so at the time of trial. In her financial statement filed 23 August 2022 she deposed to working casually earning approximately $800 per week. She also deposed to receiving Centrelink payments totalling $696 per week, but no child support.
Throughout the period of the parties’ cohabitation and post-separation the husband has been employed as a finance professional, save for a period in 2021. He deposed in paragraph 93 of his trial affidavit filed 23 August 2022 that he “became unemployed for a period and I disclosed that to the mother”.
The husband’s evidence at trial, as contained in his financial statement filed 23 August 2022, was that he earned annual income as finance professional with D Pty Ltd on a salary of $2,994 per week before tax, representing an annual income of $155,688. He deposed in that same financial statement to paying $260 per week in child support payments.
Both parties acquired superannuation prior to and during the period of cohabitation and marriage and post-separation.
Parties Proposals
The position of the husband at trial was that the parties’ net non-superannuation assets should be divided as to sixty (60) per cent in favour of the wife and forty (40) per cent in his favour, with the parties’ superannuation assets to be equalised.
In addition, he sought that the wife pay the further sum of $1,925 on account of her half share of the cost of the family assessment report obtained with respect to the parenting proceedings, and that the wife pay the total amount outstanding with respect to the parties’ Australia and New Zealand Banking Group Limited (“ANZ”) credit card account …64 in the name of the husband. This account had an agreed outstanding amount as at 15 September 2022 in the sum of $7,464.91.
It was his position that in calculating the 60/40 division of the net non-superannuation assets the wife assume the sole liability for a Statutory Charge held by the Legal Services Commission of South Australia over her interest in the former matrimonial home in the sum of $6,326.80 as at 23 August 2022. The wife acknowledged this was her debt.
It was the position of the wife that the husband should transfer his interest in the former matrimonial home to her in consideration of a payment to him in the sum of $50,000, and that the parties should be equally liable for the ANZ credit card liability. Although it was acknowledged by the wife’s counsel that the wife was indebted to the husband in the sum of $1,925 as her share of the costs of the family assessment report, it was not submitted that that amount should be paid to the husband by the wife in addition to the sum of $50,000.
The effect of the orders sought by the wife with respect to the division of the parties’ non-superannuation assets was not expressed as a percentage division between the parties either in her Amended Response or in her counsel’s submissions. It was rather submitted on her behalf that such an order would effect justice and equity as between the parties in circumstances where her mother had, on her case, loaned the parties $100,000 towards the purchase price of the property at settlement in 2011. In addition she claimed she had made a post-separation contribution of $16,000 towards the mortgage payments over the property, and that where she earns considerably less than the husband and has the primary responsibility for the care of the parties’ three children, the “s 75(2) factors” favoured her.
She did not oppose an equalisation of the parties’ superannuation entitlements.
Relevant Law
In considering competing claims for settlement of property, the Court must be satisfied, upon an identification of the existing legal and equitable interests of parties in the property available for distribution, that it is just and equitable to make an order for settlement of property involving an alteration of those interests.[1]
[1] Stanford & Stanford [2012] HCA 52 (‘Stanford & Stanford’).
It was common ground between the parties that they separated on 16 August 2019. They have engaged in litigation with respect to both children’s issues and financial matters. Both parties seek orders with respect to settlement of property. They no longer share or intend common use of their property and are not in agreement as to how it should be divided. They each seek specific orders altering their interests in property.
I am satisfied in those circumstances that it is just and equitable to make an order adjusting the property interests of the parties, including their interests in superannuation.
In order to assess the parties' competing proposals the Court must:
(a)determine the asset pool available for distribution;
(b)consider and make findings as to the parties' respective contributions to that pool in accordance with the provisions of section 79(4) of the Family Law Act 1975 (Cth) ('the Act');
(c)consider and make any necessary adjustments to those findings taking into account the relevant matters under the provisions of section 75(2) of the Act; and
(d)having considered these matters and in arriving at a determination as to the distribution of the parties' assets, the Court must be satisfied that such distribution effects justice and equity as between the parties.
The Evidence
The husband relied on the following documents:
(a)Initiating Application filed 18 May 2020;
(b)Trial affidavit filed 23 August 2022; and
(c)Financial statement filed 23 August 2022.
The wife relied on the following documents:
(a)Amended Response to Initiating Application filed 23 August 2022;
(b)Trial affidavit filed 23 August 2022;
(c)Affidavit of Single Expert, Mr E, filed 5 August 2022;
(d)Affidavit of Ms F filed 22 July 2020; and
(e)Financial statement filed 23 August 2022.
The husband gave brief additional oral evidence-in-chief and was cross-examined.
The wife adduced no further oral evidence-in-chief and was cross-examined.
Asset Pool
The parties were agreed that the asset pool available for distribution between them included the property at G Street Suburb H South Australia (the former matrimonial home) at a value of $690,000 and the parties’ respective superannuation entitlements, with the husband’s entitlements agreed to have a value of $220,155 as at August 2022 and the wife’s, a value of $72,110 also at August 2022.
It was common ground that the former matrimonial home was subject to two mortgages with a combined value of $396,483.88 at the time of trial.
It was agreed that the husband’s superannuation entitlement at separation was $154,189 and the wife’s, $60,410.
An ANZ credit card in the joint names of the parties had an outstanding balance of $7,464.91 as at 15 September 2022. The parties were not agreed as to whether, in calculating the net assets available for distribution between the parties, the outstanding balance should be taken into account as a liability of the parties jointly and equally or whether that debt should be held to be the sole liability of the wife.
It was agreed that as at 23 August 2022 the wife was indebted to the Legal Services Commission of South Australia in the sum of $6,326.80, which indebtedness was secured over the former matrimonial home by a Charge. It was acknowledged by the wife that she should be solely liable for that debt.
The wife’s share of the cost of the family assessment report prepared for the parenting dispute was $1,925. On 10 November 2020 Judge Kelly made an order that the parties share equally in the costs of an independent expert preparing a family report with respect to parenting issues. Her Honour further ordered that the husband meet the costs of the family assessment report in the first instance, with the wife to reimburse him one half of the costs of the report at settlement.[2]
[2] Order of Judge Kelly made 10 November 2020 – paragraph 6.
There were two significant issues in dispute between the parties as regards the calculations of the asset pool namely:
(a)whether the sum of $100,000 should be treated as a joint liability of the parties to the wife’s mother as asserted by the wife, or treated as a gift to the parties jointly by the wife’s mother and taken into account when assessing contributions as asserted by the husband; and
(b)whether the parties should be jointly liable for the balance outstanding in respect of the ANZ credit card account in the husband’s name or whether that should be held to be the wife’s sole liability.
Provision of $100,000 to the parties in 2011
The parties were in dispute as to whether the sum of $100,000, provided to the parties by the wife’s mother at the time of purchase of the property at G Street Suburb H South Australia (the former matrimonial home) should be treated by the Court as a loan to the parties in respect of which they should be found to be equally liable and therefore be included in the calculation of the net asset pool available for distribution between the parties (the wife’s primary position) or; a contribution made on behalf of the wife towards the acquisition of the parties assets (the wife’s alternate position) or; as a gift to the parties jointly by the wife’s mother and taken into account by the Court in an assessment of the parties contributions (the husband’s position).
The parties commenced cohabitation at the former matrimonial home in approximately mid-2011, shortly after the purchase of the property.
Annexure “1” to the wife’s trial affidavit was a copy of the Purchaser’s Settlement Statement dated 2011. The purchase price of the house was stated to be $505,000 with the total costs of purchase inclusive of Stamp Duty and Registration Fees as well as searches and utility adjustments totalling $531,021.11. Of that amount $410,860.30 was provided by the ANZ bank by way of mortgage funds and the First Home Owner’s Grant. The balance due by the parties at settlement was $117,160.81.
It was common ground that the wife’s mother provided $100,000 of the remaining purchase funds, with those funds being paid by the wife’s mother directly to the trust account of the conveyancer, Ms J Trust Account.
It was the wife’s evidence, not challenged by the husband in cross-examination, that the balance of $17,160.81 was met from her pre-relationship savings.
There was no dispute that both parties were working fulltime at that time, with the husband working as finance professional and the wife in an administrative role.
In paragraphs 12 to 14 inclusive of her trial affidavit filed 23 August 2022 the wife deposed to she and the husband approaching her mother to assist them with putting a “down payment” on the former matrimonial home. They did not have sufficient funds to acquire a property in the area and wanted to purchase a property near to her mother’s house as they knew they would need her help when starting a family.
She deposed to the sum of $100,000 being loaned specifically to the parties for the purpose of purchasing the former matrimonial home, and to an agreement between she, the husband and her mother that if she and the husband were ever to sell the property they would give $100,000 back to her mother.
In paragraphs 23 to 26 and 32 to 45 of the husband’s trial affidavit he set out his evidence in relation to the provision of the funds, namely:
·the maternal grandmother advanced the parties the sum of $100,000 directly to their conveyancer to effect settlement of the purchase of the former matrimonial home;
·the sum was gifted to the parties;
·when the parties were looking to purchase their own home the maternal grandmother expressed a strong view to them that she wanted them to stay close to her in the Suburb K area where she lives;
·that he and the wife told the maternal grandmother they would probably not be able to do so because of the cost of property in the area;
·that he ascertained the parties’ borrowing capacity was $400,000;
·there were a number of conversations with the maternal grandmother and the parties about houses and prices in the Suburb K area;
·the maternal grandmother ultimately approached he and the wife and offered to gift them the sum of $100,000 to make living in the local Suburb K area affordable;
·the maternal grandmother told the parties that she wanted to help them and that by virtue of the wife ultimately being a beneficiary to her estate they would end up with the money “down the track in any event”;
·he and the wife discussed the offer, ultimately accepted the offer and purchased the former matrimonial home;
·at no time did the maternal grandmother ever raise the issue of the sum advanced being a loan;
·there were never any discussions about the need to repay the money;
·there were no informal or formal documents drawn up with respect to a loan;
·at no time during the course of cohabitation did the maternal grandmother seek repayment or a repayment schedule;
·the maternal grandmother made no request or demands nor initiated discussions regarding repayment of the funds;
·he was never present for any conversations where those issues were raised by the maternal grandmother;
·the notion of the sum advanced being a loan was never raised by the wife or the maternal grandmother until such time as he commenced proceedings for settlement of property;
·the maternal grandmother did not seek to be joined to the proceedings as an interested party;
·notwithstanding the maternal grandmother knowing of the proceedings and giving evidence in the proceedings she had made no formal or informal request personally or through a lawyer seeking recovery of the sum; and
·the contention of the wife and her mother of the $100,000 being a loan rather than a gift is an attempt to reduce the asset pool available for distribution between the parties.
The wife’s mother’s evidence regarding the matter was contained in her affidavit filed in support of the wife on 23 July 2020. She referred to the issue of the $100,000 in paragraphs 18 to 23 of that affidavit wherein she deposed to:
·being unemployed and relying on government benefits;
·suggesting to the parties in or about 2011 when they were looking to buy a house and start a family that they would need someone to help with babysitting and that she would “love to help them with that”;
·the husband and wife agreeing that they would need her help, that they wanted to stay in the Suburb K area and that in circumstances where she does not drive it made sense for them to live near her so they could easily have her help with babysitting; and
·the parties finding the former matrimonial home in nearby Suburb H and telling her they wanted to purchase it but it was too expensive for them to buy on their own.
In paragraphs 22 and 23 of her affidavit she said as follows:
22.I cannot recall the exact conversation but it was agreed that I would pay $100,000 toward the purchase price for the property to enable the parties to afford it. I purposely paid the $100,000 directly to the conveyancer to ensure that the $100,000 would be applied to the purchase and not for any other purpose. The understanding was that the $100,000 was provided specifically for the purpose of the purchase of the property and that if the property was ever sold the $100,000 would be returned to me.
23.This understanding was borne out and confirmed in the years following the purchase of the property for example as follows:
23.1.In or about early 2014 shortly after [X] was born, [Ms Kurzawa] and [Mr Kurzawa] were at my house and [Ms Kurzawa] told me that she was considering whether she and [Mr Kurzawa] should downsize to a more affordable property. I told [Ms Kurzawa] that if they planned to move and sold the property then the $100,000 would need to be returned to me. [Ms Kurzawa] agreed. [Mr Kurzawa] was present for the conversation.
23.2.In or about 2015 [Mr Kurzawa] had travelled to Brisbane a few times for his work and he told me that he was thinking of moving the family there. I asked him what he planned to do about purchasing a property in Brisbane because if he and [Ms Kurzawa] sold the [Suburb H] property they would need to repay the $100,000 to me. He agreed that was the case.
In his additional oral evidence-in-chief the husband told the Court there had been no conversation with the wife’s mother as to paying the money back and that no conditions had been placed on the money advanced to them.
He denied that there had been any discussions regarding the sale of the former matrimonial home or returning $100,000 to the wife’s mother arising from discussions about a possible move to Brisbane. He said he had gone to Brisbane on occasions for work as well as to Sydney, that there was a job advertised in Sydney but the salary band was not sufficient to justify a move. He denied he had considered any move to Brisbane.
In cross-examination the husband agreed that he had simply made what he considered to be a “reasonable” assumption about the wife ultimately being a beneficiary to her mother’s estate but that also the wife’s mother had said something along “those lines”. He agreed that she had not said that he was a beneficiary to the estate.
He agreed that the money had been paid straight to the conveyancer rather than to either a bank account in his name or in the parties’ joint names. He agreed that was to ensure that they were not able to do just what they wished with the money.
He maintained his denial of any conversation having taken place regarding the money being a loan to the parties, but conceded that the wife’s mother had been generous to he and the wife both with respect to gifts of money and assisting with the care of their children. He said she had provided funds for the parties’ wedding, to assist with P Treatment, and generally by way of help and assistance from time to time.
When questioned about the various comments made in his affidavit as to the comfortable financial position of the wife’s mother, including referring to her as “exceptionally comfortable”, he said he formed that view in circumstances where she owned her house freehold, that she was working in that she undertook cat boarding at her home, that she had paid in full for the parties’ wedding after providing the $100,000 for the purchase of the former matrimonial home and that in addition, she had provided unconditional assistance at many times during the parties’ relationship.
He said the only time any condition was attached to funds that were provided was in relation to the purchase of Motor Vehicle 1. The sum of $25,000 was advanced by Ms F to enable him to purchase Motor Vehicle 1, with an agreement as to regular repayments, varied from time to time by further agreement but with the advance ultimately being repaid in full.
In cross-examination the wife disagreed with the proposition that the $100,000 was provided to the parties as a gift. She disagreed the funds were provided so she and the husband could remain living close to her mother or that her mother had encouraged them both to purchase the Suburb H property as it was close to her home.
She agreed that the parties were unable to obtain the finance necessary to purchase the home on their own account and conceded that at times she and the husband both relied heavily on her mother’s assistance with the care of the children in circumstances where they both worked. She agreed that she and the husband had told her mother that they wanted to live in the Suburb K area and that it was good if they did so because her mother was unable to drive.
When it was put to the wife that the $100,000 was never advanced on the basis of it being a loan she replied that she wouldn’t necessarily call it a loan, as it was “only conditional if the house was sold or something – ideally the money would then be paid back”.
She denied that there was no discussion about that issue in 2011 when the funds were advanced, and said that her mother would not have loaned that amount of money without discussions about what would happen “down the track”. When it was put to her if such discussions had taken place she would have deposed to them in her trial affidavit, she denied making the evidence up.
The wife agreed that her mother had assisted the parties with payments for P Treatment, had paid $40,000 to $50,000 for the parties’ wedding and that she had a fluid relationship with her mother regarding finances. She said that sometimes the monies advanced were by way of gifts and sometimes they had to be repaid. She agreed there had been no discussions with her mother about repayment to her of amounts advanced for the parties’ wedding, P Treatment or her legal fees.
When the wife’s mother Ms F was asked in cross-examination whether she had encouraged the husband and wife to live in the Suburb K area she replied that she had not encouraged them but had said it was a good idea. She agreed that she knew they could not afford to buy a property in the area. When it was put to her that she had gifted the $100,000 required to purchase the property she did not answer the question directly but said that she had a meeting with the mortgage broker, asked how much the husband and the wife needed to effect the purchase, and that he replied it was approximately $100,000.
She agreed that she paid some $43,000 for the parties’ wedding to various individuals and that she had loaned $25,000 to the parties for the purchase of Motor Vehicle 1. She agreed that as part of the discussions with respect to funding Motor Vehicle 1 there were discussions as to how those funds were to be repaid.
When it was put to her that it was the husband’s evidence that a payment plan had been set up by agreement, with a repayment rate of $500 per month and expectation of repayment in full within five years, she agreed that was the agreement but said there was no fixed monthly amount.
When it was put to her that those particular monies had to be repaid she agreed that to be the case in that it was a car for the husband. She said this was so because only he could drive it because it was manual. When it was put to her that the vehicle was automatic she said she did not believe so. She agreed she did not know if the wife had driven the vehicle.
She agreed that she had set the parameter of five years for repayment, that the vehicle was purchased in 2012, that payments did not start until approximately mid-2013 and that the loan was paid out in full by mid-2019. She agreed that payments were altered from $500 per month to $250 per month and then back to $500 per month and that she had no cause to complain about the repayment arrangements.
She agreed she had not asked to be repaid funds advanced for the parties’ wedding or the P Treatment at any time.
It is clear that between the time the parties commenced cohabitation in mid-2011 and their separation in 2019 the wife’s mother advanced significant sums of money to the parties from time to time.
It was not contended by either the wife or by her mother that there was any expectation that the funds so advanced, save as to the $100,000 advanced towards the purchase of the former matrimonial home in 2011, would be required to be repaid.
The $25,000 advanced to the parties for the purchase of the Motor Vehicle 1 was acknowledged by the parties and the wife’s mother as having been advanced by way of a loan, initially to be repaid within a period of five years at the rate of $500 per month but with the terms of repayment subsequently altered by agreement such that the loan was ultimately repaid in full by mid-2019.
There is no doubt that the wife’s mother intended that the funds should be utilised only for the purpose of the purchase of the former matrimonial home. To that end she paid the monies directly into the trust account of the parties’ conveyancer for the purposes of settlement rather than to the parties themselves.
The wife’s evidence is that her mother lent the parties $100,000 “specifically for the purpose of purchasing the former matrimonial home”.[3] That element of the arrangement is not in dispute. She further deposed “[i]t was agreed between my mother, and the husband and I that if we should ever sell the property, we would give $100,000 back to my mother. It was not a gift”.[4]
[3] Wife’s trial affidavit filed 23 August 2022 – paragraph 14.
[4] Wife’s trial affidavit filed 23 August 2022 – paragraph 14.
The affidavit of the wife’s mother refers only to an “understanding” that if the property was ever sold the $100,000 would be returned to her.[5]
[5] Affidavit of Ms F filed 23 July 2020 – paragraph 22.
I find that the wife’s mother was keen to have the wife and the husband live in close proximity to her and that they likewise were keen to live close to her in circumstances where she was willing and able to assist in the care of any future children. She did not drive, and knew that notwithstanding that the husband and wife were both working they could not afford, without assistance from her, to purchase a property in the immediate area.
I find that the funds were advanced without any of the husband, the wife or the wife’s mother specifically turning their minds to or discussing the nature of the advance. I find Ms F placed no conditions or terms suggestive of a loan on the advance at that time or at any other time during the course of the parties’ relationship.
It was the evidence of Ms F that at no time did she have an expectation of monies advanced for the parties’ wedding or for the purposes of P Treatment or other general living expenses being repaid, nor would she seek that the wife repay funds that she has advanced on her behalf for the payment of legal fees post-separation.
At no time did Ms F attempt to secure the advance against the former matrimonial home, she did not seek to intervene in these proceedings, and she did not take any steps to recover from the parties the funds advanced, save as to filing an affidavit on 23 July 2020, nearly twelve months after the parties separated, wherein she deposed that it was always intended that the funds be regarded as a loan.
There is no doubt the advance of the funds must be recognised by the Court in determining the dispute between the parties. Nevertheless, I find that it is appropriate to consider the $100,000 in the context of either a significant direct financial contribution made on behalf of the wife or a gift made to both parties, rather than determining it to be a liability to be taken in to account in an assessment of the parties’ assets.
I shall address that matter further in these reasons when considering the question of the parties’ contributions.
ANZ Rewards Platinum credit card account – husband’s name – …64
At separation the husband was indebted to the ANZ bank with respect to two Rewards Platinum cards in the sum of $6,037.60.
The account was in the sole name of the husband but each party operated a card on the account, with the husband’s card ending …71 and the wife’s card ending …72. The evidence as to the account number, the card numbers for each of the parties, and the balance of the account as at 15 August 2019 was contained in annexure “L2” to the husband’s trial affidavit filed 23 August 2022.
In the same annexure the husband adduced evidence that the additional cardholder account in the name of the wife was deleted from the card on 19 August 2020, some twelve months after separation.
It was the husband’s evidence, contained in paragraph 67 of his trial affidavit, that following separation he attended to paying the credit card debt in full so that the parties owed nothing in respect of that account.
As at 16 August 2019 $6,500 was paid into the card account by the husband, resulting in a credit balance of $264.17. It was the husband’s case that he made a further payment of $6,000 on 17 September 2019 and a further payment of $6,000 on 21 October 2019. That evidence was not challenged by the wife.
Those payments reduced the debit balances to $3,160.51 and $5,374.20 respectively on those dates.
It was the husband’s evidence that following separation he used his card (…71) for purchases and made payments to the account for any purchase he made.[6] He further deposed in paragraph 68 of his trial affidavit to the wife continuing to use her card (…72) to make purchases but not making any repayments.
[6] Husband’s trial affidavit filed 23 August 2022 – paragraph 67.
In paragraph 71 he deposed to the wife using the credit card to make purchases totalling almost $8,000, which balance effectively remained outstanding as at trial.
In paragraph 35 of her trial affidavit the wife deposed to incurring $8,183.26 by way of expenses on her credit card (…72) from separation until 21 October 2019 and in the same period paying $11,750 into the card account from the offset account, such that the credit card was in surplus of $3,566.74 for that period.
The only significant credits that appear on the Rewards Platinum Account …64 for the period from 16 August 2019 to 5 December 2019 are those deposed to by the husband in paragraph 73 of his trial affidavit.[7] There is no evidence that in the period between separation and 21 October 2019 the wife paid $11,750 into the card account from the parties’ joint offset account.
[7] Husband’s trial affidavit filed 23 August 2022 – Annexure “L2” (p 41 of 45).
There were two payments however recorded utilising the wife’s card (…72) on each of 4 September 2019 and 29 October 2019 in the sums of $400 and $59 respectively. It appears from statements relating to the ANZ Rewards Platinum account (…64) that the wife continued to utilise her credit card (…72) up to and including 12 November 2019 inclusive.
Neither party adduced evidence as to any calculations to quantify exactly how much was expended by each of them in the period between separation and 15 December 2019 at which time the balance outstanding on the account was $7,985.90.
It was the husband’s uncontested evidence that since that time he had been making minimum monthly repayments to avoid debt collection proceedings.[8]
[8] Husband’s trial affidavit filed 23 August 2022 – paragraph 75.
In cross-examination the wife disputed that the husband had been solely responsible for the payments of $18,500 in total between 16 August 2019 and 21 October 2019 in that she said the payments were made from the parties’ joint funds. She said that was because both the husband’s and her salary were still going into a joint account until she opened her own account into which her earnings were paid in November 2019. That evidence was not disputed.
Notwithstanding that the evidence was supportive of the $18,500 having been paid in reduction of the Rewards Platinum Credit Card Account using card …71 in the name of the husband, I was not satisfied on the evidence adduced by either party as to either the amount of liability incurred by each of them on their respective cards during the relevant periods or the source of the funds paid by the husband in reduction of the debt.
I am satisfied that the credit card debt should be included in the calculation of the asset pool as a joint liability of the parties.
No submission was made by either parties’ counsel as to a value to be ascribed to the net non-superannuation assets from their perspective. They did however jointly tender at my request during the trial an aide memoir setting out the various agreed values of assets and liabilities.
For those reasons I find that the asset pool comprises the following:
Assets:
Value:
Former matrimonial home at G Street, Suburb H
$690,000
Husband’s superannuation entitlements as at August 2022
$220,155
Wife’s superannuation entitlements as at August 2022
$72,110
Total:
$982,265
Liabilities:
Amount:
ANZ Supplementary Loan Account …15
$282,442.71
Residential Investment Loan Account …23
$114,041.17
ANZ credit card account …64 (husband’s name)
$7,464.91
Total:
$403,948.79
The net assets available for distribution between the parties therefore total $578,316.21.
The net non-superannuation assets total $286,051.21. The parties’ superannuation entitlements total $292,265.
Contributions
Both parties continued to work throughout the period of cohabitation and marriage, with the wife taking very modest maternity leave totalling less than two years over the period from approximately mid-November 2013 to early September 2017.
The three children X, Y and Z were born 2013, 2014 and 2017 respectively.
Unsurprisingly the husband’s income was significantly greater than that of the wife over the period of cohabitation and marriage, in circumstances where he had gained tertiary education resulting in his employment as a qualified finance professional.
I am satisfied that whatever the discrepancy in the parties’ incomes may have been, both parties worked hard throughout the period of their relationship and marriage, both contributed their wages to a joint account and the family expenses were paid jointly by the parties.
Neither party advanced an argument of a significantly greater contribution by one or other of them to the welfare of the family and as homemaker or parent. Both parties evidence in that regard was largely unchallenged. I am satisfied that the primary role in that regard was undertaken by the wife during periods of maternity leave but otherwise, in circumstances where both parties worked fulltime and had three children within a period of just under four years all of whom had some level of disability, I find their contributions to the homemaking and parenting role should be assessed as equal.
Nevertheless, the wife’s mother, Ms F, was not challenged as to the evidence contained in her affidavit sworn on 22 July 2020 concerning the significant assistance provided by her to both parties by way of child care for all three children. I do not consider such contribution on her part should be recognised by a specific weighting of contribution in favour of the wife, but rather noted in the context of my assessment of contributions by or on behalf of both parties to the parenting and homemaking role.
It was common ground that following upon the purchase of the former matrimonial home the parties contributed their wages to a joint ANZ offset account …77 out of which account mortgage payments were made. The parties also had a joint ANZ Access Advantage Account …48.
I have found earlier herein that there were no particular discussions at the time as to the nature of the advance of $100,000 to the parties in 2011 to assist in their purchase of their home.
I have referred at length to the issue of funds advanced to the parties by the wife’s mother towards the purchase of the former matrimonial home when assessing the asset pool. I have found that other monetary advances made by Ms F to the parties during the period of their co-habitation and marriage (save as to the Motor Vehicle 1 funds) clearly came with no expectation or requirement that they be repaid by either party.
The advance of $100,000 to the parties by Ms F in anticipation of the purchase of the former matrimonial home was a very significant contribution to the purchase price, comprising nearly nineteen (19) per cent of that amount.
There was no evidence before the Court suggestive of a depth of relationship between Ms F and the husband that would support a finding that Ms F intended the funds to be a gift both to her daughter and to her, at that time, prospective son-in-law. I have already found that none of the wife, the husband or Ms F gave particular thought to the nature of the advance at the time it was made. There was no evidence that satisfied me there were discussions as to what should happen about the money in the event of a marriage breakdown between the husband and the wife. I am mindful however that such an event occurred eight years after the parties purchased the former matrimonial home and that the parties have agreed that the wife shall retain the primary care giver role for the children. I am satisfied that justice and equity would best be served in this matter by a finding that the $100,000 advance should be taken into account as a direct financial contribution made by the wife’s mother on behalf of the wife, rather than a loan to the parties as argued by the wife or a gift to the parties as argued by the husband.
Notwithstanding the husband’s position with respect to the issue of an alleged gift, it was his position that an adjustment of ten (10) per cent on account of contribution should be made in the wife’s favour with respect to the distribution of the non‑superannuation assets, to reflect the advance from her mother.
The other funds generously advanced to the parties by the wife’s mother during the period of co-habitation and marriage were not utilised to acquire, conserve or improve any matrimonial property but rather to assist with normal day to day and special living expenses.
I find that the contribution made by the wife’s mother to the welfare of the family by way of the provision by her of significant amounts of child care for the parties three children should be considered in the context of a loving grandmother assisting in the care of her grandchildren which assistance was gratefully accepted by each of the parties. No evidence was advanced by either party as to the financial impact of such assistance.
Wife’s alleged $16,000 post-separation contribution to mortgage
The third significant issue in dispute between the parties centred around the wife’s proposal that she be credited with a post-separation contribution of $16,000 in reduction of the parties mortgages.
It was common ground that upon separation each party retained the sum of $20,000 from their joint offset account.
The husband forthwith transferred that sum into an account in his sole name, with the wife taking her $20,000 in two payment of $14,790 and $5,210 respectively, both of which amounts were paid into one or other of the parties’ joint accounts until 21 November 2019, when the wife opened an ANZ Access Advantage Account …77 in her sole name with initial deposits of $16,346 from the joint account …48 and $1,000 from the joint offset account …77.[9]
[9] Exhibit H2.
It was the wife’s evidence that she subsequently used $16,000 of her $20,000 to pay into the parties’ offset account to meet the mortgage, and the balance on day to day expenses.[10]
[10] Wife’s trial affidavit filed 23 August 2022 – paragraph 34.
In cross-examination the wife said she had not deposited $16,000 into the offset account in a lump sum but rather in “dribs and drabs” as she was advised that the husband could withdraw the funds if they were deposited in a lump sum. She therefore deposited them just before the mortgage payments were due.
The wife conceded that she had the sole use of the former matrimonial home post-separation and agreed that she maintained the mortgage payments during that time. She conceded that those funds she had paid from the account in her sole name into the offset account were standard mortgage payments as and when they fell due and not payments made as an additional contribution by her post-separation.
Post-separation the husband met his own rental housing costs.[11]
[11] Husband’s trial affidavit filed 23 August 2022 – Annexure “L3” (p 45 of 45).
I am not satisfied the wife has made out any basis for an adjustment in her favour by way of post-separation contribution to the parties’ mortgages.
Taking all of those matters into account I find that the parties contributions to their non-superannuation assets should be assessed as sixty three (63) per cent in favour of the wife and thirty seven (37) per cent in favour of the husband.
The parties were agreed that their superannuation entitlements should be divided between them equally and I am satisfied such an approach is appropriate in the circumstances of this case. I take into account however, that in the circumstances of the parties disparate incomes, the husband’s superannuation entitlements increased by some $66,000 between the time of separation and trial, with the wife’s entitlements in that same period increasing by some $11,700.
Section 75(2)
At the time of trial the husband was aged 36 years and the wife aged 33 years. The wife was apparently in good health. Although the subject of the husband’s health assumed great significance in the parenting aspect of the proceedings between the parties, it was not submitted on his behalf that the state of his health is a factor to be taken into account pursuant to s 75(2)(a).
At the time of trial both parties were appropriately gainfully employed. The only significant property of the parties is that referred to in these reasons and their income was that referred to in paragraph 13 and 15 of these reasons. The husband’s income is substantially greater than that of the wife and is likely to remain so in the future in circumstances where he has a long stable employment history with tertiary qualifications. The wife likewise has a long and stable employment history but no tertiary qualifications, and has traditionally earned significantly less than the husband. I find that both parties have the physical and mental capacity for continuing appropriate gainful employment. Neither party deposed to having accumulated savings or having access to other resources.
The children are in the primary care of the wife and at the time of trial were aged 8 years, 7 years and 5 years. Their care arrangements are those set out in the consents order of 22 August 2022 as referred to in paragraph 10 and 11 of these reasons.
Both parties deposed in their financial statements to reasonable and modest commitments necessary to enable them to support themselves and their three children commensurate with their respective incomes. Neither party has a reasonability to support any other person.
At trial the wife deposed to being in receipt of Centrelink benefits totally $696 per week, being a combination of a parenting payment, carers payments for X and Y and Family Tax Benefit A and B.
The husband was neither eligible for nor in receipt of any Commonwealth pension allowance or benefit.
Following upon separation the wife retained the sole use and occupation of the former matrimonial home and at the time of trial continued to reside in those premises. The husband has at all times lived in rented accommodation following upon separation. At the time of trial he was paying rent at his property at Suburb M in the sum of $450 per week. I am satisfied that both parties have enjoyed a standard of living that in all of the circumstances has been reasonable post separation. Notwithstanding his superior income however the husband will require settlement funds to enable him to purchase a residence.
The order I intend to make pursuant to s 79 will involve a cash payment to the husband as well as a significant superannuation split from his superannuation entitlements in favour of the wife. I find that such an order will have the likely effect of facilitating the husband being able to purchase a modest property and both parties retaining reasonable superannuation entitlements.
It was the wife’s position that she wished to retain the former matrimonial home. She conceded that she was unlikely to be able to obtain finance to pay a settlement sum to the husband through banking channels but was optimistic of support from her mother and maternal family to assist her in that endeavour. That evidence was corroborated by her mother.
The issue of child support was a source of contention between the parties in this case. It was the husband’s evidence contained in paragraph 93 of his trial affidavit that the child support payable to the wife was reduced during 2021 when he became unemployed. He deposed to having found new employment and his child support as at June 2022 having increased to $1,175 per month, which he had been paying as per the child support agency’s assessment.
It was the wife’s case contained in paragraph 44 to 48 of her trial affidavit that:
·Following separation the husband was assessed to pay child support through the child support agency at the rate of $1,607 per month.
·The assessments kept changing every few months at his request.
·At one point he was assessed to pay $1,252.35 per month.
·In September 2021 she received a letter from the child support agency advising that the husband had requested to reduce his assessment such that from October 2021 she would receive $37.17 per month in child support.
·Her mother assisted her in circumstances where she was unable to meet the mortgage payments by providing $1,000 per fortnight, which funds had been repaid.
·In October and November 2021 the husband paid $37.17 each month in child support.
·In December 2021 the husband paid child support of $14.65.
·She did not receive child support between December 2021 and 31 July 2022.
·On 31 July 2022 the husband paid $326.75 followed by $800 on 7 August 2022.
·Until mid-2021 the husband was working at N Pty Ltd and his child support was taken directly from his wages.
·He apparently left N Pty Ltd in mid-2021 and commenced new employment at O Pty Ltd.
·This was not disclosed to her or to the child support agency.
·The husband continued paying child support at the N Pty Ltd rate during mid-2021.
·She understood the husband stopped working in late 2021.
·At the end of 2021 she was advised by the child support agency that her child support would be zero as the husband had zero income.
The husband was cross examined as to child support issues. He said he had new employment with D Pty Ltd and that he had commenced on a “rolling contract” with that company in late 2021. He defined a rolling contract as being short term and then being renewed over three monthly periods during late 2022 when he was made permanent. He agreed he had income of approximately $150,000 per year from that employment and said he was paid monthly at a rate of $6,500 consistently late October 2021 to late 2022.
When asked if he had informed the child support agency about the rate of his income from late 2021 he replied that he had not because it was not secure income. He agreed that his current child support assessment was based in his income prior to late 2021.
He agreed that he earned $102,000 in the 2021 year and acknowledged that he would have to pay a lump sum in the future due to the increase in his income. When asked when he intended to tell the child support agency about the extent of his current income he said that he was not as they would find out when he filed his taxation return. When he was asked whether he thought he had a positive obligation to inform the child support agency about the change in his income he replied that he had been told by the agency that they would reconcile the figures upon the filing of his taxation returns and that he was happy with that outcome. He said that he had spoken with the agency in mid-2022 and had last lodged a tax return for the 2021 financial year.
The husband’s evidence with respect to his child support liability was glib and did not reflect a commitment to paying child support to the wife as and when the liability fell due. The result of his lack of appropriate communication with the child support agency and commitment to fulfilling his obligations as they fell due led to unnecessary financial distress being inflicted on the wife, such that she had to obtain assistance from her mother.
Nevertheless, I am satisfied that he was cognisant of the fact that the necessary adjustments would be made by the child support agency to his assessments upon the filing of his taxation returns, that he has a long history of well remunerated employment, that he will be liable to provide substantial child support in the future and, upon the adjustments being effected by the child support agency, will have done so post separation.
Taking those various factors into account, I find that there should be an adjustment of five (5) per cent in favour of the wife on account of her primary care of the parties three children and the husband’s significantly greater income earing capacity.
Conclusion
Neither counsel made final submissions based on a specific calculation of the value of the net non-superannuation assets, nor did the wife’s counsel make final submissions in terms of an appropriate percentage division of the parties’ net non-superannuation assets. The values of the assets were substantially agreed.
The husband sought an order that the parties’ net non-superannuation assets be divided as to sixty (60) per cent in favour of the wife and forty (40) per cent in his favour, with the parties’ superannuation entailments to be equalled. He sought however that the credit card debt be excluded from the calculation of the net asset pool and that it be deemed to be the sole liability of the wife.
Under his proposal he would retain forty (40) per cent of the net non-superannuation assets to a value of $114,420 together with superannuation entitlements of $146,133, totalling assets to a value of $260,553. This represents approximately forty five (45) per cent of the total value of the asset pool of $578,316.
The wife sought that she retain the former matrimonial home, pay to the husband the sum of $50,000, and that the credit card debt be deemed to be the joint and equal liability of the parties.
Under her proposal, of the total net asset pool inclusive of superannuation of $578,316, the husband would retain cash to a value of $50,000 and superannuation to a value of $146,133, a total of $196,133. This amounts to approximately 33.9 per cent of the total pool.
For the reasons to which I have referred, I do not consider that either proposal would afford justice and equity as between the parties.
I have determined that the parties’ net non-superannuation assets should be divided between them as to sixty eight (68) per cent thereof to the wife and thirty two (32) per cent thereof to the husband, with the superannuation entitlements of each party to be equalised.
I have found the net non-superannuation assets have a total value of $286,051.21. Neither party sought to include household chattels and effects or motor vehicle in their respective claims.
A division of the net non-superannuation assets between the parties on the basis of a 68/32 per cent split in favour of the wife would require a cash payment to the husband of $91,536 if the wife was to retain the former matrimonial home. Her share of the net non-superannuation assets would be $194,514.
An equalisation of the parties’ superannuation entitlements would result in each party retaining superannuation to value of approximately $146,133. That would require that a splitting order be applied to the husband’s Superannuation Fund 1 entitlements in favour of the wife, with a base amount of $74,022.
Overall, the wife would retain assets to a value of $340,647 inclusive of superannuation entitlements, which equates to a little under 59 per cent of the total asset pool. The husband would retain superannuation and non-superannuation assets to a total value of $237,669, representing just over 41 per cent of the total asset pool.
Taking into account the significant cash contribution made on behalf of the wife by her mother towards the purchase of the former matrimonial home, the significantly greater income earning capacity of the husband, and the wife’s role as primary care giver of the parties three children all of whom suffer various levels of disability, I find such an outcome reflects a just and equitable distribution of the parties assets.
In addition, in circumstances where the ANZ Rewards Platinum credit card account …64 is in the husband’s name, it is appropriate for him to receive the further sum of $3,732 from the wife, on account of her half share of the ANZ credit card account debt, together with the additional sum of $1,925 being her half share of the Independent Expert’s cost as ordered by Judge Kelly on 10 November 2020.
It was the wife’s position that she wished to retain the former matrimonial home. It was her case that with financial assistance from her mother and perhaps other family members she could afford to do so notwithstanding her concession that she was unlikely to be able to obtain bank finance to pay the husband his entitlement.
The amount I have determined the wife should pay to the husband totals $97,193. I find that is it appropriate in the circumstances of this case to order that sum be payable within eight (8) weeks of the date of the making of an order. I am unable to make an order for property settlement when delivering these reasons as the Court was advised at the time of hearing that procedural fairness had not been afforded to the relevant trustees of the husband’s superannuation fund.
The orders that I intend to make will be in the following terms:
(1)That in full and final settlement of any claim that either party may have or hereafter have against the other of them for settlement of property:
(a)On or before (a date eight (8) weeks from the date of the making of the order) the wife do pay to the trust account of the husband’s solicitors on account of the husband the sum of $97,193;
(b)That contemporaneously with the payment referred to in paragraph 1(a) hereof the husband transfer to the wife for her sole use and benefit absolutely and at her expense in all things all of his estate and interest both at law and in equity in the former matrimonial home situate at and known as G Street Suburb H in the state of South Australia being the whole of the land comprised and described in Certificate of Title …Folio …;
(c)In the event that the wife fails to comply with the terms of paragraph 1(a) hereof THEN AND IN SUCH CASE interest shall accrue on such sum as shall remain outstanding as at (a date eight (8) weeks from the date of the making of the order) at the rate of five (5) per cent per annum until as such sum shall be paid in full; and
(d)In the event of the wife’s failure to comply with the terms of paragraph 1(a) for a period exceeding four (4) calendar weeks from the date on which payment was due pursuant to the terms of paragraph 1(a) herein THEN AND IN SUCH CASE the said property at G Street Suburb H aforesaid shall be placed on the market for sale on such terms and conditions as agreed and the net proceeds of sale shall be divided as to sixty eight (68) per cent thereof to the wife less the sum of $5,657and thirty two (32) per cent thereof plus the sum of $5,657 to the husband.
(2)That contemporaneously with and in addition to the husbands thirty two (32) per cent share of the net sale proceeds he shall receive an additional sum of $5,657 from the wife’s sixty eight (68) per cent share of the net sale proceeds being the wife’s share of the ANZ Bank credit card account …64 in the name of the husband in the sum of $3,732 together with the sum of $1,925 being the wife’s half share of the Expert Report writer’s fees.
(3)That the wife otherwise retain all items of personalty in her control or possession for her sole use and benefit absolutely free of any claim by the husband.
(4)That the husband otherwise retain all items of personalty in his control or possession for his sole use and benefit absolutely free of any claim by the wife.
(5)A superannuation splitting order in terms as drafted by the parties solicitors and approved by the trustee of the husband’s Superannuation Fund 1 superannuation entitlements (member number …77), providing for a base amount split in favour of the wife in the sum of $72,110.
Upon receipt in chambers of jointly signed correspondence from the parties’ solicitors confirming the terms of the draft superannuation split order and confirmation of procedural fairness having been afforded I will make final orders in chambers without the necessity of further attendance by the parties or legal representatives.
I certify that the preceding one hundred and fifty-six (156) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Mead. Associate:
Dated: 19 December 2022
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