Lanik & Lanik
[2025] FedCFamC1F 100
•24 February 2025
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
FIRST INSTANCE
Lanik & Lanik [2025] FedCFamC1F 100
File number: BRC 10857 of 2023 Judgment of: CAREW J Date of judgment: 24 February 2025 Catchwords: FAMILY LAW – PROPERTY SETTLEMENT – Where it is just and equitable to make an order – Whether the husbands contributions should be given greater weight – Whether there should be an adjustment in the husband’s favour pursuant to s 75(2) of the Family Law Act 1975 (Cth) – Where both the husband and wife seek add backs – Where the husband seeks to diminish the contributions of the wife – Where property and superannuation will be divided equally Legislation: Family Law Act 1975 (Cth) ss 75(2), 79(1), 79(2), 79(4), 90XT(1)(a), 106A
Family Law (Superannuation) Regulations 2001 (Cth) pt 6
Cases cited: C & C [1998] FamCA 143
McKenzie v McKenzie [1970] 3 All ER 1034
NHC and RCH (2004) FLC 93-204
Stanford v Standford (2012) 247 CLR 108
Number of paragraphs: 61 Date of hearing: 17 – 18 February 2025 Place: Brisbane Counsel for the Applicant: Mr Linklater-Steele Solicitor for the Applicant: Biggs Fitzgerald Pike Solicitor for the Respondent: Litigant in person
Table of Corrections 25 February 2025 In paragraph 59, a reference to a superannuation split of “$53,177” has been corrected to the figure of “$51,926.50”. ORDER
BRC 10857 of 2023 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS LANIK
Applicant
AND: MR LANIK
Respondent
ORDER MADE BY:
CAREW J
DATE OF ORDER:
24 FEBRUARY 2025 Amended 25 February 2025
THE COURT ORDERS THAT:
Transfer of Former Matrimonial Home
1.Within 30 days of the date of this Order (“the settlement date”), the husband and wife do all acts and sign all documents as are necessary to transfer to the husband (at the expense of the husband), all of the wife’s right, title and interest in the real property situated at B Street, Suburb C in the State of Queensland more particularly described as Lot … on RP… having Title Reference … (“the former matrimonial home”).
2.In consideration and exchange for the transfer referred to in paragraph 1 of this Order, the husband shall:
(a)Do all acts and things and sign such documents necessary to procure the wife’s release from any liability or claim of the mortgagee (the Commonwealth Bank of Australia (“Commonwealth Bank”)) in respect of the loan and mortgage entered into between the Commonwealth Bank as mortgagee and the husband and wife as mortgagors and which is secured over the former matrimonial home; and
(b)Pay to the wife (by way of payment to Biggs Fitzgerald Pike Solicitors Trust Account) the sum of $356,034.10.
3.To complete the transfer by the wife and the payment by the husband the following shall apply:
(a)Settlement will take place on the settlement date;
(b)The transfer documentation will be prepared by the husband and delivered to the wife (via her solicitors) for her execution no later than 14 days prior to the settlement date;
(c)Settlement will occur by way of electronic conveyance and:
(i)The wife will sign and deliver the transfer documentation to the husband no later than 7 days prior to the settlement date;
(ii)Each party will instruct their legal representative to do all acts and things and sign all documents necessary to give effect to the settlement via the electronic conveyancing platform, Property Exchange Australia Ltd (“PEXA”);
(iii)If either party is self-represented at any time, that party will instruct a subscriber to PEXA for the purposes of the settlement and will meet their costs of instructing a practitioner; and
(iv)The parties will pay their own PEXA fees.
(d)In relation to the release of the mortgage:
(i)Each party do all acts and things to sign an authority and any other document required by the mortgagee to release the mortgage (“the release documents”); and
(ii)Each party sign and provide the release documents to the mortgagee in such timeframe necessary to enable the said release to occur on or by the settlement date.
Sale of former matrimonial home in the event of default
4.In the event of the husband’s failure to comply with the obligations in paragraphs 2(a) and/or 2(b) of this Order (“the Date of Default”), the husband and wife shall do all acts and things and sign all necessary documents to effect the sale of the former matrimonial home and for that purpose the following shall apply:
(a)Within 14 days of the Date of Default, the former matrimonial home shall be listed for sale by private treaty with such real estate agent (“the agent”) as is agreed between the parties and failing agreement within 7 days from the Date of Default, the agent will be nominated by the Chief Executive Officer of the Real Estate Institute of Queensland at the request of the parties or either of them (with the costs of and incidental to such appointment to be borne equally by the parties); and
(b)The list price for the former matrimonial home shall be such amount as is agreed between the parties and failing agreement within 14 days of this paragraph becoming operative, be the price nominated by the agent.
5.The parties shall cooperate in every way with the agent in relation to the marketing of the former matrimonial home for sale including (without limiting the generality of the foregoing):
(a)Making keys and access devices to the former matrimonial home available to the agent.
(b)Allowing inspections of the former matrimonial home at all times reasonably requested by the agent;
(c)Following the advice of the agent in relation to the marketing and presentation of the former matrimonial home for sale;
(d)Ensuring that all forms of advertising (including “for sale” signs) are displayed and not removed during the period the former matrimonial home is listed for sale;
(e)Not doing or saying anything to hinder or prevent a sale from being effected;
(f)Ensuring that the former matrimonial home (including the grounds and any surrounding structures) is clean, neat and in good order at all times of inspection by the agent and prospective purchasers; and
(g)Signing all documents requested by the agent in relation to the listing for sale of the former matrimonial home (except a contract for sale which has not been authorised by the parties/or the solicitors who act for the parties).
6.The sale price of the former matrimonial home shall be such amount as is agreed between the parties and failing agreement any offer to purchase the former matrimonial home that is at least 95 per cent of the list price shall be accepted by the parties as the sale price.
7.Upon agreement being reached for the sale of the former matrimonial home or acceptance pursuant to paragraph 6 of this Order, the parties shall execute the contract of sale and all other documents necessary to complete the sale of the former matrimonial home including but not restricted to all transfer documentation forthwith upon its submission to them.
8.In the event that a contract for the sale of the former matrimonial home has not been entered into within 60 days from the Date of Default, then the husband and wife shall do all acts and sign all documents as are necessary to sell the former matrimonial home by auction and the following shall apply:
(a)Unless otherwise agreed between the parties the former matrimonial home shall be listed with the agent appointed under paragraph 4(a) of this Order for sale by auction within a further 6 weeks of the Date of Default. The auctioneer shall be appointed by the agent;
(b)The parties shall execute all documents requested by the auctioneer for sale of the former matrimonial home by auction;
(c)The reserve price of the former matrimonial home shall be such amount as is agreed between the parties and failing agreement being reached between the parties 21 days prior to the auction, then the reserve price shall be the price nominated as the fair market value by a valuer from D Valuers (with the costs of and incidental to the valuation to be borne equally by the parties);
(d)The parties shall each pay to the auctioneer one half of any sums requested for advertising or auction expenses prior to the auction and if one of the parties pays all of the expenses, that party shall be reimbursed from the proceeds of sale in respect of one half of such payments before any division of the sale proceeds between the parties;
(e)The parties shall cooperate in every way with the auctioneer in relation to the sale by auction including:
(i)Making keys and access devices to the former matrimonial home available to the auctioneer;
(ii)Allowing inspections of the former matrimonial home at all times reasonably requested by the auctioneer;
(iii)Following advice of the auctioneer in relation to the marketing and presentation of the former matrimonial home for sale;
(iv)Ensuring that all forms of advertising (including “for sale” signs) are displayed and not removed during the period the former matrimonial home is listed for sale;
(v)Not doing or saying anything to hinder or prevent a sale from being effected;
(vi)Ensuring that the former matrimonial home (including the grounds and any surrounding structures) is clean, neat and in good order at the time of inspection by the auctioneer and prospective purchasers including on the day of auction;
(vii)Signing all documents requested by the auctioneer in relation to the listing for sale of the former matrimonial home by auction (except a contract for sale which has not been authorised by the parties/or the solicitors who act for the parties); and
(viii)The parties shall attend at the auction (either in person, via telephone or electronically) and negotiate with the highest bidder in the event of the reserve price not being reached.
(f)The sale price of the former matrimonial home shall be any amount in excess of the reserve price but in the event of the reserve price not being reached the sale price of the former matrimonial home shall be such amount as is agreed between the parties or failing agreement any offer received after the auction to buy the former matrimonial home at a price that is at least 95 per cent of the reserve price shall be accepted by the parties; and
(g)Upon agreement being reached for the sale of the former matrimonial home the parties shall execute the contract of sale and all other documents necessary to complete the sale of the former matrimonial home including but not restricted to all transfer documentation forthwith upon its submission to them.
9.In the event that the former matrimonial home is not sold at the auction or within 14 days after the date of the auction by further negotiation, then the husband and wife shall cause a further auction of the former matrimonial home to be held within 6 weeks after the date of the first auction, with such auction to be conducted in accordance with paragraph 8 of this Order.
Payment of outgoings on former matrimonial home
10.From the date of this Order, the husband shall pay and be responsible for and indemnify the wife and keep her indemnified in relation to the following payments as and when such payments fall due:
(a)Loan repayments to the Commonwealth Bank in relation to the loan to the parties secured by way of registered mortgage over the former matrimonial home; and
(b)Council rates, water rates, insurances and any other outgoings with respect to the former matrimonial home.
Distribution of sale proceeds
11.Upon the settlement of the sale of the former matrimonial home the sale proceeds be paid in the following manner and order of priority:
(a)In payment of agent’s commission, advertising and auction costs (if any) and the legal costs of sale;
(b)In payment of the loan to the husband and wife from the Commonwealth Bank secured by way of registered mortgage over the former matrimonial home;
(c)In payment to the wife of the sum calculated in accordance with the following formula:
(i)Wife’s settlement = (50 per cent x A) – B;
(ii)Where A = the pool of assets referred to in paragraph 12 of this Order;
(iii)Where B =
$82,870.39$96,560.41 being the net value of the assets to be retained by the wife referred to in paragraphs 14, 15 and 156 of this Order; and
(d)In payment to the husband of the balance sale proceeds of the former matrimonial home.
12.For the purposes of paragraph 11 of this Order, the pool of assets shall be as set out in the following table:
Description Owner Value Real Estate The former matrimonial home (net sale proceeds) Joint To be calculated upon sale Motor Vehicles Motor Vehicle 1 Wife $28,650 Motor Vehicle 2 Husband $10,000 Bank Accounts E Bank “…” Account Wife $676 E Bank “…” Account Wife $1,309 Commonwealth Bank Account ending …94 Husband $0 Business/Trust F Pty Ltd Husband $28,500 Lanik Trust (“the Lanik Trust”) (balance sale proceeds of G Street, City H (“the G Street property”) held in Biggs Fitzgerald Pike Trust Account) Joint $30,937.77 Add backs Interim distribution from Biggs Fitzgerald Pike Solicitors Trust Account (sale proceeds of the G Street property – the Lanik Trust) Wife $55,937.77 Interim distribution from Biggs Fitzgerald Pike Solicitors Trust Account (sale proceeds of the G Street property – the Lanik Trust) Husband $25,000 Funds withdrawn from the Commonwealth Bank Home Loan between January 2020 and August 2022 Husband $69,128.60 Liabilities Australian Tax Office (“ATO”) HELP Liability Joint
Wife($9,265.98) Tax liability arising from requirement to amend 2022 tax return (to include 50 per cent share of capital gain on sale of the G Street property) Wife ($11,684.15) TOTAL To be calculated following the sale of the former matrimonial home Other property to be retained
13.The wife shall transfer to the husband (if necessary) and the husband shall retain for his sole use and benefit absolutely the following:
(a)Motor Vehicle 2 in the husband’s possession;
(b)Any interest held by the wife in F Pty Ltd;
(c)Interim distribution from Biggs Fitzgerald Pike Solicitors Trust Account in the sum of $25,000;
(d)Funds withdrawn from the Commonwealth Bank Home Loan by the husband between January 2020 and August 2022; and
(e)Funds standing to the credit of all bank accounts held solely in the name of the husband.
14.The husband shall transfer to the wife (if necessary) and the wife shall retain for her sole use and benefit absolutely the following:
(a)Motor Vehicle 1 motor vehicle in the wife’s possession;
(b)Interim distribution from Biggs Fitzgerald Pike Solicitors Trust Account in the sum of $55,937.77; and
(c)Monies standing to the credit of the wife’s E Bank accounts.
Wife’s liabilities
15.The wife shall be solely responsible for the following:
(a)The wife’s ATO HELP liability in the amount of $22,956 ($9,265.98 of which has been included in the table at paragraph 12 of this Order) and the wife indemnify the husband and keep him indemnified in relation to such liability; and
(b)The wife’s taxation liability arising from the requirement to amend her 2022 income tax return to include 50 per cent of the capital gain on the sale of the G Street property owned by the Lanik Trust (calculated at $11,684.15), and the wife indemnify the husband and keep him indemnified in relation to such liability, provided the husband complies with the obligation in paragraph 19 of this Order.
Balance in Biggs Fitzgerald Pike Solicitors Trust Account
16.Within 7 days of the date of this Order, the husband, in his capacity as Trustee and/or Principal of the Lanik Trust, shall do all acts and things and sign all documents as may be necessary to cause the whole of the sale proceeds of the G Street property (in the sum of $30,937.77) currently held in the Biggs Fitzgerald Pike Solicitors Trust Account to be paid to the wife in reduction of the wife’s unpaid present entitlements held in the Lanik Trust (and this Order constitutes sufficient authority of the husband to Biggs Fitzgerald Pike Solicitors to make such payment to the wife from the sale proceeds held in their Trust Account).
Wife’s obligations
17.Within 30 days of the date of this Order, the wife shall do all acts and things and sign all documents (prepared by or on behalf of the husband at his expense) necessary to:
(a)Transfer to the husband any right, title to or interest held by the wife in:
(i)F Pty Ltd; and
(ii)The Lanik Trust.
(hereinafter collectively called the “Lanik entities”).
(b)Resign as a Director and from any other office held by the wife in the Lanik entities;
(c)If called upon to do so, renounce any interest or right the wife holds as a beneficiary of the Lanik Trust; and
(d)Assign to the husband any interest held by the wife in any loan accounts standing to her credit in the Lanik entities (subject to this Order).
Husband’s additional obligations and indemnities
18.Within 30 days of the date of this Order the husband, in his capacity as Trustee and/or Principal of the Lanik Trust, shall deliver to the wife (via Biggs Fitzgerald Pike Solicitors) a trust distribution resolution for the financial year ended 30 June 2022 that records a distribution of the capital gain arising from the sale of the G Street property as to 50 per cent thereof to the wife and as to 50 per cent thereof to the husband.
19.The husband be responsible for and indemnify the wife and keep her indemnified in relation to:
(a)Any liability whatsoever that the wife has now or may have in the future to the Lanik entities;
(b)Any liability whatsoever that the wife has now or may have in the future arising out of her having held any office or interest in the Lanik entities;
(c)Any liability arising under any guarantee given by the wife in respect of any monies advanced or credit accommodation given to the Lanik entities by any bank or other financial institution;
(d)Any liability for goods and services tax, capital gains tax, group tax, PAYG tax, company tax, land tax and superannuation contributions payable for employees of the Lanik entities, debts, claims, actions demands and choses in action brought by any creditor thereof; and
(e)Any taxation liability of the wife assessed or assessable and remaining unpaid in respect of any income derived by her from or monies paid to her by the Lanik entities save for the following payments to the wife from the Lanik Trust:
(i)The distribution of $25,000 on 4 October 2023;
(ii)The distribution of $30,937.77 on 22 October 2024; and
(iii)The distribution referred to in paragraph 15 of this Order.
Superannuation split
20.Pursuant to s 90XT(1)(a) of the Family Law Act 1975 (Cth) (“the Act”) whenever a splittable payment becomes payable in respect of the wife’s interest in Super Fund 1, the husband shall be entitled to be paid an amount calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001 (Cth) using a base amount of $51,926.50 and there be a corresponding reduction in the entitlement of the person to whom the splittable payment would have been made but for this Order.
21.Paragraph 20 of this Order has effect from the operative time and the operative time for the purposes of this Order is 4 business days after the date of service of this Order upon the trustee of Super Fund 1.
Miscellaneous
22.Except as otherwise provided in this Order, the husband and the wife are entitled to be the sole legal and beneficial owners of all items of property including (but not limited to) money, motor vehicles, insurances, equities, superannuation entitlements and personal effects currently in the possession or control of each of them respectively.
23.The parties do all acts and things necessary and give all consents and execute all documents and writing to give effect to this Order in the time periods prescribed.
24.In the event that either party refuses or neglects to execute any deed, document or instrument necessary to give effect to this Order, then a registrar of this Honourable Court be appointed pursuant to s 106A of the Act to execute such deed, document or instrument in the name of the defaulting party and do all acts and things necessary to give validity and operation to the deed, document or instrument upon the registrar being provided with verification of such refusal or failure by way of an affidavit.
25.It shall be sufficient evidence of a default in signing a necessary document or instrument as referred to above if the party requiring it to be executed forwards it to the other party (or the solicitors who act for the other party in the making of this Order) and within 14 days thereof the document or instrument is not properly executed and returned to the party requiring its execution.
26.The parties have liberty to apply to this Honourable Court upon the giving of 7 days written notice one to the other in relation to the enforcement of this Order.
Costs
27.In the event a party makes an application for costs, any submissions (limited to five pages) or any further affidavit relating to costs only are to be filed and served within 28 days.
28.Any submissions in response (limited to five pages) or any further affidavit relating to costs only are to be filed and served within 21 days after receipt of the submissions described at paragraph 27 of this Order.
29.Unless a request is made by a party for the application for costs to be listed for hearing and oral submissions, the determination of costs will be finalised in Chambers without the need for personal attendance.
NOTATIONS:
A.There is no Court by the name “Federal Circuit and Family Court of Australia”. This Court was formerly known as the Family Court of Australia and is now known as the Federal Circuit and Family Court of Australia (Division 1).
B.The design of the seal affixed to this Order issued by the Federal Circuit and Family Court of Australia (Division 1) was determined by the Attorney-General pursuant to the undated Federal Circuit and Family Court of Australia (Seal) Determination 2021 signed by the Attorney-General.
ADDITIONAL NOTATIONS:
C.This Order has been amended pursuant to rule 10.13 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
Amended pursuant to r 10.14(b) of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) on 25 February 2025
CAREW J:
The parties to this property dispute, Ms Lanik (“the wife”) and Mr Lanik (“the husband”), married in 2001 and separated in about September/October 2020. They are not yet divorced. They have two children, now aged 21 years and 17 years.
The proceedings were commenced by the wife in the Federal Circuit and Family Court of Australia (Division 2) on 17 August 2023 and transferred to this Court on 4 February 2025.
While the husband has at times been legally represented, he represented himself at trial with the assistance of a person commonly referred to as a ‘McKenzie friend’.[1]
[1] McKenzie v McKenzie [1970] 3 All ER 1034.
As at the commencement of trial, the wife has incurred legal fees and outgoings of approximately $75,143 and the estimated costs to the end of the trial will take her legal fees to about $100,000. The husband had not filed a costs disclosure notice but contended he has incurred legal fees of approximately $66,000.
For reasons that will be explained, the property of the parties and their respective superannuation will be divided equally.
PROPOSALS OF EACH PARTY
The wife proposes an equal division of the property of the parties and an equal division of their respective superannuation benefits.
The husband proposes a division of the property of the parties and superannuation of 62.5/37.5 in his favour.
ISSUES
The issues requiring determination are as follows:
(1)Balance sheet items;
(2)When considering the myriad of contributions made by each party throughout the marriage, prior thereto, and after separation, should the husband’s contributions be given greater weight?
(3)Should there be an adjustment in the husband’s favour pursuant to s 75(2) of the Family Law Act 1975 (Cth) (“the Act”)?
APPLICABLE LEGAL PRINCIPLES
In property settlement proceedings, the Court may make such order as it considers appropriate, altering the interests of the parties to the marriage in the property of the parties or either of them, including an order for a settlement of property in substitution for any interest in the property for the benefit of the parties, and an order requiring either or both of the parties to the marriage to make, for the benefit of either or both of the parties, such settlement or transfer of property as the Court determines (s 79(1) of the Act).
The Court cannot make an order unless it is satisfied that, in all of the circumstances, it is just and equitable to make the order (s 79(2) of the Act).
In considering what order (if any) should be made in property settlement proceedings, the Court is required to take into account the following (s 79(4) of the Act):
(a)The financial contribution made directly or indirectly by or on behalf of a party to the acquisition, conservation or improvement of any property of the parties or either of them, whether or not that property still exists;
(b)The contribution (other than financial) made directly or indirectly by or on behalf of a party to the acquisition, conservation or improvement of any property of the parties or either of them, whether or not that property still exists;
(c)The contribution made by a party to the welfare of the family constituted by the parties and any children, including any contribution made in the capacity of homemaker or parent;
(d)The effect of any proposed order upon the earning capacity of either party;
(e)The matters referred to in s 75(2) of the Act so far as relevant;
(f)Any other order made under the Act affecting a party; and
(g)Any child support under the Child Support (Assessment) Act 1989 (Cth) that a party has provided, is to provide, or might be liable to provide for a child of the marriage.
The High Court of Australia in Stanford v Stanford[2] identified certain principles to be applied in property settlement proceedings. In particular, when considering whether it is just and equitable to make an order, it is firstly necessary to identify, according to ordinary common law and equitable principles, the existing legal and equitable interests of the parties in the property.[3] Secondly, the discretion as to whether or not to make a property settlement order, although extraordinarily wide, must nevertheless be exercised in a principled way.[4] Thirdly, there is no presumption that the parties’ rights to or interests in property are or should be different from those that currently exist.[5] The consideration of whether it is just and equitable to make an order should not be considered by reference only to the matters in s 79(4) of the Act. It is necessary to give separate consideration to ss 79(2) and (4) of the Act and not to ‘conflate’ the two subsections.[6]
[2] (2012) 247 CLR 108.
[3] Ibid at 120, [37].
[4] Ibid at 120–121, [38].
[5] Ibid at 121, [40].
[6] Ibid at 120, [35].
IS IT JUST AND EQUITABLE TO MAKE A PROPERTY ORDER?
Neither party submitted that it was not just and equitable to make an order. That position is understandable given that the wife and husband separated in late 2020 and “there is not and will not thereafter be the common use of property” by the parties.[7] Additionally “the express and implicit assumptions that underpinned the existing property arrangements have been brought to an end by the voluntary severance of the mutuality of the relationship”.[8] In such cases, the “just and equitable requirement is readily satisfied”[9] and I am satisfied in this case that it is just and equitable to make an order.
[7] Ibid at 122, [42].
[8] Ibid.
[9] Ibid.
BALANCE SHEET
A joint balance sheet was tendered on 18 February 2025 (Exhibit 10) and is set out below:
Ownership Description Wife’s value Husband’s value ASSETS 1 Joint B Street, Suburb C (“the former matrimonial home”) (single expert valuation) $875,000 $875,000 2 Wife E Bank “…” Account $676 $676 3 Wife E Bank “…” Account $1,309 $1,309 4 Husband Commonwealth Bank of Australia (“Commonwealth Bank”) Account ending …94 $0 $0 5 Wife Motor Vehicle 1 $28,650 $28,650 6 Husband Motor Vehicle 2 $10,000 $10,000 7 Husband F Pty Ltd $28,500 $28,500 8 Joint Lanik Trust (“the Lanik Trust”) (balance of the sale proceeds of G Street, City H (“the G Street property”) held in the Biggs Fitzgerald Pike Solicitors Trust Account) $30,937.77 $30,937.77 Total Assets $975,072.77 $975,072.77 ADD BACKS 9 Wife Interim distribution from Biggs Fitzgerald Pike Solicitors Trust Account (sale proceeds of the G Street property – the Lanik Trust) $55,937.77 $55,937.77 10 Husband Interim distribution from Biggs Fitzgerald Pike Solicitors Trust Account (sale proceeds of the G Street property – the Lanik Trust) $25,000 $25,000 11 Husband Funds withdrawn from the Commonwealth Bank Home Loan between January 2020 and August 2022 $79,048 $41,967 12 Wife Post separation tax refund Nil $10,829 13 Wife Mobile Phone … (October 2021) Nil $1,675 14 Wife J Pty Ltd Nil $1,474 15 Wife 50 per cent J Pty Ltd health care to 30 July 2023 Nil $6,883 16 Wife 50 per cent Council rates and insurance to maintain the former matrimonial home Nil $14,293 17 Wife Redraw from Super Fund 1 Nil $34,548 Total $159,985.77 $192,606.77 LIABILITIES 18 Joint Commonwealth Bank Loan - the former matrimonial home ($199,000) ($199,000) 19 Wife Australian Tax Office (“ATO”) HELP Liability ($22,956) Nil 20 Wife Tax liability arising from requirement to amend 2022 tax return (to include 50 per cent share of capital gain on sale of the G Street property) ($11,684.15) Nil 21 Husband Anticipated tax debt arising from distribution of funds held in the Lanik Trust to parties on a 50/50 basis Nil ($7,000) 22 Wife Anticipated tax debt arising from distribution of funds held in the Lanik Trust to parties on a 50/50 basis Nil ($7,000) 23 Husband Latent tax debt to be paid by the husband to clear director's loan in F Pty Ltd Nil ($18,000) 24 Husband Loan account owing to the husband for creditors paid by him Nil ($3,224) 25 Husband 25 per cent sales tax and 10 per cent goods and services tax (“GST”) on business assets Nil ($6,477) 26 Husband Sales cost and conveyancing the former matrimonial home Nil ($30,000) Total ($233,640) ($270,701) SUPERANNUATION Member Name of Fund Wife’s value Husband’s value 27 Wife Super Fund 2 $53,177 $53,177 28 Wife Super Fund 1 $408,657 $408,657 29 Husband Super Fund 1 $357,981 $357,981 Total $819,815 $819,815 Total Net Assets (including add backs and super) $1,721,233.54 $1,716,793.54 BALANCE SHEET ITEMS
The parties are in dispute about items 11–17 (add backs) and 19–26 (liabilities) in the joint balance sheet. It is settled law that add backs are “the exception rather than the rule”[10] and that separated couples are not expected to “go into a state of suspended economic animation”.[11]
[10] C & C [1998] FamCA 143 at [46].
[11] NHC and RCH (2004) FLC 93-204 at [2.11].
Item 11
Item 11 is an add back against the husband. The wife seeks an add back of $79,048. The husband concedes there should be an add back, but only of $41,967. The parties disagree about the difference of $37,081.
The sum of $79,048 represents withdrawals by the husband from the joint Commonwealth Bank redraw facility (“redraw facility”). Included is a withdrawal made by the husband on 20 January 2020 of about $9,900. The husband contends that he paid that sum into the business account for F Pty Ltd as a capital contribution to the company. The wife does not concede that to be the case. However, I am not prepared to add this sum back given the withdrawal occurred nine or 10 months prior to separation. The wife is seeking to cherry pick one withdrawal that occurred when the parties were still together. I do not propose to conduct some quasi audit of the parties’ finances.
It is common ground that over the period 10 September 2020 to 12 October 2020 the husband withdrew the sum of about $69,128.60 from the redraw facility for what he describes as a “safety net” for himself.
The husband contends that the funds were dispersed as follows:
(a)$10,000 in cash was stolen from his business premises (no corroboration that any complaint was made to police or that an insurance claim was lodged);
(b)$40,000 was paid in legal fees;
(c)$800 paid to an accountant;
(d)$2,730.23 paid for rates; and
(e)$15,598.37 retained by the husband as at 10 January 2024.
The husband’s bank accounts corroborate only the sum of $4,534.20 paid to lawyers. The husband tendered three invoices from two firms of solicitors. One invoice was for $1,707.20 and the others for $567.05 and $520.85.
It was disclosed for the first time during his cross-examination that some or all the funds were given to various friends (unnamed) or family (unnamed). The husband also contended he had paid $66,000 in legal fees which on his own admission had been paid from the redraw facility.
In the circumstances, I propose to add back against the husband the sum of $69,128.60. It has either been used for legal fees or other purposes for which the husband has failed to properly account.
Item 12
Item 12 is a tax refund that the wife received after separation relating to the wife’s income in the 2019 and 2020 financial years. The wife was unemployed in those financial years, but trust distributions were attributed to her. As the tax refunds were received on 10 September 2021, the wife has expended the funds on ordinary living expenses. I do not propose to add back item 12.
Item 13
Item 13 is a mobile phone account paid by the husband for a phone in the wife’s possession. The invoice is in the name of the business. The husband concedes he would have claimed the payment as a business expense. I do not propose to add back item 13.
Item 14
Item 14 is a modest sum allegedly received by the wife for government rebates relating to private health insurance. I do not propose to add back item 14.
Item 15
Item 15 represents half of the private health insurance premiums paid by the husband up to 30 July 2023. The insurance covered the husband and the two children and until the wife obtained her own separate policy, it covered her as well. The premiums were deducted from the husband’s bank account into which he deposited cash sums from time to time out of the redraw facility. I do not propose to add back item 15.
Item 16
Item 16 represents half of rates and insurance on the former matrimonial home in which the husband lived after separation. The wife lived in rented accommodation. I do not propose to add back item 16.
Item 17
Item 17 is a redraw made by the wife from her superannuation upon which she paid tax of $6,988 and the balance was used for medical expenses associated with surgery and correction of a medical condition. I do not propose to add back item 17.
Item 19
Item 19 is the wife’s ATO HELP debt relating to two tertiary degrees completed. The first degree was completed shortly after separation and the second degree commenced and completed after separation. The debt owing at the time the wife commenced her second degree was $9,265.98 and I propose to include that part of the debt as a joint liability as the debt was incurred during the marriage.
Item 20
Item 20 is a taxation liability arising out of the wife having to amend her 2022 tax return to include a 50 per cent share of the capital gain attributed to the wife by the husband but about which she was unaware at the time she submitted the tax return. I propose to include this liability.
Items 21–25
Items 21–25 relate to anticipated tax debts for the wife and the husband; a so-called “latent tax debt” relating to the husband’s director’s loan about which there is no evidence; “a loan account owing to the [husband] for creditors paid by him”; and “25 [per cent] sales tax and 10 [per cent] GST on business assets”. There is no evidence, or at least no satisfactory evidence, to support the inclusion of any of these items. I do not propose to include them.
Item 26
Item 26 is anticipated sale and conveyance costs in the event the former matrimonial home is sold. The husband did not press this item in circumstances where the liability may not arise if he is able to refinance or if it does arise it will be factored into the net proceeds to be divided.
CONTRIBUTIONS
The parties do not agree on when they commenced to live together on a genuine domestic basis. The wife contends it was 1991 while the husband was unable to identify the year their relationship commenced other than it was prior to their marriage in 2001. Suffice to say the focus of this enquiry is on what contributions were made and what weight should be afforded to them. Neither party sought a finding as to the date their de facto relationship commenced.
It is not in contention that the property at K Street, City H (“the K Street property”) was purchased in the husband’s sole name in or about late 1993 for about $92,000 and that the husband paid the deposit and borrowed the balance of $82,947 from a bank. This was a property that the husband and wife and a friend had moved into in 1991 and contributed equally to the rent. The friend moved out prior to the purchase of the K Street property by the husband.
The husband contends that he undertook improvements to the K Street property by way of sanding and polishing floors, renovating the bathroom, replacing damaged window latches, landscaping and painting inside and outside. The wife contends she worked alongside the husband in painting, sanding, etc. which the husband disputes. The husband contends the wife’s contribution was limited to sewing a few curtains.
It is common ground that the mortgage secured on the K Street property was paid out by December 1999. It is not in contention that the wife made financial contributions, although the husband seeks to minimise these contributions by referring to them as “rent”. The husband concedes the wife made a lump sum contribution. The wife contends her lump sum contribution was about $20,000 from the sale of a block of land and R Company shares while the husband was only prepared to concede a lump sum contribution of $10,000. The husband and wife were in full-time employment throughout the period they lived at the K Street property.
The K Street property was sold in early 2002 for $128,000. There is no evidence the improvements carried out to the property increased the sale price nine years later.
In 2001, the parties jointly purchased a block of land at L Street, Suburb M (“the L Street property”) for $68,000. The husband contends that the purchase from his sister was at a discount but there is no evidence to support that contention. The parties engaged N Pty Ltd to construct a home on the property. The husband contends that they received a discount on the labour costs because his brother worked for N Pty Ltd. There is no evidence to support that contention nor is there any evidence of the costs of construction. The parties moved into this property in mid-2001. The husband contends that he spent every spare minute over the following 12 months making the house liveable and that the wife refused to assist in any way.
The wife disputes the husband’s account and contends that most of the work was undertaken after she became pregnant with their first child in or about June 2002 and subsequent to the child’s birth in February 2003. The wife continued in full-time employment before taking maternity leave in 2003. The wife endured a traumatic birth experience suffering serious injury. The wife contends that she assisted to the extent possible while pregnant and later caring for a baby. The wife contends that she established gardens and maintained them throughout the years they lived at this property. The parties’ second child was born in 2007. The wife returned to part-time employment, two and a half days per week, in 2004 before ceasing employment in 2007 to care for the children full time as the second child suffered extreme separation anxiety from the mother. This was a joint decision.
At the same time as he established his own business, F Pty Ltd, in partnership with Mr O in 2004, the husband established a family discretionary trust, namely the Lanik Trust. The husband was the appointor of the trust, and the wife was the trustee.
In 2005, the Lanik Trust acquired a 50 per cent interest in two properties, G Street, City H (“the G Street property”) and the G Street property for $78,000 and $81,500 respectively. Mr O funded the purchases under a commercial loan agreement. The half interest in the G Street property was sold to Mr O in late 2017 for $122,500. The husband constructed a shed and landscaped the G Street property and this property was sold in late 2021 for $415,000 from which Mr O was paid $85,227.59 to discharge the mortgage secured on the property. The trust’s share of the proceeds was $114,375.54. Each of the parties has received some of these funds which are the subject of agreed add backs and $30,937.77 remains in the trust account of the wife’s solicitors.
The husband contends that other than some casual cleaning of the business premises for a short period the wife made no contribution to the operation of F Pty Ltd despite his requesting her to do so. The wife disputes the husband’s account, contending that the husband never requested she assist in the business because he already had an assistant from the time the business was established. The wife had returned to part-time work by that time and then after the second child was born, the wife undertook employment two days per week in the business. The wife also completed a tertiary degree over the period 2001–2007.
The L Street property was sold in or about mid-2012 for $510,000. The husband contends the sale proceeds were applied to reduce the principal on the loan secured on this property. Whereas the wife contends that the sale proceeds exceeded the loan and were paid into a redraw facility connected to their joint purchase of the former matrimonial home in or about 2011 for $585,000 for which they borrowed the entire sum. Both parties contend they carried out improvements to the former matrimonial home. The husband minimises the wife’s contribution.
The husband contends he received inheritances from the estates of his eldest brother and his parents totalling $102,500 with payments made by instalments over the period 2010–2015. The wife does not admit the quantum of the inheritances conceding only that the husband told her that he had received an inheritance after his mother died but she was not privy to the amount. Despite the wife requesting corroboration of the inheritances throughout these proceedings, in particular, in a letter dated April 2024, the husband failed to produce any evidence to support his contentions until a few days before the trial when he produced what purported to be a copy of a statutory declaration by the executor of his mother’s will (the husband’s sister). The evidence was ruled inadmissible. The husband failed to produce any bank statement corroborating receipt of any of the alleged instalments of the inheritance payments.
The wife and children moved to Region P for 12 months in 2016 so that she could take up employment. The family intended to permanently relocate to Region P upon the wife obtaining a permanent position. During the 12 months, the wife cared for the children and worked full‑time. The husband continued to work in City H and visited on weekends. The wife and children returned to City H in late 2016 as the wife was unable to secure a permanent position. Upon her return to City H, the wife obtained casual employment. The wife commenced a degree in 2020, prior to separation, to improve her employment prospects. The wife completed her degree in 2022 and has since completed a second degree.
Each of the parties withdrew $20,000 from their respective superannuation funds in the 2020 and 2021 financial years as permitted under special rules during the Covid-19 pandemic. In July/August 2020 the wife transferred $13,000 of her superannuation into an account in the husband’s name. Immediately prior to separation, the husband held a balance of $29,663.23 from their combined superannuation drawdowns. Shortly after separation, the husband paid off two credit cards and deposited $15,000 into the joint home loan. The wife had no income from employment from April 2020 after losing her job because of the pandemic.
When separation occurred in or about September/October 2020, the wife only had $439 left in her bank account.
In the lead up to separation, the parties’ eldest child ran away from home, dropped out of school, and started using drugs. Each party contends they did what they could for the child although each contends the other did little.
In or about August 2020, the wife’s mother became very ill, and the wife was caring for her mother. The wife’s absences from the home caused friction between the husband and wife. The husband contends the wife neglected the youngest child; an allegation disputed by the wife. There were several altercations at the family home in the lead up to separation in or about September/October 2020. The wife had no funds at this time and the only employment she succeeded in obtaining was in City Q. The wife relocated to City Q in early 2021 and travelled back to City H regularly to see the children and was otherwise in contact with them by phone or text. The husband is critical of what he contends is the wife’s limited contact with the children. The youngest child never spent time with the wife in City Q; the wife alleging that the husband would not allow it. The husband disputes this contending that the wife never asked.
The husband cancelled the wife’s access to the joint credit card shortly after separation alleging she had been spending recklessly. There is no evidence to substantiate that claim.
The wife’s mother died in 2021. When the wife returned on weekends and holidays to see the children she was thereafter required to stay in hotels. The wife received an inheritance of $116,724.65 in mid-2022. The funds have been fully expended on the purchase of a new car, living expenses, hotel costs when visiting City H, mobile phones for herself and the eldest child, a laptop, professional development expenses, furniture, etc.
Since separation, the eldest child has lived either with the husband in the former matrimonial home, at her boyfriend’s home, or for a time, at the husband’s business premises. Both parents contend they have supported their daughter to the best of their ability. The youngest child has lived with the husband at the former matrimonial home and from the end of 2021 the wife has paid child support as assessed. Prior to assessment the wife contends she purchased clothing and paid expenses for him.
Over this long marriage and the period before marriage and after separation, I am satisfied that each party made a myriad of contributions to the best of their ability. It is likely that the husband’s financial contributions exceeded the wife’s as he was employed throughout, and the wife was either in part-time employment or casual employment at times after the birth of each child and then a full-time homemaker from 2007 until 2016. It is likely that the wife’s homemaker contribution exceeded the husbands until separation and that thereafter the husband’s parenting responsibility for the youngest child likely exceeded the wife’s given that she lives several hours’ drive away.
Doing the best I can on the evidence before the Court, I am not persuaded that the husband’s contributions overall should be afforded greater weight than the wife’s as submitted by him. I assess the parties’ respective contributions over this long marriage to be largely equal.
SECTION 75(2) FACTORS
The wife is 56 years of age and employed full time in City Q. The wife’s wage is $106,000 per annum. The wife pays child support for the youngest child of $600 per fortnight. The child will turn 18 in 2025 although he will still be at school until the end of the year and has plans to attend university. The eldest child is now employed full time and lives between her boyfriend’s home and the former matrimonial home. It appears that both parents assist her financially when required.
The wife contends that after tax, child support, and HELP repayments (the current debt is about $22,000), she is left with $1,100 and her rent is $460 per week. The wife is hopeful of returning to live closer to the children but until she can find employment, she will continue to have substantial expenses travelling between City H and City Q as well as accommodation expenses during her stays. The wife also has outstanding legal fees of at least $41,516.
The husband is 55 years of age and continues to be self-employed in City H. The husband contends that he pays himself a wage of $64,896 per annum irrespective of the hours he works and concedes this is the wage he has paid himself for a very long time. The husband contends that his net weekly wage is $1,025. When there are profits, his trust receives dividends. The husband controls the trust. The husband also receives other benefits from his employment, namely, the use of a motor vehicle, a telephone, and superannuation contributions. The husband contends that his business is in decline but there is no evidence to substantiate this submission. The husband continues to operate his electrical business in a large regional centre which he established over 20 years ago. The youngest child will continue to live with him until the end of the year. It is anticipated that he will then begin tertiary studies. The husband contends that he has some health issues but there is no evidence to corroborate this submission. The husband operates his business from his home and contends that if he has to sell the home to pay out the wife, his business will suffer. Again, there is no evidence to substantiate this submission.
I am not persuaded that the s 75(2) factors warrant any adjustment.
WHAT PROPERTY ADJUSTMENT ORDER IS JUST AND EQUITABLE?
An equal division of the parties’ property and superannuation will result in each party receiving $862,502.01 in total: being property of $452,594.51 and superannuation of $409,907.50. The wife will retain her bank accounts, car, the balance in her solicitor’s trust account and receive a cash payment from the husband of $356,034.10. The wife will retain responsibility for paying her HELP debt and the tax liability arising from the necessary amendment to her 2022 tax return. The husband will retain the former matrimonial home subject to the mortgage, his car, F Pty Ltd and the Lanik Trust and pay the wife a cash sum of $356,034.10. In order to achieve equality of superannuation benefits, there will be a superannuation split from the wife’s superannuation to the husband’s superannuation of $51,926.50.
This is a just and equitable outcome.
The husband will have the opportunity to pay out the wife if he can refinance the mortgage on the former matrimonial home but if he cannot, then the home will be sold. I am not satisfied that it would be just and equitable for the wife to receive less in the way of property and more in the way of the superannuation. Each party wants the opportunity to rehouse. If the former matrimonial home is to be sold, I am not persuaded that the parties should borrow further funds to carry out any improvements when there is no guarantee that such expenditure would result in a higher sale price. The valuer anticipates that a purchaser would likely demolish the house and rebuild.
I certify that the preceding sixty-one (61) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Carew. Associate:
Dated: 24 February 2025
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