LANE & OWEN
[2010] FamCA 575
•6 July 2010
FAMILY COURT OF AUSTRALIA
| LANE & OWEN | [2010] FamCA 575 |
| FAMILY LAW - PROPERTY SETTLEMENT – Assets and Liabilities – Contributions – Adjustments – Just and equitable – Superannuation |
| Family Law Act 1975 (Cth) ss 75 & 79 |
Young v Queensland Trustees Ltd (1956) 99 CLR 560
In the Marriage of Hickey (2003) 30 Fam LR 355
In the Marriage of Omacini (2005) 33 Fam LR 134
Mallett v Mallett (1984) 9 Fam LR 449
Inthe Marriage of Ferraro (1992) 16 Fam LR 1
In the Marriage of Shewring (1987) l2 Fam LR 139
In the Marriage of Lenehan (1987) 11 Fam LR 615
In the Marriage of Norbis (1986) 10 Fam LR 819; FLC 91-712
In the Marriage of Zyk (1995) 19 Fam LR 797
In the Marriage of Coghlan (2004) 33 Fam LR 414
In the Marriage of Robb (1994)18 Fam LR 489
| APPLICANT: | Mr Lane |
| RESPONDENT: | Ms Owen |
| INTERVENORS: | Mr and Mrs Lane (Snr) |
| FILE NUMBER: | SYC | 6078 | Of | 2008 |
| DATE DELIVERED: | 6 July 2010 |
| PLACE DELIVERED: | Sydney |
| JUDGMENT OF: | Judicial Registrar Loughnan |
PLACE HEARD: Sydney
| HEARING DATE: | 1, 2 & 3 June 2010 |
REPRESENTATION:
| COUNSEL FOR THE APPLICANT HUSBAND: | Mr T. Tockar |
| SOLICITOR FOR THE APPLICANT: | Uther Webster & Evans |
COUNSEL FOR THE RESPONDENT WIFE: | Mr N. McPherson |
| SOLICITOR FOR THE RESPONDENT: | Warren McKeon Dickson |
COUNSEL FOR THE INTERVENORS: | Mr B. Quinn | |
| SOLICITOR FOR THE INTERVENORS | Roderick B Harris & Co | |
Orders
Within seven (7) days from the date of Order, the parties do all acts and things and sign all documents that may be necessary to disburse the net proceeds of sale of the property at L, standing in a Macquarie Bank account styled “Uther Webster & Evans in trust for [Mr Lane] and [Ms Owen]”, as follows:
(a)in payment of the total of any undistributed interest earned on the account to the husband and wife equally;
(b)in payment to the husband’s parents the sum of $276,622;
(c)in payment to the wife of $360,026; and
(d)in payment of the remaining balance to the husband.
In accordance with Section 90MT(1)(a) of the Family Law Act 1975, whenever a splittable payment becomes payable in respect of the superannuation interest of the Husband in the UniSuper Accumulation 1 Superannuation Fund (“the Fund”), the Wife will be entitled to be paid an amount calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001, using a base amount in the sum of $93,538, and that there will be a corresponding reduction in the entitlement of the person to whom the splittable payment would have been made but for these Orders.
Order 2 binds the Trustee of the Fund and that Order takes effect from the operative time being the fourth business day after the date of service of a sealed copy of these Orders upon the Trustee of the Fund.
Unless the parties otherwise agree in writing the furniture and contents formerly located at the property at L be deemed the property of the wife.
Unless otherwise specified in these Orders and save for the purposes of enforcing payment of any monies due under these or subsequent Orders, the Wife retain and be declared to be the sole legal and beneficial owner of all her right, title and interest in and to:
(a)all cash at bank and other monies invested by her;
(b)all shares registered in her name;
(c)all personal effects in her possession;
(d)her motor vehicle;
(e)her superannuation entitlements;
(f)all other personal and real property in her possession, custody or control as at the date of these Orders.
Unless otherwise specified in these Orders and save for the purposes of enforcing payment of any monies due under these or subsequent Orders, the Husband retain and be declared to be the sole legal and beneficial owner of all his right, title and interest in and to:
(a)all cash at bank and other monies invested by him;
(b)all shares registered in his name;
(c)all personal effects in his possession;
(d)his motor vehicle;
(e)his superannuation entitlements;
(f)all other personal and real property in his possession, custody or control as at the date of these Orders.
In the event that the Husband or Wife refuses or neglects to comply with any of the provisions of these Orders within seven (7) days of a document been forwarded to either of them for their completion, a Deputy Registrar or a Registrar or any other Officer of the Family Court of Australia at Sydney be appointed pursuant to Section 106A(1) of the Act, to execute all such deeds and documents in the name of the defaulting party and to do all acts and things necessary to give validity to the said Orders.
The Registrar or a Deputy Registrar of this Court at Sydney are authorized to execute any such necessary instruments upon being satisfied by Affidavit that refusal, neglect or default, as the case may be, has occurred.
IT IS NOTED that publication of this judgment under the pseudonym Lane & Owen is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)
| FAMILY COURT OF AUSTRALIA AT SYDNEY |
FILE NUMBER: SYC 6078 of 2008
| MR LANE |
Applicant
And
| MS OWEN |
Respondent
And
| MR AND MRS LANE (SNR) |
Intervenors
REASONS FOR JUDGMENT
The husband and wife are divorced but for convenience I will refer to them as the husband and wife. After a marriage that involved more than 10 years cohabitation, the husband and wife cannot agree on a settlement of their property. The husband’s parents have intervened, seeking a repayment of an alleged debt.
Applications
The husband seeks orders in terms of a minute of Orders attached to the Case Outline document provided by email on 28 May 2010 as follows:
SHORT MINUTES OF ORDERS PROPOSED BY THE HUSBAND
1.That within seven (7) days from the date of Order, the parties do all acts and things and sign all documents that may be necessary to disburse the net proceeds of sale of the property at [L], standing in a Macquarie Bank account styled “Uther Webster & Evans in trust for [Mr Lane] and [Ms Owen]”, as follows:
(a)in payment to [the husband’s parents] the sum of $223,769;
(b)in payment to [the husband’s parents] the sum of $51,875, plus interest accruing at the rate of 8% pa on this sum from 1st June 2010 until the date of repayment by the parties;
(c)in payment to the [A] Group in relation to accounting services for the company [V] Pty Ltd. for the preparation of returns and related services for the financial years ended 30th June 2008 and 30th June 2009;
(d)in payment of the Wife's HECS debt as at the date of separation;
(e)in payment to the Husband of such amount as will see him with 52.5% of the net asset pool, taking into account the superannuation splitting order referred to in Order 2 below and taking into account assets to be transferred to or retained by him (as contemplated in Orders 4 & 6 below);
(f)in payment to the Husband half of the single expert fees of [Mr BK], valuer, [Mr BY], valuer, [BD], valuers, and Dr. [BA], psychologist, in accordance with their relevant invoices;
(g)in payment of the remaining balance to the Wife.
2.That in accordance with Section 90MT(1)(a) of the Family Law Act 1975, whenever a splittable payment becomes payable in respect of the superannuation interest of the Husband in the UniSuper Accumulation 1 Superannuation Fund (“the Fund”), the Wife will be entitled to be paid an amount calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001, using a base amount in the sum of $77,640, and that there will be a corresponding reduction in the entitlement of the person to whom the splittable payment would have been made but for these Orders.
3.That Order 2 binds the Trustee of the Fund and that Order takes effect from the operative time being the fourth business day after the date of service of a sealed copy of these Orders upon the Trustee of the Fund.
4. That the furniture located at the property at [L] be divided equally between the parties by agreement, and failing agreement then on the basis of the two listed method of division.
5.That unless otherwise specified in these Orders and save for the purposes of enforcing payment of any monies due under these or subsequent Orders, the Wife retain and be declared to be the sole legal and beneficial owner of all her right, title and interest in and to:
(a)all cash at bank and other monies invested by her;
(b)all shares registered in her name;
(c)all personal effects in her possession;
(d)her motor vehicle;
(e)her superannuation entitlements;
(f)all other personal and real property in her possession, custody or control as at the date of these Orders.
6.That unless otherwise specified in these Orders and save for the purposes of enforcing payment of any monies due under these or subsequent Orders, the Husband retain and be declared to be the sole legal and beneficial owner of all his right, title and interest in and to:
(a)all cash at bank and other monies invested by him;
(b)all shares registered in his name;
(c)all personal effects in his possession;
(d)his superannuation and work-related entitlements:
(e)all other personal and real property in his possession, custody or control as at the date of these Orders.
7.That in the event that the Husband or Wife refuses or neglects to comply with any of the provisions of these Orders within seven (7) days of a document been forwarded to either of them for their completion, a Deputy Registrar or a Registrar or any other Officer of the Family Court of Australia at Sydney be appointed pursuant to Section 106A(1) of the Act, to execute all such deeds and documents in the name of the defaulting party and to do all acts and things necessary to give validity to the said Orders.
8.That the Registrar or Deputy Registrar or other Officer is authorized to execute any such necessary instruments upon being satisfied by Affidavit that refusal, neglect or default, as the case may be, has occurred.
The wife seeks orders in terms of a Minute of Orders as follows:
1.That within 7 days from the date of Orders, the parties do all acts and things and sign all documents that may be necessary to instruct their solicitors to distribute the net proceeds of sale of the property at [L], standing in Macquarie Bank controlled monies account, as follows:
a)in payment to the Husband of the sum of $391,618;
b)in payment to the Husband of half of the single expert fees of [Mr BK], Valuer, [Mr PY], Valuer, [BD] Valuers and Dr [BA], in accordance with their relevant invoices;
c)in payment of the balance then remaining to the Wife.
2.That, in accordance with Section 90MT(1)(a) of the Family Law Act 1975, whenever a splittable payable becomes payable in respect of the superannuation interest of the Husband in the Unisuper Accumulation 1 Superannuation Fund (“the Fund”), the Wife will be entitled to be paid an amount calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001, using a base amount in the sum of $82,436.00, and that there will be a corresponding reduction in the entitlement the Husband would have had but for these Orders.
3.That Order 2 binds the Trustee of the Fund and that Order takes effect from the operative time, being the fourth business day after the date of service of a sealed copy of these Orders upon the Trustee of Unisuper Accumulation 1 Superannuation Fund.
4.The parties will retain any other personal liabilities, loans or debts in their sole name and will indemnify the other party in relation thereto.
5.That unless otherwise specified in these Orders and save for the purposes of enforcing any monies due under these or subsequent Orders, the Wife retain and be declared to be the sole legal and beneficial owner of all her right, title and interest in and to:
a)All cash at bank and other monies invested by her;
b)All shares registered in her name;’
c)All personal effects in her possession;
d)Her motor vehicle;
e)Her superannuation entitlements;
f)The furniture and household contents that she has retained from the property at [L].
g)All other personal and real property in her possession, custody or control as at the date of these Orders.
6.That unless otherwise specified in these Orders and save for the purposes of enforcing any monies due under these or subsequent Orders, the Husband retain and be declared to be the sole legal and beneficial owner of all his right, title and interest in and to:
a)All cash at bank and other monies invested by him;
b)All shares registered in his name;
c)All personal effects in his possession;
d)His superannuation and work-related entitlements;
e)The tools and equipment, furniture and household contents that he has retained from the property at [L].
f)All other personal and real property in his possession, custody or control as at the date of these Orders.
7.In the event that either party refused or neglects to execute any deed or instrument necessary to give effect to these Orders then the Registrar of the Court is appointed pursuant to Section 106A of the Family Law Act, to execute such deed or instrument in the name of such party and to do all things necessary to give validity and operation to the deed or instrument.
8.Either party is granted liberty to apply on seven (7) days notice regarding the implementation of these Orders.
The husband’s parents seek orders in accordance with their Notice of Intervention filed. The claim was amended orally during the hearing as to the amount claimed. They seek:
A declaration that [the husband] ( hereafter called "the Applicant') and [the wife] ( hereafter called "the Respondent" ) are indebted in the sum of $275,144.30, to [the husband’s parents] from the property of the Said Marriage of the Applicant and the Respondent.
A declaration that the sum of $275,144.30 was loaned to [the husband] ( hereafter called "the Applicant") and [the wife] (hereafter called "the Respondent") for use by the said marriage in the purchase and development of property, such loan being made by [the husband’s parents].
Judgment in favour of the intervening persons [the husband’s parents], be entered against the the Applicant and the Respondent of the said marriage, in the sum of $275,144.30.
That the Applicant and the Respondent pay the cost of the intervening persons [the husband’s parents], of and incidental to this Application.
Interest.
Documents read
The parties relied on the following documents:
Documents relied on by Husband:
1.1Application for Final Orders filed 16th October 2008
1.2Affidavit of Husband sworn and filed 3rd August 2009
1.3Affidavit of the husband’s mother sworn and filed 3rd August 2009
1.4Further Affidavit of Husband sworn 7th December 2009 and filed 8th December 2009
1.5Further Affidavit of the husband’s mother sworn 19h May 2010 and filed 20th May 2010
1.6Husband’s Statement of Financial Circumstances filed 1st June 2010
2. Expert’s Reports
2.1Report of Mr PY dated 7 December 2009 (regarding value of property at P, as at December 1996 and December 1997)
2.2Report of BD Valuers (regarding combined & separate values of properties at 4 & 6 H Street, as at March 1997)
Documents relied on by Wife:
Document Sworn Filed
Wife’s Amended Response 5.11.2009
Wife’s Affidavit 27.08.2009 28.08.2009
Affidavit of Mr HS (Builder) 21.08.2009 28.08.2009
Affidavit of Mr SR (Builder) 20.08.2009 28.08.2009
Wife’s Financial Statement 28.08.2009 28.08.2009
Wife’s Financial Statement 28.5.2010 28.5.2010
Wife’s Further Affidavit 20.11.2009 23.11.2009
Affidavit of Wife’s father 25.11.2009 25.11.2009
Wife’s Further Affidavit 7.12.2009 8.12.2009
Affidavit of ST 21.5.2010 24.5.2010
Single Expert Witnesses:
Document Sworn Filed
Affidavit of BA 7.12.2009 8.12.2009
(Psychologist reporting on Wife’s health and capacity for employment)
Affidavit of Mr PY 8.12.2009 9.12.2009
(Historical valuation of P property)
Report of Mr BD Dated 24 November 2009
(Historical valuation of 4 & 6 H Street)
The hearing
On 29 September 2009 the proceedings were fixed for hearing over two days, commencing on 10 December 2009. On 29 September 2009, among other orders, I ordered that:
3.In the event that either party becomes aware of any matter which may prevent the hearing commencing or continuing to conclusion on 10 & 11 December 2009 that party is to forthwith restore the proceedings to the list before Judicial Registrar Loughnan by arrangement with his associate and the other party.
A Notice of Intervention was filed on 16 November 2009 by the husband’s parents. The notice was made returnable on 25 November 2009. On that date the appearances were Mr Quinn of counsel for proposed interveners, Mr McPherson of counsel for the wife and Ms Evans, Solicitor for the husband. After Mr Quinn outlined the purpose of the appearance, I asked if his client’s intervention would affect the hearing duration. I was told by learned counsel for the interveners that the intervention would not extend the trial and that the intervention was not opposed. That statement was not contradicted save that counsel for the wife said that the wife did not oppose the intervention on two bases – that there would be no further material filed on behalf of the interveners and that the intervention would not affect the duration of the hearing. Counsel observed that as the husband’s mother was already a witness in the husband’s case he did not expect that the intervention would have the effect of extending the hearing. Counsel also observed that the wife contended that the claim of the interveners was entirely without merit and that indemnity costs would be sought against them. Counsel for the wife and Ms Evans for the husband confirmed that the preparation for the hearing was in hand and I reminded the parties of the orders made on the earlier date in relation to the provision of case Outlines etc.
No approach was made to my associate pursuant to order 3 of 29 September 2009.
At the commencement of the hearing on 10 December 2009, but only when I raised the issue, I was told by learned counsel for the husband that the hearing might not be contained within 2 days. I referred to the history of the directions for trial and what I understood of the assurances previously given to the court. I indicated that if the hearing could not be contained within the time I was minded to abandon the hearing. I referred to the inefficiencies and increases in costs for the parties and the community if the proceedings went over for a period of months, part-heard – the wasted preparation time etc. I asked counsel for the parties to settle a trial plan that would contain the hearing within two days. I mentioned the possibility of the lawyers being restrained from charging in relation to the wasted hearing days. I emphasised that the parties should be aware of the waste of costs in the event that the hearing was abandoned and noted that if they agreed that the matter needed more time, I would consider abandoning the hearing.
I accept that counsel for the husband and wife diligently applied themselves to drafting a trial plan. They were not successful and decided that there was no reasonable prospect that the matter could be contained within the time allocated. Indeed the estimate from learned counsel for the wife, based on the most optimistic view of the responsiveness of witnesses, was that the oral evidence could barely be contained within 2 days, let alone submissions. Notwithstanding that I had earlier rejected the concept of the hearing commencing and being adjourned part-heard after 2 days, I then canvassed that with counsel. In addition to the wasted preparation time, counsel for the husband raised the potential unfairness of having one parties’ case fully exposed over two days and allowing the other party 6 months to repair problems in that parties’ case. No advocate spoke against the abandonment of the hearing and that is what I ordered. At the application of counsel for the husband and without objection on behalf of the other parties, I restrained the parties from filing any further material and adjourned the proceedings to a hearing of three days, commencing on a date to be settled by my associate in consultation with the parties. No applications were made in relation to the costs wasted.
By arrangement with my associate the matter was subsequently fixed for hearing over three days commencing on 1 June 2010.
On 1 June 2010 the hearing commenced. Evidence and submissions were concluded on 3 June 2010 and judgment was reserved.
The issues
The issues are:
Balance sheet
·The amount, if any, owing to the husband’s parents;
·If there is an amount owing to the husband’s parents, whether it is a debt for which the husband alone should bear responsibility or a joint debt of the husband and wife;
·Add backs – joint funds used by the wife after separation;
Contributions
·Whether the contributions by and on behalf of the husband were greater than those made by and on behalf of the wife or contributions were equal;
Adjustments
·Whether the adjustment to the wife should be 7 ½% or 10%.
Short history
As at 1 June 2010 the husband was 43 years of age and the wife was 53. The husband and wife were married in 1997 and separated on 2 March 2008. The marriage was dissolved on 14 January 2010.
Children
The wife’s daughter was a member of the household and was supported by the parties but she does not fall within the definition of “child of the marriage” for the purposes of section 79(4)(c).
Background facts
The wife’s daughter was born in December 1985.
In March 1988 the wife purchased a property at M for $132,000 (‘the M property’).
In 1992 the husband and his parents purchased a property at 4 H Street, H, for $300,000. The husband contributed an amount of $150,000.
The husband says that he contributed the amount of $35,000 towards the working capital of the business that he operated.
According to the wife, the husband and wife met and started dating in 1992.
The wife says that from this time until 1999, she was employed by DS Company earning about $65,000 per annum and was running a hire business, AV Company, with her parents. The wife says that from 1993-1998 she also worked in the husband's business, on a part-time basis, mainly serving customers and tending stock.
In 1992/1993 the husband’s father purchased the property at 6 H Street, H, which adjoined number 4 H Street where the husband’s business operated. The purchase price was $130,000. The two properties at H Street were thereafter used to operate the husband’s business.
The husband’s parents assisted him in running the business from 1992 - 1999. The husband says that his parents were not paid for their work.
The husband says that the husband and wife met and commenced dating in 1994. He agrees that the wife was operating a hire business and was employed but at a University.
In 1994 the wife enrolled to undertake BA Dip. Ed studies with the intention of teaching but she withdrew from the course.
In June 1994 the husband’s first wife, R Lane transferred her share of 4 H Street to the husband, leaving him with a half share as tenant in common with his parents.
In late 1995/early 1996 the wife purchased the property at P (“the P property”) for $257,500. The wife used the sale proceeds of the M property and obtained the balance of the funds by way of a mortgage in the sum of $108,000. In March 1996 the wife refinanced the mortgage with the Commonwealth Bank in the sum of $141,000. The wife says that from the time that the property was purchased, until it was sold in 2003, she paid the mortgage entirely from her income.
The wife spent about $40,000 on improving the P property. She borrowed money from her parents and used some of the moneys raised by way of mortgage, to pay for the improvements.
According to husband, in 1996/1997 the wife began working in the husband’s business (assisting with work in the café), on a part-time basis. The wife says that the café was only established in about 1999, and closed after about six months. I cannot resolve this issue but nothing turns on it.
The husband and wife were married in December 1997. It is the wife’s case that she and the husband first lived together a month or two before the wedding. In cross-examination she said that by mid 1997 the husband was staying at the P house 2 or 3 nights a week. The husband says that they first lived together in late 1996 when he and the wife and the wife’s daughter moved into the P property. I cannot resolve this issue.
From 1997 – 2004 the wife’s daughter attended P College. After Year 10 she attended E College.
The husband says that approximately $25,000 per annum was spent on school fees, tuition and extra-curricular activities. The wife says that over the years 1990 to 2004, her daughter’s school fees were between $7,000 and $11,000 per annum and that the moneys came from the income of AV Company. The wife says that her father drew income from AV Company, paid the tax on that income and although the moneys represented the wife’s earnings from AV Company, he advanced an average of $30,000 per annum to her by way of gift. The advances were in the form of payments of the child’s education expenses and some direct payments. Throughout the marriage the wife’s daughter earned a small amount of money by coaching tennis and debating.
From 1998 – 2002/2003, renovations were effected to the P property. The renovations doubled the size of the existing residence, adding two bedrooms, a bathroom, a lounge & study, a double car garage and landscaping. Both husband and wife worked on the renovations. The wife mainly dealt with the builders and sourced supplies. The husband, the wife and the wife’s father painted the house. Staff from U Pty Ltd completed the landscaping and the husband and the wife assisted with the design.
The husband says that the renovations were funded by way of monies drawn from his business (approximately $90,000), a loan from the wife's parents (approximately $20,000) and a loan from the husband's parents (approximately $40,000). The husband says that he provided the sum of $20,000 to fund the erection of a new deck and back-entry doors to the property. The wife says that the renovations cost $100,000 were funded as to $5,000 borrowed from her parents, $30,000 from the husband’s parents, the mortgage funds and the balance from her income from DS Company, AV Company and U Pty Ltd. She says that the husband did not contribute $20,000 to the project. It is not possible to make a finding on that issue. However, it is agreed that the loans were repaid when the house was sold.
In 1999 the café at the business was closed. The husband says that the wife continued working part time in the business. The wife says that at this stage she began working in the husband's business on a full-time basis. It is not possible to make a finding on that issue, save to say it is an agreed fact that the wife worked in the business.
The parties had a Development Application for the H Street properties approved. The wife says that improved the value of the properties. In November 1999 the properties were combined into one Deposited Plan.
A company owned by the husband and wife purchased 10 vehicles to be leased through the wife's business (“AV Company”). The income from the business was used to acquire the vehicles, at the cost of $15,000-$20,000.
The wife says that she managed the business "AV Hire" from 1980 to 2004. She says she sold a vehicle for $8,000.
The husband commenced a business known as “e-retail”, an online retail store. The wife says that she established a company called U Pty Ltd. in about 2000 to operate the online store. The wife also says that from this time until about February 2008 she also worked as a freelance artist, earning about $25,000 per year. She recalls completing work for a tour company in February 2008. The wife ran a business called HN Company through the husband’s company, V Pty Ltd from about 2000 to 2008. The business mainly produced material for a tour company earning about $25,000 per annum.
In about 1999 the husband commenced studying for an degree. The course cost $36,000 which was met by the H Street business.
In 2000 the H Street business properties at H Street, were sold for $900,000. The husband received $300,000 and the balance went to his parents. The husband deposited $250,000 into a Macquarie Bank investment account. The wife says that the husband later applied those moneys towards the purchase of the L property. The husband says and the wife disputes that he applied a further $50,000 to the renovations. It is not possible to make a finding about that issue.
The wife completed a night-time course at North Sydney College in MYOB accounting.
The husband later sold the H Street business and cleared about $200,000. He received $250,000 but chose not to pay a tax impost of about $49,000 arising from the sale. He paid that tax recently.
The husband says that wife's hire business closed down. The husband does not recall there being any profit after the sale of the vehicles purchased in 1999. The wife says that in about 2004 she sold her share in the business to her parents for about $20,000. I accept the wife on this issue.
The wife continued to work in the e-retail online retail business. She also undertook freelance art work for up until 2008.
In August 2001 the husband purchased the property at L for $672,000. With stamp duty, the costs of the acquisition amounted to about $700,000. This was funded by way of $500,000 that the husband had accumulated from the sale of the H Street property and the business. The husband also obtained about $200,000 from his parents to complete the purchase.
It is the evidence of the husband and of his mother that the advance was by way of loan. The wife is not able to give evidence about the terms of the advance but it is her case that this amount was a gift to the husband from his parents as they had made similar provision for their other children. I deal with this issue in more detail later in these reasons.
The husband allowed his friend to live in the L property for about 1 year, rent free.
In October 2001 the wife refinanced the mortgage over the P property. She borrowed $163,000 from the St George Bank.
In 2001-2003 the husband sold the majority of his shareholdings, including shares in Goodman Fielder, Qantas and Woolworths, for about $20,000.
In 2002 the husband obtained a part-time job at TAFE (until 2004), and spent time working on the renovations to the P property. The wife says that she was primarily responsible for overseeing the P property renovations. Because of the unchallenged evidence of the two builders involved, I accept the wife on that issue.
The husband commenced studying for a Doctorate degree.
The husband and wife obtained approval to subdivide and develop the L property at a cost of about $100,000 to $150,000.
In March 2003 the property at P was sold for $905,000. $30,000 was repaid to the husband's parents. The wife repaid a loan from her parents of about $35,000 and after the purchase of various items, net proceeds of about $750,000 were paid into her bank account. The wife then deposited about $605,000 into a Macquarie Bank investment account, which moneys she says were applied towards the development of the L property. The wife also deposited about $87,750 into a separate Macquarie Bank investment account.
In about March 2003 the husband and wife and the wife’s daughter moved into the property at L.
In 2004 the husband, the wife and the wife’s daughter moved into a rental property in L in order to allow for the demolition and redevelopment of the property at L into a detached dual occupancy development. The development cost $1.2 million, funded by way of a mortgage secured on the property, the wife's investment account and loans from the families of the husband and wife. The wife says that the borrowed funds were also applied to family living expenses.
The L property was transferred into the joint names of the husband and the wife.
The husband commenced working at a University on a full-time basis.
The wife decided to pursue a teaching qualification at university. She also started doing volunteer work.
From 2004 -2007 the wife’s daughter attended University and lived rent-free with the husband and wife.
In March 2005 the wife commenced teaching studies.
In August 2005 the husband and wife moved back to the L Property.
In 2005-2007, in order to assist with the property development, the wife's parents lent an amount of about $40,000 to the husband and wife. The husband's parents lent them an amount of $130,000, funded by way of a mortgage taken out over a property owned by the husband's mother. The husband's brother lent the husband and wife $40,000.
In 2006 the husband completed his studies. He obtained employment at a university.
According to the wife, construction of the dwellings at L was completed in May 2007. The husband says it was in October 2007. It is not necessary to resolve that dispute. The subdivided properties became properties L and L2.
In December 2007 the husband and wife sold the property at L2 for $1,577,700. The proceeds of sale were used to repay bank loans, outstanding expenses and the loan from husband's mother ($141,000). The wife says that an amount of $30,125 was paid to a builder, Mr HS. The remaining money was invested in a joint account with ANZ bank to the extent of $400,000. The husband says and the wife denies that approximately $40,000 was invested by the wife in an account in her name. I cannot make a finding about that issue.
In January 2008 the husband was promoted.
The husband and wife travelled to Japan in early 2008. According to husband, in January/February 2008 his parents made three or four requests for him and the wife to repay the original loan of $200,000+ which was used to purchase the L property. The husband says that in February 2008 the wife agreed to repay his parents. The wife denies making that agreement. I cannot make a finding about that issue. On 29 February 2008 the husband received an e-mail from his mother indicating that she had received from the wife a cheque for $40,000 in respect of the moneys that had been borrowed from his brother.
On 2 March 2008 the wife wrote out a cheque in the sum of $202,083 in favour of the husband's father. The husband and wife thereafter drove to the home of the husband's parents and the husband gave them the cheque while the wife waited in the car. The wife says that her co-operation with paying the husband’s parents was obtained in circumstances where she was in shock after confirming that the husband was having an affair.
After arriving home the husband and wife had an argument and final separation occurred. The husband moved out of the former matrimonial home.
Overnight on 2 March 2008 the wife changed her mind about the payment to the husband’s parents and cancelled the cheque by telephoning the ANZ Bank. The wife then withdrew $346,311 from the relevant account. She deposited $96,242 into a savings account, and $250,000 into a term deposit account.
The wife also withdrew about $3,400 from the husband’s Commonwealth Bank Account.
The husband told his mother what had happened, explaining that there were no funds to honour the cheque given to her on the previous day.
On 4 March 2008 the wife drew a fresh cheque in favour of the husband’s brother for $40,000 to replace the one effectively cancelled by her withdrawal of funds from the ANZ Bank.
In March 2008 the husband agreed to pay the wife $1,500 per fortnight by way of spouse maintenance. The wife deferred her university studies because of the breakdown of the marriage.
The wife withdrew $10,000 from the business account of V Pty Ltd. On 28 April 2008 the wife withdrew a further amount of $10,000 from the business account of V Pty Ltd, being a payment for work she had completed for the tour company. The wife concedes that those two amounts of $10,000 related to income received by V Pty Ltd prior to separation. Other moneys were drawn on the V Pty Ltd account after separation and the wife concedes that some of those drawings were made by her or for her benefit.
The wife says that in April 2008 she received two payments of $1,500 from the husband and thereafter the payments ceased. The husband says he paid a total of $6,100. I accept the husband on this issue. Thereafter the husband told the wife to use the moneys she had withdrawn from the joint account.
On 28 April 2008 the wife repaid her parents $44,520.
In June 2008 the wife received a letter of demand from the husband's parents, claiming that she and the husband owe them a total of $253,769.27. On 24 June 2008 the wife’s solicitors wrote to the solicitors acting for the husband’s parents, disputing the debt.
In June/July 2008 the property at L was listed for sale. In the meantime, the wife had exclusive occupation of the property and except for a few months of 2008, the wife’s daughter lived there with her. The husband says that he lived with his parents. The wife contends that he lived with his new partner. It is not possible to make a finding about where he lived.
The husband filed an Application for Final Orders on 16 October 2008.
In November 2008 the wife consulted a Psychologist.
In December 2008 the wife filed a Financial Statement indicating the balance of funds withdrawn from ANZ joint account of $346,000 was reduced to $66,000.
The wife says that in June 2009 she exhausted the joint funds representing the sale proceeds of the L2 property.
In March 2009 the wife recommenced full-time university study and applied for Austudy.
In June 2009 the wife noticed that the husband’s employer had paid money into her account. In July 2009 the husband noticed that withdrawals had been made from his personal CBA Streamline account totalling $3,962.76.
In late October 2009, contracts exchanged for the sale of L property. for $1,515,000.
On 18 November 2009 the wife filed an Application for Divorce.
On 19 November 2009 the wife withdrew from her final subject at University, with her final exam having been scheduled for 30 November 2009.
On 10 December 2009 the final hearing was adjourned. The husband and wife agreed to a partial property settlement whereby each received $200,000 from the sale of the L property with the balance to the placed in an investment account with each of the husband and wife to receive half of the interest earned.
On 11 December 2009 the sale settled, $200,000 was paid to each of the parties and $1,078,591.58 was placed in a controlled moneys Term Deposit.
Notwithstanding earlier advice to the contrary, by arrangement with the university, in January 2010 the wife was able to complete her studies, enabling her to graduate.
On 14 January 2010 the husband and wife were divorced.
In March 2010 the wife graduated from with a Bachelor of Arts. She then enrolled in University to complete a Diploma in Education for teaching. She hopes to complete the course in June 2010.
In April 2010 the wife commenced working 2 days per week at W Facility earning $400 per week. Her Austudy had ceased.
On 15 April 2010 the term deposit matured, each of the parties received $9,197.84 and $1,078,591.58 was reinvested for a further 2 months.
Credit and Submissions
The evidence of the witnesses
The only witnesses called for cross-examination were the husband, the wife and the husband’s mother. As the hearing progressed it became apparent that there are not many issues that fall to be determined solely by reference to the uncorroborated testimony of a party. The critical events were usually events about which the contradicting party or parties had no personal knowledge. There was a practice of privacy or secrecy between the husband and the wife and similarly there were limits to the communication between the husband’s mother and the wife. There is only a limited relevance in credit findings.
The husband was not a good witness. His written evidence exaggerates his case and omits important detail. In cross-examination the husband made concessions that do not appear in his affidavits. Indeed, there are few concessions made in his affidavits.
For example, the husband omitted from his Financial Statement any reference to the financial details of his cohabitation with any of the people in the three households in which he variously lives – his parents, his brother and Ms T. At paragraph 17 of his primary affidavit the husband seeks to give the impression that he provided the main financial support for the wife’s daughter. He refers to about $25,000 per annum in fees and additional expenses for the wife’s daughter. He says:
“Those monies came from our pooled resources earned primarily through the business, and later my employment with TAFE and the University […].”
The husband was taken to the evidence of his taxable income from 2001 to 2004 was between $25,000 and $39,000 per annum. Obviously, the wife’s daughter’s school fees could not be a business expense. I therefore cannot accept the husband on this issue. At paragraph 25 the husband deposes that he bought 10 vehicles to be leased through the business AV Company. He conceded in cross-examination that a company jointly owned by the wife bought the vehicles.
The husband’s mother was a good witness. She generally answered questions carefully and was not successfully challenged on any issue. She omitted conversations and parts of conversations from her affidavit but asserts that they occurred. The events are some years ago and she was hampered by a lack of written records. Some of the material relied on by the husband’s mother was information reconstructed from other sources. It is possible that certain details were omitted from her affidavits because the thing in question did not occur but overall I believe the husband’s mother tried to give truthful evidence.
The wife was very deliberate and seemed to be thoughtful in giving her evidence. She was unable to explain how she prepared some of the evidence in her affidavits. For example in seeking to account for her use of funds since separation she gave very precise estimates of certain expenses and yet had no documents to support some of those estimates. The wife was not able to satisfactorily explain how she arrived at the estimates without documents to refer to. Further, the documents she did have did not always support the estimates she had made and usually revealed a lesser amount than the estimate. Thus the estimate exaggerated her claim. It is the wife’s case that she suffered distress at about the time of separation and since. There is evidence that she has difficulty with the order of events and maintaining patterns of thought[1]. I do not believe that the wife set out to mislead the Court but in the circumstances, I could not safely rely on her uncorroborated testimony on every issue.
[1] Report of Clinical Psychologist Dr BA dated 5 December 2009
Submissions
The written submissions on behalf of the husband included:
Commentary
1.It is suggested that it can safely be accepted that at the commencement of cohabitation the husband had assets worth approximately $317,000.
2.The wife's estimate of the value of her assets at commencement of cohabitation is appears to be inflated. The wife relies on the value of the [P] property as at 1 December 1997, but it is submitted that the appropriate date should be late 1996, or, at the latest, mid-1997. There also appears to be no basis for her having estimated the value of her motor vehicle at $20,000, and there is no evidence of her having had savings of $8,000 - $10,000.
3.At the commencement of cohabitation, it would accordingly appear that the net asset pool was worth between $475,000 and $548,000.
(B) CURRENT FINANCIAL CIRCUMSTANCES
Assets
Item Owner-ship Husband’s Value Wife’s Value Balance of proceeds of sale of property at [L] J 1,078,592 1,078,592 Agreed Household Contents (at separation) J 10,000 10,000 Agreed CBA account […]41 H 1,650 N/K Subject to production of Bank Statement Telstra shares ([…]) H 1,525 1,525 Agreed Tools & Equipment H 5,000 12,000 Not Agreed Unisuper Superannuation H 188,916 188,916 Agreed [V] Pty Ltd H Nil N/K The company has no assets and is dormant CBA Savings Account and
ANZ V2 Account
W 1,800 1,800 This is not in the Joint Balance Sheet, but is in the wife’s updated Financial Statement Telstra Shares ([…]) W 1,525 1,525 Agreed Holden Astra m/v W 20,000 20,000 Agreed [M] Super Superannuation Fund W 23,036 23,036 Agreed [e-retail business] J Nil Nil Agreed Part payment from sale of [L property] W 200,014 200,014 Agreed Part payment from sale of [L property] H 200,014 200,014 Agreed Add-Back of monies taken by the wife from the ANZ Joint Account W 180,822 Nil Not Agreed Add-Back of interest earned by the wife from joint moneys invested by her in a personal account. W 11,744 Nil Not Agreed Add-Back of monies withdrawn from the [V] Pty Ltd. account by the wife between 3 March 2008 and 9 April 2009 W 45,702 Nil Not Agreed Add-Back of monies taken from the husband’s CBA account by the wife W 3,963 Nil Not Agreed Add-Back of half the costs of the single experts W 4,477.50 4,477.50 It is assumed that the wife agrees to this.
There will be additional costs if any of these experts are obliged to testify at trial
Total: $1,978,780.50 $1,741,899.50 Liabilities
Item Ownership Husband’s Value Wife’s Value Loan: Husband’s Parents J 223,770 Nil Not Agreed Debt to husband’s parents in respect of loan to pay tax from sale of business in 2001 J 51,875 N/K Wife does not agree to full amount HECS Debt W 8,865 8,865 Agreed Total: $284,510 $8,865
NET ASSETS
$1,694,270.50
$1,733,034.50
Commentary:
1.The value of the net asset pool will be significantly different if:
· The alleged debts of $223,770 and $51,875 to the husband's parents are not recognized as debts that are due and payable to the parents;
· The add- backs contended for by the husband are not added back (either in the amounts as alleged, or at all);
2.The total add-backs amount to $246,708.50 ($180,822 + 11,744 + 45,702 + 3,963 + 4,477.50).This is arrived as follows:
· On 3 March 2008 the wife withdrew $346,242 from the joint ANZ account;
· An amount of $40,000 was repaid to the husband's brother, […];
· An amount of $44,520 was repaid to the wife's parents;
· An amount of $13,500 was paid in respect of landscaping costs;
· Amex visa card payments were made in respect of pre-separation debts, in an amount of $6,000;
· If one deducts these amounts (total: $104,020) from the withdrawal of $346,242, the figure is reduced to $242,222;
· The husband is further prepared to concede that an amount of $61,400 may be legitimately allocated to the wife for spousal maintenance for the period March 2008 to December 2009 ($67,500 as per the wife’s calculation for spousal maintenance for the period from March 2008 to December 2009, less $6,100 paid to the wife by the husband as and for spousal maintenance) and may be deducted from the add-back figure, reducing it to $180,822;
· To this figure of $180,822, there must be added the following amounts: $3,963 taken by the wife from the husband’s CBA account; $45,702 taken by the wife from the [V] Pty Ltd. account; $11,744 in respect of interest earned by the wife from joint monies invested by her in her personal account; and $4,477.50 in respect of half the costs of the expert witnesses. The result is that the total amount to be added back is $246,708.50.
· The wife’s credit card debt of $35,000 has not been included in the calculation of the asset pool, as it is understood that this money was used to pay legal fees, which have also not been included by either party in the Joint Balance Sheet, as payment of legal fees has been paid out of the partial property settlement (when each party received $200,014 from the proceeds of sale of [L Property]), which total amount has already been included in the calculation of the asset pool.
· The husband submits that the amount of $1,694,270.50 represents a proper calculation of the net asset pool.
….
(D) EFFECT OF THE ORDERS SOUGHT
1.If Orders are granted as sought by the husband, the outcome will be as set out hereunder.
1.1The husband will have assets worth a net amount of $881,021, made up as follows:
ITEM VALUE Share of household furniture 5,000 CBA Account […]41 1,650 Telstra shares 1,545 Tools & Equipment 5,000 Unisuper Superannuation 111,276 Payment from proceeds of sale of [L property] 200,014 Payment to be made from balance of proceeds of sale of [L property] 556,536 Total: $881,021 1.2.The wife will have assets worth a net amount of $813,250, made up as follows:
ITEM VALUE Share of household furniture 5,000 Unisuper Superannuation 77,640 Telstra shares 1,525 CBA Savings & ANZ V2 Account 1,800 Holden Astra motor vehicle 20,000 Media Super Superannuation Fund 23,036 Payment from proceeds of sale of [L property] 200,014 Add-Backs 246,708.50 HECS Liability (8,865) Payment to be made from balance of proceeds of sale of [L property] 246,391.50 Total: $813,250
1.3.In percentage terms, this will see the husband with 52% of the net asset pool, and the wife with 48%.
2.It appears as if the wife contends that the net value of the asset pool is in the region of $1,733,035.
3. She seeks that:
· From the amount of the balance of the sale proceeds of [L property], namely $1,078,592, payment be made as follows:
(i)$391,618 to the husband;
(ii) $4,477.50 to the husband, being half the single expert fees;
(iii)$682,496.50 to her (being the balance of the sale proceeds).
· The husband’s Unisuper Superannuation be split, with her receiving a base amount of $82,346.
· She retain her cash at bank, shares, personal effects, motor vehicle, furniture & effects retained from [L property];
· Each party retain any personal liabilities, loans or debts in their names
4.If Orders are granted as sought by the wife, she will have assets to the value of $1,012,353, made up as follows:
ITEM VALUE Share of sale proceeds 682,496.50 Unisuper Superannuation 82,346 Household Contents 10,000 Bank Accounts 1,800 Telstra Shares 1,525 Holden Motor Vehicle 20,000 Media Super Superannuation 23,036 Part Payment from Sale Proceeds 200,014 HECS Debt (8,865) Total: $1,012,353
Notes:
(i) This will see the wife with 58% of the asset pool as contended for by her, or 60% of the asset pool as contended for by the husband.
(ii)This disregards all indebtedness that the parties, or either of them, might have to the husband’s parents. It is to be noted that not even the wife appears to contend that NOTHING is owing to the husband’s parents (she appears to recognize that the money borrowed to pay the tax debt is a debt that is repayable and that she is liable for at least part of this).
(iii)This disregards entirely the add-back of $246,708.50 contended for by the husband. The wife appears to take the view that there should be NO CONSEQUENCE to her having spent this amount, plus a further $67,500 (spouse maintenance) in a short period of time and while she was living rent-free in the former matrimonial home (March 2008 to June 2009 - $314,200 in about 1 year and 4 months).
(E) CONTRIBUTIONS
1.Direct Financial Contributions:
1.1In the wife’s Summary of Argument, it is submitted that her initial contributions were greater than the initial contributions of the husband. This is not correct.
The husband's initial contribution at commencement of cohabitation was very significant. His contribution of approximately $317,000 constituted between 58% and 67% of the commencement value of the asset pool, and constitutes approximately 19% of the current value of the net asset pool ($1,692,735).
1.2During the marriage both parties worked and earned and contributed their income to joint expenses and acquisitions.
However:
· it appears to be common cause that the husband's income was generally much higher than the wife's income. If regard is had to the parties taxable income over the period 2001 to 2007, it will be seen that the wife's total gross taxable income was $151,919 (not including 2007, as wife’s Tax Return is missing), while the husband's total gross taxable income was $467,361;
· it is also apparent from the wife's own evidence that much of her time was concentrated on taking care of her daughter, […];
· it is further so that the wife spent significant amounts of time travelling overseas;
· [the wife’s daughter’s father Mr Y], did not financially contribute to her support. [The wife’s daugher’s] school fees and costs of extra tuition, etc, were very substantial, significantly reducing any direct financial contributions that could have been made by the wife (if she is to be believed that she was responsible for payment of [her daughter’s] schooling, etc);
· the husband was the major breadwinner.
1.3The parties were assisted financially by the parents on both sides (and also by the husband’s brothers). All the amounts provided by the parents and the husband’s brothers were repaid to them, save for a total amount of $275,645 ($223,770 + $51,875) to the husband's parents. The wife does not deny that these amounts were provided by the husband’s parents, but contends that at least $223,770 constituted a gift. The husband and his parents maintain that the amounts provided by the husband's parents constituted a loan. However, if the wife's contention is upheld, then the amount provided by the husband’s parents will represent a very significant financial contribution on the part of the husband.
1.4In any event, the admitted loans from the husband’s family substantially outweigh the loans from the wife’s family – it appears as if a total of $79,000 was borrowed from the wife’s parents and repaid to them, and that a total of $461,875 was borrowed from the husband’s family, of which $211,000 has been repaid. The wife concedes that at least between $220,000 and $271,875 (if the loan of $51,875 to pay tax is included) was loaned to the husband by his family, and says that $211,000 has been repaid to them.
2. Indirect Financial Contributions:
2.1The [H Street] business was operated from the property at [H Street, H]. This property was owned by the husband and his parents. This provided a platform for the parties to work and earn, and to derive benefit from the increase in the value of the business and the property and to purchase the [L] properties
2.2The increase in value of the wife's property at [P] was attributable to a large extent to the substantial renovations performed by both parties and to the financial assistance that they received from their parents and from the husband's parents in particular.
2.3If it were not for the loans from the husband's parents and brothers, it would not have been possible to develop the properties at [L] and to sell them for a considerable profit.
2.4The husband's father worked for free for seven years (1992-1999) in the businesses five days a week (10 hours per day).
2.5The husband's mother worked for free for four years (1992-1996) in the businesses one day a week.
2.6The husband's parents looked after the business when the husband and wife were on an annual leave.
3.Non-Financial Contributions and Contributions as Homemaker and Parent:
3.1The husband, […], was able to, and did, make a substantial contribution to the renovation and maintenance of the various properties. The husband’s parents also helped with renovation work.
3.2The husband in effect stood in loco parentis for the largely absent [Mr Y]. He helped take care of [the wife’s daughter] both financially and as a father-figure, and played a significant role in her upbringing.
4. Post-Separation Contributions:
4.1Since the parties separated on 3 March 2008, the wife has lived rent-free in the former matrimonial home.During this time, the husband has resided with his parents.
4.2Since 3 March 2008, the wife has had the use of many hundreds of thousands of dollars. She has lived in a freshly renovated, unencumbered home, has travelled extensively, has continued her education, has indulged herself, and has failed to generate an income for herself.
4.3The increase in the husband's superannuation entitlements is largely attributable to salary sacrifices made by the husband, and constitutes a contribution solely by him.
(F) THE HUSBAND'S SUBMISSIONS:
1.“... the established approach to section 79(4) is for the court first to consider the contribution that each party to a marriage has made to property and to the welfare of the family, and then make a notional adjustment of property interests in the light of these contributions. The court then, as it were, stands back and considers this notional adjustment in the light of the general future economic position of the parties and the other considerations of paras. (d) to (g). This might, and often will, require the court to make a further adjustment before it can make an order under s.79(1) which is just and equitable in all the circumstances for the purposes of subs. (2)”.- Anthony Dickey: Family Law 5th edition, page 564.
2.The issue of contributions is fundamental to the making of a proper order altering the property interests of parties to a marriage.
3.Having regard to the husband's direct and indirect financial contributions and to his contributions as a homemaker and parent, and also having regard to the post-separation contributions, it is submitted that an appropriate finding in respect of contributions would be at least 63:37 in favour of the husband. It appears as if the wife recognizes and accepts that the contributions favour the husband in the ratio of 60:40 - see Case Outline Document prepared on behalf of the wife at page 14.
4.In amplification of the above submission, it is submitted that the following should be considered:
· at commencement of cohabitation, the contributions to the then asset pool were at least 60:40 in favour of the husband;
· during the subsistence of the marriage, the husband's income was approximately 3 times more than that of the wife;
· during the subsistence of the marriage, contributions of all kinds by the husband's family heavily outweighed the contributions from the wife's family:
· the husband contributed significantly both in financial and non-financial terms to the care of the wife's daughter, […];
· the parties otherwise contributed on an equal basis to the acquisition, conservation or improvement of any of the property of the parties or either of them, and to the welfare of the family;
· it is accordingly inconceivable that the original 60:40 disparity in favour of the husband could have reduced during the subsistence of the marriage. On the contrary, it is clear that the contributions from the husband's side would have increased;
· even if the initial contributions at the commencement of cohabitation are found to be more or less equal, it is nevertheless submitted that - having regard to the contributions made by and on behalf of the husband during the marriage - the contribution-based entitlement should favour the husband in the ratio of 60:40;
· post-separation, the contributions from the husband continued to outweigh the contributions from the wife, who did not work, but who spent vast amounts of money and who lived rent-free in the former matrimonial home.
5.It is recognized that an adjustment should be made in the wife's favour to take account of the relevant s. 75(2) factors. In this regard:
5.1 The Age and State of Health of the Parties:
· the wife has gone to great lengths to mount a case that she is in a poor emotional and psychological state;
· the evidence of Dr. [BA] goes some way to support this contention;
· however, a consideration of the wife's conduct post-separation suggests that she is very determined, energetic, motivated and active;
· the emotional and psychological strain of the litigation will soon be a thing of the past;
· the wife is not old, and appears to have no significant health problems (in a physical sense).
5.2Income, Property and Financial Resources of Each of the Parties, and the Physical and Mental Capacity of each of them for Appropriate Gainful Employment:
· as indicated above, the wife has sought to make out a case that she has a very limited earning capacity;
· it appears to be the wife's case that the emotional and psychological consequences of the breakdown of her marriage has resulted in her becoming virtually unemployable;
· however, as suggested above, it is apparent that the wife’s post-separation conduct has shown that she is by no means incapacitated;
· she has managed post-separation to work, to study, to travel (extensively), to do volunteer work, to litigate in a very determined manner and to spend vast amounts of money;
· history and past conduct demonstrates quite clearly that the wife is able to work and to earn reasonably well. She has skills in many areas;
· it is submitted that the prospects of the wife re-entering the marketplace and obtaining gainful employment are extremely good;
· notwithstanding her alleged psychological condition, it appears that:
o in January 2010 the wife was able to complete her exams to enable her to graduate;
o in March 2010 the wife enrolled at [University] to complete a Diploma in Education for [teaching];
o in April 2010 the wife obtained part-time employment at [W Facility];
· it is conceded that the likelihood is that the husband will continue to have a better earning potential than the wife, but it must be recognized that the husband's contract will expire in December 2010, and that he will thereafter return to work […] at $92,000 per annum.
5.3 Care and Control of Children Under 18 Years:
· the wife's daughter, […], is nearly 24 years old.
5.4 Commitments of Each of the Parties:
· each of the parties are responsible only for their own upkeep.
5.5 The Responsibilities of Either Party to Support any other Person:
· see above.
5.6 The Eligibility of Either Party for a Pension, Allowance or Benefit:
· until recently, the wife received an Austudy loan.
5.7 Reasonable Standard of Living:
· the property settlement proposed by the husband will ensure that both parties will be able to maintain a reasonable standard of living.
5.8The Duration of the Marriage and the Extent to which it has Affected the Earning Capacity of the Parties:
· if anything, the wife's earning capacity has improved during the subsistence of the marriage.
5.9 Any Other Factors:
· in the event that the Court does not add back some or all of the amounts expended by the wife post-separation (other than the amounts that the husband concedes were legitimately expended), then it is submitted that a very significant adjustment should be made in the husband's favour to compensate him for the losses sustained as a result of the wife's expenditure;
· it is submitted that if the Court concludes that the wife has been deceptive in her conduct, and has not been wholly frank with the Court, then it is submitted that the Court should be less inclined to make allowances in her favour
6.Having regard to the aforesaid, and on the basis that the Court upholds the claim by the husband's parents for repayment of the amounts that they assert were loaned to the parties, it is submitted that an adjustment in the wife's favour of a maximum of 7.5% would be appropriate. If the Court does not uphold the claim of the husband's parents, then it is submitted that the contributions on the part of the husband must be found to be significantly more than 63:37 in his favour, and a similar outcome as that proposed by the husband in his Minute of Orders should follow.
(G) CONCLUSION
1.It is submitted that the husband has succeeded in establishing that the asset pool is in the amount as alleged by him, and that, based on such value, the pool should be divided 52% to 48% in his favour (representing a more favourable outcome for the wife than is indicated by the contribution entitlement of the parties and the reasonable adjustment that should be made thereto).
2.It is submitted that the wife has not made out a case for property orders as sought by her. Having regard to her Case Outline and to her Summary of Argument, it will be noted that:
· It is stated at page 2 (last sentence) of her Case Outline that “The Wife says that the transfers referred to by the Husband and the Intervenor during 2001 and 2002 were unknown to her and she does not know how the monies were used” (emphasis supplied). This is contrary to her own evidence, where she says that she was largely responsible for the parties’ finances and where she says that the husband’s parents gifted the money to him;
· It is stated in the table at page 5 of her Case Outline that the date of commencement of cohabitation was December 1997. This is contrary to the wife’s own evidence – at paragraph 5 of her 1st affidavit she says that “We started living together in about mid1997, shortly before we were married” (emphasis supplied);
· At page 6, paragraph 7,of her Case Outline, reference is made to the contributions made by the parties. The wife neglects to mention the $141,000 mortgage attaching to her property at commencement of cohabitation, or the amount of $30,000 owing to her parents. She refers to the value of the property as at December 1997, rather than the true date of commencement of cohabitation. She neglects to mention that it has been agreed that the husband’s business was worth $125,000;
· At page 7 of her Case Outline, the statement is made (4th paragraph) that “The Wife was primarily responsible for household and domestic duties”. This is contrary to her own evidence (see paragraphs 121 & 122 of her 1st affidavit);
· At page 7 of her Case Outline (penultimate paragraph) the extraordinary statement is made that “The monies in the Wife receives from the orders made for property and financial settlement are likely to be all she has to survive on and to maintain herself, other than governmental assistance for the balance of her life”. The Court is referred to the Joint Chronology and to the references to the wife's activities since January 2010 ;
· At page 10 (last paragraph) of her Case Outline, the complaint is made that the husband has not paid spousal maintenance to the wife since April/May 2008. This rings hollow in the light of the massive spending spree that was embarked upon by the wife after separation in March 2008;
· At page 11 (middle paragraph) of her Case Outline, it is stated that the wife worked and supported the parties during the period of 4-5 years that the husband undertook studies. This is simply not correct. Besides being very involved in the renovation work, the husband did work and earn, as evidenced by his tax returns;
· At page 12 (Section 75(2)(o)) of her Case Outline, reference is made to the provisions of section 14 of the Limitations Act. Besides the fact that this has not been specifically pleaded, the fact is that cause of action only arose upon the sale of the [L] property;
· At page 2 of her Summary of Argument (stage 2), reference is made to the wife's “greater initial contributions”. This is factually incorrect.
The written submissions on behalf of the Wife
1.CONTRIBUTIONS PURSUANT TO SECTION 79(1) – (4)
Section 79(4) (a)
Financial contributions made directly or indirectly on, by or on behalf of a party to the acquisition, conservation or improvement of any property of the parties
·At the commencement of cohabitation in 1997 the Wife owned the [P] property purchased in 1995 for $257,500 (as per Transfer […]), co-owned a business with her parents, [AV Business] (W.11), a motor vehicle and savings (W.13) and personal effects (H.72).
·Report of single expert [Mr PY] values the [P] property at $425,000 as at 1 December 1997.
·At the commencement of cohabitation in 1997, the Husband owned an interest in real property in [H]; [the H Street] business; a motor vehicle; furniture and effects and superannuation (H.12).
·Report of single expert at [BD Valuers] values [4 H Street] at $380,000 as at March 1997. At that time the husband owned one half share in that property only, to the value of $190,000.
·The parties each worked and studied throughout their relationship and contributed their incomes derived therefrom for matrimonial purposes (The husband’s university fees were paid for from matrimonial funds whereas the wife has accrued a HECS liability).
Section 79(4) (b)
The contribution, (other than financial contributions) made directly or indirectly by or on behalf of a party to a marriage
·The Husband and Wife and their parents participated in the renovations that were undertaken on the property at [L].
·The Wife worked in the Husband’s [H Street] business (café) without payment and worked in the various businesses the parties conducted throughout the time of the relationship.
·The wife was primarily responsible for running the parties’ business whilst the husband was studying at university.
·The Wife carried out the supervision of the [L property] development and made payment associated with the development and accounting function for all the parties’ enterprises.
·The Wife was the primarily responsible for household and domestic duties.
Section 79(4) (c)
The contribution made by a party to the marriage to the welfare of the family and children of the marriage.
·The Husband contributed to the Wife’s child, [the wife’s daughter] by assisting the Wife who had her primary care (and [the daughter’s] Father and paternal grandparents).
·The Wife says the Husband’s contribution to the care of [the wife’s daughter] was minimal and she was mainly assisted by the maternal grandparents.
Section 79(4) (d)
The effect of any proposed order upon the earning capacity of each party to the marriage.
· The monies the Wife receives from the orders made for property and financial settlement are likely to be all she has to survive on and maintain herself, other than governmental assistance for the balance of her life. The Wife is aged 52 years and the Husband 42 years.
Section 79(4) (e)
These are matters referred to Sub Section 75(2) so far as they are relevant.
Section 79(4) (f)
Any order made under this Act affecting a party to the marriage or a child of the marriage.
·Not relevant.
Section 79(4) (g)
Any Child Support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage; and
·Not relevant.
THE WIFE’S CONTRIBUTIONS SHOULD BE ASSESSED AT 50%.
2.FACTORS TO BE CONSIDERED PURSUANT TO SECTION 75(2)
Section 75(2) (a)
The age and state of health of each of the parties;
·The Wife is aged 52 years and says she is not in good health.
·A single expert, Dr [BA], has been appointed by the Court to provide an assessment and report pertaining to the Wife’s emotional mental health issues.
·Dr [BA’s] report states that the Wife is suffering from mild to moderate depression, anxiety and suicidal ideation, which would have a significantly detrimental impact on her ability to meet the requirements of paid employment (paras 49-55).
Section 75(2) (b)
Parties’ income, property, financial resources and physical and mental capacity for appropriate gainful employment;
·These are contained in the parties’ Financial Statements filed herein.
·The Wife is aged 52 years and is not in good health. She is a full time student, currently working 2 days per week with a total average weekly income of $400.00.
·The Husband is aged 42 years and is in good health. He [has] a total average weekly income of $2,697.00. (He asserts his total personal expenditure at $2,576.00 including tax of $851.00 per week, food at $350.00 per week and entertainment, chattels of $300.00 per week and gifts of $100.00 per week, and says that he lives with his parents).
Section 75(2) (c)
Whether either party has the care or control of a child of the marriage under the age of 18 years;
·Not relevant.
Section 75(2) (d)
a)Parties’ commitments necessary to enable support of themselves and any child or person that the party has a duty to maintain;
·These are contained in the parties’ Financial Statements filed herein.
·The Wife continues to financially support her daughter […] (24) as she is a full time university student.
Section 75(2) (e)
The parties’ responsibilities to support any other person;
·The Wife has a responsibility to Support her daughter […] who lives with her until she has completed her university education.
Section 75(2) (f)
Subject to subsection (3) parties eligibility for a pension, allowance or benefit under any law of the Commonwealth, State or Territory or other country; any superannuation fund or scheme established or operated within or outside Australia;
·Not relevant.
Section 75(2) (g)
The parties’ standard of living that in all the circumstances is reasonable;
·The parties had and maintain a comfortable standard of living, which the final orders for property settlement should take into account.
Section 75(2) (h)
The extent to which maintenance payment (under consideration) would increase earning capacity;
·The Husband has not paid Spousal Maintenance to the Wife since April/May 2008 ($1,500.00 pf) and the Wife has not sought spousal maintenance on the basis of the Husband advising the Wife shortly after separation she could use the proceeds of sale of the property at [L2] to support herself. (W. 127-132).
Section 75(2) (j)
The extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party;
·Not relevant.
Section 75(2) (k)
The marriage duration and extent of affected earning capacity of the party whose maintenance is under consideration.
·The marriage and relationship was of about 10 year’s duration.
·The Wife worked and supported the parties during the period of 4-5 years that the Husband undertook studies which led to him acquiring the degree […] in 2007 and subsequently being employed by University [at] $140,000.00 plus per annum. The parties separated in March 2008 shortly after the Husband received his degree.
Section 75(2) (l)
The need to protect a party who wishes to continue role as a parent;
·Not relevant.
Section 75(2) (m)
If either party is cohabiting with another person – the financial circumstances relating to the cohabitation;
·The Wife is cohabiting with her daughter, […], who is a full time university student.
·The Husband says he is living with his mother and father but otherwise does not disclose the financial circumstances relating to the cohabitation.
Section 75(2) (n)
Terms of any order made or proposed under Section 79 (property);
·These are contained in the parties’ Application, Response and Notice of Intervention.
Section 75(2) (na)
Child support under the Child Support (Assessment) Act 1989 that a party has or is to provide;
·Not relevant.
Section 75(2) (o)
Facts or circumstance which, in the opinion of the Court, the justice of the case requires to be taken into account; and
·The provisions of S.14 of the Limitations Act 1969 (NSW).
Section 75(2) (p)
The terms of any financial agreement that is binding on the parties.
·Not relevant.
THERE SHOULD BE AN ADJUSTMENT IN FAVOUR OF THE WIFE IN THE AMOUNT OF 10%.
CONCLUSION:
THE WIFE SHOULD RECEIVE A SUM EQUATING TO 60%OF THE ASSETS.
SUMMARY OF ARGUMENT ON BEHALF OF THE RESPONDENT WIFE
The Wife incorporates into her submission her Case Outline Document filed herein.
Stage 1:
(1)There is an issue to what if any amounts should be ‘added back’ into the pool of assets, in particular:
·The sum of $346,242 removed by the Wife at or about the time of separation.
·The Wife says that some of that money was expended in accordance with an agreement she had with the Husband for her maintenance until this litigation concluded.
·The Wife further says she used other parts of that money for ordinary and reasonable expenses.
·The husband seeks total add-backs of $240,222.
(2)There is an issue as to whether or not loans the Husband and his parents allege were made by the parents to the parties totalling $223,769.72.
·The Wife says she has no knowledge of such loans.
·The Wife says she does not know how the monies said to have been loaned by the Husband’s parents were expended.
Stage 2:
The Wife submits that her contributions should be assessed at 50% as a result of:
· Her greater initial contributions.
· Her contributions during the relationship particularly during the time the Husband was engaged in full time study at […] which led to his securing his current employment [at the University].
Stage 3:
The Wife submits that there should be an adjustment in her favour of 10% as a result of her:
· Limited capacity to obtain employment in the future due to her psychological condition.
· The disparity between the parties’ financial circumstances.
· The Wife’s age.
Stage 4:
· The Wife submits that the orders sought by her are just and equitable in all the circumstances.
The submissions on behalf of the Interveners
It is submitted on behalf of the interveners that the evidence of the husband and his mother should be accepted and that the court should find that the wife knew at all relevant times that she and the husband borrowed the disputed moneys from the husband’s parents. In any event it is submitted that she must have known of the advances as she managed much of the family finances and she should have known that those advances were not by way of gift. It is submitted that the court should further find that she, with the husband, is responsible to repay those moneys. It is argued that the act of drawing a cheque in favour of the husband’s parents on 2 March 2008 was a concession that the advances were by way of loan. In those circumstances it is submitted that the wife bears the onus of establishing that the debt has been repaid - Young v Queensland Trustees Ltd (1956) 99 CLR 560, and she cannot discharge that onus.
The approach in proceedings under section 79
The case law reveals that there is a permissible approach to the determination of an application brought pursuant to the provisions of s 79. That approach involves four inter-related steps. First, findings are made as to the identity and value of the property, liabilities and financial resources of the husband and wife at the date of the hearing. Second, I can identify and assess the contributions of the husband and wife within the meaning of s 79(4)(a), (b) and (c) and determine the contribution based entitlements of the husband and wife expressed as a percentage of the net value of the property of the husband and wife. Third, I can identify and assess the relevant matters referred to in s 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 husband and wife established at step two. Fourth, I can consider the effect of those findings and determination and resolve what order is just and equitable in all the circumstances of the case. [2]
[2] This summary of the effect of the authorities is paraphrased from the comments of the Full Court in In the Marriage of Hickey (2003) 30 Fam LR 355 at 370
The wife’s HECS debt
There were no submissions about this amount but the Joint Balance Sheet contains two different figures. I will use the wife’s figure as she incurred the debt.
The liabilities are:
Liabilities Amount Loan from Husband’s parents – joint $223,769.72 Debt to parents for loan to pay tax paid from sale of business in 2001 – joint (with interest to 1 June 2010) $52,364 HECS Liability – wife $8,865 Total $284,998.72
Net assets
The net non-superannuation assets have a value of $1,445,227.67 ($1,730,226.39 - $284,998.72). The superannuation has a value of $211,952.26.
Financial Resources
The husband and wife had very substantial financial support from their parents. The support from the husband’s parents was in greater amount than that from the wife’s parents. There is no reason to suppose that support, at least by way of loans, would not be available in the future. However, no significance can be given to that finding as there is no evidence about the detail of the financial circumstances of the parents of the husband or the wife.
Otherwise, the husband and wife disclose no financial resources.
Contributions
The obligations placed on the Court by section 79 call for an assessment of the respective contributions of the husband and wife. The manner of assessing contributions has been the subject of previous decisions. The contributions of a parent and homemaker are to be assessed, not in any merely token way, but in terms of their true worth to the building up of the assets[5]. There are said to be risks in taking an overly technical approach to the assessment of the respective contributions of the husband and wife in that the Court can become involved in questions of the quality of contributions which go far beyond the real world expectations of husband and wife[6].
[5] Mallett v Mallett (1984) 9 Fam LR 449; In the Marriage of Ferraro (1992) 16 Fam LR 1
[6] In the Marriage of Shewring (1987) l2 Fam LR 139
As to whether the Court should apply the considerations in section 79(4) to the assets globally or asset by asset, the authorities have it the latter approach is preferred, in appropriate circumstances either approach is permissible and sometimes the asset by asset approach is best. See In the Marriage of Lenehan (1987) 11 Fam LR 615; In the Marriage of Norbis (1986) 10 Fam LR 819; FLC 91-712; In the Marriage of Zyk (1995) 19 Fam LR 797.
In the Marriage of Coghlan (2004) 33 Fam LR 414 the Full Court allowed that superannuation may be included in the list of property drawn up as “the first step” in the determination of proceedings under s 79, whether or not a splitting order is sought in those proceedings. The Full Court suggests that that:
“… approach could be adopted where the parties agree that it should be adopted, or where the court is satisfied that the superannuation interest is indeed property within the meaning of the definition of property contained in s 4(1), or if the interest is not within that definition, but is of relatively small value in the context of the value of the other assets in the case, or there are features about the interest which leads the court to conclude that this would be an appropriate approach.”
Here the case has been argued on a global basis. Notwithstanding that the husband and wife agree that there should be a splitting order but seek a different basis for the split, it is agreed that by way of splitting order I can providing for a division of the superannuation interests in the same proportion as the ultimate division of property between those parties.
I will deal with the assets in a global way.
Contributions
Section 79(4)(a) Contributions
Financial contributions, both direct and indirect were made by each of the husband and wife.
Because I cannot resolve the question of the commencement of cohabitation it is difficult to make a finding about the balance of contributions at that time. After hearing cross-examination, the range of dispute is between late 1996 and mid 1997. The husband’s initial contributions amounted to $315,000 made up of his interest in the H Street property and the business. On the other hand the wife had her interest in AV Company which later realised $20,000 and in the P property she bought for $257,500 and which by 1 December 1997 had a value of $425,000. The wife owed $141,000 on that property. On those facts it is not possible to make a finding about the proportions in which the parties made initial contributions.
Both parties had paid employment and contributed their income to joint expenses and acquisitions. The husband’s taxable income was greater than that of the wife but paradoxically, in most years she earned more than him. In the last few years of the marriage the husband held University positions and his income was much higher than that of the wife. The wife says that in addition to her taxable income, over the years 1980 to 2003 her father gave her $30,000 per annum from the income of AV Company. It is her evidence that her father paid the tax on that income as a way of providing support to his daughter, who was a single mother. It is the wife’s evidence that the gift of $30,000 was paid largely in the form of the direct payment of her daughter’s education expenses but by way of some cash payments. There is no documentation in relation to the gifts. In a sense it does not matter greatly as expenditure on the wife’s daughter is not, strictly speaking, expenditure on a child of the marriage. A problem with the wife’s evidence about this is that her taxable income for many years includes income from AV Company. For example in the 1997 income tax year she declared $4,408 from AV Company. In 1998 it was $1,923; in 1999 $2,409; in 2000 $3,150; and in 2001 $6,503. She declared no AV Company income in 2002 or 2003. This makes no sense of her evidence that her father paid the tax on her AV Company income and passed $30,000 per annum to her – tax free. I raised this in the course of the wife’s cross-examination by learned counsel for husband. My recollection is that the wife then offered to explain but the issue was invited to do so by any counsel. In those circumstances I cannot reject the wife’s case on this point. I am left with the following evidence – throughout the period of cohabitation until 2003 the wife received payments related to her interest in AV Company which averaged $30,000 net of tax and most if not all of that money was applied to her daughter’s expenses.
In addition to the AV Company moneys, the husband and wife were assisted financially by the parents on both sides (and also by the husband’s brothers). All the amounts provided by the parents and the husband’s brothers were repaid to them, save for a total amount of $275,645 ($223,770 + $51,875) to the husband's parents. I have found that the latter amounts should be repaid.
Albeit not of the same import as a gift in a similar amount there was a direct contribution from the families of the husband and wife to the extent that loans did not attract interest or attracted interest at less than market rates. More money was lent on behalf of the husband than on behalf of the wife.
The husband’s business provided support to the marriage and the financial contributions to the various projects, P, H and L properties contributed to the return to the parties.
The increase in the husband's superannuation entitlements since separation is largely attributable to salary sacrifices made by the husband, and constitutes a contribution solely by him.
The argument on behalf of the wife is the contributions were equal. The wife came into the marriage with the P property purchased in 1995 for $257,500. She co-owned a business with her parents, AV Company and owned a motor vehicle, savings and personal effects. The wife owed $141,000 on the P property. It is submitted for the wife that she and the husband each worked and studied throughout their relationship and contributed their incomes derived therefrom for matrimonial purposes. The wife notes that the husband’s university fees were paid from matrimonial funds whereas she has accrued a HECS liability. However, the wife’s HECS debt is included in the list of liabilities. Therefore it too is being met from joint funds.
Section 79(4)(b) contributions
This provision deals with direct and indirect non-financial contributions other than those made in the form of parent and homemaker contributions.
Non-financial contributions were made by and on behalf of both parties.
The parties both worked in businesses. More of that work was done by and on behalf of the husband than by and on behalf of the wife. The husband's parents worked in the H Street business without wages. His father worked for seven years (1992-1999) in the businesses five days a week (10 hours per day). His mother worked for four years (1992-1996) in the businesses one day a week. The husband's parents looked after the business when the husband and wife were on an annual leave. Those contributions must be taken into account but there can be no finding as to their precise value. There is no evidence, for example, on the basis of which I could find that it was necessary that that work be done, or if so, of the wages foregone or saved through the efforts of the husband’s parents.
In relation to two lots of renovations to the P property, the wife worked closely with the builder and gave the builders directions for the work. The wife sourced and purchased all of the building materials for those renovations. That is the unchallenged evidence of the two builders.
It is submitted for the wife that she and the husband and their parents participated in the renovations that were undertaken on the property at L. The wife worked in the husband’s business (in the café) without payment and worked in the various businesses the parties conducted throughout the time of the relationship. The wife was primarily responsible for running the parties’ business whilst the husband was studying at university. The wife undertook the accounting function for all the parties’ enterprises. The husband was able to, and did, make a substantial contribution to the renovation and maintenance of the various properties. The husband’s parents also helped with renovation work.
Since separation the wife lived rent free in the former matrimonial home. Although the husband also lived rent free, the wife’s period in the L property was a contribution by him. Each of the parties permitted others rent-free accommodation.
Section 79(4)(c) contributions
This provision deals with contributions to the family including contributions in the form of homemaker contributions and contributions to children of the marriage.
Contributions were made by the parties to the wife’s daughter.
Contributions to children who are not the children of both parties to a marriage, cannot be recognised under section 79(4)(c). In the Marriage of Robb (1994)18 Fam LR 489 the Full Court dealt with that interpretations made by Mullane J at first instance. The Full Court said at p 500:
This construction is, in our view, placed beyond doubt by his Honour's opening statement in relation to ``Contributions To Property And To The Welfare of The Family'’ (Paras (a), (b) and (c) of subs 79(4) of the Family Law Act) where he said:
For the purposes of subs 79(4)(c) the family does not include the children K and B of the wife's previous marriage as they are not within the usual meaning of the expression, ``children of the marriage'’, used in that paragraph. (See the Full Court of the Family Court of Australia in In the Marriage of Mehmet (1986) 11 Fam LR 322 ; [1987] FLC 91-801 but cf Cohen J in In the Marriage of Molen (1992) 16 Fam LR 203 ; [1993] FLC 92/2-344 at Fam LR 205-6 FLC 76,649/2-50).
`Thus, we do not think that his Honour fell into the error of double counting in respect of the husband's contribution to the welfare of B and K and ground 8 is therefore not made out.
In relation to ground 4, just as the husband's contribution to the welfare (including the financial support) of the wife's children of her former marriage, for the reasons given by his Honour in the passage from his judgment last quoted (with which we agree), could not be taken into account as a contribution by him under s 79(4)(c), so too the wife's contribution to the welfare of those children could not be taken into account on that basis. However, as his Honour did (in our view correctly) take the husband's contribution to those children into account under s 75(2)(o), the question arises whether he should have taken the wife's contribution to the welfare of those children into account also, under that paragraph of s 75(2). This raises the question whether the fact that a party to a marriage contributes during that marriage to the welfare of his or her own children of a prior marriage is a fact or circumstance which the justice of the case requires to be taken into account in that party's favour, at least, in circumstances where the other party's contribution to that welfare has been taken into account as a fact or circumstance in that party's favour.
In considering whether the justice of a case requires some act done by a party to be taken into account under s 75(2)(o), the court should, we think, have regard primarily to the existence or otherwise of any legal obligations, as between the parties, in relation to the doing of that act, and also, perhaps, to ordinary notions of justice and equity between the parties.
In this case, the wife had a legal duty to maintain the children of her prior marriage, which duty had primacy over the duty of any other person, other than the children's father, to so maintain them: ss 66a and 66b of the Act. The husband, on the other hand, had no legal duty to maintain these children at any time during the marriage because, by s 66g, a step-parent has such a duty only if he or she is a guardian of the child, or has custody of the child by an order of a court, or a court having jurisdiction under Pt VII of the Act by order determines that it is proper for the step-parent to have that duty. None of those pre-conditions existed in this case.
Accordingly, in contributing to the support of these children the wife was merely honouring a legal obligation which she owed to the children, whilst the husband, in making his contribution, was acting essentially as a volunteer assisting the wife in the discharge of her legal obligations. Upon that basis, whilst we consider the justice of the case clearly required the husband's contribution to be taken into account under s 75(2)(o), the same cannot be said of the wife's contribution. In making that contribution the wife was in no way discharging or assisting to discharge any legal obligation of the husband.
Turning, then, to ordinary notions of justice and equity, we are of the view that such notions do not call for any allowance to be made in the wife's favour, in the property proceedings between the husband and wife, because she honoured her legal obligation to maintain her own children of a prior marriage. We believe that a failure to make such an allowance would not offend the ordinary reasonable man or woman's notions of justice.
In our view, therefore, his Honour did not err in failing to give any weight to the wife's contributions to the welfare of her own pre-marital children.
Thus the only relevant contributions made to the wife’s daughter are those of the husband and will be addressed under section 75(2)(o) later in these reasons.
The wife says that she was primarily responsible for household and domestic duties.
Conclusion on Contribution
In summary it is argued on behalf of the husband that his contributions represented more than 60% and the wife’s – less than 40%. The argument on behalf of the wife is the contributions were equal.
The facts support the finding that the husband’s contributions were greater than those of the wife. His financial contributions were greater than those by and on behalf of the wife and his non financial contributions were also greater than hers. It is not possible to make a differential finding about the homemaker contributions of the parties. Contributions were made over a substantial period and care is needed not to exaggerate the differences in contributions in the context of the property pool. The difference would be properly recognised by a finding that the husband’s contributions were 55% compared to 45% by the wife. In the context of this case that creates a difference between the husband and wife of about $140,000.
The other matters in Section 79
Once contributions have been assessed, the other factors in section 79(4) need to be considered. They are:
Section 79(4) (d)
Pursuant to s 79(4)(d) I am required to take into account the effect of any proposed orders on the earning capacities of the husband and wife. There is no relevant effect.
Section 79(4)(e) - Section 75(2) Factors
The relevant matters in Section 75(2) would seem to be paragraphs (a), b), (d), (f), (k), (m) and (o).
(a) the age and state of health of each of the husband and wife;
The husband and wife are 43 and 53 years of age respectively. When the wife discovered the husband’s infidelity, she suffered weight loss. In November 2008 she consulted Psychologist Mr LD in relation to a sense of abandonment by the husband. Her General Practitioner monitors her health. She feels depressed and unsettled. She is treated with Citalopram for depression and Imovane for insomnia. The single expert Dr BA is a Clinical Psychologist. He says the wife reported suicidal thoughts and that her academic grades suffered. Dr BA says that the wife’s behaviours are consistent with mild to moderate symptoms of depression. In diagnostic terms he opines that they would be represent a Moderate Adjustment Disorder or differentially, a Major Depressive Disorder. With therapy and possibly pharmaceutical treatment, Dr BA says there is generally a positive diagnosis within 12 – 18 months.
There is no authoritative evidence about the health of the husband.
(b) the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment;
The husband receives $2,697 per week in the form of his salary from the University. According to his Financial Statement he lives alone. That is not true. It transpired in the course of his cross-examination that:-
the husband variously lives with his parents, his brother and Ms T;
he mainly lived with his parents but is in the process of moving to his brother’s house;
he often stays at Ms T’s home but there is no regular pattern. He stayed there on the night of 31 May 2010 and he stayed for about 7 consecutive nights in November 2009;
he does not contribute to rent or board or mortgages in any house. In Ms T’s household he sometimes buys groceries and pays for restaurant meals.
The husband spends $2,576 per week made up as follows:
Expense
Amount
Income tax
$851.00
Superannuation contributions - Unisuper
$517.00
Motor vehicle registration Toyota Kluger
$88.00
Other expenses.
$1,120.00
Food
$350.00
Telephone
$12.00
Petrol
$0
Car maintenance
$0
Fares and car parking
$20.00
Clothing and shoes
$100.00
Medical dental and optical
$0
Entertainment hobbies
$300.00
Holidays
$120.00
Chemist pharmaceuticals
$10.00
Dry cleaning
$30.00
Books and magazines
$20.00
Gifts
$100.00
Hairdressing, toiletries
$50.00
Gym membership
$18.00
Sub-total
$1130.00
Total
$2,576.00
There is no suggestion that the husband is not exercising his earning capacity.
The evidence about his assets and liabilities is addressed above.
The wife’s income is $577 per week, made up of her salary of $400 at W Facility and $177 in interest on the proceeds of sale of the L property. She lives with her daughter, who earns $185 per week. The wife receives financial help from her parents for living expenses and remarkably, $500 per week, towards vehicle repairs. The wife’s Financial Statement makes no other reference to a debt for vehicle repairs. Perhaps the $500 was a one-off payment.
The wife’s expenditure is as follows:
Expense
Amount
Income tax
Not known
Rent
$630.00
Health Insurance – Medibank Private
$17.00
Motor vehicle registration Holden Astra
$27.00
Furniture storage
$58.00
Visa and American Express payments
$150.00
Other expenses.
$443.00
Food
$100.00
House supplies
$50.00
Electricity
$23.00
Telephone
$39.00
Petrol
$40.00
Car maintenance
$10.00
Clothing and shoes
$80.00
Medical dental and optical
$25.00
Holidays
$20.00
Education expenses
$28.00
Books and magazines
$3.00
Gifts
$10.00
Hairdressing, toiletries
$15.00
Sub-total
$443.00
Total
$1325.00
The wife assesses that of her living expenses, $50.00 is applied to her daughter’s costs. Evidence about the wife’s assets and liabilities is set out earlier in these reasons.
There is an issue about whether the wife is fully exercising her earning capacity. She is completing teaching qualifications but Dr BA is not sanguine about her taking up any paid employment. Dr BA thought that as a result of ongoing therapeutic support and the resolution of these proceedings there was a possibility that part time employment would be beneficial to the wife, to re-establish herself professionally and within a greater social context. After seeing Dr VA the wife did take up her present position of part time employment. Nevertheless, Dr BA’s report would not engender optimism for the wife embarking on a new teaching career. Dr BA thought that rather a general teaching position the wife might be better suited to teaching in an area in which she has prior experience.
(c) whether either party has the care or control of a child of the marriage who has not attained the age of 18 years;
There are no children of the marriage. The wife’s daughter is over 18 years of age.
(d) commitments of each of the parties that are necessary to enable the party to support:
himself or herself; and
a child or another person that the party has a duty to maintain;
(e) the responsibilities of either party to support any other person;
I have set out the evidence in relation to the parties’ expenses.
(f) subject to subsection (3), the eligibility of either party for a pension, allowance or benefit under:
any law of the Commonwealth, of a State or Territory or of another country; or
any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia,
and the rate of any such pension, allowance or benefit being paid to either party;
Neither the husband nor the wife receives a Centrelink benefit. They have interests in superannuation funds and both seek a splitting order in relation to the husband’s interest.
(g) where the parties have separated or the marriage has been dissolved, a standard of living that in all the circumstances is reasonable;
There is some evidence in relation to the standard of living of the parties during the marriage. The wife gives evidence about regular overseas travel and her attention to her sport of snowboarding. Indeed the husband and wife were in Japan in early 2008, just before the separation.
(h) the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income;
The wife was due to complete her teaching Diploma in the month following the hearing. Otherwise there is no evidence of either of the parties planning further study or intending to set up in a new business.
(ha) the effect of any proposed order on the ability of a creditor of a party to recover the creditor’s debt, so far as that effect is relevant;
I intend the address the claim of the husband’s parents directly. Otherwise this is not a significant aspect of the case.
(j) the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party;
There is no application for maintenance.
(k) the duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration;
In 2000 the wife completed an MYOB course which equipped her to undertake accounting tasks for the H Street business and for U Pty Ltd. The wife resumed studies in 2005 with a Bachelor of Arts course. Those studies were interrupted in 2008 but were completed in January 2010.
Between 1999 and 2006 the husband undertook studies for a Masters and then a Doctorate. The formal requirements were largely out of hours. Those studies lead directly to his current University position.
(l) the need to protect a party who wishes to continue that party's role as a parent;
This is not relevant.
(m) if either party is cohabiting with another person — the financial circumstances relating to the cohabitation;
I have set out what there is of that evidence, above.
(n) the terms of any order made or proposed to be made under section 79 in relation to the property of the parties;
(na) any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage; and
There is no child support.
(o) any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account;
Only the husband’s contributions to the wife’s daughter are relevant[7]. The husband contributed to the wife’s child by assisting the wife who had her primary care. The wife says the husband’s contribution to the care of the wife’s daughter was minimal and she was mainly assisted by the maternal grandparents.
[7] In the Marriage of Robb (1994) above
I accept that the husband in effect stood in loco parentis for the child’s father. He helped take care of the wife’s daughter both financially and as a father-figure, and played a significant role in her upbringing. The evidence about the personal aspects of that role is scant but it is clear that the husband housed the child and made a direct and indirect financial contribution to her.
Care is needed not to double count contributions. I have already given the parties credit for their financial contributions by way of capital and income. Those contributions, such as the application of the husband’s income, cannot be counted again, save to record that in relation to the wife’s daughter, they were in effect contributions made for the sole benefit of the wife.
I hasten to say, no doubt the wife’s daughter was an integral member of the family, loved and cared for by the husband and wife. The approach cited with approval from Robb and Robb nevertheless requires credit to the husband for those contributions.
Otherwise nothing comes to attention here.
(p) the terms of any financial agreement that is binding on the parties.
There was no binding agreement made between the parties.
Section 79(4)(f)
There are no other relevant orders made under the Family Law Act 1975.
Section 79(4)(g)
There is no child support.
Conclusion
It is agreed that there should be an adjustment in favour of the wife. The husband argues for a 7.5% adjustment and the wife for a 10% adjustment.
The relevant matters arising from the remaining elements of s 79, which include the s 75(2) factors referred to above are:
ØThe husband is 10 years younger than the wife;
ØThe wife’s health is compromised;
ØThe husband is likely to remain in the paid workforce longer than the wife but independent of that fact, the husband has a greater earning capacity than the wife;
Øboth parties can expect financial support from their parents but on the basis of the past, it is likely that the husband will benefit to a greater extent than the wife; and
ØThe division based on contribution alone, would leave the husband with a greater share of the property; and
The dispute on this issue is within the margin of discretion but given that all of the factors favour an adjustment, and given the difference between the parties’ earning capacities and their ages, the wife’s claim is more realistic. I will make an adjustment of 10% in favour of the wife.
Just and Equitable
The net non-superannuation assets have a value of $1,445,227.67 ($1,730,226.39 - $284,998.72). There will be additional interest on one of the loans from the husband’s parents. I will provide for a payment by 13 July 2010 and will include an additional $489 for that interest. Thus the net non-superannuation assets have a value of $1,444,738.67 ($1,730,226.39 - $285.487.72). The superannuation has a value of $211,952.26.
A division in the proportions 55% to the wife and 45% to the husband would leave the wife with net non-superannuation assets of about $794,606 and superannuation assets of about $116,574. The husband would have net non-superannuation assets of about $650,132 and superannuation assets of about $95,378.
Framing the Orders
The husband seeks that the items of personalty formerly housed at L be divided equally. The wife seeks that she retain those items. No submissions were made in relation to this issue. For convenience I will leave the items with the wife. The husband and wife would be free to reach some other accommodation in respect of those items.
The wife has had or has the benefit of:
Assets
Value
Furniture in L property - joint
$10,000
Motor vehicle – Holden Astra - wife
$20,000
Telstra shares– wife
$1,525
CBA Account & ANZ Account - wife
$1,800
Add back agreed distribution from L property proceeds to Wife
$200,014
Add back - Moneys from ANZ Joint Account - wife
$159,332
Add back - Interest earned on ANZ moneys - wife
$11,744
Add back - Moneys taken by Wife from account of V Pty Ltd - wife
$30,589.89
Add back - Moneys taken from Husband’s CBA account by Wife - wife
$3,963
Add back - Half of the invoices in relation to the Single Experts Mr BK, Mr PY, BD Valuers, Dr BA - wife
$4,477.50
HECS Liability – wife
-$8,865
Total
$434,580.39
In order to bring her to 55% of the non-superannuation assets she should receive about $360,026 from the funds held on trust.
That would leave the husband with:
Assets
Value
Tools and equipment – husband
$5,000
Telstra shares– husband
$1,525
CBA Account – husband
$1,650
Add back agreed distribution from L property proceeds to Husband
$200,014
Balance of funds held on trust
$441,943
Total
$650,132.00
I note that I do not need to deal with any interest on the funds held on trust as the existing orders require that the interest be divided equally.
As to the superannuation, the parties have the following interests:
Superannuation
Value
UniSuper – husband
$188,915.92
M Super – wife
$ 23,036.34
Total
$211,952.26
A division in the proportions 55% to the wife and 45% to the husband would leave the wife with superannuation interests of about $116,574 and the husband of about $95,378. I will order a split of the husband’s superannuation interests in the wife’s favour with a base amount of $93,538.
In my view those orders represent a just and equitable settlement of the parties’ property.
Conclusion under Section 79
This was a marriage involving 10 years cohabitation and very significant contributions by each of the parties. They acquired assets and supported each other and the wife’s daughter. The parties shared the work of the family in different ways but overall the contributions slightly favoured the husband. An adjustment is required in the wife’s favour by reference to the non-contribution aspects of Section 79(4). The husband’s parents’ claim of a loan, insofar at is was said to be a loan made to the wife, must fail. However, they are entitled to be repaid for moneys lent by them to the husband.
I certify that the preceding two hundred and twenty six (226) paragraphs are a true copy of the reasons for judgment of Judicial Registrar Ian Loughnan.
Associate:
Date: 6 July 2010
Key Legal Topics
Areas of Law
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Family Law
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Equity & Trusts
Legal Concepts
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Remedies
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Constructive Trust
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Jurisdiction
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Procedural Fairness
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