Landers and Crease (Final Judgment and Corrigendum)
[2012] FamCA 242
FAMILY COURT OF AUSTRALIA
LANDERS & CREASE (FINAL JUDGMENT AND CORRIGENDUM) [2012] FamCA 242
FAMILY LAW - PROPERTY – Contributions – inheritances – add backs - winding up of businesses
Family Law Act 1975 (Cth)
Hickey and Hickey and A-G for the Commonwealth of Australia (Intervener) (2003) FLC 93-143
Essex and Essex [2009] FamCAFC 236
Chorn and Hopkins (2004) FLC 93-204
APPLICANT: Ms Landers
RESPONDENT: Mr Crease
FILE NUMBER: LNC 179 of 2010
DATE DELIVERED: 20 April 2012
PLACE DELIVERED: Hobart
PLACE HEARD: Launceston
JUDGMENT OF: Benjamin J
HEARING DATE: 8 & 9 December 2011 &
28 February, 1 March 2012REPRESENTATION
COUNSEL FOR THE APPLICANT: Ms Trezise
SOLICITOR FOR THE APPLICANT: Andrea Trezise
COUNSEL FOR THE RESPONDENT: Mr Dixon S.C.
SOLICITOR FOR THE RESPONDENT: Mrs De Giovanni of Wallace Wilkinson & Webster Orders
1.Subject to these orders, the Husband and the Wife shall do all things and sign all necessary documents to effect the sale of the properties at … S Street, Suburb A in Tasmania and … B Street, Suburb N in Tasmania (“the sale properties”).
2.The Husband and the Wife shall do all acts to cause the sale properties to be placed on the market for sale in such manner and with such real estate agent as is agreed between them, subject to:-
a)In the event that the parties do not agree on the real estate agent to be employed for such sales, the real estate agent will be as nominated by the President of the Real Estate Institute of Tasmania, at the request of either party.
b)The sale properties are to be listed for sale at such price and upon such terms as may be agreed between the Husband and the Wife from time to time. In the event that the Husband and the Wife do not agree at any time as to the price or terms at which the sale properties should be offered for sale, then the price and terms will be as determined by a qualified valuer to be nominated for that purpose by the President of the Real Estate Institute of Tasmania, at the request of either party.
c)Wife is restrained from entering into a contract for the sale of the sale property at … B Street, Suburb N at a price less than that value agreed in writing with the Husband or as determined by the qualified valuer appointed in accordance with this order.
d)The Husband will, at his expense, do all acts and sign all documents and take all actions to cause the caveat lodged by his solicitors to be discharged and/or withdrawn prior to the completion of the sale of the sale properties.
e)Upon completion of the sale of the sale properties, the gross sale proceeds will be applied as follows:-
i)in payment of all real estate commissions and reasonable advertising costs of the sales;
ii)in payment of the legal costs of acting on the sale and the usual disbursements incurred in completing the conveyancing of the sale;
iii)in payment of the expenses and fees of the qualified valuer and the President of the Real Estate Institute in the event that the processes as set out above are used;
iv)in payment of the amount required to discharge all encumbrances registered over the sale properties in favour of the ANZ Banking Group;
v)in payment of all outstanding businesses liabilities owing by G Pty Ltd and C Pty Ltd (‘the businesses’) owing to Company D;
vi)make payments in accordance with orders 3, 4, 5, 6 and 7 of these orders.
vii)the net balance sale proceeds shall be distributed as to 27.5 per cent to the Husband and 72.5 per cent to the Wife.
3.In their capacities as directors of the businesses the Husband and the Wife shall direct payment and cause to be paid from the assets of the businesses and then from the proceeds of sale of the sale properties in the following priority, namely:-
a)the outstanding tax liabilities owing to the Australian Taxation Office by the businesses in the sum of about $11,400.
b)pay the outstanding liability owing to Mr H, (the single expert) the sum of $9,350.
c)pay the sum of $4,871 or thereabouts being outstanding invoices of one and/or other of the businesses as is recommended by Mr W, Accountant.
d)pay all accounting costs and disbursements owing to W Accounting of about $1,700.
e)Pay the fees and expenses of Mr W for the preparation of the financial accounts for the businesses and the winding up of the businesses.
f)pay the debts of the businesses to the ANZ Banking Group of about $223,450 and $162,776;
g)pay the debt to Company D of about $281,268.30.
4.Mr W, Accountant, shall be appointed as the arbitrator of any dispute that may arise between the Husband and Wife in respect to the payment of the business liabilities as set out in order 3 herein.
5.Except as is otherwise provided in these orders and in their capacities as directors of the businesses the Husband and the Wife shall do all acts and things necessary to sell by way of public auction the unsold plant and equipment and unsold stock being property of G Pty Ltd and C Pty Ltd including the food type 1 machine, food type 2 machine and the food type 3 machine with the proceeds of same to be deposited to the bank accounts of G Pty Ltd and/or C Pty Ltd.
6.In their capacities as directors of the businesses the Husband and the Wife shall do all necessary acts and things to effect the transfer of the Bob Cat and coffee machine from G Pty Ltd to the Husband.
7.In their capacities as directors of the businesses the Husband and the Wife shall continue to pay all repayments as such payments fall due in respect to the borrowings to the ANZ Banking Group of about $223,450 and $162,776.
8.Upon the sale of the sale properties and the discharging of the debt owed by G Pty Ltd and C Pty Ltd to Company D, the parties shall do all acts and things to wind up the companies G Pty Ltd and C Pty Ltd with the intent and effect that the said companies shall be wound up and deregistered.
9.The Husband and the Wife shall do all acts and things and sign all necessary documents to:-
a)jointly employ at equal cost Mr P of P Accounting … Y Street, Suburb NN to calculate the Wife’s entitlement in the T Superannuation Fund as at 29 February 2012; noting that the agreed value of the interests of the wife and the husband for the purpose of the property hearing was $65,689 and $155,996 respectively.
b)rollover or transfer the entitlement of the Wife in the T Superannuation Fund as at 29 February 2012 to another complying superannuation fund of the Wife’s choosing;
c)to finalise taxation returns, financial statements and any other financial documents required of the T Superannuation Fund for the period to 30 June 2011;
d)thereafter the Wife shall resign as Appointer and/or Trustee of the T Superannuation Fund.
10.The wife shall pay to the husband within 30 days of the date of these orders the sum of $182,785.
11.The Wife relinquish in favour of the Husband and where necessary transfer to him any claim or interest she may have in the following property (general details of which are contained in the husband’s various financial statements or other evidence):-
a)any savings, shares or investments held in the name of the Husband or under his control.
b)any entitlement of the Husband to superannuation whether by way of lump sum pension or otherwise;
c)any furniture or household items presently in the Husband’s possession or control;
d)the motor vehicles in the possession of the Husband;
e)the Harley Davidson motor bikes, Bob Cat and coffee machine in the possession of the Husband.
12.The Husband shall relinquish in favour of the Wife any interest he has in the properties at … E Street, Town F and … I Street, Suburb J and the Wife shall be solely responsible for all costs and outgoings in respect to the said properties.
13.The Husband relinquish in favour of the Wife and where necessary transfer to the Wife any claim or interest he may have in (general details of which are contained in the wife’s various financial statements or other evidence):-
a)Bank accounts, PML account, Westpac term deposit, loan to Mr S Landers shares or investments held in the name of the Wife or under her control;
b)any entitlement of the Wife to superannuation whether by lump sum or pension;
c)the Wife’s interest in K Pty Ltd as Trustee for the L Trust;
d)the Wife’s Business M;
e)any furniture or household items presently in the Wife’s possession or control;
f)the Mazda … motor vehicle in the possession of the Wife;
g)the Wife’s … MG motor vehicle.
14.Unless otherwise specified in this Order and save for the purposes of enforcing any monies due under this Order:-
a)each party is solely entitled to the exclusion of the other to all property in the possession of the such party as at the date of this Order;
b)each party shall remain solely liable for their own personal debts including credit card debts;
c)each party shall be solely liable for debts held in their name and shall indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to this Order.
15.Each of the parties shall promptly do all such things and sign all such documents as are necessary to give effect to this Order.
16.All outstanding applications, except for costs, are dismissed.
17.This matter be removed from the list of cases requiring determination.
18.All subpoenaed documents are to be returned to the persons or institutions from which they emanated and all exhibits are to be returned to the person or persons who tendered the same.
IT IS CERTIFIED
19.Pursuant to Rule 19.50 of the Family Law Rules 2004 (Cth) it was reasonable to engage senior counsel and counsel to attend.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Landers & Crease (final judgment and corrigendum) has been approved by the Chief Justice pursuant to s 121(9)(g) of the Act.
CORRIGENDUM
FAMILY COURT OF AUSTRALIA AT HOBART FILE NUMBER: LNC 179/2010
Ms Landers Applicant
And
Mr Crease Respondent
JUDGE: Benjamin J
DATE OF ORDERS: 20 April 2012
WHERE MADE: HobartCORRIGENDUM 24 May 2012
1. On page 14, paragraph 95 of the Reasons for Judgment the sum of $4871 being outstanding business invoices needs to be included as liability of the businesses.
2.On page 14, paragraph 95 of the Reasons for Judgment the sum of $20,000 being the loan for the Mazda … needs to be included as an agreed liability of the wife.
3.On page 14, paragraph 95 of the Reasons for Judgment the sum of $11,585 being a debt to the Australian Taxation Office needs to be included as an agreed liability of the wife.
4.On page 14, paragraph 95 of the Reasons for Judgment delete the sum of $585, 347.69 and inert the sum of $580,476.69.
5.On page 14, paragraph 95 of the Reasons for Judgment delete the sum of $1,220,491 and insert the sum of $1,188,906.
6.On page 14, paragraph 95 of the Reasons for Judgment delete the sum of $6,010 and insert the sum of $986.
7.On page 14, paragraph 95 of the Reasons for Judgment delete the sum of $203,871 and insert the sum of $198,847.
8.On page 15 insert paragraph 96(a) following paragraph 96 in the Reasons for Judgment.
9.On page 20, paragraph 130 of the Reasons for Judgment delete the sum of $50,424 and insert the sum of $60,424.
10.On page 27, paragraph 196 of the Reasons for Judgment delete the sum of $585,000 and insert the sum of $580,000.
11.On page 27, paragraph 196 of the Reasons for Judgment delete the sum of $424,000 and insert the sum of $420,000.
12.On page 27, paragraph 196 of the Reasons for Judgment delete the sum of $161,000 and insert the sum of $159,000.
13.On page 27, paragraph 197 of the Reasons for Judgment delete the sum of $1,220,491 and insert the sum of $1,188,906.
14.On page 27, paragraph 197, delete the sum of $203,871 and insert the sum of $198,947.
15.On page 27, paragraph 197 of the Reasons for Judgment delete the sum of $1,424,362 and insert the sum of $1,387,753.
16.On page 27, paragraph 197 of the Reasons for Judgment delete the sum of $1,032,662 and insert the sum of $1,006,120.
17.On page 27, paragraph 197 of the Reasons for Judgment delete the sum of $391,700 and insert the sum of $381,632.
18.On page 27, paragraph 198 of the Reasons for Judgment delete the sum of $552,700 and insert the sum of $540,632.
19.On page 27, paragraph 198 of the Reasons for Judgment delete the sum of $1,457,662 and insert the sum of $1,426,120.
20.On page 27, paragraph 199 of the Reasons for Judgement delete the sum of $203,871 and insert the sum of $198,847.
21.On page 27, paragraph 199 of the Reasons for Judgment delete the sum of $391,700 and insert the sum of $381,632.
22.On page 27, paragraph 199 of the Reasons for Judgment delete the sum of $187,829 and insert the sum of $182,785.
23.Subsequent to the delivery of Reasons the parties acknowledged that the agreed debts of $20,000 and $11,585 were not included in the Reasons. The evidence in respect of these liabilities was before the Court but was not included in the list of property to be retained by the wife. Similarly the parties both acknowledge that outstanding business invoices of $4,871 were determined to be debts of the business but were not included as liabilities to be paid from the sale of the assets in the Reasons. Finally, both parties acknowledge that there was a clear misconception in Exhibit H25 as to the value of the husband’s V Credit Union bank account which was subsequently determined by me to be $986, which was not included in the property to be retained by the husband in the Reasons.
I certify that the preceding twenty three (23) paragraphs are a true copy of the Corrigendum of the Reasons for Judgment herein of the Honourable Justice Benjamin.
Associate:
Dated: 24 May 2012
FAMILY COURT OF AUSTRALIA AT HOBART FILE NUMBER: LNC 179/2010
Ms Landers Applicant
And
Mr Crease Respondent
REASONS FOR JUDGMENT
INTRODUCTION
1.Ms Landers (“the wife”) and Mr Crease (“the husband”) were a married couple whose relationship broke down. They were unable to agree on issues of parenting and property and sought orders from the Family Court to resolve their conflict. The proceedings were to be heard at Launceston over four days. However, events intervened and the proceedings took more time that was initially envisaged.
2.At the commencement of the hearing the parties agreed that there ought not to be orders with regard to the children and both parties’ applications were withdrawn and dismissed. It was noted that parental responsibility was in accordance with s 61C of the Family Law Act 1975 (Cth) (“the Act”).
3.The property proceedings involved a relatively considerable pool of assets with the wife asserting that the property should be divided as to 75 per cent to her and 25 per cent to the husband. The husband asserted that it ought to be on the basis of 40 per cent to him and 60 per cent to the wife.
4.The reason for this division was the significant contributions made by the wife through significant inheritances to which I will allude to later in these reasons.
5.The husband asserted that there ought to be a series of add-backs being the sum of about $225,576 expended from the wife (from her mother’s former superannuation account) and the $20,000 from the family allowance account.
6.The parties do not seek a split of their superannuation and that such superannuation is included in a single pool.
7.In these reasons any statement of fact is to be regarded as a finding of fact, unless the contrary is clear from the context of the statement.
BACKGROUND
8.The wife is aged 48 and is in fair health subject to some psychological issues to which I have referred later.
9.The husband is aged 46 and is in relatively good health. In his affidavit filed 2 May 2011 he says he suffers from hypertension, high blood pressure and sleep apnoea. He goes on to say that he is hopeful that once the businesses are sold and these proceedings are concluded that his medical conditions will improve. The husband also says he has a knee complaint with consequent restriction of movement in the knee, leg and some back pain. The husband deposed that he anticipates working forty to sixty hours per week pending the sale of the businesses.
10.The parties commenced cohabitation in November 1993, and married in November 1994. They separated in May 2009.
11.There are two children of the marriage,AA and O who were born in March 1996 and at the date of the hearing were aged 15 (almost 16). They attend a private school in Launceston and they spend equal time with each of the parents.
12.The wife has a child from a previous marriage, Q who was aged about 22 at the time of the hearing. Q lived with the wife and the husband during the course of their relationship. I had regard to this fact in terms of my consideration of the contribution factors.
13.The wife deposed, and was not challenged, that in March 1990 her paternal grandfather passed away leaving her a bequest of about $75,000.
14.In 1993 the wife’s father passed away and left her the sum of about $500,000 to be paid to her over ten years. In addition the wife also inherited from her father a one half interest in a property at I Street, Suburb J.
15.In 2008 the wife’s mother died and left a sizable estate to the wife. The wife’s mother lived in a property at B Street, Suburb N. In 1997 that property was transferred to the wife as a gift to her by her mother. The property was occupied by the wife’s mother until she died. I am satisfied that the gift of this property to the wife was subject to the wife’s mother’s right to residence during her lifetime. The gift became absolute upon her death.
16.In addition the wife was left the other half interest in I Street, Suburb J and other monies and property to which I will allude to later in these reasons.
17.There is no doubt that the wife has received a significant amount of money from inheritances prior to and during the course of this long marriage.
THE EVIDENCE
The wife
18.The wife gave evidence in accordance with her affidavits filed 14 January 2011, 25 May 2011 and 19 October 2011. In addition she relied upon her four financial statements filed 23 March 2010, 25 May 2011, 6 December 2011 and 9 December 2011.
19.The wife was not an impressive witness and prevaricated from time to time. She was anxious (perhaps understandably) to show the amount of money that had come from various estates, particularly her parents. She was clearly angry at the end of her relationship with the husband. Her approach to the businesses of the parties following separation was not constructive and was at some levels damaging. I have had regard to that approach in terms of assessment of contribution.
20.The wife did not disclose to the husband or the Court the sum of about $190,000 which she had received from her mother’s estate. It was necessary for her to file an amended statement of financial circumstances when this failure to disclose was revealed during cross examination of her. The wife was shown a My State account sheet from November 2009.[1] That document showed a withdrawal on 13 November 2009 of $190,000. When questioned about this withdrawal the wife initially said she had no recollection. When pressed about a cash withdrawal of that amount she conceded that she did recall removing the money from the account but said it was given to someone, but eventually conceded that she had taken the money and that it was in her possession and control.
[1] Exhibit H4.
21.The wife now accepts that the husband has sold the Hobart business for more than valuation but believes that he has used funds for his own benefit and had not run the business well.
22.In relation to the Launceston business the wife acknowledged that the assets of that business were the wholesale business (she believed it had a value of $50,000 and a buyer could be found for that amount) and plant and equipment including three motor vehicles.
23.The wife is of the view that the husband has run down the businesses to make a loss. I do not accept that evidence.
24.The wife said that she initially operated the retail side of the Launceston business but the financial management of the business was undertaken by the husband. She acknowledged that both she and the husband had worked very hard during their time together.
25.The wife initially had difficulty in acknowledging that economic and business circumstances of recent years had been difficult, but she eventually conceded that circumstance.
26.The wife used funds from her mother’s estate to purchase a small business at a cost of $10,000 which now has a value of $2,000. She also used a further sum of $10,000 to buy stock for that business. The wife said that she was not ‘in the right head space’ when she did this. I have had regard to these transactions in terms of contribution.
27.The wife was upset at the manner of her leaving the Launceston business. A month or so before she left the business she had expressed a willingness to leave the business but then claimed she was forced out. I have dealt with the events surrounding her departure from the business elsewhere in these reasons.
28.This event was just one of a number of examples of the conflict that existed between the parties. They could barely communicate and each had a significant lack of trust of the other. I am satisfied that, from her subjective point of view, the wife was forced and/or bullied from the business in December 2009. The wife conceded that the business would have needed to have run with additional staff notwithstanding that she continued to be paid.
29.In many ways it was a ‘perfect storm’ for these parties. They had purchased the Hobart business at the time of the global economic woes and at a time when their relationship was breaking down. At the same time I accept the evidence of the husband that retail was generally suffering and the parties’ businesses defaulted as a consequence. Each party blamed the other.
30.The wife said the husband was an unreasonable person and did not provide timely information. The wife said that when he did provide the information it was mostly provided in such a way that it was overwhelming for her.
31.The wife acknowledged that the accountant, Mr W, was satisfied with the accountability but said she was not satisfied. She said many of the personal expenses of the husband had been set off against his loan account. Very few personal expenses were revealed, and in the order of the losses sustained by these parties they were almost insignificant.
32.At the commencement of the hearing the wife sought an adjournment so she could arrange for further investigation of the business. I declined the adjournment but put in place orders to enable that investigation to take place with the assistance of the single expert. The costs of that were to be met out of a joint account although at the end of the hearing the question of the payment of those costs was left open for argument between the parties.
33.In terms of the circumstances of the parties’ liabilities with Company D they are set out in the summary of outstanding invoices.[2]
[2] Exhibit H3.
34.In relation to the purchase of the Hobart business the wife said that she agreed to it but felt that it was a last minute decision and that she was talked into buying the business. I am satisfied that the parties had been advised, at least by one accountant, not to buy the business but that they both agreed to purchase it and that that entrepreneurial risk was not successful.
35.Such were the difficulties that the parties had with the business that the wife wrote to Company D in December 2010 reminding Company D that they could resume the licence. That was a mischievous letter, and had the capacity to undermine the business.
36.The wife required the joint signing of cheques but was not available at all times to do so. She was ‘tardy’ in signing cheques and used the signing of the cheques for the business by way of complaint about the husband. As a result the husband used cash from the business to pay wages and other bills.
37.The husband wanted to relocate the premises of Company D in Launceston to less expensive premises. The wife opposed that suggestion. She said she had spoken to Company D about this but produced no correspondence in relation to that assertion.
38.In December 2010 and January 2011 the wife was authorised to try and sell the Launceston business. She was advised by correspondence of the proposed sale over a significant period. The wife produced nothing and said the discussions with the selling agent were by telephone. I am satisfied she made no real efforts to sell the business in that time.
39.The wife conceded the husband’s affidavit was accurate where he talked about his contributions to various properties.
40.The wife asserted the husband took $2,000 or $2,500 from her late mother’s money. That was denied by the husband. I prefer the husband’s evidence. I do not treat that money as money in the hands of the husband and give it no weight in the determination of the property proceedings.
41.The wife conceded that both she and the husband worked hard throughout the course of the marriage.
42.The wife was cross-examined in relation to her income. She said she had an income of about $92,000 per year and used that money to support herself and her children. The wife’s son, from a previous relationship, works full time but does not pay any board to the wife. The parties share half of the school fees in relation to their daughters. The wife says, and I accept, that she meets other expenses such as the majority of school uniforms, books etc. She also says she buys most of the children’s clothes.
43.The wife was cross-examined in relation to her expenses which she did not detail although I am satisfied, having regard to her evidence, that it is a relatively accurate indication of her expenditure for herself and the children. She said she spends about $300 per week on groceries (and this is averaged over the weeks when the girls are with her and the weeks that they are not), and has expenses for school, dental, health, clothing, movies and holidays. The wife takes more holidays now than she took prior to separation.
44.In terms of the husband’s support, the wife said that he was a good father but her level of support in terms of care of the children was overall greater than the husband’s. I accept her evidence in that respect.
45.The wife conceded in cross-examination that her memory may have been faulty in respect of the purchase price of a property at Z Street. At paragraph 22 of her affidavit filed 25 May 2011 the wife has said she had purchased a property at X Street. The wife says that she applied all of the funds towards the purchase and that the husband contributed nothing. The wife conceded that in fact they borrowed $100,000 on that home. They also borrowed $50,000 from the wife’s mother which was used to buy furniture and for some renovations. The wife agreed that they purchased a block of land at U Street, Suburb R in 1994 and sold it in 1997. She said the net proceeds of sale were about $78,000 and that proceeds was applied to their home at Suburb A.
46.The wife was pressed about the property at B Street and said that she received it from her mother’s estate. In fact it had been transferred to her about ten years before her mother died. The wife, however, says that her mother lived in the property and I am satisfied the wife only became entitled to use of the property on her mother’s death. She conceded that the husband assisted her mother and did some work on the property and also assisted by taking meals to her mother. However, I am satisfied the gift was to her. I considered the husband’s contributions to that home and his mother-in-law when assessing contributions.
47.The wife has a property at Town F which was also left to her. She goes up there every second weekend when the children are not with her and uses it for holidays. The children, she says, love going there. She said she did not want to sell the property and wants to keep the property if she can afford to. The wife does not let that property to derive income.
48.The wife conceded that the husband was stood down from Company V for about eighteen months and eventually received his back pay in relation to that issue. As such the husband earnt income over that period of time.
49.The wife was cross-examined in relation to the use of the family allowance account for her living expenses. Between 31 August 2009 and the date of the hearing, the wife has used about $20,000 out of that account. I am satisfied she used the money in the care of the children. Having regard to the wife’s evidence about care for the children and the usual expenses, I am not satisfied that there ought to be any add-back in relation to that sum. I have had regard to the wife’s access to those funds in terms of the contributions to which I will allude later in these reasons.
50.At separation or shortly after separation there was a fund of money from the wife’s mother of about $286,000. That has now reduced to about $45,000. I have dealt with that issue later in these reasons.
51.The wife was not a reliable witness, her credit was undermined by her failure to disclose the money from her mother and in addition she was inaccurate in her recollections. I have treated her evidence with great care and caution.
Ms HH
52.Ms HH is a psychologist who treated the wife. She gave evidence contained in her affidavit sworn 19 October 2011 and the attached report. Ms HH’s qualifications were not challenged and she said she had seen the wife on about nine occasions for the first year after separation and on about two occasions subsequent to those visits.
53.Ms HH said the wife had mixed anxiety and depression. She was not aware of the wife using any medication. Ms HH said that the wife’s psychological health would likely improve at the end of these proceedings which would lead to some ‘ongoing’ psychological assistance. I have had regard to that in terms of the wife’s ongoing health.
54.Her evidence was of a party who was struggling with relationship breakdown and who was likely to improve once the proceedings had concluded.
The husband
55.The husband relied upon his financial statements filed May 2010, May 2011 and his affidavits filed 14 October 2011, 2 May 2011 and 20 December 2010. Those affidavits were read into evidence.
56.The husband said that in addition to the evidence in his affidavits, the Company D businesses were challenged because the supermarkets were selling a broad range of lines, far greater than the three raised by the wife. The husband denied that he took any cash from the wife’s mother, from the shop or a Dyson vacuum cleaner. I accept that evidence.
57.In evidence in chief the husband provided details in respect of the sale of the Hobart business.[3] He also provided details in respect of the sale of the Launceston business.[4]
[3] Exhibit H16 and H17.
[4] Exhibits H8 and H19.
58.There was an issue about the husband allegedly taking money from the business. The husband offered to the solicitors for the wife in May and June 2010 to have the company director audited.[5] That offer was declined through the wife by letters through her solicitors.[6] I accept that evidence.
[5] Exhibit H20.
[6] Exhibits H21 and H22.
59.The husband said that the single expert, Mr H, could not open the MYOB program but that he had offered to assist him in terms of that. That would have provided the detail that Mr H needed. I accept that evidence.
60.The husband was cross-examined by Ms Trezise in relation to compliance of the orders of 9 December 2011. He gave evidence about items owned by the Launceston business which were being sold.
61.He had sold some material for about $8,900. There were more to be sold with a value of about $7,200. He wanted to retain a bob cat machine and a coffee machine with a total value of about $3,500. When pressed in this area he conceded there were others which he had not remembered and that stock was to be sold including; a food type 1 making machine, food type 2 making machine and a damaged food type 3 machine. I accept that evidence.
62.There was cross-examination of the husband in relation to the parties’ purchase of the Company D business in Hobart. The wife’s case was that the business was purchased at the request of the husband. After hearing the evidence of Mr W and the other evidence, I am satisfied that both parties agreed to the purchase of that business and it makes little difference as to whether one party was more anxious than the other.
63.That business purchase was funded by some of the inheritance the wife had received.
64.There was a significant issue as to the circumstances of the wife’s departure from the Launceston business in December 2009. The parties had separated and trust had broken down. The husband asserted that some security cameras had been turned off and it is clear that he asserted that the wife was taking cash. There is no evidence that the wife took cash from the business and there is evidence that she ran the business reasonably well.
65.The husband arranged for a security guard for the business. This caused unhappiness in the business and the wife walked away from the business. She wanted to be kept informed as to the financial activities and the husband did not provide this to her. The wife was reluctant to sign cheques and there was an issue as to whether she was to be paid out of the turnover of the business.
66.As a result, shortly before December, the husband commenced taking cash from the business to pay bills of the company.
67.I am troubled by the evidence of Mr H that the accounting of the businesses was chaotic, having regard to the offer made by the husband. Records were kept but the cash nature of the arrangements made it difficult to prepare income tax returns and financial statements. Mr W was protective of both parties but acknowledged that the record keeping left something to be desired. He was not as critical about protecting the records as Mr H. On balance I prefer Mr W’s analysis.
68.The wife complained that the husband used funds from the business to fund his lifestyle. He did but the extent of that cost is not clear. The husband paid at least one air fare and other expenses which were personal. The husband had occupation of the home at Suburb A. I have had regard to that occupation and the payment of those expenses (generally unspecified but relatively modest sums over the period of time since separation).
69.The husband endeavoured to run the businesses as best he could in the highly conflicted circumstances of the parties. The husband’s use of a security guard and continued use of the cash to run the business did little to ameliorate the conflict. The wife’s approach in delay and prevarication in signing cheques and her approaches to Company D were likewise unhelpful. The conflict impacted adversely upon the business.
70.Whilst the husband operated a cash drawer there is no evidence that he took cash and there is no evidence that he acted covertly. The husband was not overly forthcoming in providing information to the wife but there was no evidence that he was hiding information with the exception of delay in providing MYOB data.
71.I am satisfied that the husband put the security guard in the business in December 2009 in an effort to encourage the wife to leave the business. That effort succeeded. The evidence of Mr W, the accountant is somewhat supportive of the wife’s version of that event.
72.The husband claims there ought to be an add-back in relation to the monies spent by the wife in relation to her mother’s estate in the so called PML Superannuation Fund. The husband seeks an add-back of $240,576. I am satisfied that the wife spent on living expenses for herself and in part for the children that sum of money together with the money from the family assistance account. I am satisfied that it accorded with the normal way of life however, bearing in mind the circumstances of the parties acrimonious break-up I do not intend to provide any add-back in respect of those funds. I have, however, taken this into account in terms of the contribution factors.
73.I prefer the wife’s evidence in terms of the additional contributions towards the broader activities of the children and their broader school experiences.
74.The evidence of the husband was subjective but I generally accepted his evidence in preference to the wife, where there was a conflict and the wife’s evidence was not objectively supported.
Mr W
75.Mr W gave evidence contained in his affidavit sworn 12 October 2011. His qualifications as an accountant were not put in issue. He had been the accountant for the parties through most of their business activities although there was a short period of time he did not assist. This arose out of his views that the purchase of the Hobart business was not, in all of the circumstances, a course they should adopt. Mr W was concerned that the parties had matrimonial difficulties and that the travel exacerbated those difficulties. He also formed the view that the business may have been somewhat over priced (prophetic advice indeed).
76.Mr W was open to both the husband and wife in terms of providing financial advice in what appears to be a competent way. He maintained the records of the company and filed tax returns when information was provided to him. He was concerned about the use of the cash takings to pay business accounts and was somewhat surprised that it had continued for some time. In 2010 he facilitated an arrangement to facilitate the signing of cheques at his office.
77.He confirmed the husband has managed the business since December 2005 and that the trading conditions over that period of time had been difficult.
78.Mr W was a sensible and balanced voice in the parties’ conflict and his evidence was impressive.
Mr H
79.Mr H was appointed a single expert as there were significant issues between the parties as to their Company D businesses in Hobart and Launceston.
80.Mr H provided an affidavit in court filed 17 May 2010, a report dated 1 July 2011,[7] an affidavit and report filed 6 December 2011, an affidavit and report filed 19 October 2011 and an affidavit and report filed 1 February 2012. Mr H did not complete the task required of him pursuant to the orders made by this Court in December 2011. This arose because of the short period of time (in terms of working days) between the date of the order and the date when the report needed to be prepared. I am not critical of Mr H in that respect.
[7] Exhibit H23.
81.In his report Mr H summarised the previous business valuation which seemed to show that the value of the businesses diminished from $635,000 in September 2010 to $245,500 in September 2011.
82.There were some limitations to Mr H’s report. Firstly he had difficulty opening the accounts provided by the husband, albeit the husband had said he would make his computer available to inspect that material. Mr H said, and I accept, that the hard copy material he had was sufficient for these purposes.
83.Mr H’s initial valuation of the Launceston business was $235,000 and this included an amount of $85,000 for the plant and equipment. There had been no independent valuation of this plant and equipment and it had been determined by a simple method of taking an average between the assertions made by the husband and the wife and reflecting on the depreciation schedule. That figure was carried forward in the subsequent valuations.
84.In addition the valuation in September of the Launceston business was based upon figures which did not have the profit and loss figures. The effect of putting in the profit and loss (as set out in the report Exhibit H23) meant that the value of the goodwill of the Launceston business as at 30 June 2010 was $38,000 in lieu of $85,000.
85.I did not have the accurate figures as to the plant and equipment. Accordingly the comparisons set out in that report are not helpful.
86.Mr H observed that the reduction in the value of the businesses resulted from a number of factors including:-
(a)poor accounting factors;
(b)separation of the parties and change in management (I accept that this was a factor);
(c)the general economic conditions for retailers (I accept this evidence particularly having regard to the evidence of the husband);
(d)payments of private or non-operating nature (in that regard full enquiries were not made and I do not make a determination to support that contention);
(e)payment of a wage to the wife whilst she was not working; and
(f)other factors relating to the running of the business.
87.Mr H could not allocate any particular percentage to any of these or other nominated factors.
88.Having regard to the evidence I am satisfied that the reduction in value of the Launceston business was because of the down turn in trade, the break-up of the relationship between the parties and the parties’ failure to acknowledge or act on (and at some levels perhaps know of) the continuing losses of that business.
89.As to the Hobart business I am satisfied that the parties purchased it for more than its value (in all of the circumstances) and contrary to the advice of their accountant.
90.Mr H raised issues in relation to personal or private expenditure set out in annexure C to his report. However, he made no enquiries of the parties and there may have been some explanation. In any event, the amount involved, having regard to the losses of the business, are not that significant. The amount identified was some $14,192.
91.The valuation of the businesses was troubling as a result of inaccurate underlying figures.
THE RELEVANT LEGAL PRINCIPLES TO BE APPLIED
92.The Full Court in Hickey and Hickey and A-G for the Commonwealth of Australia (Intervener) (2003) FLC 93-143 at page 78,386 reiterated the preferred approach to the exercise of discretion in property matters, pursuant to s 79:-
39. The case law reveals that there is a preferred approach to the determination of an application brought pursuant to the provisions of s.79. 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 of the parties within the meaning of ss.79(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 s.79(4)(e), the matters referred to in s.75(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 (1985) FLC 91-626; 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) FLC92-569; Biltoft and Biltoft (1995) FLC 92-614; McLay and McLay (1996) FLC 92-667; JEL and DDF (2001) FLC 93-075 and Phillips and Phillips (2002) FLC 93-104.
40. Section 79, unlike s.78, requires the Court to consider the whole of the property of the parties, however and whenever acquired, notwithstanding that the parties may only seek an alteration of interest in some of that property. As a consequence of the first step in the preferred approach to the determination of the s.79 proceedings, each party to the proceedings has an obligation to make a full and frank disclosure of his/her financial circumstances and all matters relevant thereto: Oriolo and Oriolo (1985) FLC 91-653; Black and Kellner (1992) FLC 92-287; Weir and Weir (1993) FLC 92-338 and Tate v Tate (2000) FLC 93-047.
93.Thus the approach in a property determination involves a number of steps:-
a.The identification of the property and its value;
b.An evaluation of the parties’ contributions having regards to ss 79(4)(a),(b) and (c) of the Act;
c.Consideration of any adjustment to that assessment having regard to the relevant matters in ss 79(d),(e),(f) and (g) of the Act (“the other factors”) including the matters referred to in s 75 (2) of the Act;
d.A review of the outcome against a just and equitable requirement.
94.In terms of the identification of the property and its value, it is as set out in the following schedule of assets and liabilities.
95.The assets and liabilities are:-
Assets to be sold - subject to liabilities
S Street, Suburb A – agreed value
$740,000
B Street, Suburb N – agreed value
$460,000
Business bank account - agreed
$32,769
Business Hobart bank account - agreed
$7,563
Unsold plant and equipment - agreed
$8,500
Unsold stock - agreed
$3,000
ATO rebate - agreed
$24,111
ANZ loan - agreed
($223,450.26)
Company D invoices - agreed
($281,268.30)
ANZ Bank # 2 loan re Hobart - agreed
($162,776.75)
ATO BAS debt - agreed
($11,400)
Single expert fees - agreed
($10,000)
W Accounting - agreed
($1,700)
Outstanding business invoices
($4871)
Estimated net value.[8]
$580,476.69
[8] These agreed amounts were set out in Exhibit H25 (a joint tender). The addition in respect of the S Street and B Street properties set off against the business assets and debts were incorrectly calculated in the Exhibit. The amount to be received will vary subject to the sale price of the properties, the varying loan and debt balances and the cost of winding up the companies. All of which I have taken into account.
Property to be retained by the wife
I Street, Suburb J - agreed
$445,000
E Street, Town F - agreed
$415,000
Business M Trust - determined
($2,069)
Mazda - determined
$27,150
Mazda loan – agreed
($20,000)
Wife’s bank accounts- agreed
$11,694
So called PML Superannuation fund - determined
$45,424
Westpac term deposit - agreed
$180,000
Loan to Mr S Landers - agreed
$15,000
MG motor vehicle - agreed
$10,000
L Trust being Telstra Shares $6,953 and Commonwealth Bank account$650) - agreed
$7,603
ATO Debt - agreed
$11,585
T Superannuation - agreed
$65,689
Total
$1,188,906
Property to be retained by the husband
Harley Davidson motor cycles - agreed
$20,250
V credit union
$986
V Account and shares - agreed
$3,470
Husband miscellaneous shares - agreed
$4,845
Commodore motor vehicle - agreed
$9,800
Bob Cat -agreed
$3,000
Coffee machine - agreed
$500
T Superannuation fund - agreed
$155,996
Total
$198,847
96.The parties are generally in agreement as to what property ought to be sold and what property ought to be retained and by whom. That agreement was set out in Exhibit H25. The husband seeks orders that the parties pay the outstanding business invoices of $4,871. The wife agreed with the amount but says it ought to be paid by the husband. Having regard to the comments made elsewhere in these reasons and that these are accepted as business debts I will be ordering that these invoices are paid as a debt of the business. I will also be ordering that Mr W, an accountant, be appointed as an arbiter in respect of any dispute that may arise between the parties in respect to the payment of these business debts.
96(a).There was also a dispute between the parties as to the value of the husband’s V Credit Union bank account. The wife asserted that the value of the husband’s account was $6,010 and the husband asserted that this account had a current value of $986. Having regard to the lack of evidence and absence of argument I am left with limited information to make a finding beyond the sum of $986. As such I determine the value to be $986.
97.The other issues are the add backs sought by the husband of $225,576 being the previous PML money and the Family Assistance funds of $20,000. I have dealt with that elsewhere.
98.The husband has a superannuation entitlement of $155,996. The wife has a superannuation entitlement of $65,689. The parties do not seek a splitting order of their superannuation fund. The parties have sought an approach that there be orders whereby the precise amount payable to the wife be substantially in accordance with the agreed figures to be determined by an accountant and that this amount is paid out to a superannuation fund nominated by the wife. That is a sensible course, which I will adopt. Counsel for both the husband and wife submitted that there ought to be a single list, I will likewise adopt that approach. However, I have had regard to the larger amount of superannuation in the hands of the husband, and I have had regard to that circumstance in terms of the considerations under s 75(2) and what, in all of the circumstances, is just and equitable.
99.In relation to the businesses the parties have various assets remaining from them totalling $75,943. The Hobart and Launceston businesses have debts of $690,595.31 plus the $4,871 referred to above. This leaves a net liability of the businesses of $619,523.31.
100.The wife wishes to retain the Suburb J property and the Town F property. The husband does not oppose that approach. In terms of the properties at Suburb A and B Street, the parties agree that they should be sold and the proceeds be used to liquidate the business debts. The husband does not object to that course but says that he is amenable to one or the other of the Suburb J and Town F properties being transferred to him as part payment or payment of the monies to which he may be entitled under these orders. Such transfer to be at the election of the wife. I had intended to make an order to that effect, however the outcome is such that such an order seemed unnecessary.
101.At the commencement of the trial there seemed to be an issue about a horse that was not raised by the parties in terms of the list of assets and liabilities tendered jointly by them.[9] Accordingly, I assume that it is no longer an issue.
[9] MFI1.
102.Some of those figures will fluctuate by their very nature. The sale price of the properties may be more or less than the valuation and of course there will need to be payment of council rates, water rates, legal fees, auction fees and agent’s fees etc. In addition there will be monies payable to the ANZ Bank including interest and it is unlikely that the parties will pay all of these debts until the properties are sold. In addition monies will need to be put aside from the sale of the two properties to meet the costs of winding up of the company.
103.There was a submission on behalf of the wife that the parties are equally liable for payment of interest on the ANZ Bank debts following the making of these orders. There were no submissions to the contrary accordingly I will be making an order that each of the parties is equally liable for the interest on the ANZ Bank debts pending the repayment of those loans and the sale of the Suburb A and Suburb N properties.
104.As to Business M there was no real issue that the wife tried this venture, in circumstances where she was unable or unwilling to work in the family businesses. The issue from the husband’s point of view was that it was not a joint decision. The liability is not disputed per se, what is disputed is whether it should be a joint debt. If the business was successful then the husband would have expected it to be included in the pool. The wife was entitled to try to set up a business and endeavour to earn income. She was not successful, but she ought not to be criticised for that eventuality. In the circumstances I will allow the liability $2,069.
105.The husband asserted that there ought to be a series of add-backs, set out in the following paragraphs, expended by the wife. In Essex and Essex [2009] FamCAFC 236 the Full Court said :-
31.The principles about when an expense should be “added back” have been comprehensively discussed in Full Court decisions particularly Chorn & Hopkins (2004) FLC 93-204, Omacini & Omacini (2005) FLC 93-218 and Gollings & Scott (2007) FLC 93-319.
32.The principle that where one party has unilaterally assumed control of, and has improperly disposed of, or diminished the value of, an asset to the detriment of the other party, that the disposal should be regarded as a premature distribution to the party at fault is not in doubt (see Townsend& Townsend (1995) FLC 92-569).What is often controversial is when the principle is applicable.
106.The husband complained that the wife sold an asset of the Launceston business being a Peugeot motor vehicle. The wife concedes that she traded that vehicle in on another vehicle being a Mazda. The evidence in relation to the Mazda is that the wife paid $34,759 for it and the wife said the Red Book valuation of the car was $27,150. There was no independent evidence as to the value of that vehicle. Having regard to the limited material before me I accept that the vehicle has a value of $27,150 as it is the only evidence of value apart from the purchase price that is before me. There is a liability in respect of that car of about $20,000 (agreed). The Peugeot motor vehicle was traded in on that vehicle for $15,000. There is an overall loss of about $8,000. I have had regard to that contribution post separation.
107.The husband complained, implicitly through his counsel, that the sale of that car would have had some detrimental effect on that business. I do not accept that implied criticism as the wife ran the car and any lease payments after the car was traded in were, to all intents and purposes, ended. There may have been a balloon payment or one other payment however in the order of things it was not a significant feature.
108.The husband sought to add-back a family assistance package of $20,000. Senior counsel for the husband asserted that the money which had been collected over a period of time in the family assistance account was applied by the wife to set up the business. There is no issue as to that fact. I do not propose to do so. Those monies were used in the maintenance of the wife and children (albeit the children spend equal time with each parent) as the wife met the costs of school uniforms, books etc of that paid by the husband and I accept the evidence of the wife that she generally paid more monies for the care of the children than did the husband. I am not satisfied that this sum ought to be added back, it was a sum simply applied in the context of the day to day living of the wife from the period of separation until the hearing of these proceedings.
109.I have had regard to that sum and its expenditure in term of the contribution.
110.In about December 2009 the wife had her late mother’s superannuation entitlement which at that time had a value of about $286,000. That had reduced to about $45,424 as at December 2011. The husband sought to add-back $240,576.
111.Of that sum $45,424 remains in the account and $15,000 was advanced to Mr S Landers and is an asset. This leaves a sum of $225,576 which has been spent by the wife. It is not in issue that of that sum $195,576 is money spent by the wife on living expenses, including travel and in other non-specified ways and about $30,000 was spent in legal costs.
112.The husband wants $225,576 added back as an asset of the wife for the purpose of these proceedings. Alternatively, (but as a secondary argument) that it be treated as a contribution post separation and that the $30,000 legal costs be added back as an asset.
113.I am satisfied that the wife has spent that $225,576 on herself and the children since separation including the sum of $30,000 in legal costs. I am conscious that the whole of that sum was provided to the wife by way of a bequest shortly before or at separation. The Full Court in Chorn and Hopkins (2004) FLC 93-204 at paragraph 58 sets out that if funds used to pay legal fees have been generated by a party post separation from his or her own endeavours or received in his or her own right (for example, by way of gift or inheritance) they would not generally be added back as a notional asset
114.I do not, in these proceedings, intend to add the sums back as a capital sum. I have had regard to the use of those funds by the wife since separation in terms of my assessment as to contribution. In doing so I have also had regard to the underlying source of those funds. Accordingly, the pool of assets will not include the $225,576 of add-backs in relation to PML money or the family assistance account add-backs.
115.I had considered the question of adding back the legal costs however having regard to the significant contributions by the wife in terms of the inheritances it seems to me appropriate to simply regard that in terms of post separation contributions.
Contributions
116.The parties made submissions as to contributions on a global basis. I intend to deal with the contributions on that basis however, as a matter of caution, I will consider the contributions to various items of property before approaching it on a global basis.
117.In terms of contributions the husband says that the contributions ought to be on the basis of 70 to 75 per cent on the part of the wife and 25 to 30 per cent on his part. This is predicated upon his submission that there ought to be an add-back of $245,576 (the PML fund and family allowance). I have had regard to my determination in respect of those add-backs to include those in the exercise of my discretion regarding contribution. Accordingly, this must mean that the contributions asserted by the husband in favour of the wife must be somewhat less than as submitted by the husband to give effect to that earlier determination.
118.The wife asserts that on a contribution basis (including the treatment of the expenditure of alleged add-back funds) ought to be on the basis of 75 per cent to her and 25 per cent to the husband.
119.The scope of the dispute between the parties on contribution was quite narrow.
120.At the commencement of the relationship (accepting the evidence of the husband) he owned a house at Suburb MM in which he had equity of about $25,000. He had an investment property at Suburb N in which he had equity of about $13,000 (the difference between $81,000 and mortgage of $68,258). The husband had a motor vehicle with the value of about $10,000 and a Harley Davidson motor vehicle with a value of about $12,000. He had superannuation entitlements of about $8,000 and savings of about $10,000. Thus he had assets at that time of about $70,000.
121.The wife claims that she received an earlier property settlement in 1994 of about $140,000 and acquired an interest in Z Street, Suburb J, furniture of $10,000 and superannuation with an asset of $10,000 (excluding her late father’s estate) to the sum of about $190,000. As I indicated earlier I prefer the husband’s evidence in relation to the value of the BMW motor vehicle which reduces the amount the wife brought into the relationship.
122.Excluding the bequests from her late father’s estate, the wife’s initial financial contributions were greater than those of the husband. This needs to be seen in the context of their long relationship.
123.The wife’s interest in her father’s estate was substantial. She asserted it had a cash value of about $700,000 and the husband asserted had a value of about $500,000. I have treated the value of that equity of about $500,000.
124.In addition the wife was also left a half interest in the property at I Street, Suburb J, the other half of which was later left to her by her mother. This property is now valued, for the purpose of these proceedings, at $445,000 and has provided income during the course of the marriage. She also received three blocks of land at Town LL and six blocks of land at TT Street in Suburb NN. In relation to the TT Street properties it seems that the wife eventually received a sum of about $23,000 on their sale. In relation to the Town LL properties the wife eventually received about $18,000.
125.The wife asserts that in relation to the TT Street property she received approximately $90,000. Having regard to the concerns I have about her evidence, I do not accept that figure.
126.In about March 1990 the wife says received about $75,000 from her paternal grandfather. That bequest was not challenged although it is not clear whether all or part of that money were used to acquire the other assets of the wife at the time the relationship commenced. I have treated it as part of the $140,000 property settlement which the wife received in 1994.
127.The wife was left a property at Town F by her mother with a value of $415,000 and a property at B Street, Suburb N with a value of $460,000.
128.The three properties which came directly to the wife from her mother, the estate of her mother and her father had a combined value of $1,320,000.
129.In addition she was left an account containing about $190,000 to which I have alluded elsewhere, in terms of the wife’s non disclosure. Further she had another account the PML superannuation account which at separation totalled $286,000. There was no direct contribution by the husband to these two sums totalling about $476,000. The wife wrongly asserted that this was a superannuation fund when it was in fact funds available for her to apply for her own benefit without any restrictions. She was rightly criticised by senior counsel for the husband in that respect.
130.Of that sum, $45,424 and $15,000 are included in the balance sheet making a total of $60,424. The husband sought an add-back of $225,576. Of that sum the wife asserted, and the husband submitted, that $30,000 was applied to her legal costs. I have not added that $30,000 back but I have treated it in terms of contribution, subsequent to separation. The husband did not have access to that sum. As to the balance of about $195,576 this was applied by the wife for her living expenses over the period of time from late 2009.
131.At the same time the wife was receiving rent from her investment properties, income from the business and an income of about $15,000 per year. I have had regard to the holidays taken by the wife in terms of this and given credit to the husband in terms of his inability to access part of those funds although having regard to the circumstance that the source of those funds came primarily from the bequest to the wife from her mother about twelve or eighteen months prior to separation.
132.In 1997 the parties purchased a property at S Street, Suburb A. The purchase was paid for out of the sale proceeds of a property which had been acquired by the parties subsequent to the commencement of their relationship and monies borrowed from the ANZ Bank of about $215,000. The husband asserts that he made contributions to the maintenance and development of the property at Suburb A.[10]
[10] At paragraph 86(b) of the husband’s affidavit filed 2 May 2011.
133.The husband’s evidence is that he maintained the property and undertook some renovation including exterior paving, cleaning gutters and down pipes, maintenance on out buildings (two to three days per year), smaller painting jobs, mowing lawns, trimming cypress hedges, removing rubbish and gardening to the extent of about three to four hours per week.
134.I have to have regard to the parenting of the parties, their direct and indirect financial contributions and their broader contributions as homemaker and parent.
135.The husband acknowledges that he was away from the matrimonial home when working with Company V for a significant amount of time and that he encouraged the wife to find a job. He acknowledges that the wife was a good mother and cared properly for the children. The husband was significantly involved in preparing meals.
136.Each of the parties has been in paid employment during the marriage. At the commencement of the relationship the husband was employed in customer service at Company V and earned an income of about $50,000 to $75,000 per year.
137.In December 1998 the husband’s employment with Company V was terminated. He was not in employment for about eighteen months (although has was later paid for this time). He took up re-employment and remained working with Company V until about April 2000.
138.From April 2000 the husband worked in the Launceston business for long hours. This continued until the sale of the businesses in late 2011 or early 2012. Since December 2009 the husband has been operating the businesses in the absence of any support from the wife.
139.The husband received about $28,000 from Company V in June 2000 and when he left Company V in mid to late 2000 or 2001 he received $55,000. Those funds were paid into joint accounts.
140.The wife was the primary carer of the children through a significant proportion of the marriage, at least up until the year 2000 when the business started. The evidence of the husband was that the wife’s work in the business was initially limited but built up over the years. I am satisfied that the wife primarily cared for the children over the years but the time needed in that role diminished and the wife took up more time within the business and the husband’s assistance at the home, and not working for Company V, became greater.
141.The wife worked at Company BB as a consultant about thirty hours per week at the time of cohabitation. In 1998 the wife was made redundant from Company BB and received a redundancy of about $21,000. The husband asserts that $20,000 of that sum was withdrawn. I am satisfied that that money was employed for the benefit of the parties during the marriage.
142.In December 1998 the wife returned to part time work in Launceston for about fifteen to twenty hours per week. She remained in that employment, apparently, until the parties purchased the Launceston Company C business in April 2000.
143.I am satisfied that the husband assisted the wife’s mother as set out in his affidavit. The parties’ daughters were born in March 1996 and the wife ceased paid employment for a period of twelve months after their birth.
144.In early 2000 the husband and wife purchased the Launceston franchise of Company D. I accept the husband’s evidence that initially the wife worked shorter hours but this developed over time.
145.I accept the husband has managed the Hobart business. There is some evidence that the wife may have removed $250 from the till in September 2009. However, the wife denied taking the money and there is evidence that the money disappeared but not evidence as to who took it.
146.The husband asserted that the horse float was sold cheaply although there was no valuation evidence provided to support that assertion.
147.In the pool of assets there is a sum of $190,000 which represents monies from the estate of the wife’s mother (the Westpac term deposit) which were monies hidden by the wife to which I have made criticism of her earlier in these reasons. There was the PML Superannuation fund which, as at December 2009, totalled about $286,000, but is now about $45,000 plus $15,000, viz $60,000.
148.There is no issue that estate monies were used to help purchase the business at Hobart totalling $250,000.
149.It is clear that the wife, at various times throughout the marriage including significant amounts late in the marriage, contributed property to the current value well in excess of a million dollars. I have had regard to those contributions.
150.There was argument about the value of the business and the running of the business post separation. The parties had purchased a Company D franchise in Launceston which had been run by the husband and wife in various ways during the course of the marriage and until it was disposed of in about December 2011 or January 2012. In about 2008 the parties purchased a Company D franchise in Hobart for $440,000. This was financed by cash from the wife’s inheritance and a loan from the ANZ Bank. The parties were advised against purchasing this property by their accountant. The wife asserted that the husband was more interested in the purchase than the wife. As I said earlier, I am satisfied that both parties made the decision to purchase this business.
151.Both businesses struggled. The Company D business at Launceston had commenced losing money from 2007. In 2009 it lost $121,104[11] and in 2010 it lost $126,907.[12] In the three financial years, 2008, 2009 and 2010 the business lost about $300,000. Significant anxiety and conflict arose over these businesses. The wife asserted she was ordered out of the Launceston business in December 2010 by virtue of the husband putting a security guard into the business.
[11] Affidavit Mr H filed 22 September 2010 report page 5.
[12] Exhibit H23 report page 3.
152.The wife asserts that the value of the business was diminished because of the husband’s approach to book-keeping and trying to run two businesses and forcing her out of the business. Further she said the sale of the business was delayed by the husband because she said he was interested in acquiring them. I do not accept that approach.
153.The evidence of the accountants concluded that there were a variety of reasons for the downturn in the businesses, including:-
·Change of the marketing by Company D;
·The difficult retail environment;
·The conflict between the parties;
·Their failure to recognise and adapt to the downturn;
·Paying too much for the Hobart business.
154.The businesses were eventually sold with the assistance of the husband at sums greater than the valuation of the single experts (at least in so far as the good will was concerned). The wife had stopped signing cheques for a period of time and the husband needed to operate the business from the cash drawer.
155.As a consequence of these various factors the parties lost a large sum of money in the businesses. I do not attribute blame to one party or the other. It was a factor of the change in retail arrangements, the conflict between the parties and the break-down of their relationship. The parties have lost in excess of half a million dollars in terms of these businesses and each will, in one form or another, bear the consequence of that loss. I do not accept the submissions asserted by the wife in relation the husband’s actions damaging the business. Both parties should share equitably in that approach.
156.In terms of contribution I have had regard to the car owned by one of the companies which the wife sold to purchase her new car.
157.In terms of contribution the husband was critical of the wife in regard to her non-disclosure of the money she withdrew from her mother’s estate of $190,000. I accept that submission and I have generally treated the evidence of the wife as unreliable. However, I have had regard to the significant contribution made by the estates which were not challenged by the husband.
158.The husband asserts in his affidavit dated 2 May 2011 the details of his contributions. He sets this out in paragraph 86 of his affidavit. There is no doubt that the husband made significant financial contributions as asserted by him. I accept that since December 2009, whilst the husband worked both businesses, the wife received a wage whilst she was not working in the business.
159.The wife has had the benefit of income from the rental properties post separation and I accept that the husband worked long hours in the businesses.
160.During the course of the marriage the wife’s son from a previous relationship lived with them and expenses were paid out of the family account. I have had regard to that circumstance (albeit in a financial circumstances which were significantly improved by virtue of the wife’s inheritance) particularly from her father in earlier times.
161.Both the husband and wife have undertaken repairs and maintenance to the properties which they own and it is noted that the husband asserts that the cleaning of the home was as to 60 per cent by the wife and 40 per cent by him. It is clear that both parties worked hard in terms of the support and care of the children.
162.One of the properties owned by the wife is a home at B Street, Suburb N which has a value of $460,000. This was the home of the wife’s late mother. The wife’s mother passed away in January 2008. From that time the wife was entitled to the benefit of that property.
163.That property had been transferred to the wife from her mother in about May 1997 although it is clear from the parties that the property was to remain the wife’s mother’s home until her death. The husband asserted, and I accept, that he made contributions to that property by undertaking maintenance work on it including cleaning the swimming pool (in between times when it was cleaned by a pool company), attempting to look at the spa, fixing the watering service up to twice per year, also liming and fertilising the lawns. The husband from time to time did other maintenance work. As such he has made some very small contribution to this property of which I have had regard.
164.The wife was left a half interest in a property at I Street, Suburb J. The other half of the property was retained by the wife’s mother. The property comprised of four units, all of which were rented out. The wife’s share of the rent was used by the parties. During the course of the marriage the husband observed that the wife renovated the units and claims that he helped with some of the liaising with the builder and supervised with the fittings. The husband also advised the wife to increase the rent and on a couple of occasions removed rubbish and generally assisted in the tidying up the grounds. The balance of this property was left to the wife after the death of her mother. She received the whole of the net benefit of the property at that time.
165.On the evidence of the husband his contributions to this property were, in the order of things and having regard to the income it derived, small.
166.In January 2008 the wife inherited, from her mother, property at E Street, Town F (agreed value $415,000). From the evidence it is clear that this property has been used as holiday accommodation for the parties and their children over their relationship.
167.The parties contributed to this property by way of the wife employing a gardener to do mowing and general maintenance work and some maintenance work was undertaken by the husband when he went to the property. This included mowing lawns from time to time and spraying weeds. He trimmed trees, maintained plants and undertook other handyman work.
168.He also undertook some painting downstairs and fixed the television antenna. In about 2007 a shed was built for boats and the parties contributed about $3,000. The husband checked on the property from time to time when he visited Town F. His contribution to that property was very small.
169.I accept that the husband undertook slightly more of the cooking than that of the wife.
170.When I analysed the assets of the parties as set out in the evidence the following assets are clearly identified as coming from the estate of the wife’s mother (albeit the B Street was transferred earlier but the benefit of the property only became available after the death of the wife’s mother).
B Street $460,000
I Street (Suburb J) as to half early
in the marriage and the other half late in the marriage $445,000
Town F $415,000
PML Superannuation Fund (approx) $45,000
Westpac term deposit $190,000
Loan to Mr S Landers $15,000
171.Out of a total pool of assets of approximately $2,000,000, the amount of at least $1,560,000 came wholly from the wife’s bequests.
172.The balance of the assets was significantly supported by funds from the wife’s parents’ estates. This included the Hobart business and the acquisition of Suburb A.
173.Senior counsel for the husband submits that I should give little credit to the wife’s evidence. Accepting that submission there was still an overwhelming direct financial contribution through the wife’s family.
174.Even assuming the husband’s non-financial contributions were far greater than the wife’s (which I do not) of the non-estate assets the husband would be unlikely to achieve much more than 50 per cent.
175.Having regard to all of those factors and generally preferring the evidence to that of the husband to that of the wife, I am satisfied that the contribution in respect of all of the property as at the time of hearing was as to 75 per cent on the part of the wife and 25 per cent on the part of the husband.
Other factors
176.In terms of the other factors, the husband claims that it falls into a number of areas.
177.The first is the income differentiation between the parties. In terms of income, senior counsel for the husband said that the wife’s income is about $92,000 per year. I do not accept that submission into the future.
178.In the wife’s most recent financial statement filed 9 December 2011 (upon which that submission is based) shows that income but it is made up of a number of sources. These comprised of the salary of the wife as a merchandiser of about $15,000 to $16,000 per year. Rent of $870 per week, income from the business of $550 per week and family assistance of $37 per week.
179.These orders propose that the B Street property be sold so the rent on that property will cease. That the wife retains the properties at I Street, Suburb J and Town F. The rental on the I Street, Suburb J properties was about $19,000 per year with expenses of about $8,600 per year, leaving an income of about $12,000 per year.[13] As a consequence the wife’s income from the rent will diminish significantly. She of course has the ability if she chooses to rent or sell Town F. She intends to retain that property for family use.
[13] Exhibit W3- wife’s tax return.
180.The business will no longer provide her with an income as they have been sold and the family assistance would fall where it falls bearing in mind the age and maturity of the children.
181.The husband deposes that he is no longer employed and has recently ceased receiving an income from the business upon the completion of the sale on the Hobart and Launceston business. He asserts that he ran the businesses effectively bearing in mind the troubles and difficulties of that business over that period of time. I accept his evidence in that regard. The husband asserts in his affidavits that he is likely to earn an income of between $30,000 and $40,000 per year. I accept that evidence.[14]
[14] At paragraph 93 of the husband’s affidavit filed 2 May 2011.
182.Any income disparity between the parties will arise by the additional assets held by the wife and I am satisfied that the income disparity is such as would warrant an adjustment in respect of the other factors.
183.The parties are of a similar age, the wife is some two years older than the husband.
184.The wife is in fair health. There is some evidence from her psychologist that she had some psychological difficulties however I am satisfied that her health is fair.
185.The husband asserts that his health is problematic but it is clear that much of that relates to the dealing of the business and the husband himself concedes ‘I am hopeful that once the businesses are sold and these proceedings are concluded that my medical condition will improve”.[15]
[15] At paragraph 88 of the husband’s affidavit filed 2 May 2011.
186.The husband asserts that he anticipates continuing to work fifty to sixty hours per week. The husband has shown a capacity to work long hours over the last twelve years. I accept his evidence in that respect.
187.Each has the support of the children and equally provide for them, although the wife’s expenses are greater than the husband.
188.The husband asserts that he provides equally for the children including half of their expenses in extra curricular activities. I accept that evidence.
189.I have also had regard to the amount of superannuation being retained by the husband, albeit it was submitted that there should be a single pool and no splitting order.
190.The wife’s superannuation entitlement is some $65,000 and the husband’s superannuation entitlement is some $155,996.
191.The primary difference will be in terms of the property which the parties will retain at the end of these proceedings. The wife will have a significantly greater pool of property than that of the husband and having regard to the provisions of s 75(2)(b) and (n) I propose to make an adjustment in that regard.
192.Accordingly I will make a further adjustment of 2.5 per cent (an overall difference of five per cent) in relation to the other factors.
193.Thus the adjustment will be on the basis of 72.5 per cent to the wife and 27.5 per cent to the husband.
JUST AND EQUITABLE
194.The result I arrive at must be a just and equitable outcome in all the circumstances of the case. There needs to be a focus on the steps but the essential task to arrive at a just and equitable outcome exercising the broad discretion given under the legislation.
195.In my assessment a division of property in accordance with the percentages and dollar amounts I have concluded earlier give effect to that outcome.
196.The sale of Suburb A and B Street and the liquidation of the business debts and assets will leave a balance of about $580,000. This will be reduced by sale costs and the cost of winding up the businesses. In addition there will be interest accruing pending sale. However, the wife will receive about $420,000 and the husband about $159,000.
197.In terms of the properties which each party retains, the wife’s is valued at $1,188,906 and the husband’s at $198,947. This makes a total of approximately $1,387,753. The wife is entitled to $1,006,120 and the husband $381,632.
198.Thus overall the husband receives about $540,632 and the wife about $1,426,120.
199.The amount the wife needs to pay to the husband to give effect to the division of property in specie is the difference between $198,847 and $381,632, viz $182,785. I see no reason why this sum cannot be paid by the wife out of the funds she has available to her of at least $225,000.
200.As can be seen, the division of property there outlined assumes the retention of particular property and the sale of other property. I am conscious that the husband has a significantly larger sum in superannuation than does the wife.
201.In my view the orders resulting from such a result represents a just and equitable outcome in this case and I will order accordingly.
I certify that the preceding two hundred and one (201) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Benjamin delivered on 20 April 2012.
Associate:
Date: 20 April 2012
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