Leggero and Jagger
[2007] FamCA 659
•4 July 2007
FAMILY COURT OF AUSTRALIA
| LEGGERO & JAGGER | [2007] FamCA 659 |
| FAMILY LAW - Property settlement – Husband has terminal cancer – Very limited life expectancy – Third marriage for each party – Wife has 4 children of second marriage three of whom remain under 18 years of age – Pre-cohabitation assets – Aggressive property dealings and acquisitions throughout relationship and marriage of 8 years – Husband’s business very successful for 4 years – Wife’s significant involvement in organisation and support of business – Wife works full-time in her employment – Contribution – Financial and otherwise of wife’s mother – Home maker contribution – Negatively geared property investments – Superannuation – Assessment of contributions and 75(2) factors - Financial add backs – Evaluation of Pool of Assets – Legal fees – Consideration of Lawrie and Lawrie (1981) FLC 91-102 – SVP (Unreported), Just and equitable orders – s.79(4) – s.79(2) – s.75(2) |
| Family Law Act 1975 (Cth) |
In the Marriage of Quinn (1979) FLC 90-677
In the Marriage of Tuck (1981) FLC 91-012)
In the Marriage of Burke (1981) FLC 91-055
Omacini and Omacini (2005) FLC 93-218
Townsend and Townsend (1995) FLC 92-569
Minagall v Ayres (1966) SASR 151 at 154
In re J (a child) (FC), judgment delivered 16 June 2005
In the Marriage of Clauson (1995) FLC 92-595)
P v P (unreported) Appeal No. WA3 of 2002
In the Marriage of Lee Steere (1985) FLC 91-626
Way and Way (1996) FLC 92-702
Pierce and Pierce (1999) FLC 92-844
White v White
M v M (No. EA32 of 1998 – 13.10.1998)
Lawrie and Lawrie (1981) FLC 91-102
S v P (unreported decision of Fogarty, Lindenmayer and Finn JJ delivered 29 April 1997)
JCVB v SKK (2005) FLC 93-233
Menzies v Evans (1988) FLC 91-969
Tasmanian Trustees Limited and Gleeson (1990) FLC 92-156
| APPLICANT: | MR LEGGERO |
| RESPONDENT: | MS JAGGER |
| FILE NUMBER: | MLF | 2130 | of | 2006 |
| DATE DELIVERED: | 4 JULY 2007 |
| PLACE DELIVERED: | MELBOURNE |
| JUDGMENT OF: | YOUNG J |
| HEARING DATE: | 18, 19, 20, 21 and 22 JUNE 2007 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | MR MAWSON |
| SOLICITOR FOR THE APPLICANT: | ROBINSON GILL |
| COUNSEL FOR THE RESPONDENT: | MR THOMPSON |
| SOLICITOR FOR THE RESPONDENT: | SAXBYS LAWYERS |
ORDERS
THAT the wife pay to B on behalf of the husband within sixty (60) days (“the period”) a sum of $139,415 (“the lump sum”) and contemporaneously with such payment the husband then cause B Pty Ltd (“[B”] to transfer to the wife his 39% interest on title in the property situate at and known as E, Victoria being the land more particularly described in Certificate of Title Volume … Folio … (“[E]”).
THAT if the wife is unable to pay, or does not pay, to B Pty Ltd on behalf of the husband within the period the lump sum then E property be forthwith sold by public auction pursuant to the joint conduct and control of the parties, or their legal personal representative, on terms and conditions to be agreed and the proceeds of sale after proper conveyancing charges and commissions, property adjustments and costs be apportioned:
§as to the wife – 80.64%; and
§as to B Pty Ltd on behalf of the the husband or his legal personal representative – 19.36%.
THAT pending payment of the lump sum, or otherwise the sale of E property, the wife and B Pty Ltd maintain their current financial entitlements to rental and their responsibility for the payment of outgoings and expenses and, if there is any capital gains tax payment applicable upon the sale of E property then each of the owners pay their respective assessment on the basis of their current ownership.
THAT if the wife defaults in payment of the lump sum within the period, but otherwise elects to proceed to purchase the interest of B Pty Ltd, or any part thereof, in B Pty Ltd and without a public sale then she pay interest on the sum outstanding from time to time after the period at the rate prescribed in the Family Law Rules.
THAT the wife forthwith resign any directorship or other position in B Pty Ltd, surrender any loan account held by her or members of her family and relinquish any claim or right to claim any other money, interest or entitlement in B Pty Ltd, save for any enforcement provisions arising out of paragraphs 1, 2 3, and 4 of these Orders;
IT is otherwise ordered that:
(a)each of the husband, wife and B Pty Ltd be solely entitled to the exclusion of the others to all real and personal property, including shares and chooses in action, in the possession of or registered in their name;
(b)each of the husband and wife retain their respective superannuation, long service leave and other work entitlements or insurance policies;
(c)each of the husband, wife and B Pty Ltd be solely liable for and indemnify the other against any mortgage liability, family borrowing or other secured or unsecured debt for which such party is currently responsible;
(d)each party and B Pty Ltd retain their current bank account deposits.
THAT these Orders are binding upon B Pty Ltd, the husband and wife and each of their heirs, executors and legal personal representatives.
THAT the husband and wife each sign all documents and do all acts and things required and give all necessary and proper instructions to forthwith, at their own expense, uplift or discharge any caveat(s) lodged upon the title to real property owned and to be retained by the other party.
THAT forthwith upon completion of these proceedings the wife deliver up to the husband, or his legal personal representative all of the financial corporate and like documents of B Pty Ltd and the husband as are required to complete and lodge all outstanding personal and corporate taxation returns and financial statements.
THAT the Form 1 application of the husband filed 10 July 2006 and the Form 1A response of the wife filed 2 August 2006, and any amending or further applications be otherwise dismissed and the proceedings be removed from the list of cases awaiting hearing.
IT IS CERTIFIED
THAT pursuant to Rule 19.50 of the Family Law Rules this matter reasonably required the attendance of Counsel for each of the husband and wife.
| FAMILY COURT OF AUSTRALIA AT MELBOURNE |
FILE NUMBER: MLF 2130 of 2006
| MR LEGGERO |
Applicant
And
| MS JAGGER |
Respondent
REASONS FOR JUDGMENT
ISSUE
The husband and wife, in tragic and difficult circumstances where the husband has a very limited life expectancy, have been unable to resolve their property and financial issues and I have therefore been required to hear, determine and adjust these matters pursuant to s.79 of the Family Law Act1975 (“the Act”).
AFFIDAVITS RELIED UPON
I have read and carefully evaluated the evidence given viva voce by the parties and in their following affidavits:
Husband
§the husband’s trial affidavit filed 23 April 2007;
§the husband’s further affidavit in response filed 12 June 2007;
§the affidavit of Dr L filed 24 April 2007;
§the husband’s Form 13 financial statement filed 10 July 2006; and
§the husband’s Form 13 financial statement filed 24 April 2007.
Wife
§the wife’s trial affidavit, and all exhibits thereto, filed 24 April 2007;
§the wife’s further affidavit in response filed by leave of the court during this hearing together with the wife’s court book of documents which was provided as an exhibit to that affidavit;
§the affidavit of the wife’s mother, Mrs C filed 24 April 2006;
§the affidavit of Mr V filed 15 June 2007;
§the Form 13 financial statement of the wife filed 2 August 2006; and
§the Form 13 financial statement of the wife filed 24 April 2007.
There are some omissions and financial inaccuracies in the husband’s financial statements, particularly the document first filed. Having observed the husband in his evidence and more particularly being aware of his illness and the very real assistance that he would have required in preparing and understanding financial documents, I am not critical of him. The criticisms elaborated upon by the wife in paragraphs 30 and 31 of her trial affidavit are noted but are of no importance or assistance to me in these proceedings.
The wife’s further affidavit was permitted to be filed on the basis that it dealt with “the big issues” in reply, as is evidenced by paragraph 1 thereof. Unfortunately thereafter, and over the 53 paragraphs of the document, the author of the affidavit and the wife raise further issues, fresh evidence, refined valuations and specific dollar amounts. As such there were matters then sought to be put in evidence which were not before the Court at the commencement of the case and to which the husband had no specific right of reply and to which I have therefore given little or no weight. In many instances the paragraphs seek to amend valuations or amounts to the wife’s benefit. Examples of such issues are contained in paragraphs 36, 41, 44, 47, 50, 51, 52 and 53 thereof. I record that no objection was taken to the detail in this affidavit though there was little time or notice for such objection to be made. In the exercise of my discretion and bearing in mind the requirement for there to be a just and equitable approach and outcome to this case, I have read and evaluated but not necessarily incorporated these amended amounts within the reasons for judgment.
During the hearing I heard argument and ruled inadmissible the affidavit filed on behalf of the wife by Ms H, sworn and filed 24 April 2007. I otherwise ruled on various objections taken to the husband’s trial affidavit.
The parties have relied upon the valuations of real property prepared by Mr W, valuer, although they have been a matter of agreement both as to current value and as to the prior value as at the date of cohabitation of certain properties. I have accepted that evidence but, as requested, I have not otherwise read the particular valuation reports.
PREPARATION OF WIFE’S CASE
The evidence given by the wife and on her behalf and all of the annexures to her affidavit and proposed documents to be put in evidence were prepared in overwhelming detail. At the commencement of the case I was provided with two large arch lever folders containing approximately 130 separate documents of and relating to the corporate, financial and property history of these parties during their cohabitation and marriage. I declined to accept those documents generally in evidence and ultimately a number now are before the Court as annexures to the wife’s further affidavit in response. That was not my intention when I indicated during the hearing that the wife could have leave to file such a further affidavit which I had understood to be in response to the further issues raised by the husband in his affidavit filed 12 June 2007.
All of the other exhibits in this case, tendered by both the husband and wife, largely arose from those folders of documents but I have had regard only to annexures and documents that are properly in evidence. Otherwise I have returned to the wife’s legal practitioners the balance of other documents not specifically tendered or annexed.
I have highlighted this intended presentation of the wife’s evidence to the Court to underline the significant detail and investigation that was undertaken and in the context that I advised counsel for both parties that I would not determine the case on a specific arithmetic basis. From the outset, counsel and the parties understood that I would determine a just and equitable adjustment of their property and financial entitlements within the context of the required four (4) step process identified by the Full Court and the contributions and s.75(2) factors as specifically provided for in the Family Law Act1975 (Cth).
The Full Court has held that in assessing contributions under s.79, Judges should not take an excessively mathematical or arithmetical approach (see: In the Marriage of Quinn (1979) FLC 90-677; In the Marriage of Tuck(1981) FLC 91-012). I am bound to identify and weigh financial contributions against non-financial contributions and the latter by their very nature can only be determined in a broad and discretionary manner.
In the Marriage of Burke (1981) FLC 91-055 the Full Court held that a broad approach to contributions was to be preferred over a precise mathematical determination. Baker J, with whom Ellis and Asche JJ agreed said (at p. 76-452):
“It is not necessary for judges to justify their decision in property and maintenance cases by reference to precise mathematical calculations. His Honour took a very broad approach to the figures that were before him and the appellant must show that there has been a fundamental and significant error before it could be said that his Honour’s discretion had been wrongly exercised”.
I have considered and evaluated all relevant financial issues and valuations but in the context of what can and should be reasonably required of a Trial Judge.
OUTLINE OF ARGUMENT
Counsel for both parties filed at the commencement of the case a detailed outline of their case, a summary of argument and a statement of current assets and liabilities. I have read and evaluated each of those documents and they have been the subject of discussion with counsel and submissions during the proceedings. I have specifically addressed the various questions posed by the wife in her counsel’s outline of argument and as were identified in paragraph I thereof (issues 1 – 8 inclusive).
ORDERS SOUGHT
The initial orders sought by the husband were as detailed in his Form 1 application filed 10 July 2006 and the others of the wife were as detailed in her Form 1A response filed 2 August 2006 and otherwise the orders sought have now been amended pursuant to the specific orders in their Outline of Argument and otherwise as varied by counsel, on the instructions of their clients, during this hearing.
The husband’s case was opened on the basis of an equal distribution of the net assets and financial resources and specifically for each party to retain their individual assets and liabilities with the adjustment being made by way of the sale of the property at E (“[E]”) and the equal division of the net proceeds of such sale notwithstanding the current percentage ownership of 39% to B Pty Ltd on behalf of the husband and 61% to the wife.
The wife’s case was opened on the basis of an overall financial adjustment of between 68% - 70% in her favour and she likewise seeks primary orders for each party to retain their individual assets and liabilities save that E property not be offered for sale and the 39% equity of B Pty Ltd therein be wholly transferred to her name so that she then holds absolute ownership of that property.
On a careful reading of the wife’s outline of argument it could be initially understood that what she sought was an overall adjustment of up to 75%, inclusive of all s.79(4) and s.75(2) factors. Mr Thompson lowered the percentage outcome sought but has declined a specific opportunity during the hearing to reframe the actual percentages sought pursuant to each of those sub-sections of the Act as to attain 68%, though he did finally submit that within s.75(2) there should be a loading of not less than 10%. Nevertheless the orders finally sought by the wife are clear and must stand the scrutiny and evaluation of being just and equitable.
In opening the wife’s case, and at the conclusion of the husband’s evidence Mr Thompson outlined to the Court that the wife additionally does require the reasonable opportunity to acquire any remaining equity that the husband may hold in E property, that is the wife would have the Court determine the appropriate cash sum to be paid to the husband to buy out any remaining equity as a result of just and equitable orders now being pronounced.
In answer to a question which I asked of the wife she indicated that her financial circumstances would permit her, and she would be prepared, if ordered so to do, to pay up to a sum of $144,000 to or on behalf of the husband to acquire the equity in E property, given its current agreed market valuation of $720,000. That question was asked by me of the wife prior to any determination of what is a just and equitable order but primarily to ascertain how she understood her financial capacity to acquire further equity in that property and in response to the amended order sought by her counsel, on instructions, in that regard.
I was asked by counsel in their final addresses and on the basis that if there was to be an adjustment of the equity held by each of the parties in E property to order, largely as a matter of financial convenience for each of the parties, that such adjustment occur as at 30 June 2007. However because of ongoing payments and rental receipts in the 2007 – 2008 financial year I am not legally able to and the parties could not adopt this course of action.
BACKGROUND FACTS
A concise statement of the relevant background facts are:
§the husband is 65 years of age having been born in May 1942 in Italy and emigrating to Australia in 1953;
§the wife was born in December 1956 and is 50 years of age;
§the husband and wife (“the parties”) commenced their period of cohabitation in October 1997;
§on 31 January 1999 the parties married. This is a third marriage for each of them. At the date of the marriage the husband had three adult children from his first marriage and the wife then had four dependent children from her prior marriage, at that date aged 9, 7, 5 and 4 years respectively. Her fifth child, from her first marriage was then aged 19 years and living independently;
§in July 2005 the husband was diagnosed with advanced progressive prostate cancer and secondary bone cancer;
§the parties separated in November 2005 and insofar as it may be of any relevance I accept the evidence of the wife as to the circumstances of such separation;
§the parties were divorced on 22 March 2007, on the application of the husband;
§there are no children of this marriage.
CHILDREN FROM EARLIER MARRIAGES
The husband has three adult children who are largely financially independent and their current ages are 39, 36 and 34 years of age.
The wife’s eldest daughter from her first marriage, M, is 28 years of age, married and lives with her husband.
The four children of the wife’s second marriage all live with the wife at home and are:
§L who is 19 years of age, works as an apprentice dental nurse;
§P who is 17 years of age, works as an apprentice builder;
§N who is 14 years of age and is in Year 9 at High School; and
§K who is 13 years of age and now attends High School.
I have particularly read paragraph 50(b) of the wife’s trial affidavit, and the relevant exhibits thereto as to K’s schooling, behaviour and general circumstances. I have specific regard to all of these issues, the obligations of the wife, the pressures on her and her financial responsibilities in that regard in determining an overall just and equitable settlement of property. In particular I am alert to the time and effort that K will require, and the guidance from his mother and grandmother and the responsibility and commitments which this places upon the wife in the context of s.75(2) factors. From the evidence I do not know the relationship which the father of the wife’s four children have with each of them, particularly K and whether he is able to assist the wife in that regard apart from paying a minimal sum in child support. I record that I have evaluated the financial pressures on the wife in relation to the expenses of her two younger children as detailed in paragraphs 50 and 51 of her further affidavit and the Court documents supporting those outgoings.
The two children of the wife who are working, live at home and do not pay board or financially contribute to the family. I accept the wife’s evidence as they are each in their apprenticeship years and are meeting their own personal expenses, particularly mobile telephone charges and their entertainment. That is reasonable though, in the years to come if they remain at home it can and should be expected that they contribute to their costs in the household.
HEALTH ISSUES
Husband
The husband filed an affidavit of his general practitioner, Dr L and exhibited thereto is his medical assessment dated 12 January 2007 and where it is advised that the husband has progressive prostate cancer and is undergoing hormone therapy and palliative chemotherapy for increasing bone pain due to the spread of cancer. The medical opinion expressed is that his overall prognosis is poor.
In his most recent affidavit filed with the leave of the court at the commencement of these proceedings, the husband updated his health circumstances which I accept to be as follows:
“4.I have been diagnosed with metastatic prostate cancer. My condition is now considered to be terminal and I am in receipt of palliative care only. My current treatment includes chemotherapy, local radiotherapy for pain relief and blood transfusions. My doctors have recently estimated that my life expectancy is not likely to exceed three or four months”.
The wife did provide very real support and assistance to the husband when his illness was diagnosed, including researching medical specialists and accompanying him on a trip to Ireland for medical treatment. I accept the evidence of the wife in paragraphs 23 and 24 of her trial affidavit. The husband deposes to the fact, and I accept, that all of the expenses of this trip, including the holiday to Malta, and all medical treatment were paid from the
B Pty Ltd bank account.
Wife
The wife is an insulin dependent diabetic who has previously, and may now be continuing to suffer from Bell’s Palsy. In her evidence she said that “she can still feel the impact of this illness on her face”. She has previously been an in-patient at a private Hospital for one week. She recently needed treatment to stem the bleeding in an inflamed eye.
I must assess the wife’s health without any evidence from her medical practitioner or specialist which would have been a matter of real assistance. That presents a real difficulty to the Court. She has a continuous work history and otherwise, as her case was developed is responsible for the family, the upkeep of the home and her mother. Accordingly whilst I find that there have been some relatively minor health concerns they currently do not have any real impact upon her ability to travel to and from work each day (M to Q) and otherwise to work full-time and undertake her other significant family responsibilities. Her counsel’s submission to the Court was that the wife “is a candidate for early retirement”. I find that is not borne out on the evidence and in her current financial circumstances, with the required ongoing negatively geared property, her intent to acquire the balance of the E property and the costs of maintaining her family are very strong incentives to the wife to continue in full-time employment. On balance I do not accept the evidence of the wife in paragraphs 49 and 50 of her trial affidavit save that I understand and accept “her feelings that she cannot afford to retire”.
ASSET AND LIABILITY POSITION
The pool of assets and liabilities (excluding superannuation) as agreed to by the parties at the commencement of the case is as follows:
Husband’s Assets
O1 property $330,000
T Shares $1,900
1/3 of fishing boat $2,000
2000 Holden Rodeo $6,000
B Pty Ltd
O2 property $360,000
39% of E property $280,800
ANZ B Pty Ltd Bank Account $34,500
Total $1,015,200
Husband’s Liabilities
ANZ Loan ($270,000)
Husband’s Net Position $745,200
Wife’s Assets
M property $775,000
R1 property $280,000
61% of E property $439,200
ANZ [wife’s] Bank Account $1,533
T shares $1,900
2006 Mazda - Equity $1,500
2002 Holden Club Sport $25,000
Household contents $5,000
Total $1,529,133
Wife’s Liabilities
ANZ Loan ($552,800)
Wife’s loan from mother ($132,547)
Wife’s Net Position $843,786
Total Net Asset Pool $1,588,986
A particular asset in dispute is the proceeds of sale of the Holden Rodeo motor vehicle used by the husband to pay legal fees. Those moneys total $26,000. There is evidence before the Court from Mr V placing the value of this motor vehicle, including all of its accessories at approximately $31,000. In the circumstances of the sale of the vehicle and on a balance of all evidence before me, I do not accept that increased accessory sum(s) necessarily adds real value and I conclude that the sale of this motor vehicle was for fair value and for the purpose described.
WIFE’S PERSONAL LIABILITIES
In her outline of argument the wife provided a summary of her current assets and liabilities which included four items which are both post separation and personal to the wife and her family and which I have determined not to bring to account in these proceedings. Those items were:
§ANZ Qantas Visa Card $2,965
§CE loan $583
§K’s braces $7,330
§School fees $1,753
My understanding is clearly that the exclusion of these four personal liabilities of the wife was acknowledged and agreed to by her counsel in final submissions.
Insofar as the wife’s trial affidavit identifies a further loan to her mother in the sum of $105,000, paragraph 47 thereof, I reject that evidence as to treating such amount as a loan. There is no evidence before me that the wife’s mother ever loaned those moneys or will ever need or recall that amount and given that the B1 property was purchased in June 2000, the alleged transaction is seven years past and, I find, not a live or real issue.
ESTATE OF THE WIFE’S AUNT
In the financial statements and outline of argument of both husband and wife an asset was included of $30,000 being the money the wife is due to receive from the Estate of her late aunt who died on 7 January 2006. That death occurred after the separation of the parties. There is agreement on the quantum of the inheritance, $30,000 and within the reasoning of decisions such as Bonnici (1991) FLC 92-272 and Burke (1993) FLC 92-356 the issue is whether they should be included within the pool of assets or otherwise evaluated on an adjustment of matrimonial assets.
In Bonnici the Full Court said:
“a property does not fall into a protected category merely because it is an inheritance. On the other hand if there are ample funds from which an appropriate property settlement can be made and a just result arrived at, then the fact of a recently acquired inheritance would normally be treated as an entitlement of the party in question: The other party cannot be regarded as contributing significantly to an inheritance received very late in the relationship and certainly not after it has terminated except in very unusual circumstances”.
On the facts of this case and with an understanding that the wife will soon receive these moneys I do propose to exclude the inherited amount from the pool of assets available for distribution between the parties. That exercise of discretion is undertaken on the basis that it is in accord with case law and will more likely produce a just and equitable outcome.
SUPERANNUATION
The approach of both parties is to identify the current value of their superannuation entitlement but on the basis that there is no splitting order sought and they each retain their own superannuation. I have adopted that approach and I specifically record in the context of an overall financial adjustment that the wife has approximately $24,000 more than the husband in such entitlements. That is a factor I have considered in s.75(2) issues. The husband’s superannuation, to which I accept he will make no further contributions, is $101,538 and I do not accept any higher sum. The wife is continuing currently to make contributions and has current tax effective opportunities available. Her superannuation entitlement is $125,621. I accept the evidence of the wife that she had effectively transferred her long service leave entitlements from her previous employer to her superannuation. That increased its then value and was apart from the period of cohabitation. Otherwise I understand that at the commencement of cohabitation the husband had some $5,000 more invested in superannuation than had the wife and these are identified in the pre-cohabitation assets elsewhere in this Judgment.
OVERALL POOL OF ASSETS
I therefore understand that the total net assets available to the parties and their respective agreed superannuation sums total $1,816,145.
LEGAL FEES
At the commencement of the proceedings I required the parties to hand to the Court a statement of their legal fees in compliance with the Family Law Rules – 19.04. I will not retain those handwritten documents on the file. I record that the wife’s evidence, confirmed by her counsel in final submissions is that she has paid only $11,000 to her former and current solicitors. She has substantial legal fees, accounting fees and disbursements owing and incurred daily costs of $7,000 plus GST for this hearing. The husband has incurred legal costs of $26,000, paid for by the sale of the Holden Rodeo motor vehicle and otherwise has some costs outstanding and his cost estimate, excluding GST for this hearing was approximately the same as incurred by the wife.
As to my treatment of these legal fees and disbursements previously paid by the parties I propose in the exercise of my discretion to properly adjust the s.75(2) factors and percentage division to include this amount. Otherwise I am generally aware from the financial statements of the parties, or more particularly from their compliance with Rule 19.04 of their significant future legal fees and disbursements to be paid. The wife’s total future expenses do considerably outweigh those of the husband and I have had regard to that financial circumstance.
CAVEATS ON TITLE
I was advised by counsel in their final addresses that both parties have lodged caveats on title(s) against the real property owned by the other. There was a discussion in Court, in the presence of the parties and it is specifically agreed that the parties are to retain their respective real property assets save for E property which they own in their sole name. On this basis they have each agreed to uplift those caveats and the Court was asked to make an order, effectively by consent, that all such caveats be removed forthwith. Such an order will be included in the orders pronounced herein.
FINANCIAL ADD BACKS SOUGHT BY WIFE
Counsel for the wife presented to the Court at the commencement of the hearing an Aide Memoire identifying twelve specific financial add backs which she sought to include in the net pool of assets and specifically in this regard items included post separation expenditure by the husband. The wife identified a total sum of $114,700 and specifically the twelve individual items sought to be included were pursuant to “W1” as follows:
1.Assistance to husband’s son B to replace stolen
tools in 2001/2002 (paragraph 51(a) of wife’s
affidavit $7,0002. Assistance to husband’s son B to repair/
purchase Porsche in December 2004 (paragraph
51(b) of wife’s affidavit) and paragraph 6.46 of
husband’s second affidavit $8,0003. Loan to husband’s son M in 1998 to assist with
upholstering of his car (paragraph 5(c) of wife’s
affidavit $3,0004. Gifting of panel van motor vehicle to husband’s son
J in 2001/2002 (paragraph 51(d) and 35(c) of
wife's affidavit $1,0005. Advance to husband’s brother F in December
2002 (paragraph 51(e) of wife’s affidavit) $2,000
6. Forgiving of loan to brother’s company regarding
“coring machine” in November 2001 (paragraph
51(f) of wife’s affidavit) $5,0007. Gifting of money to husband’s son M to buy car
in November 2005 (paragraph 51(g) of wife’s
affidavit and paragraph 6.49 of husband’s second
affidavit $10,0008. Gifting of 1/3 interest in boat to husband’s sons
(paragraph 51(h) of wife’s affidavit) $3,000
9. Rental fromO1 property paid to
Husband’s first wife since separation (paragraph
8 of husband’s second affidavit) $15,00010. Husband’s purchase of car for first wife (paragraph
8 of husband’s second affidavit) $30,000
11. If the value of the 2004 rodeo ($30,700) is excluded
from the Asset Pool, then the difference between its
market value and what the husband’s son has paid
for it ($26,000) (paragraph 18 of the husband’ssecond affidavit) $4,700
12. The sale proceeds of the 2004 Rodeo paid for legal
costs (paragraph 18 of the husband’s second affidavit) $26,000
$114,700
FINDINGS ON FINANCIAL ADD BACKS
Save for my findings in respect of legal fees expended in these proceedings (item 12) I otherwise reject each and every add back sought by the wife. I will intentionally not include such other add back amounts within the available pool of assets for distribution between the parties. I find that the adding back to the pool of assets of the value of items 1 – 11 (inclusive) would not bring about a just and equitable result. I have specifically considered the facts and circumstances of each item, as required pursuant to s.75(2)(o) and conclude that the justice of the case requires that there be no such add backs.
Having carefully read the affidavits of the parties and in particular paragraph 52 of the wife’s document and in particular having listened to the evidence of the wife and the submissions of her counsel I do not accept her evidence on any of tehse matters and I find:
§that items 2, 4 and 5 were properly gifted or advanced by the husband to his sons, or members of his family;
§that items 3, 6 and 7 were effectively a repayment for work undertaken by each of those persons to the benefit of the husband or the family business;
§specifically as to item 7 I accept that M did work in the business and did give very real assistance during the period of his father’s illness and that such a gift was reasonable and appropriate for the purposes of purchasing a car for him in lieu of wages and payment;
§that the gift of the interest in the boat (item 8) was fair, reasonable and appropriate within a family environment and that asset should not be included within the pool of assets for distribution;
§that item 9 is moneys now accumulated to pay the funeral expenses of the husband. This is proper and I regard it as highly inflammatory and inappropriate for this rental sum accumulated of approximately $15,000 to be sought to be included in the pool of assets;
§on balance, and given the various contributions of the husband throughout the marriage, of his past and present need for a motor vehicle and the benefit that his former wife (U) is providing to him by support and transport services I will not add back item 10;
§I find that the Holden Rodeo motor vehicle was sold for a negotiated price which I regard to be reasonable. I do not necessarily reject the evidence of valuation of the extras that were fitted to that motor vehicle as described in the affidavit of Mr V but they may have been unwanted extras and there has been no questioning of the negotiation or sale process of the car. I accept that the $26,000 sale price was, in the circumstances of a private sale between family members fair and reasonable. I therefore reject any addition of $4,700 to the available asset pool;
§the inclusion of the sum of $7,000, item 1, is a more substantial issue. I accept that those moneys were paid to the husband’s son B to replace stolen tools. I accept the wife’s evidence that she withdrew $7,000 from her bank account, which she separately maintained, and those moneys were paid to B Pty Ltd to be on-paid to the son. I accept that course of action was adopted because the son wished to receive the moneys, not from the wife but from the corporate entity. I accept that the moneys were repaid on 30 June 2002 by the son to the company as identified in exhibit “H12”. I accept that the wife did not specifically withdraw or have the direct benefit of that sum from the company;
§with that background, and after careful evaluation I have elected not to add back that sum of $7,000 to the available asset pool. The repayment occurred approximately five years ago and from that date of repayment until separation there was a general dealing in funds mutually to the benefit of both parties. In any event the reality is that the current bank assets of B Pty Ltd have been brought to account in the asset pool with the moneys now deposited in the ANZ Bank. During submissions I accepted that this issue was acknowledged by the wife’s counsel and the request to include this add back was then effectively discontinued. I find it would not bring about a just and equitable resolution to include that particular sum within the available asset pool.
The Full Court in Omacini and Omacini (2005) FLC 93-218 (Holden, Warnick and Le Poer Trench JJ) determined that there were three clear categories of case where the Court could determine that it was appropriate to notionally add back to the parties pool of assets.
§first where the parties had expended money on legal fees;
§secondly, where there had been a premature distribution of matrimonial assets; and
§thirdly, where one of the parties had undertaken reckless investments or deliberately set out to diminish the value of the matrimonial property.
I will separately include appropriate expenditure on legal fees and I find that there has been no reckless venture or deliberate action to diminish the pool of assets. I remain comfortable that the acquisition of the motor vehicle for U was appropriate and was not caught within the approach and decision of the Full Court in Townsend and Townsend (1995) FLC 92-569. In any event I specifically do not have evidence of the now value of that motor vehicle and will not bring same into account in the pool of assets. That is within my discretion on the whole of the evidence in this case.
HUSBAND’S EMPLOYMENT AND INCOME
The husband currently has no income from employment. He is not in receipt of any pension or superannuation income benefit. He does receive rental income of approximately $4,000 per calendar month from B Pty Ltd’s 39% ownership of E property and from his ownership of both of his O properties. This rental income likely covers his current mortgage obligations. I accept that B Pty Ltd ceased all outstanding work and contracts and has not traded beyond 2006. All contracts were concluded and I reject any allegation that the husband’s sons or members of his family have otherwise benefited at the financial expense of the wife with the winding up of the business.
I specifically find that the husband worked diligently in his business throughout the years of cohabitation and marriage, more so in the years 2002 – 2006 (inclusive) and whilst his health so permitted. In addition I accept the husband’s evidence that he did undertake repair and renovation work on the various homes and investment properties that were purchased by the parties, individually or jointly. I accept his evidence as contained in paragraphs 6.21 – 6.28 (inclusive) of his further affidavit.
I accept that the husband has sought an extension to file his taxation return for the year ended 30 June 2006 on the basis that all of the required documents are currently not available to him and have, in part, been collated for the purposes of this hearing. I require all of the husband’s personal documents to be returned to him upon completion of these proceedings and he, or others on his behalf will then need to lodge his required personal and corporate taxation returns and accompanying financial documents.
WIFE’S EMPLOYMENT AND INCOME
The wife is a general manager in the employ of C Company a ladies retail fashion business. She has a wholly reliable work history for the past 29 years having worked with the same employer, first at S Company and now in her present employment. I have carefully considered her financial statements filed with the Court and accept that her gross income, including allowances is currently $80,000 p.a. plus superannuation.
Subject to my findings on the wife’s health I realistically would expect, and the wife financially would almost certainly have to continue working, at least to age 55 years or thereafter. I would be confident that she is greatly accepted and appreciated in her employment and her work skills and organisational abilities are very considerable. The wife’s evidence was that her work day, from departing to returning to the M home is between 12 and 14 hours each day. Her travel time is up to four hours and clearly that is a very real burden but since her move to R, and then return to M travel has been part of her daily work life. She has coped and likely will continue to cope with such significant driving time.
In any event a financial assessment of the wife’s home and family expenditure and her negatively geared assets, and her desire to acquire, if necessary, the husband’s interest in E property establish that her ongoing income is essential to her family’s financial wellbeing and lifestyle.
WIFE'S MOTHER'S CONTRIBUTION
The wife’s mother is 72 years of age, lives with the wife in her M home and has filed an affidavit and annexures in this hearing which I have read and evaluated. The wife’s primary affidavit substantially highlights her mother’s financial and other contributions made primarily from the year 2000.
I accept the assistance that the wife’s mother has provided to her daughter and grandchildren and, with the hours of employment and travelling time expended by the wife each day the real assistance given in the role of home person and grandparent should not be under-estimated to the benefit of, primarily, the wife. I have wholly accepted the evidence of the wife in paragraphs 43(a) and (b) of her trial affidavit.
I further accept the financial assistance identified in the wife’s mother’s affidavit though I do not treat moneys advanced as a loan as I am confident that the repayment was never intended and will not be required.
I do accept that a specific debt of $132,500 is owing by the wife and attributable directly to the advance of moneys to purchase M in late 2002.
Whilst the husband alleges in paragraph 6.42 of his further affidavit that he was not aware of the financial contributions of the wife’s mother I find that unlikely and specifically he would have been aware of the financial contributions and basis of purchase of the property at B1 and, of course, the M property. I accept paragraph 48 of the wife’s primary affidavit.
I have therefore carefully understood and evaluated the various contributions of the wife’s mother both generally to the family and more specifically by way of ongoing day to day support and assistance to the wife. I will properly include these contributions in determining a just and equitable outcome.
B PTY LTD – LEGGERO FAMILY TRUST
B Pty Ltd is the husband’s company and was incorporated in July 1988. The husband’s maintenance business was conducted through this corporate entity and it also acted as the trustee of his family discretionary trust known as the Leggero Family Trust which was also established in July 1988. The husband was the appointor and guardian of the Trust.
The financial picture provided by the corporate taxation returns is somewhat incomplete. Exhibit “W11” provides that financial information for the years 2003 – 2006 (inclusive). There are no earlier financial returns for B Pty Ltd save for what can be ascertained through the Family Trust returns. Exhibits “W8”, “W9” and “W10” are the financial statements and taxation returns for the Trust for various years between 1993 and 2004 but significantly excluding the years 1999 – 2002 (inclusive). There was no satisfactory explanation for these documents not being produced, particularly when the wife was able to identify and submit all other documents.
To highlight the substantial income received by the Trust, primarily from business activities in the years 2002 – 2006 (inclusive) I have set out hereunder paragraphs 40(a) and (b) of the wife’s primary affidavit:
“40.(a) The Trust has made the following taxable income since 1 July 2002:
(i)1/7/02 to 30/6/03 - $69,817;
(ii)1/7/03 to 30/6/04 - $218,624
(iii)1/7/04 to 30/6/05 - $297,194
(iv)1/7/05 to 30/6/06 - $274,254;
(b)[B Pty Ltd] in its own right has received the following distributions from the Trust since 1 July 2002:
(i)1/7/02 to 30/6/03 - $24,601;
(ii)1/7/03 to 30/6/04 - $177,624
(iii)1/7/04 to 30/6/05 - $244,981
(iv)1/7/05 to 30/6/06 - $204,579;
I accept that the husband was employed at all times prior to cohabitation and then, most likely he did contract work or was employed until about 2002. The husband’s evidence to the Court particularly acknowledged that his business was not wholly successful in the early years of cohabitation and that its real success was in and after the 2002 financial year. He emphasised that in its early years it always returned “a living” but it did not have the substantial contracts that it won from late 2002. His specific evidence was that from that time the business “won tenders” and that he “pushed the business harder”. I accept that evidence inclusive of paragraphs 6.32 and 6.33 of his further affidavit but subject to the caveat acknowledging the wife’s bookkeeping and administrative contributions. I generally accept the wife’s evidence in paragraphs 36, 37 and 38 of her trial affidavit.
I accept the wife’s evidence in paragraph 40 of her affidavit as amended by paragraph 2(b) of her further affidavit and this certainly does highlight the very significant income which the husband was able to generate through that corporate structure and as a result of the work identified by the wife in paragraph 37 of that affidavit. The husband quoted, organised and undertook, personally or at his direction the actual physical work engaged in deriving that substantial income. That is a very significant s.79(4) contribution as the income in those years immediately prior to separation in November 2005 was significant and far and away greater than any income from any other source available to these parties.
The wife has highlighted her work and contributions to B Pty Ltd in paragraph 39 of her affidavit and with her bookkeeping skills and background I accept that she performed these duties on a regular basis and thereby has made a s.79(4) contribution to the organisation and financial success of the business in those years immediately prior to separation. I have read document 116 to her further affidavit.
I have carefully considered and generally accepted paragraphs 20 – 29 (inclusive) of the husband’s trial affidavit and paragraph 5 of his further affidavit. Nevertheless, in cross examination he effectively conceded the work and significance of the wife’s bookkeeping and organisational contributions and additionally he acknowledged that it “contributed to the profitability of the business”. I accept that evidence and will have due regard to the wife’s contributions in this regard. The caveat that the husband placed upon that admission was that he could have retained the employment of his former bookkeeper to undertake all tasks and more importantly that he was the person able to obtain and negotiate the contracts and more particularly undertake the work which produced this significant income. I accept his evidence in that regard that he made the very significant work and financial contribution to which I give real weight.
In particular, and in the context of all of the property acquisitions and the lifestyle enjoyed by the parties and the wife’s children I accept that all of the earnings of B Pty Ltd were applied at all times, but particularly in the four years from 2002 to meet the investment needs, property dealings, family expenses, lifestyle, health and financial commitments of the husband and wife. Included as such an expense must be assistance with meeting the negatively geared expenses of various investment properties and in this regard I therefore record the significant contribution made by the husband.
There are related matters put in issue in the affidavits that ultimately add little relevance to the hearing. The husband at all times acknowledged that he was the person in control of B Pty Ltd and his Family Trust. The relevance therefore of the debt owing by the Family Trust to B Pty Ltd as at 30 June 2006 in the sum of $498,366 was never explored or developed. In reality what was before the Court, by agreement, was the totality of the current assets of B Pty Ltd and the Trust, those assets are the O property, 39% of the E property and the balance of the ANZ Bank account. All of those matters are wholly included within the pool of assets and available to be adjusted by the orders herein.
Likewise there was a considerable initial issue as to the inclusion of the wife’s children as beneficiaries, or at least as persons to whom distributions were made within the Family Trust. That was never fully explored nor in my view is it of any relevance in the ultimate determination of just and equitable property orders.
STANDARD OF PROOF
The appropriate standard of proof that I have applied is the civil standard, namely the balance of probabilities. The more serious that the matter or allegation was, or its importance in this case, then I have more strictly examined the level of proof required. In Briginshaw v. Briginshaw (1938) 60 CLR 336 at 361-2, Dixon, J. said:
“Except upon criminal issues to be proved by the Prosecution, it is enough that the affirmative of an allegation is made out to the reasonable satisfaction of the Tribunal. But reasonable satisfaction is not a state of mind that is attained or established independently of the nature and consequence of the fact or facts to be proved. The seriousness of an allegation made, the inherent unlikelihood of an occurrence of a given description, or the gravity of the consequences flowing from a particular finding are considerations which must affect the answer to the question whether the issue has been proved to the reasonable satisfaction of the Tribunal.”
OBSERVATION OF WITNESSES
I have had what I consider to be in this case the very real benefit of observing the husband and wife in giving their evidence on oath and in observing them in the courtroom, their demeanour and character and also when they were cross‑examined. That observation has been of real assistance in formulating appropriate orders. Those observations are acutely available to a trial judge and the legal authority for such a position is that part of the Judgment of Kirby J in Minagall v Ayres (1966) SASR 151 at 154 per Hogarth J; see also Government Insurance Office of New South Wales v Bailey(1992) 27 NSWLR 304 at P313:
“By conventional theory, the observations made by a trial judge of the appearance and demeanour of a witness giving evidence are not only available to be used in the determination of a dispute but amount to important ingredients of the decision-making process. They normally provide the primary decision-maker a distinct advance which controls, and even limits, the exercise by the appellate court of its statutory functions in an appeal by way of re-hearing: see Owners of Steamship Honestroom v Owners of Steamship Sagaporack [1927] AC 37 at 47; Jones v Hyde (1989) 63 ALJR 349 at 351; 85 ALR 23 at 27; Abalos v Australian Postal Commission (1990) 171 CLR 167 at 178ff.”.
I have had the significant benefit of hearing all of the evidence in its entirety, of reading carefully all of the affidavits, the exhibits to the affidavits and the other exhibits in the proceedings. I have reflected upon and have weighed all parts of the individual testimony against the balance of all evidence prior to delivering these reasons for judgment. I stress that, in this case, my court observations of the parties were of benefit and importance.
The unique role and observations of a trial Judge have very recently been highlighted by the House of Lords, Appellate Committee, in the case of In re J (a child) (FC), judgment delivered 16 June 2005 and I refer to this opinion to support my observations in this case.
In paragraph 4 and paragraphs 10-12 (inclusive) of the Judgment of Baroness Hale of Richmond the role of the trial Judge in the evaluation of oral evidence was considered and in part, it was there stated that:
“10. The Court of Appeal appears to have intervened on the basis, first, that the judge’s conclusion on the risk was not justified by the evidence and second, that he had given it too much weight in his overall conclusion. Yet the assessment of the risk depended entirely on the judge’s evaluation of the father’s present intentions and likely future behaviour and its impact upon the child. There was objective evidence of the risk in the fact that the father had made the allegations in writing and then withdrawn them when he saw that they were damaging rather than helping his case. Whether he might do so again depended crucially on the judge’s evaluation of his oral evidence. The judge was the only person who could do this. He concluded that, while the father was sincere in his current intention not to raise such allegations again, there was a serious risk that if disputes arose in future, as they might easily do, he would resurrect them. These were findings of credibility and primary fact with which, for all the reasons explained by Lord Hoffmann in Piglowska v Piglowski [1999] 1 WLR 1360, at pp 1372-3, an appeal court is not entitled to interfere”.
ASSESSMENT OF HUSBAND AND WIFE
I find the husband to have been a hard working, industrious person but with somewhat limited written and verbal skills. He was not, by nature, financially adventurous. He did establish and develop good business contacts and he must have been very good at his work performance given the financial success of B Pty Ltd in the years 2002 – 2006 (inclusive). His memory has now failed him on much of the past financial detail, but with his age and current state of health that is understandable. He has confronted his fight for life with determination and dignity. Whilst I have a number of qualifications about his evidence and its content, he was not, in any way a misleading or dishonest witness.
The wife is an extremely hard working and career minded individual as well as a mother devoted to her children and her extended family. She has adopted a very aggressive financial and property acquisition outlook. She actively sought out property acquisition opportunities. Her organisational and borrowing skills are high. She has proved to be very persuasive to financial lending institutions. She is methodical and determined and I am confident, above all else, a very good and dedicated bookkeeper and office general manager. Her records kept and her recollection of many past events is much clearer than that of the husband. There were however matters upon which I do not accept her evidence, or where it has been somewhat exaggerated or where she has simply down-played the past work effort and contribution of the husband.
Notwithstanding the request from counsel for the wife, I have not determined this case upon a finding of credit. I have evaluated all of the evidence and made orders that are just and equitable. I have endeavoured to be respectful of both parties and properly limit personal criticism. I do not make a general finding that I prefer the evidence of one party as against the evidence of the other, as I was asked so to do.
FAMILY LAW ACT 1975 (CTH), S.79 AND RELEVANT CASE LAW
The proper approach to determining a section 79 application is now well established, both by the Family Law Act and by case law (see In the Marriage of Lee Steere and Lee Steere (1985) FLC 91-626; In the Marriage of Davuat & Raif(1994) FLC 92-503; In the Marriage of Clauson (1995) FLC 92-595).
Section 79(2) requires that any order must be just and equitable. Section 79(2) provides:
“(Just and equitable requirement) The court shall not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.
In considering the alteration of property orders that may be required I must have specific regard to and evaluate section 79(4) of the Family Law Act 1975 (Cth). I have detailed throughout this Judgment the very specific contributions both direct and indirect, financial and non-financial and other contributions, including that of a home maker. I have referred to and incorporate within my consideration and evaluation of section 79(4) all such issues and findings.
Section 79(4) specifically provides:
[Matters to be taken into account:] In considering what order (if any) should be made under this section in proceedings with respect to any property of the parties to a marriage or either of them, the court shall take into account-
(a)the financial contribution made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them;
(b)the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of the, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them;
(c)the contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage and any children of the marriage, 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 to the marriage;
(e)the matters referred to in sub-section 75(2) so far as they are relevant;
(f)any other order made under this Act affecting a party to the marriage of a child of the marriage; and
(g)any child support order 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.
As was said by Guest J in P v P (unreported) Appeal No. WA3 of 2002:
“the mandatory prescription of the Act is to evaluate contributions pursuant to section 79(4). In Pierce v Pierce (1999) FLC 92-844 at page 85,881 the Full Court (Ellis, Baker and O’Ryan JJ) said: “… there is an obligation on the trial Judge not only to identify the relevant contributions but also to assess them”. Similarly in JEL v DDF (2001) FLC 93,075 at paragraph 152(b) the Full Court (Kay, Holden and Guest JJ) said “…it is a clear general principal, derived from recognised authority that there is a requirement to undertake an evaluation of the respective contributions”.
Accordingly I have carefully safeguarded against utilising the provisions of section 79 of the Act as a “source of social engineering or as a means of evening up the financial positions of the parties to the marriage”. See Kennon v Kennon (1997) FLC 92-757 at p. 84,303. It is not the purpose of the relevant provisions of the Act to “… equalize the financial strengths of the parties”, per Wilson J in Mallet v Mallet (1984) 156 CLR 605 at 638 when addressing his attention to the object of section 75(2) of the Act.
Section 79(4) involves a four step exercise which I have undertaken in this Judgment, namely:
(a)the identification of the property of the parties, their assets and financial resources net of their liabilities;
(b)the evaluation of the “contributions” and s.79(4) issues;
(c)the evaluation of the matters referred to in section 75(2);
(d)a determination as to whether the result is just and equitable by reference to section 79(2) of the Act. In determining whether the outcome is just and equitable it is “the real impact in money terms which is ultimately the critical issue” (JEL v DDF (supra)).
SECTION 75(2) FACTORS
The relevant factors which I have considered and evaluated throughout this Judgment are :
(a)the age and state of health of each of the parties;
(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;
(c)whether either party has the care or control of a child of the marriage who has not attained the age of 18 years;
(d)commitments of each of the parties that are necessary to enable the party to support :
(i)himself or herself; and
(ii)a child or another person that the party has a duty to maintain;
(f)subject to subsection (3) the eligibility of either party for a pension, allowance or benefit under -
(i)any law of the Commonwealth, of a State or Territory or of another country; or
(ii)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;
(g)where the parties have separated or divorced, a standard of living that in all circumstances is reasonable;
(n)the terms of any order made or proposed to be made under section 79 in relation to the property of the parties;
(o)any fact or circumstance which, in the opinion of the Court, the justice of the case requires to be taken into account.
INITIAL PROPERTY CONTRIBUTIONS
The issue of initial contributions to property has been considered and developed over the years by the Full Court and other Superior Courts.
§In the Marriage of Lee Steere (1985) FLC 91-626 (Fogarty, Maxwell and Nygh JJ at 80,078) said:
“The strength of a contribution made at the inception of a marriage is eroded, not by the passage of time but by the off-setting contribution of the other spouse”.
§In Way and Way (1996) FLC 92-702 (Barblett DCJ, Finn and Butler JJ at 83,404) the Court said:
“We regard the law in this area as now settled by the statement of Fogarty J in Money (and subsequently accepted by all members of the Full Court in Bremner) that an initial substantial contribution by one party may be eroded to a greater or lesser extent by the later contributions of the other party even though those later contributions do not necessarily at any particular point outstrip those of the other party”.
§More recently in Pierce and Pierce (supra) (Ellis, Baker and O’Ryan JJ) said at (paragraph 28):
“In our opinion it is not so much a matter of erosion of contribution but a question of what weight is to be attached, in all the circumstances, to the initial contribution. It is necessary to weigh the initial contributions by a party with all other relevant contributions of both the husband and wife. In considering the weight to be attached to the initial contribution, in this case of the husband, regard must be had to the use by the parties of that contribution”.
In White v White Lord Nicholls said (at p. 1583F):
“This distinction is a recognition of the view, widely but not universally held, that property owned by one spouse before the marriage, and inherited property whenever acquired, stand on a different footing from what may be loosely called matrimonial property. According to this view, on a breakdown of the marriage these two classes of property should not necessarily be treated in the same way. Property acquired before marriage and inherited property acquired during marriage come from a source wholly external to the marriage. In fairness, where this property still exists, the spouse to whom it was given should be allowed to keep it. Conversely, the other spouse has a weaker claim to such property then he or she may have regarding matrimonial property.
Plainly, when present, this factor is one of the circumstances of the case. It represents a contribution made to the welfare of the family by one of the parties to the marriage. The judge should take it into account. He should decide how important it is in the particular case. The nature and value of the property, and the time when and circumstances in which the property was acquired, are among the relevant matters to be considered. However, in the ordinary course, this factor can be expected to carry little weight, if any, in a case where the claimant’s financial needs cannot be met without recourse to this property”.
I have also considered the unreported Full Court decision, M v M (No. EA32 of 1998 – 13.10.1998) (Ellis, Lindenmayer and Brown JJ at paragraph 79) where it was stated:
“In considering the weight to be attached to an initial contribution, one should not lose sight of the subsequent use of such contributions. In the instant case, the substantial benefits which flowed have been identified in the wife’s submissions and by the trial Judge”.
I have carefully considered these contributions and the weight attached thereto in my s.79(4) evaluation. I am aware of and have had regard to the ongoing use of such initial financial positions.
INHERITANCES AND PRE-COHABITATION CONTRIBUTIONS
Husband
The husband initially identified his assets at the commencement of cohabitation in paragraph 8 of his original trial affidavit. He did not ascribe a value to the business or tools of trade and otherwise estimated those contributions to then be $312,000.
A subsequent property valuation, accepted by both parties has determined the value of that property at O1 to be $125,000. There was initially an issue as to whether that property was then encumbered by a $50,000 liability but I am wholly satisfied that was not the case and my understanding is that, notwithstanding paragraph 7 of the wife’s further affidavit, counsel for the wife now accepts that this property was then unencumbered.
As a result of cross examination I am satisfied that the superannuation entitlements then held by the husband should more correctly be found to then be $19,000 in lieu of $25,000.
There was considerable cross examination of the husband as to his level of then savings and cash moneys held. I have carefully read paragraph 6.31 of his further affidavit and the answers given in cross examination. I am satisfied that the husband’s business cheque account fluctuated from time to time subject to his work completed. I am satisfied that he did hold cash amounts, including “a lucky trifecta”. I otherwise am satisfied that the balance of cash and savings so as to find that the husband most likely did have total available moneys of $30,000.
I carefully followed the wife’s counsel in his cross examination of the husband upon his personal tax returns and business tax returns and financial statements which are variously before the Court in exhibits “W3” – “W10” (inclusive). In particular I have reflected upon exhibits “W5” and “W6” in the context of the debt then owing by the husband to the Australian Taxation Office and its subsequent variation and I am comfortable with my findings in the context of that evidence. I do not intend to disseminate the individual yearly returns but I am generally comfortable in accepting the husband’s evidence under cross examination where he stated that:
“I certainly did have $30,000 in savings”
and I interpret savings to include, cash, all moneys and financial deposits. I have considered the minimal disclosure of interest income received in the husband’s taxation returns that are in evidence but nevertheless I am comfortable with my finding.
In summary I find that the assets, excluding the value of the business and tools in trade and inclusive of the motor vehicle and panel van, held by the husband at cohabitation totalled $181,000 and specifically were as to:
§Equity in the O1 property $125,000
§Superannuation entitlements $19,000
§Cash and savings $30,000
§Motor vehicle $7,000
$181,000
WifeThe wife’s assets at the commencement of cohabitation were specifically summarised in paragraph 32 of her trial affidavit and otherwise detailed in the outline of argument relied upon by her counsel. I conclude that subject to one further liability those assets were then:
§One-third interest in farm at G $56,667
§Equity in F property $175,000
§Ford Maverick motor vehicle $20,000
§Superannuation $14,170
$267,837
I have had regard to the wife’s exhibits “W13” and “W14” in determining these values.
As to the mortgage then encumbering F property I have had particular regard to the wife’s exhibit “W15”. It does seem that with continuing payments of principal and interest the balance of that mortgage debt would have totalled approximately $105,000 as at cohabitation.
On the basis of exhibit “H2”, being a summary of the wife’s loans to the ANZ Bank as at 28 August 1997 I have however adjusted her then assets by deducting the further sum of $15,000 that was then owed on a second home loan (as is identified in paragraph 2(d), on page 9, of that exhibit).
On that basis therefore I find that the wife’s assets at cohabitation totalled $252,837.
The total of pre-cohabitation assets of the parties therefore totalled $433,837 of which the wife contributed approximately 58% and the husband contributed approximately 42%. This is an important background factor, but relevant to a then much smaller pool of assets which I will fully evaluate in determining the appropriate s.79(4) contributions of the parties.
M HOME
The wife is now the sole registered proprietor of the property situate at M.
The title history of the acquisition of this property is explained in exhibit “H11”, the property having originally been acquired as tenants in common in unequal shares by the wife and her mother. The provision of the deposit moneys and other required moneys on settlement of the sale are identified in exhibit “H10”.
To facilitate the acquisition of this property the wife sold a residential property at F for $482,000 in or about October 2002.
There was a history to the delay in settling the sale of M, which the wife has explained and which I regard as largely irrelevant to the adjustment of property interests as between these parties.
I accept the wife’s evidence in paragraph 45 of her trial affidavit, and the annexures thereto. This property has been and remains the primary home of residence to the wife, her mother and her four children. I have evaluated her s.79(4) financial and other contributions and it is of real importance.
The purchase price of the home was $680,000 and, with the agreed valuation for the purposes of these proceedings the wife’s equity therein has increased by $95,000.
I accept that the wife has been financially responsible for payments of the ANZ Bank mortgage encumbering title to M and otherwise has the agreed responsibility to repay the balance of her mother’s loan of $132,500. I do accept that without the financial contribution of the wife’s mother M could not and would not have been purchased. I have given due weight to that family contribution and the ongoing and effective interest free loan period.
Whilst I accept the husband made no specific financial contribution to the acquisition of M I find that the income from B Pty Ltd in the years post 2002 were available to facilitate the loan repayments and general upkeep of the property and specifically I find the husband made the extensive physical contributions as identified in paragraph 6.24 of his further affidavit. I do not accept the wife’s more limited evidence in this regard.
E PROPERTY
This property was purchased as tenants in common on 10 February 2004 in the name of the wife as to 61% and by B Pty Ltd as to 39%.
The purchase price was $680,000 and I accept that B Pty Ltd paid the deposit from its own funds and thereafter borrowed against the title a sum required to finance its total 31% share therein. The wife separately funded and borrowed to acquire 61% of the property.
E property is tenanted and the parties receive their appropriate percentage of the income paid and are responsible for like outgoings. The wife currently receives $710 per week in gross rent and those moneys, and other rental income from her property at R1 ($235 per week) enable her to service the weekly repayment of her ANZ Bank mortgage in the sum of $928 per week. Her current gross rental income is therefore similar to that of the husband.
As counsel opened their cases the central issue to the respective adjustments sought by the parties are as to the adjustment of the interests on title for E property where the wife seeks ownership of the whole property and the husband proposes an adjustment to title to reflect equal ownership and then a sale on the basis of maximising his financial entitlement therein.
The evidence of the wife is that she could readily fund, on the basis of the orders she has sought, the acquisition of any interest which the husband may retain in E property by converting her ANZ mortgage loan into an interest only facility and additionally she would thereby have the advantage of increasing her borrowings to fund any required payment to the husband, but only up to the additional sum of $144,000.
NEGATIVELY GEARED INVESTMENT PROPERTIES
The wife’s taxation returns are in evidence before the Court but a rental property statement is attached only to the returns for the financial years ending 30 June 2005 and 30 June 2006 and these are before the Court as part of exhibits “H8” and “H9”.
In the 2005 financial year the wife claimed personal property losses as follows:
§R2 $7,548
§R1 $11,151
§O2 $11,002
$29,701
In the 2006 financial year the wife claimed:
§R2 $9,762
§R1 $4,822
§O2 $15,314
$29,898
The above sums have been calculated after incorporating the gross rental paid and primarily are reflective of all interest charged, depreciation, council rates and outgoings, insurances and all other expenses. These losses are substantial and do provide in these years a highly effective taxation outcome for the wife. The property at R2 has now been sold.
I have included these most recent yearly expenses to highlight both the income that the wife needs to derive from her gainful employment to maintain a tax effective negatively geared investment and otherwise the availability of income from B Pty Ltd which had been required to assist with other commercial and family expenses and outgoings.
PROPERTY DEALINGS
Throughout the cohabitation and marriage the parties jointly or individually bought and sold numerous properties. The addresses of the properties are more particularly identified in paragraph 34 of the wife’s trial affidavit and paragraph 21 of her further affidavit. I do intend to take a general approach to the real estate activities of the parties acknowledging the financial result being their current ownership of two properties each, together with their interests in E property and subject to the total ANZ liabilities identified in the evidence.
My assessment is that the wife was the prime motivator in the property acquisition ventures though there was often a co-mingling of funds and effort, at least in some of these acquisitions. I do well understand that the wife solely or principally acquired and financed some of the property ventures, in particular her various properties at R and B2. The husband undertook physical work and made such a contribution to a number of these properties. I therefore do not accept the matters deposed to by the wife in paragraph 19 of her trial affidavit or paragraph 24 of her further affidavit where there is conflict on these issues. I prefer the evidence of the husband.
On balance and with a good understanding of the evidence I do propose to take somewhat of an overview and not descend to the particular detail for each and every property acquisition that the wife had available in her arch lever folders of documents. I emphasise that I have listened carefully to the evidence and read all of the affidavits and fairly understand the respective contribution made by the parties in this regard.
HOME MAKER AND ACCOMMODATION
I accept the evidence of the wife that she, together with her mother, were the primary home makers and domestic providers for the family. This is a valuable and specific contribution on her behalf which she identified in paragraph 33(b) of her trial affidavit.
Her evidence was that she and her mother provided all household services, cooked meals, shopping, laundry, home cleaning and the like. In cross examination the husband acknowledged that the wife was a good home maker and said that “he did not criticise her as a home maker”.
I balance however that home maker role in the context that both the wife and her mother were primarily providing a home and all support for the four children, which they extended to the benefit of the husband and which therefore did “free him up to do other things including increasing the profitability of [B Pty Ltd’s] business”.
I acknowledge the very busy work and domestic schedule of the wife, the very significant driving time involved from R or M, to and from Q and her dedication to her family. These are important contributions which I have fairly and properly weighed in my evaluation of a just and equitable outcome.
Additionally it is a fact that throughout the period of cohabitation and marriage the husband lived in homes owned or provided by the wife. This accommodation is identified in paragraph 21 of the wife’s trial affidavit and I accept her evidence given therein. Throughout the marriage the parties lived at B, F, R and finally at M.
I have considered and evaluated this further proposed contribution by the wife in the context of the other property dealings by the parties and the husband’s physical work and assistance on the various properties. I am of the view that any particular contribution alleged through the provision of this various accommodation, in the particular circumstances of this case is relatively minor.
I am not comfortable on the evidence concluding as a fact that the husband was unable to find work in Southern Victoria for six months in 2002. I do record, in the context of home maker contributions that the husband regularly stayed, three nights in each week, at his parents’ home in O rather than travelling to R of M.
FINANCIAL DEALINGS
The wife has endeavoured, for the period of cohabitation and marriage to reconstruct the parties conduct, management and separation of their respective bank accounts and finances and the history of all of the property dealings. Mr Mawson, in his final address sought to compare this to the wife unsuccessfully “solving a jigsaw” or otherwise “unscrambling the egg”. I do not wholly adopt either analogy but, without criticism, evidence was selectively available and incomplete and certainly almost entirely, as to documentary evidence, produced by the wife. The evidence was somewhat confusing though clearly the wife had many documents available to her to partially support her position. I am comfortable in finding that there were various occasions when the husband did give cash sums to the wife and I certainly accept his evidence as to both the $7,000 and $5,000 sums, together with other smaller payments from time to time. The wife acknowledges a particular payment identified in exhibit “W12”.
There was clearly some level of separation of finances and bank accounts. Otherwise there was a joint account opened by the wife and, as bookkeeper for B Pty Ltd it is quite apparent that she had available to herself access to all funds and moneys from the considerable income of that business post 2002.
On balance, and reflecting on all of the evidence I conclude that there often was a separation of finances and also when that best suited the wife but otherwise she had access to and did avail herself of business and family funds for all required and proper purposes and dealings. I therefore do not wholly accept her evidence in paragraph 18 of her trial affidavit and specifically I do not accept that all of the husband’s funds were used only to pay his own expenses and fund his own lifestyle. I do not accept the wife’s evidence in sub-paragraphs (b) and (c) thereof.
WIFE’S CONTRIBUTIONS
I assess the wife to have made a very real financial and non-financial contribution to the acquisition, conservation and improvement of property. I have carefully balanced these contributions in determining an appropriate adjustment pursuant to s.79(4) of the Act. I have further specifically considered the effect of my proposed order upon the ongoing earning capacity of the wife, and given that the husband has no such earning capacity hereafter.
I highlight that the particular contributions of the wife which I have carefully evaluated include:
§her initial financial contributions which, in monetary terms, exceeded those of the husband by $86,837;
§her home maker contributions;
§the assistance, financial and otherwise provided to her and her family, and in a limited manner, to the husband, by her mother;
§her bookkeeping, administrative and financing work and responsibilities for the corporate and compliance organisation of B Pty Ltd and the husband;
§her financial and non-financial contributions;
§her various property transactions and dealing and her considerable financial organisation and input thereto;
§her own personal work and exertion and gainful employment;
§the other contribution matters that I have discussed in these reasons for judgment.
HUSBAND’S CONTRIBUTIONS
Likewise I have herein identified and discussed the husband’s contributions and, in summary, they include:
§his initial financial contribution;
§his work, effort and physical skill and involvement in B Pty Ltd and in primarily generating and performing its contracts and deriving significant income for the years (approximately) 2002 – 2006 (inclusive);
§his various financial contributions and his co-operation and involvement with the wife’s property ventures;
§his repair and renovation work and physical effort to various of the homes and properties;
§his financial and non-financial contributions.
S.79(4) ASSESSMENT
My assessment of the contributions of each of the parties is that they are not equal but that there is a disparity of contribution in favour of the wife of 6% having regard to the evidence and the overall pool of assets now available for adjustment between the parties and on the understanding that they will each separately retain their superannuation and other work related entitlements and where the wife has no less than a $24,000 benefit.
S 75(2) FACTORS
I have previously outlined the relevant factors and have evaluated them in the context of the evidence which I have accepted in this case.
The specific legal issue relevant to the current and future needs of the parties that was raised by counsel and which I will now separately consider is as to the husband’s life expectancy and his entitlement to benefit, or for his estate to benefit, from the application of these factors.
HUSBAND’S LIFE EXPECTANCY
In Lawrie and Lawrie (1981) FLC 91-102 the Full Court considered the relevance of the husband’s diminished life expectancy under 75(2). The majority held, at 76-750, that –
“It is appropriate and, in my view, necessary to consider the relative future needs of the parties in determining what is a just and equitable order under sec. 79. Where there is a significant disparity, that would ordinarily be reflected in the orders. This is frequently a result in cases of a more unusual type. Further, where in any case it is clearly established that the future financial needs of a party will terminate (or perhaps significantly diminish) upon the happening of a definite future event, it is proper to take that into account… A number of examples of that readily spring to mind. The weight to be given to that will obviously vary from case to case”.
Fogarty J in the leading judgment in this case qualified the principle by saying, at 76-749, that “future needs are only one factor and… must be kept in appropriate perspective”.
In Lawrie the husband had terminal cancer and it was accepted by the parties that he had a life expectancy of approximately six months. The parties had been married for 27 years and there was an 11 year delay before the wife applied for a final property settlement. The Trial Judge assessed contributions as being equal and stated that:
“[I]f these applications had been heard at or about the time of separation an equal division of their interest in the home would have been an appropriate order”.
However, on the basis of the husband’s limited future financial needs and the continuation of the wife’s needs, the Trial Judge ordered a property distribution of 65 per to the wife and 35 per cent to the husband. These orders were upheld on appeal by the majority of the Full Court (comprising Fogarty and Gee JJ).
Asche J in his dissenting judgment opposed the s.75(2) adjustment and said, at 76-752, of his judgment that:
“[H]is Honour has in my view, over-emphasised the one factor that the husband’s life expectancy is limited. That should not, in my view, have led his Honour to make an alteration of what he otherwise would have come to in his assessment, namely an equal division.
…
[T]he Court is bound to do that which is just and equitable to both parties, and in the circumstances which [the Trial Judge] found, which called for an equality of contribution, it is not just and equitable that the husband should be deprived of some part of what would otherwise be his equal share on the basis that he has a short life expectancy. It is not just and equitable to him, it is not just and equitable to his desire and capacity to deal with his estate as he wishes; and although I concede that I am stating this in an extreme way, it might well seem to him as if he were being punished for his illness”.
I am of the opinion that Asche J’s rationale, but not his analogy to punishment, bears considerable force. In my view, it does present a difficulty for it to be said to be just and equitable within the focus of the Act as it is now drafted for a party to receive an additional loading based not on some specific need of their own, but rather on the diminished need of another. To award one party an adjustment to which they would not be entitled were the other not terminally ill is, in effect, to allow the surviving party to profit from the other’s tragic circumstance.
In find that Asche J’s approach and logic to be particularly attractive in the present case since it has several features which distinguishes it from Lawrie. The property pool in Lawrie was significantly smaller in that the sole asset for distribution was equity of $49,500 in the former matrimonial home. At trial the wife was living in a commission flat and due to serious health problems was unable to earn income and she had considerable future needs which could not possibly have been met without a significant s.75(2) adjustment in her favour. In the case before me, on the basis of contributions alone the wife will be able to maintain her M home and the comfortable standard of living to which she is accustomed, although, she would not be able to improve her circumstances by immediately retiring.
In S v P (unreported decision of Fogarty, Lindenmayer and Finn JJ delivered 29 April 1997) the Full Court endorsed the principle in Lawrie, stating at pages 23 - 24:
“We consider that the approach adopted by the majority of the Full Court in Lawrie’s case is correct in principle. However, each case must ultimately be decided on its own particular facts and the conclusion is ultimately an exercise of discretion within s.75(2) and overall within s.79.
In principle, it is correct, as Mr George conceded, to take into account the fact (if it be so) that the future needs of one of the parties within s.75(2) will be limited or diminished by some future event. For example, where it is clear that at the end of a particular period a party will, by inheritance or otherwise, come into substantial property which may limit or diminish that person’s “needs” within s.75(2), at least in comparison with the longer term “needs” of the other party. Here the circumstances are especially tragic and although it is a difficult thing to say, the fact remains that on the uncontested evidence the husband’s needs will terminate within the predicted time whereas the wife’s needs will be likely to continue beyond that time.
On the evidence in this case it was open to his Honour to approach the matter in this way and make an adjustment of 5%. (my emphasis)”
S v P (supra) concerned an 8 year marriage with no children and a pool of matrimonial assets totalling $128,780. The husband had contracted HIV from a blood transfusion and had been given a life expectancy of 5 years. The Trial Judge assessed contributions at 35% to the wife and 65% to the husband and granted the wife an additional loading of 5% on the basis of s.75(2) factors in keeping with the principal established in Lawrie. The Trial Judge’s decision was upheld on appeal to the Full Court.
I am bound by the line of cases following Lawrie to consider the husband’s limited life expectancy. I find therefore that some adjustment must be made in the wife’s favour on the basis of all relevant s.75(2) factors, but this adjustment cannot be given such weight as to “override the right of the husband”. (Lawrie at 76-749)
Before leaving this topic, however, I wish to reiterate that I see considerable logic in the reasoning of Asche J’s dissenting judgment in Lawrie. In my view, it would be appropriate and indeed necessary for the Full Court to reconsider the principle which Lawrie has come to stand for. This is especially appropriate since that principle was based on the then drafting of s.75(2)(d), which has since been amended. Whilst S v P and the subsequent Full Court case of JCVB v SKK (2005) FLC 93-233 have applied Lawrie under the Act as it presently stands, when Lawrie was decided s 75(2)(d) read as follows:
(d) the financial needs and obligations of each of the parties.
This section was amended by the Family Law Amendment Act 1987 (No. 181 of 1987) and now reads:
(d) commitments of each of the parties that are necessary to enable the party to support:
(i) himself or herself; and
(ii) a child or another person that the party has a duty to maintain;
To my mind, the language in the amended section is much broader than, and of a different emphasis, to its predecessor. It omits the much commented upon terminology of ‘needs’ and the stress placed upon financial obligations. The new language explicitly includes commitments to others including children and may perhaps be more accommodating of a party’s right to direct their estate as they see fit, their commitments to beneficiaries under a will and of their entitlement to benefit from their assets and financial resources acquired during a marriage. The Full Court in S v P (supra) did not specifically consider this amending legislation which I regard to be more supportive of the reasoning and outcome favoured by Asche J in Lawrie.
ENTITLEMENT TO BENEFIT FROM CONTRIBUTIONS
Mr Mawson generally submitted to the Court that there should be a finding of the husband’s entitlement to benefit from his contributions and generally to provide a proper entitlement to his estate. He referred me to the decision in Menzies v Evans (1988) FLC 91-969 where the wife died before hearing. The presiding judge, Smithers J, held that the wife’s estate should not be deprived of the benefit of her contributions to the marriage. Smithers J stated at 77,010 that
“[I]t would in my view be wholly inappropriate that the deceased should be deprived of the benefits of her contributions over so many years.”
Menzies was cited with approval by the Full Court in Tasmanian Trustees Limited and Gleeson (1990) FLC 92-156. Referring to Smithers J’s decision in Menzies, Nygh J stated at 78,086:
“I wholeheartedly agree with the learned Judge in that case that the deceased has a prima facie moral entitlement to the share gained by contribution during his or her lifetime and, if this is so desired, to dispose of that share by will to persons who are strangers to the marriage.” (my emphasis)
In the present case, it is apparent that an assessment of s.75(2) factors would inevitably favour the wife, and this is what I have found. However it is proper and reasonable for any adjustment to be balanced on the particular facts and having proper regard to the husband’s moral rights and entitlements.
S.75(2) – OTHER FACTORS
I have carefully considered the impact and circumstances of sub-paragraphs (a), (b) and (c) and have made specific findings in that regard. I am aware of the wife’s financial commitments as outlined in her most recent financial statement and her obligations to her children.
I reflect upon the established superannuation and general work entitlements of each of the parties and the wife’s additional $24,000 in that regard and her capacity to continue tax effective contributions.
The husband does have a level of private health insurance cover and there is a safety valve within our community as a maximum spend for pharmaceutical expenses. Nevertheless he has and will incur health costs and disbursements and these are a financial need to which I have regard. I do reject paragraph 48 of the wife’s further affidavit which is somewhat opportunistic.
The wife will, with her work skills, asset base and ongoing income, even in the short term, be able to enjoy a standard of living that is in all of the circumstances reasonable.
I have considered the monetary impact of the proposed s.79 order that I will pronounce and evaluated that order in the context of these factors. I have specifically now made allowance for the $7,000 sum of legal costs and that is incorporated within my percentage adjustment.
I have otherwise dealt with and excluded the financial add backs sought by the wife and the difficult issues of the husband’s very limited life expectancy and in this regard I have considered the wife’s long term financial circumstances, and that of her children, in the context of a just and equitable order.
ASSESSMENT OF S.75(2) FACTORS
Accordingly I conclude that there should be a further adjustment in favour of the wife and in reliance upon the relevant s.75(2) factors of 6%. I do not accept the request of counsel for the wife, and his reasoning to afford to the wife an adjustment of “not less than 10%”. I find that such an adjustment for these factors would be wholly inappropriate on the facts of this particular case.
OUTCOME
In considering both s.79(4) contributions and the relevant s.75(2) factors I conclude that it is a just and equitable order to divide the net asset pool, save for superannuation which each of the parties will individually retain, as follows:
§as to the wife 62%
§as to the husband 38%
MONETARY EFFECT OF ORDER
I now specifically consider the real impact of these Orders in money terms which has been emphasised by the Court to be a critical consideration. The effect of my orders will be that, of the net asset pool, excluding superannuation of $1,588,986:
§the wife will receive, after payment of the required lump sum as ordered to the husband an amount of $985,171;
§the husband will receive assets or moneys to a total sum of $603,814.
The wife will retain property, assets and money to a value of $381,357 more than that of the husband and B Pty Ltd and whilst that is a very significant sum I find it is just and equitable.
FOURTH STEP
In accordance with the requirements of case law I now stand back and reflect upon the overall determination and judgment, both in percentage terms and monetary terms and confirm, having considered and re-evaluated all of the evidence, that the proposed orders are just and equitable pursuant to the provisions of s.79(2) of the Act.
STRUCTURE OF THE ORDERS
As discussed in the reasons for judgment I propose to give the wife an opportunity to finance the purchase of B Pty Ltd’s interest in E property. This will require the wife to pay to B Pty Ltd on behalf of the husband a lump sum of $139,415. Sixty days is a reasonable period for such payment to be made and otherwise interest would be paid in default at the rate prescribed within the Family Law Rules.
If the wife defaults in payment or otherwise elects or is unable to pay that lump sum to acquire the interest in E property then the property will be forthwith sold at public auction. The parties are to have the joint conduct and control of the sale by themselves or their legal personal representative. Each of the parties will be responsible for discharging their respective mortgage encumbering title to E property and for their share, if any, of applicable capital gains tax. The proper costs of sale and agent’s commission and related legal fees are a charge on the property and when paid the proceeds then available are to be apportioned:
§as to the wife – 80.64%; and
§as to B Pty Ltd on behalf of the husband – 19.36%.
I certify that the preceding paragraphs are
a true copy of the reasons for judgment herein
of The Honourable Justice Young
………………………………………………………..
Associate:
Date: 4 July 2007
IT IS NOTED that this judgment for all publication and reporting purposes be referred to as LEGGERO & JAGGER
Key Legal Topics
Areas of Law
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Family Law
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Property Law
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