Lilla & Lilla
[2023] FedCFamC1F 192
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Lilla & Lilla [2023] FedCFamC1F 192
File number(s): SYC 3859 of 2020 Judgment of: SCHONELL J Date of judgment: 24 March 2023 Catchwords: FAMILY LAW – PROPERTY – Proceedings for financial adjustment following an approximately 20 year marriage – Where the parties were at issue as to what the contributions and adjustment should be – Where both sides have made contributions – Where the wife’s contributions were more significant – Where the husband sought to advance an argument about waste – Where no submission was ultimately made about waste – Where the elements of waste were not established – Where the husband has the full time care of the parties two children and an adult child who has significant disabilities – Where a just and equitable outcome was found to be 45 per cent to the husband and 55 per cent to the wife. Legislation: Family Law Act 1975 (Cth) ss 75, 79
Conveyancing Act1919 (NSW) s 66G
Real Property Act 1900 (NSW)
Cases cited: Ak-Tankiz v Ak& Ak [2014] NSWSC 1044
Dickons v Dickons (2012) 50 FamLR 244; [2012] FamCAFC 154
Georgeson and Georgeson (1995) FLC 92-618; [1995] FamCA 62
Hickey & Hickey & Attorney-General for the Commonwealth of Australia (intervener) (2003) FLC 93-143; [2003] FamCA 395
Horrigan & Horrigan [2020] FamCAFC 25
Jabour & Jabour (2019) FLC 93-898; [2019] FamCAFC 78
Kardos v Sarbutt (2006) 34 Fam LR 550; [2006] NSWCA 11
Kowaliw & Kowaliw (1981) FLC 91-092; [1981] FamCA 71
Marlowe–Dawson v Dawson (No 2) (2014) 53 Fam LR 568; [2014] FamCA 599
Norbis v Norbis (1986) 161 CLR 513; [1986] HCA 17
Palumbo v Mandel (2019) FLC 93-929; [2019] FamCAFC 228
Singerson & Joans [2014] FamCAFC 238
Stanford v Stanford (2012) 247 CLR 108; [2012] HCA 52
Whisprun Pty Ltd v Dixon (2003) 200 ALR 447; [2003] HCA 48
Williams & Williams [2007] FamCA 313
Division: Division 1 First Instance Number of paragraphs: 184 Date of hearing: 8 – 10 March 2023 Place: Sydney Counsel for the Applicant: Ms Judge Solicitor for the Applicant: Angel Legal Counsel for the Respondent: Mr Fowler Solicitor for the Respondent: Greg Morahan & Co ORDERS
SYC 3859 of 2020 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MR LILLA
Applicant
AND: MS LILLA
Respondent
order made by:
SCHONELL J
DATE OF ORDER:
24 MARCH 2023
THE COURT ORDERS THAT:
1.Within 90 days of the date of these orders, the applicant husband (“the husband”) is to do all acts and things and sign all documents necessary to transfer to the respondent wife (“the wife”), all of his right, title and interest in the property known as B Street, Suburb C NSW (also known as lot … in deposited plan …) (“the Suburb C property”).
2.Simultaneously with Order 1, the wife is to do all acts and things, and sign all documents necessary and meet at her own expense, all fees and charges necessary to payout and discharge, or otherwise refinance in her own name, all of the loans secured by mortgage over the Suburb C property, being identified as:
(a)Commonwealth Bank Loan Account No. …07;
(b)Commonwealth Bank Loan Account No. …08; and
(c)Commonwealth Bank Loan Account No. …06.
3.Simultaneously with Order 1, the wife will:
(a)do all acts and things and sign all documents necessary to transfer to the husband, all of her right, title and interest in the property known as 2 D Street, Suburb E NSW (also known as Lot … in Deposited Plan …) (“2 D Street”); and
(b)simultaneously, or prior to the transfer in Order 3(a), and at her own cost, sign all documents and do all acts and things necessary to secure the removal/withdrawal of the caveat lodged on or over the title of the property situated at 2 D Street, by her parents Mr F and Ms G, to enable the transfer referred to in Order 3(a) above to be completed and registered.
4.Simultaneously with the transfer in Order 3, the wife is to sign all documents and do all acts and things necessary to transfer to the husband, any legal or equitable interest held by her in relation to the former partnership and business known as ‘H Company’, including but not limited to any interest in goods, stock, equipment, goodwill.
5.Simultaneously with Order 1, the parties do all acts and things and sign all documents necessary to close the J Bank account number …08 and transfer the balance to the husband.
6.Simultaneously with Order 1, the wife is to pay to the husband the sum of $278,120.50, with such sum to be paid into the trust account of the husband’s solicitor.
7.In the event that the wife fails to comply with Orders 2, 3, 4, 5 and/or 6, then the following orders shall apply:
(a)The wife must at her own expense, and within fourteen (14) days of the end of the 90 day period referred to above, sign all documents and do all acts and things necessary to instruct:
(i)A solicitor of her own choosing to prepare a contract for the marketing and sale of the Suburb C property; and
(ii)A local real estate agent of her own choosing to list and market the Suburb C property for sale by private treaty for a price which is greater than or equivalent to the mean value of the market value ascribed to the property by the real-estate agent charged with the sale of the property and the valuation (or any updated valuation, if able to be obtained within time) of Mr K of L Services.
(b)If the property is not sold within 49 days of listing, then the wife is to forthwith, sign all documents and do all acts and things necessary to instruct the appointed real estate agent to list the Suburb C property for auction within 21 days of the expiry of the 49-day private treaty listing period.
(c)The wife shall be at liberty to select the auctioneer of her choice and the reserve price at auction is to be the reserve price recommended by the auctioneer, and the wife shall accept the recommendation of the auctioneer in that regard, provided that the wife is hereby restrained from giving authority for the sale of the property at a price which will realise an amount which is less than the amount necessary to enable her to comply with her obligations pursuant to these orders.
(d)The wife shall execute all documents requested by the auctioneers for the sale of the Suburb C property by auction (including the execution of a Contract for Sale), and shall otherwise attend the auction sale and negotiate with the highest bidder in the event that the reserve price is not reached, and accept the advice of the auctioneers as to the acceptance of a price less than the reserve price, if the reserve price is not reached; provided that the wife is hereby restrained from giving authority for the sale of the property at a price which will realise an amount which is less than the amount necessary to enable her to comply with her obligations pursuant to these orders.
(e)The wife shall otherwise co-operate in every way with the auctioneer in relation to the auction, including making a key available and allowing inspection of the Suburb C property at times requested by the agent and auctioneer.
(f)The wife is to sign all authorities necessary to cause the husband to be permitted to communicate with any solicitor, conveyancer or agent acting on the sale and to be furnished with any and all information requested by him in relation to the sale or the sale process.
8.At the time of the settlement of the sale of the Suburb C property, the wife is to sign all documents and do all acts necessary to cause the proceeds of sale to be paid and disbursed in the following order of priority:
(a)In payment of all legal and agents’ costs of sale;
(b)In payment to the Commonwealth Bank of Australia, a sum of money sufficient to fully pay out the following listed loans and discharge the mortgages secured over the property in respect of those loans:
(i)Commonwealth Bank Loan Account No. …07;
(ii)Commonwealth Bank Loan Account No. …08; and
(iii)Commonwealth Bank Loan Account No. …06;
(c)To the husband, a payment in the amount of $278,120.50 plus interest as prescribed in the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth), with such payment to be made into the trust account of the husband’s solicitor, the details of which are to be advised by the husband’s solicitor to the wife’s solicitor prior to settlement;
(d)The balance to the wife.
9.The wife shall be solely responsible and liable for the payment of, and shall otherwise indemnify, and keep the husband indemnified, against all claims, actions, suits or liabilities, whether past, present or future, arising from, relating to or otherwise in connection with:
(a)any loans payable to, or allegedly payable to the wife’s parent’s (either jointly or individually), including but not limited to an alleged loan made by the wife’s parents to the parties in 2008, and identified by an alleged loan agreement made at that time;
(b)any of the wife’s personal income tax liabilities to the ATO; and
(c)any other debts or liabilities in the wife’s own name not otherwise covered by these orders.
10.The husband shall be solely responsible and liable for the payment of, and shall otherwise indemnify, and keep the wife indemnified against all claims, actions, suits or liabilities, whether past, present or future, arising from, relating to or otherwise in connection with:
(a)any loans, payable to, or allegedly payable to the husband’s father (or his parent’s together, either jointly or individually), including but not limited to an alleged loan made by the husband’s father in mid-2017, with the source of the loan identified as CBA Account number BSB … / Ac. …75;
(b)any of the husband’s personal income tax liabilities to the ATO; and
(c)any other debts or liabilities in the husband’s own name not otherwise covered by these orders.
11.Subject to these orders, each of the parties is to retain to the exclusion of the other, as their sole property in law and equity, all other property currently in their name, possession or control including but not limited to interests in superannuation, shareholdings, business names, businesses, savings and investments and motor vehicles.
12.By consent, in relation to the GST and PAYG liabilities:
(a)The parties are to be responsible in equal shares for payment of the GST and PAYG Liabilities for the H Company partnership which, at the 9 March 2023, was in the sum $120,890 as shown in the Activity statement 001 for H Company produced by the husband to the wife which is annexed to this order and marked “A” (being Item 24 on the Balance Sheet Exhibit 29), (“the Partnership GST and PAYG Liabilities”), plus any penalties or interest issued by the Australian Taxation Office (“the ATO”) on the Partnership GST and PAYG Liabilities.
(b)Forthwith upon the issue of any Notice of Assessment by the ATO in respect of any of the Partnership GST and PAYG Liabilities, each of the parties is to do all things necessary to pay, compromise or otherwise satisfy their one half share of the Partnership GST and PAYG Liabilities and to provide to the other party written confirmation of the payment, compromise or satisfaction.
(c)Each party is to indemnify and keep indemnified the other in respect of any claim made upon the other party for the indemnifying party’s one half share of the Partnership GST and PAYG Liabilities and the parties are at liberty to plead this indemnity in any tribunal or Court determining any claim in relation to such debt.
13.By consent, in relation to the H Company debts:
(a)The parties are to be responsible in equal shares for those business debts of ‘H Company’ referred to in Item 23 on the Balance Sheet (Exhibit 29) and particularised in the ‘Spreadsheet of Creditors of H Company’ a copy of which is annexed to this order and marked “B” (“the H Company debts”).
(b)Forthwith upon receipt of a final demand from the creditor for payment of any of the H Company debts referred to in Order 13(a) each of the parties is to do all acts necessary to pay, compromise, or otherwise satisfy, their one half share of such debt, including any interest or costs properly payable in respect of such debt, and to provide to the other party written confirmation of the payment, compromise or satisfaction.
(c)Each party is to indemnify and keep indemnified the other in respect of any claim made upon the other party for the indemnifying party’s one half share of the H Company Debts and the parties are at liberty to plead this indemnity in any tribunal or Court determining any claim in relation to such debt.
14.In the event of either party neglecting or refusing to execute any document, deed or instrument necessary to give effect to any of the orders herein, the Registrar of this Court is appointed and authorised pursuant to s 106A of the Family Law Act 1975 (Cth) to execute any such document, deed or instrument on behalf of and in the name of the defaulting party, necessary to give validity and operation to any such document, deed or instrument, upon the filing of an affidavit evidencing the default.
15.The proceedings transferred to this Court by order made in the Supreme Court of New South Wales in mid-2020 be dismissed.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Lilla & Lilla has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
SCHONELL J:
These are proceedings for financial adjustment after a marriage of approximately 20 years.
Proceedings were first commenced through an Initiating Application filed by the applicant husband on 16 June 2020. For reasons which are unexplained, the parties have been unable to resolve what is a relatively straight forward financial case and consequently the matter proceeded to a three day hearing.
The husband submitted that the Court should assess the parties’ contributions as to 45 per cent in his favour and that there should thereafter be a 10 to 15 per cent adjustment to him, giving rise to a division in his favour of approximately 55 to 60 per cent. The husband contended that the parties’ assets should be assessed against one pool of assets.
The respondent wife contended that the parties’ assets should be assessed against two pools; one pool comprising a property at Suburb M, being an investment property owned by the wife, her mother and siblings, and another pool constituting the balance of the parties’ assets. The wife for her part submitted that in relation to the first pool, the Court would find that the husband’s contributions were zero and in relation to the second pool, that the husband’s contributions should be measured in the range of 20 to 25 per cent. She submitted that thereafter there should be an adjustment as to 10 per cent in the husband’s favour for matters under s 75(2) of the Family Law Act 1975 (Cth) (“the Act”). This was said to give rise overall to a range of settlements in favour of the husband of approximately 30 to 35 per cent on a global basis.
Whilst the parties were unable to reach agreement about what the division of their property should be in percentage terms, they were in agreement that the wife would retain the former matrimonial home at Suburb C and that the husband would retain the parties’ business and the premises from which the business was conducted.
However, the wife sought that the husband take responsibility for a loan secured against the former matrimonial home, which was originally obtained to fund the acquisition of the parties’ business. The loan balance is approximately $150,000. The husband for his part sought that the wife assume responsibility for all of the loans secured against the former matrimonial home and that she pay him $750,000.
There is a caveat secured against the business premises lodged by the wife’s parents to secure a loan advanced by them to the parties. I was advised by the wife’s counsel that the wife’s parents would lift the caveat once they were repaid what they were owed. The wife’s orders did not contemplate a payment of the outstanding loan, merely an indemnity to the husband. In circumstances where this would have frustrated the orders that even the wife sought, I advised the parties that I would require the wife to do all acts and things to cause the discharge of the loan and removal of the caveat, and absent compliance, I would order that the Suburb C property be sold to give effect to such an arrangement. There was no demurrer to such a proposal.
A part of the history of the parties’ litigation involves proceedings commenced in the Supreme Court of New South Wales by the wife by way of Summons. In those proceedings, the wife sought the appointment of a trustee pursuant to s 66G of the Conveyancing Act1919 (NSW) for the sale of a property at Suburb E. By an order made in mid-2020, the proceedings were transferred to this Court. The wife seeks a dismissal of those proceedings.
The parties agreed to divide equally various taxation liabilities and unpaid creditors in relation to their business. They submitted in that respect an order that was to be made by consent. Where there is some uncertainty as to what the final amount of the taxation liability is to be and if there ever will be a demand for payment by some of the creditors, I propose to remove the asserted liabilities from the pool of assets for division in circumstances where the parties will share the liability equally but where the pool will not be divided equally.
The parties also agreed that a liability to the accountant, who prepared various taxation returns, should be shared such that the husband pay $3,850 and that they share the balance equally.
In my view, neither percentage position represents a just and equitable outcome. I am of the view that the parties’ property should be divided as to 45 per cent to the husband and 55 per cent to the wife. I set out my reasons below.
The husband relied upon the following documents:
(1)Amended Initiating Application filed 21 February 2022;
(2)Affidavit of husband filed 28 February 2023;
(3)Affidavit of Mr N filed 28 February 2023;
(4)Affidavit of Dr P filed 28 February 2023
(5)Financial Statement filed 6 March 2023; and
(6)Case Outline document.
The wife relied upon the following documents:
(1)Amended Response to Initiating Application filed 11 August 2022;
(2)Affidavit of wife filed 28 October 2022;
(3)Affidavit of Ms G filed 28 October 2022;
(4)Affidavit of Mr F filed 28 October 2022;
(5)Affidavit of Ms Q filed 28 October 2022;
(6)Financial Statement filed 28 October 2022;
(7)Single expert report of Mr R (“the single expert”) dated 28 September 2021; and
(8)Case Outline document.
BACKGROUND FACTS
The husband was born in 1975 and is currently aged 48 years.
The wife was born in 1976 and is currently aged 47 years.
The parties commenced cohabitation following their marriage in 1999 and separated on a final basis in early 2019.
There are four children of the marriage, namely Mr S born in 2000 and aged 23 years, Mr T born 2001 and aged 21 years, and X and Y born in 2008 and aged 14 years.
Mr S has been diagnosed with Autistic Spectrum Disorder, a developmental disorder and a mild intellectual disability. The father contends that he gets overwhelmed easily, tends to have high anxiety levels and requires constant supervision.
At the commencement of the cohabitation, the husband had a 50 per cent interest in a property at Suburb U (“the Suburb U property”).
At the commencement of the cohabitation, the wife says she owned a motor vehicle and personal effects.
Following their marriage, the parties resided in a property owned by the wife’s parents for approximately two years.
After becoming pregnant in 1999, the wife ceased working.
In late 1999 or early 2000, the wife’s father purchased the Suburb M property. The property was purchased for over $1,300,000, with the wife’s father contributing $550,000 and a loan of $850,000 being taken out by the wife, her mother and her siblings. The wife has a quarter interest in this property. The wife says that the property has always been managed by her mother, including collecting rent, paying outgoings and managing the partnership tax returns. The wife says that the monies received from her share of the property were used to pay off her share of the loan. She also says that neither she nor the husband ever made any financial contribution related to the Suburb M property.
In or about mid-2001, the wife’s father purchased a property at Suburb C for over $300,000. The wife’s father subsequently demolished the property and commenced building a new house on the property for the parties.
The husband contends that the cost of the construction was approximately $150,000. He concedes that the wife’s father made a significant contribution to the purchase and development of the property. He says he also made a contribution to the construction of the property, which includes a financial contribution of at least $10,000 and labour undertaken by him, his family and his friends. The husband also contends that he used to work during the evenings so that he was available to work as a labourer during the day.
The wife says that neither she nor the husband financially contributed to the purchase or construction of the property. She says that they went to work on the property on about one or two days. In his cross-examination, the wife’s father denied that the husband made any financial contribution as asserted by him but conceded that there were occasions when the husband was present on site.
Subsequent to the purchase and demolition of the Suburb C property, the parties moved into the husband’s parents’ home rent free.
In or about early 2003, the husband sold his half share of the Suburb U property. He says the net sale proceeds received were approximately $160,000.
In or about mid-2003, construction on the property was completed and the parties subsequently moved into the Suburb C property.
In or about mid-2003, the parties purchased an industrial premises at Suburb V for over $250,000. The husband says some of the sale proceeds from the Suburb U property were applied to the purchase and a loan of approximately $180,000 was taken out by the parties on an interest only basis for five years. The Suburb V property was leased out, with the rental proceeds being applied towards the mortgage debt.
In or about mid-2004, the parties purchased a business called H Company. To fund the purchase of the business, the parties borrowed $160,000 secured over the Suburb C property. At the time of purchase, the business was being operated out of a leased premises situated at 3 D Street, Suburb E.
In mid-2004, the wife’s father transferred the Suburb C property to the parties as tenants in common in the proportions of the wife having a 99 per cent share and the husband having a one per cent share. The husband contends that he always assumed that the property had been transferred to the parties as joint tenants. He says he only discovered that this was not the case when the proceedings commenced.
The parties paid the stamp duty of $31,040 and the legal costs associated with the transfer of the Suburb C property. To do this, the parties borrowed $70,000 on an interest only loan for five years. The wife says that the $70,000 was applied to pay the stamp duty and legal costs which were a few thousand dollars. In her examination in chief, she corrected her affidavit and said that the remainder of the monies were applied towards other debts and expenses. The husband contends he was not aware that the stamp duty was $31,040 and that he only became aware of this after his solicitor showed him the Real Property Act 1900 (NSW) transfer form. He says that he is unaware as to how the remainder of the $70,000 was used.
In or about 2005, the husband’s father purchased a property for the husband and his brother at W Town. The husband contends that his father took out a loan for the purchase and that he did not make any contribution to the property.
In or about mid-2008, the parties and the wife’s brother purchased two business premises at 1 D Street and 2 D Street, Suburb E for $500,000 (over $250,000 for 1 D Street and under $250,000 for 2 D Street). The purchase was funded by the wife’s father who drew down on a loan facility which was secured against the wife’s parents’ home. The wife contends that a loan agreement was signed by the parties and the wife’s brother. The husband denies this and says that it is not his signature on the loan agreement. Subsequent to the purchase, the parties and the wife’s brother created a bank account with the Commonwealth Bank of Australia (“the CBA”) from which funds would be deducted to the wife’s parents’ account as repayment for the debt. Both business premises were tenanted and the rent received covered the repayments owed to the wife’s father.
In early 2010, the parties refinanced their loans and credit card debt with the CBA under interest only terms for five years. The loan for the Suburb V property was refinanced with the CBA in the amount of $180,000; the loan for H Company was refinanced with the CBA in the amount of $160,000; and the loan for the Suburb C property was refinanced with the CBA in the amount of $120,000. All three loans with the CBA were secured against the Suburb C property.
In 2010, the tenant at either 1 or 2 D Street vacated the premises. The parties subsequently commenced major renovations on 2 D Street so as to operate H Company from there. The husband says that part of the renovations included work being done to 1 D Street, which the wife’s brother had the benefit of but that he did not make a financial contribution to the renovation.
The husband contends that after moving H Company to 2 D Street, the parties began making loan repayments for the business premises, which was previously covered by the rent. The husband also contends that cash payments were made to the father, which the wife denies.
In mid-2010, the husband says that the tenant in 1 D Street defaulted on making mortgage repayments. The husband contends that the parties had to make the mortgage repayments for the wife’s brother’s half share of the property as he ceased repaying the loan after a few weeks. The wife denies this.
In or about late 2010, the parties sold the Suburb V property for over $300,000. The wife denies this and says that it was sold to pay for the renovations on 2 D Street. The husband says that the majority of the sale proceeds were applied towards the renovations on 2 D Street. The wife contends that the sale proceeds were applied towards the Suburb V property loan, which was then re-drawn to pay for the renovations.
In late 2010, the husband says that after expending the sale proceeds from the Suburb V property, a further sum of $28,000 was borrowed from his father.
In early 2011, the mortgage on the Suburb M property was paid off and discharged. The wife says that her mother used her share of the profits to pay her tax and her other debts, with left over funds being paid to her around Christmas.
In or about early 2012, 1 D Street was transferred into the wife’s brother’s sole name and 2 D Street was transferred to the parties as joint tenants.
The husband contends that from about 2014, the rent received from the Suburb M property was applied towards the parties’ share of the loan for 2 D Street. The husband contends that the wife told him that her father said the Suburb M loan was paid off and so they could use the profits for the loan on 2 D Street. The wife does not appear to agree with this.
In 2015, the husband sold his half share of the W Town property. The husband says he received $70,000 after paying off his share of the loan for the property and repaying his father the $28,000 that he borrowed for renovations.
In or around mid-2017, the husband borrowed $50,000 from his father. The husband’s father borrowed funds from the CBA and subsequently repaid the loan. The husband says that the sum of $50,000 is still owing to his father.
The wife contends that from early 2018, the parties failed to make regular repayments for the loan on 2 D Street. She says they ceased making repayments in or about April 2018 after which her share of the profits from the Suburb M property have been used to make the repayments. The husband denies that this is the case.
In early 2018, the wife’s parents refinanced their loan that was used to purchase 1 and 2 D Street. The husband says that he was not aware of the circumstances surrounding the refinancing and that he did not consent to it.
The wife and her parents contend that in mid-2018, the wife’s parents paid $26,372.91 to assist the parties with reducing the loan for 2 D Street.
In late 2018, the parties briefly separated for a period of three weeks. As stated earlier, the parties separated on a final basis in early 2019. Following separation, the husband moved into his parents’ home and the children remained living with the wife in the Suburb C property.
In early 2019, an Apprehended Domestic Violence Order (“ADVO”) was issued against the wife for the protection of the husband.
Two months later, an incident between the parties occurred whilst working at H Company. An interim ADVO was taken out against the husband for the protection of the wife. The effect of the AVDO was such that the husband was precluded from entering the Suburb C property and the business premises of 2 D Street. Consequently, the wife had sole possession and control of the Suburb C property and H Company.
In mid-2019, the interim ADVO against the husband became a final ADVO.
In or around mid-2019, the parties’ children Y and X began living with the husband. The parties are in dispute as to how this came to be. Since mid-2019, the wife has not spent any time with Y and/or X and last spoke to them on Christmas in 2019.
The wife contends that the parties ceased making any repayments for their loans with the CBA after 29 July 2019.
In or about late 2019, the husband contends the CBA contacted him to advise that the loan repayments were in significant arrears. He says a letter was sent to the wife’s solicitors and that he subsequently organised for a monthly direct debit for the loans from the business account.
In late 2019, the wife ceased operating H Company for a period of time. The wife says this was because she was unable to pay all the business suppliers as the funds were not available to her. She says that the business account required the signatures of both parties and that the husband would not authorise payments for the suppliers.
The wife contends that during this time, her parents paid numerous bills on her behalf, totalling approximately $31,300.
On 30 September 2019, the husband’s solicitors sent a letter to the wife’s solicitors regarding a proposal for him to take over the business. He says no response was received.
The husband says he subsequently went to J Bank and filled out payment directions for payments to be made towards the three loans.
Another letter was sent to the wife’s solicitors on 4 October 2019 as a follow up to the previous letter and to get the wife to sign the J Bank payment directions. On 10 October 2019, the wife’s solicitors responded by rejecting the husband’s proposal that he take over the business and requesting that the husband give access to all funds held by the business and that the mortgage repayments be paid from the business account.
The husband says he continued to press for the handover of the business but that these requests were ignored.
In December 2019, the husband says he received a letter from the CBA enclosing a default notice. The wife’s solicitors were notified of this on 3 December 2019.
On 18 December 2019, the wife advised the husband that she would close the business for the Christmas break.
The husband subsequently applied for a deferral of the loan repayments with the CBA.
On 21 January 2020, the husband’s solicitors sent the wife’s solicitors a letter requesting a variation of the ADVO made against the husband. The wife did not respond to the request.
The wife contends that she intended to reopen in early 2020, however, was unable to do so because of her health and later the intervention of COVID-19.
In early 2020, Mr S moved to live with the husband and two months later Mr T moved as well. The husband and children have all lived with the husband’s parents in their home save for a about a year and half when they lived in rented accommodation.
In early 2020, the husband’s superannuation fund released $10,000 of which $7,800 was received by the husband following an application to release those funds.
In early 2020, the wife’s parents sent both the husband and wife a letter of demand in which repayment of $280,458.86 was sought. The husband contends that he was unaware that they were in default on their repayments to the wife’s parents. On 25 February 2020, the husband’s solicitors sent a request to the wife’s parents’ lawyers for further particulars. On 27 February 2020, the request for further particulars was denied.
On 21 February 2020, conditional approval was granted by the CBA for deferral of the loan repayments.
In early 2020, the wife filed a Summons and supporting affidavit in the Supreme Court of New South Wales. The husband was served with a copy of these documents along with a copy of an unfiled Statement of Claim the next day.
In mid-2020, the CBA approved the husband’s application for deferral of the loan repayments, with the deferral to end in late 2020.
In mid-2020, the ADVO against the husband lapsed.
On 16 June 2020, the husband commenced these proceedings.
In July 2020, the husband’s solicitors emailed the wife’s solicitors advising that the husband intended to re-enter the business premises at 2 D Street and take over H Company without further notice. The husband subsequently took over the business. He contends that the premises were left in an extremely poor condition by the wife.
In mid-2020, by consent, the matter was transferred from the Supreme Court of New South Wales to this Court.
The wife contends that since late 2021, she has been repaying the loans with CBA, including the loan for the business which the husband had been operating since about mid-2020.
On 2 December 2022, the matter was listed in the Rolling List. The trial commenced on 8 March 2023 and ran for three days.
ISSUES AS IDENTIFIED BY THE PARTIES
The husband’s counsel identified the issues as follows:
1. Disputed valuation of the parties’ business.
2. The nature and extent of various alleged financial and non- financial contributions (including homemaker and parenting contributions) by each of the parties prior to separation and the weight to be given to those contributions – see summary in Applicant Husband’s Case Outline at pages 2 to 3.
3. The nature and extent of various alleged financial and non – financial contributions by each of the parties’ post separation (including homemaker and parenting contributions) and the weight to be given to those contributions - see summary in Applicant Husband’s Case Outline at pages 2 to 3.
4. Assessment of Section 75(2) factors and whether either party should receive an adjustment due to such factors – see summary in Applicant Husband’s Case Outline at pages 4 to 5 – although it is noted that the concession is made in the Respondent Wife’s Case Outline filed 7 March 2023 (page that an adjustment should be made in the husband’s favour of 10%). Instructions will be sought by those acting for the husband at the first opportunity in relation to that matter.
5. Debt alleged by the wife to be owing by the parties to the wife’s parents – whether any amounts are owed and if so the quantum and whether the debt is enforceable.
6. Debt allegedly owed by the wife to her parents in relation to post separation advances.
7. The nature and extent of the parties’ indebtedness for GST, tax and various business debts and how any such debts should be borne between the parties.
8. Debt alleged by the husband to be owing by the parties to the husband’s father.
9. Allegation by the husband of waste by the wife post separation, inter alia, in relation to:
- Non-payment of debts secured by mortgage over the former matrimonial home.
- Failure to assist the husband in his efforts to forestall action by the mortgagee.
- Running down of the parties’ business.
- Neglect leading to deterioration of the physical state of business premises.
- Directing away from the business of various takings and the non- payment of business debts.
10. The form of any orders to put any adjustment of property into effect i.e., by transfer and payment orders or alternatively sale orders in relation to all assets (save for a property in which the wife has an interest at [Suburb M]); including the issue of removal of a caveat on the title of the business premises at [Suburb E] allegedly securing the alleged debt to the wife’s parents.
11. Dismissal of the wife’s section 66G Conveyancing Act NSW Summons transferred to this Court from the Supreme Court.
12. Such other issues as are disclosed by the evidence.
(Exhibit 2)
The wife’s counsel identified the issues as follows:
1. Value of the […] business “[Z Company]”.
2. The existence of, and, if found to exist, the amount owing on, a loan asserted by the wife to be owed to her father for the property at [Suburb M].
3. The amount, if any, still owing to the wife’s parents for a loan made by them of $517,998 to the parties, and to the wife’s brother [Mr AA], in August 2008 to assist in the purchase of [property] at [D Street, Suburb E].
4. The existence of, and, if found to exist, the amount owing on, a loan asserted by the husband to be owing to his father.
5. The existence of, and, if found to exist, the amount owing for, liabilities asserted by the husband to be payable to the ATO for GST and PAYG tax arising from the […] business.
6. The inclusion in the Balance Sheet by the husband of personal debt to [EE Finance] and [FF Finance].
7. The financial and non-financial contribution asserted by the husband to have been made by him to the construction of the home at Suburb C.
8. Other contributions made by the wife’s parents to the wife, the husband, and their children, both financial and non-financial.
9. The quantum of the contribution made by the husband of sale proceeds of his property at [Suburb U], owned by him at the date of marriage.
10. The husband’s health.
11. The husband’s income from the business.
(Exhibit 3)
I will address the issues as identified by the parties in these reasons.
APPROACH TO PROPERTY PROCEEDINGS
The approach to be adopted in a financial adjustment case under s 79 of the Act is to follow the well-recognised four-step process (see Hickey & Hickey & Attorney-General for the Commonwealth of Australia (intervener) (2003) FLC 93-143). Following such an approach, the Court identifies and values the assets and liabilities at the date of hearing for the purposes of division. Secondly, the Court assesses the contributions of the parties within the meaning of s 79(4) of the Act and determines a contribution based entitlement. Thirdly, the Court identifies the relevant matters under s 75(2) and determines such adjustment as is necessary to the contribution based entitlement. Finally, the Court considers the effect of the findings and must then determine whether the order as proposed is in all the circumstances just and equitable.
Whilst no submission was made consistent with the ratio arising out of the High Court’s determination in Stanford v Stanford (2012) 247 CLR 108, I am of the view that it is just and equitable that an order be made adjusting the property interests of the parties. The parties are no longer living together and there is no longer the common use of their property. The assumptions and undertakings that governed the use of their property ended with separation and both parties sought that there be an adjustive order.
POOL OF ASSETS
The parties’ assets and liabilities were captured in a document, which became Exhibit 29 in the proceedings. By the time of submissions, it revealed the following:
Ownership Description Applicants value Respondents value ASSETS 1 99% Respondent
1% ApplicantB Street, Suburb C $1,525,000 $1,525,000 2 Joint 2 D Street, Suburb E $640,000 $640,000 3 Respondent 25% share of family investment property – BB Street, Suburb M $500,000 $500,000 4 Applicant Business “Z Company” (previously traded as H Company by the parties. H Company no longer operates) $100,000 or less $300,000 5 Applicant Bank Account – CBA …03 $765 $765 6 Applicant Bank Account – CBA …42 $527 $527 7 Applicant Bank Account – J Bank …60 $78 $78 8 Applicant Bank Account – CBA …74 NIL NIL 9 Joint Bank Account – J Bank …08 $1,630 $1,630 10 Applicant Motor Vehicle 1 $2,500 $2,500 11 Applicant Home contents and personal property $3,400 $3,400 12 Respondent CBA acc. …25 $651 $651 13 Respondent & partner CC Bank acc …35 $1 $1 14 Respondent Home contents and personal property $3,600 $3,600 15 Respondent Motor Vehicle 2 $400 $400 Total $2,778,552 or less $2,978,552 ADDBACKS 16 17 Total LIABILITIES 18 Joint CBA Home Loan – …07 $169,660 $169,660 19 Joint CBA Home Loan – …08 $149,231 $149,231 20 Joint CBA Home Loan – …06 $85,416 $85,416 21 Applicant Income tax liabilities $40,449 $40,449 22 Joint Mr DD loan (Applicant’s father) $50,000 $0 23 Joint Business debts – “H Company” $16,850 $16,850 24 Joint GST and PAYG liabilities $120,890 $120,890 25 Joint Accountant $24,783 $24,783 26ApplicantEE Finance loan$17,74727 Applicant FF Finance (Expenses for the children) $1,495 $1,495 28 Joint Loan Mr F & Ms G 0 $148,000 29 Respondent Centrelink Debt $6,655 $6,655 30 Respondent Debt to father for Suburb M property NK $140,417 31 Respondent ATO $39,804 $39,804 32 Applicant Super Guarantee Liability $5,115 $5,115 33 Applicant GST + PAYG Liability $31,507 $31,507 Total $703,738 + NK $942,155 SUPERANNUATION Member Name of Fund Type of Interest Applicants value Respondents value 34 Respondent Superannuation Fund 1 Accumulation $7,041 $7,041 Total $7,041 $7,041 FINANCIAL RESOURCES Ownership Description Applicants value Respondents value 35 36 Total
The parties agreed to deal with Items 23 and 24 by separate order so they will be removed from the pool of assets for division. The only matters in dispute as between the parties were Items 4, 22, 28 and 30.
As to Item 4, the single expert valued the business in his report (Exhibit 6) as at three separate dates, namely 31 January 2019, 17 July 2020 and 1 August 2021. As at 1 August 2021, he determined the business had an enterprise value of $300,000. His determination arose in part as a consequence of an assessment by him of the future maintainable earnings of the business at the various dates. In relation to the date of 31 January 2019, he assessed the future maintainable earnings at $120,000 and, as at 7 July 2020 and 1 August 2021, it was assessed at $100,000. To that determination he applied a multiple of three.
His ultimate conclusions in relation to the future maintainable earnings were as follows:
5.10 My assessment of FME at each of the valuation dates is as follows:
Table 11: Assessed FME 31 January 2019 17 July 2020 1 August 2021 Assessed FME 120,000 100,000 100,000 5.11 I have determined the above figures for the following reasons:
5.11.131 January 2019: $120,000, representing the approximate average adjusted EBIT achieved by the Business over FY18 and FY19;
5.11.217 July 2020: $100,000, representing the approximate average adjusted EBIT achieved by the Business over FY18 and FY19, with downward adjustment of 15% reflecting the uncertainty associated with the expected duration of COVID-19 at this time; and
5.11.31 August 2021: $100,000, representing the approximate average adjusted EBIT achieved by the Business over the FY18 and FY19, with downward adjustment of 15% reflecting the uncertainty associated with the expected duration of COVID-19 at this time.
(Footnote omitted)
As a consequence of assessing the earnings he then determined the equity value of the business as follows:
6.8Having regard to the above, I set out my assessment of the equity value of the Business as follows.
Table 14: Valuation of the Business (Equity Value) Reference 31 January 2019 17 July 2020 1 August 2021 Enterprise value
Less debt
Less refurbishment costTable 12
Table 13
Paragraph 6.7360,000
(307,957)
(29,373)300,000
(311,127)
(29,373)300,000
(151,946)
(29,373)Equals equity value 22,669 Nil 118,681 (Footnotes omitted)
The single expert was cross-examined by all parties. Much of the cross-examination by the husband’s counsel focused upon determining whether the single expert should have taken into account a notional wage for the operator of the business. The single expert made it clear that he was not a remuneration consultant. The single expert said that while he could not express an opinion about a notional wage, he could investigate a baseline figure based on an award. Various propositions were put to the single expert, some of which were not found in the evidence. The single expert indicated that he was unable to express an opinion about a minimum award wage as the various assumptions did not neatly fit within a particular award.
The single expert was also cross-examined on the multiplier that he used for the purposes of the valuation. He accepted that a multiplier of two is a common multiplier for small businesses. He was then asked by the husband’s counsel whether he would accept that as an appropriate multiplier. The single expert indicated that he would not shy away from a multiple of 2.5 but then said that he had not seen anything to suggest that a multiple of three was incorrect.
The single expert was also asked questions by me as to the reasons why he adopted the 2018 and 2019 figures. He indicated that he used those two years as they were the only two complete years of trading. He was asked if the 2022 year figures more closely aligned with 2021 years whether that would change his assessment of value. He agreed that it would if they indicated a fundamentally different business, saying he would prefer the more up to date information.
He was asked to assume that if the 2022 sales were approximately $243,000 and the earnings before interest and tax (“EBIT”) was about $20,000 whether that would affect his reliance upon the 2018 and 2019 figures. He agreed that it would. He was asked whether it would change the multiple and he agreed that it would support a materially lower multiple.
Prior to the commencement of submissions, I indicated to the parties that in my view one way of approaching the value of the business was to apply a multiple of two to an average EBIT for the 2021 and 2022 years. According to the single expert, the EBIT in the 2021 year was $49,189. For the 2022 year (Exhibit 20), the EBIT was $20,152, with it being noted that in that year there was no interest expense. This would give an enterprise value of approximately $70,000 based on EBIT. This clearly, however, did not involve any assessment as to the adjusted EBIT.
In submissions, the husband’s counsel submitted that the Court should find that it was appropriate to allow a notional salary of approximately $50,000, which would give rise to an enterprise value of approximately $100,000 or less. I do not accept this submission. There is no evidence that would enable me to conclude what the notional salary was nor was there any evidence from the single expert as to an appropriate notional salary. The question of the notional salary was well known to the husband for approximately eight months prior to the hearing. In that respect, on 21 July 2022, the husband’s solicitor submitted a series of questions to the single expert (Exhibit 6). One of the headings for a few questions was described as an “allowance for owner’s wages”. The expert responded to the questions in relation to the “owner’s wages” in these terms:
… In assessing FME, I did not make an allowance for wages that might be payable to the owner of the business. No adjustment was made because whilst information regarding the market value of work performed by the owners was requested, no information was provided.
(Exhibit 6)
It has been well within the knowledge of the husband for many months to address this issue and it is quite clear that he has done nothing about it.
Counsel for the wife contended that the Court should adopt the opinion of the single expert as expressed in the report. He submitted that the Court could not rely upon the financial accounts or income tax returns for the 2022 year as they were unsigned drafts. He further contended that he had not understood that the 2022 accounts would be a matter relevant to value and, had he been aware, then he would have asked further questions of the husband. He further contended that simply using the accounts did not take into account any adjustments that would need to be undertaken to the valuation.
I do not accept those submissions. There is no evidence that the 2022 accounts are draft accounts. The unchallenged evidence of the husband is to the effect that the accounts are ready to be submitted to the Australian Taxation Office. Part of Exhibit 20 includes income tax returns prepared from the accounts. The husband says in his affidavit that the returns have not been lodged because if he does so they will give rise to a Notice of Assessment which he is unable to pay until he receives his property settlement. As to the submission that the wife’s counsel would have asked further questions of the husband, I reject that submission. I offered counsel for the wife an opportunity to further cross-examine the husband. He declined to take up that offer.
In relation to any other adjustments which would be made to the 2022 accounts, it is clear that the only adjustments that have been made in the past years are in relation to market rental and repairs and maintenance.
I am satisfied that there is sufficient information before me based upon the single expert’s report and the answers that he gave in cross-examination to adopt his methodology, apply his adjustments, and apply a materially lower multiple to determine an enterprise value for the business using the 2021 and 2022 years. In that respect, I rely upon his findings in relation to the adjusted EBIT in the 2021 year, which makes allowance for an adjustment for repairs and maintenance and deducts a market rental, giving rise to an adjusted EBIT of $22,263 (Exhibit 6, Table 10).
Applying the same approach to the 2022 year where the EBIT was $20,152, adding back the amount of $4,274, being the adjustment for repairs and maintenance in the 2021 year, and deducting the market rental of $31,200 gives rise to an adjusted EBIT of -$6,774. An average of the adjusted EBIT’s for those two complete financial years is $7,745. Applying a multiple of two which is clearly materially less than a multiple of three gives an enterprise value of approximately $15,500.
I am satisfied that this represents a proper approach for the valuation of the business. In that respect, in Georgeson and Georgeson (1995) FLC 92-618, the Full Court said as follows at 82-218–82-219:
… Expert evidence may be adduced as to the proper method to be adopted, in the circumstances of a particular case, to assist the Court in forming an independent judgment on the issue of valuation by the application of the appropriate principles. Whilst an expert may thus suggest an approach as being appropriate 1n a particular case, before accepting it, the Court must come to its own conclusions as to whether that approach is appropriate in the circumstances.
I am satisfied in this case that to adopt an enterprise value of $300,000 for this business would be to overvalue the business. The business today is very different to the business that was previously conducted by the parties as a partnership based on the 2018 and 2019 years, even allowing for a discount for COVID-19. The clearest example of that is that in the 2018 and 2019 years, the gross sales for the business were $468,346 and $416,357 respectively. In those same two years the net profit was $158,967 and $114,814 respectively. That is to be compared with the gross sales and net profit for the business in the 2021 and 2022 years. In that respect, in the 2021 year the gross sales were $238,203 and net profit was $36,044, whilst in the 2022 year gross sales were $242,759 and net profit was $20,152. They are very different businesses from the point of view of gross revenue and net profit. I have also had regard to the evidence given by the wife in cross-examination. She said that the husband could not run the business without her and agreed that it is a very different business now to that which it was when it was run by them both as a partnership. In light of the change in the gross sales and net profit and particularly, in light of the evidence given by the wife as to the changes in the business and the evidence of the single expert, it would be erroneous to have regard to a valuation that is predicated upon an assumption that the business that existed in 2018 and 2019 has, but for the intervention of COVID-19, remained the same when it self-evidently has not.
In my independent judgment, I will adopt a figure of $15,500 as the value for the business.
As to Item 22, the husband contended that the parties had borrowed 50,000 from his father. The wife acknowledged that the parties had received this sum of money and she said that they had repaid a small portion of it to the father. She did not know how some of the monies had been used. The wife’s counsel submitted that just because the wife said “we did make some small repayments back to the father”, it did not indicate the monies were advanced as a loan. I do not accept that proposition. If monies have been advanced and part are given back, then I am satisfied that it represents an acknowledgment that the monies advanced are to be repaid. It begs the question why the wife repaid some funds if there was no obligation to repay. I intend to take the $50,000 into account as a joint liability of the parties.
Item 28 is said to be a debt of $148,000 to the wife’s parents in relation to the funding of the 2 D Street property.
The husband’s counsel submits that the parties paid more than was required to have been paid under the loan and that the Court would not be satisfied that the parties are indebted as to $148,000. Ultimately, the husband’s counsel made a submission that doing the best that they can, it is possible that the parties owe $148,000 but that it is equally possible that it is less than that. The husband’s evidence is to the following effect in his affidavit:
150. As I have said previously, the Respondent was in charge of all of the loan repayment arrangements as the Respondent usually organised that with her father. All I knew was that the loan was being repaid and I never heard anything to the contrary from anyone not the Respondent, nor my in laws or anyone else. The first I ever became aware of payments alleged not to have been made was when the Respondent and I separated and demands started being made against me in 2020 (I shall say more about that below).
That evidence makes it clear that the husband does not know what is owed.
The source of evidence for the $148,000 were from calculations made by the wife’s mother. I accept that the demand made by the wife’s parents in early 2020, suggesting that there was in fact approximately $280,000 owing under this loan, has contributed significantly to the husband’s suspicions. However, during the course of the cross-examination of the wife’s mother, it became apparent that the $280,000 included approximately $107,000 of other payments made by the wife’s parents that did not in total relate to the balance of the initial advance. In light of the absence of knowledge by the husband and the clear and unimpeached evidence of the wife’s mother, I accept her evidence.
I am satisfied that there is $148,000 outstanding to the wife’s parents as a consequence of the initial advance to acquire the 2 D Street property.
The remaining Balance Sheet item is the debt to the wife’s father for the Suburb M property. This is said to total $140,417, being one-quarter of the amount said by her mother to be outstanding, namely $561,670 as identified in Exhibit 17. I do not accept that is the total sum that is outstanding. It includes a figure of stamp duty of approximately $60,000, which in my view, represents a double-dip as a consequence of the purchase price of over $1,300,000, the mortgage advance of $850,000 and the contribution of the wife’s father of $550,000. As much was conceded by the wife’s counsel during the course of submissions.
Reducing the balance of $561,670 by $60,000 leaves a balance outstanding of $501,670. The quarter share of the wife would be $125,417.50, which is the amount I propose to bring to account.
I note that the terms of the loan are such that this money is not repayable until a sale of the Suburb M property. The husband has elected not to call any evidence that the loan should be discounted by virtue of the fact that it is not repayable until a sale of the property.
The husband’s counsel proposed that the liability of the husband for the EE Finance Loan, FF Finance debt and other business debts in Items 27, 32 and 33 of the Balance Sheet be removed and taken into account at the s 75(2) stage.
I find the pool of assets for division between the parties to be as follows:
Ownership Description Value ASSETS 1 99% Respondent
1% ApplicantB Street, Suburb C $1,525,000 2 Joint 2 D Street, Suburb E $640,000 3 Respondent 25% share of family investment property – BB Street, Suburb M $500,000 4 Applicant Business “Z Company” (previously traded as H Company by the parties. H Company no longer operates) $15,500 5 Applicant Bank Account – CBA …03 $765 6 Applicant Bank Account – CBA …42 $527 7 Applicant Bank Account – J Bank …60 $78 8 Applicant Bank Account – CBA …74 NIL 9 Joint Bank Account – J Bank …08 $1,630 10 Applicant Motor Vehicle 1 $2,500 11 Applicant Home contents and personal property $3,400 12 Respondent CBA acc. …25 $651 13 Respondent & partner CC Bank acc …35 $1 14 Respondent Home contents and personal property $3,600 15 Respondent Motor Vehicle 2 $400 Total $2,694,052 LIABILITIES 18 Joint CBA Home Loan – …07 $169,660 19 Joint CBA Home Loan – …08 $149,231 20 Joint CBA Home Loan – …06 $85,416 21 Applicant Income tax liabilities $40,449 22 Joint Mr DD loan (Applicant’s father) $50,000 25 Joint Accountant $24,783 28 Joint Loan Mr F & Ms G $148,000 29 Respondent Centrelink Debt $6,655 30 Respondent Debt to Wife’s father for Suburb M property $125,417.50 31 Respondent ATO $39,804 Total $839,415.50 SUPERANNUATION Member Name of Fund Type of Interest Respondents value 34 Respondent Superannuation Fund 1 Accumulation $7,041 Total $7,041 TOTAL $1,861,677.50
ASSESSMENT OF CONTRIBUTIONS
Much of the evidence in the affidavits was of limited assistance and much of it amounted to broad ranging submissions and criticisms of the other party’s behaviour or conduct.
Much of this material was either rejected during the course of objections or not the subject of cross-examination or submission, reinforcing the conclusion about its irrelevancy.
It is little wonder that the parties have incurred so much money on legal fees (in the case of the husband approximately $483,000 and in the case of the wife approximately $215,000). The incurring of such fees in the context of this very modest pool of assets demonstrates the complete lack of focus and proportionality brought by the parties to the proceedings. It is little wonder that they have spent so much money given the state of the evidence.
I have, however, read all of the evidence relied upon in the proceedings including the exhibits but do not propose to repeat all of it in these reasons. As the High Court reminds in Whisprun Pty Ltd v Dixon (2003) 200 ALR 447:
62. … A judge’s reasons are not required to mention every fact or argument relied on by the losing party as relevant to an issue. Judgments of trial judges would soon become longer than they already are if a judge’s failure to mention such facts and arguments would be evidence that he or she had not properly considered the losing party’s case.
The assessment in a property case calls for the exercise of a discretion and a holistic value judgment of the respective contributions of the parties. The Court is required to consider all of the contributions of the parties as the Full Court in Dickons v Dickons (2012) 50 FamLR 244 makes plain:
24.… the task of assessing contributions is holistic and but part of a yet further holistic determination of what orders, if any, represent justice and equity in the particular circumstances of this particular relationship. So much is clear from the terms of s 79 itself and, in particular, s 79(2). The essential task is to assess the nature, form and extent of the contributions of all types made by each of the parties within the context of an analysis of their particular relationship.
25.Doing so is also consistent with the demands of authority that the ultimate assessment of contributions should be made without “giving overzealous attention to the ascertainment of the parties’ contributions” (Norbis v Norbis (1986) 161 CLR 513 at 524 ; 65 ALR 12 at 18 ; 10 Fam LR 819 at 825 ; [1986] HCA 17) and the well-established recognition in the authorities (acknowledged specifically by her Honour in this case) that the process required of the court by s 79 is the exercise of a wide discretion, not the performance of a mathematical or accounting exercise.
26.The necessarily imprecise “wide discretion” inherent in what is required by the section is made no more precise or coherent by attributing percentage figures to arbitrary time frames or categorisations of contributions within the relationship. Indeed, we consider that doing so is contrary to the holistic analysis required by the section and, in the usual course of events, should be avoided.
The Full Court as recently in Horrigan & Horrigan [2020] FamCAFC 25 emphasised and reinforced that the proper approach to the assessment of contributions is:
35.… well established that an assessment of contributions is not a mathematical exercise, but rather involves the identification and assessment of all of the parties’ respective contributions, in a holistic way across the course of the relationship and in the post separation period to the point of assessment. …
I am also mindful of what the Full Court said in Singerson & Joans [2014] FamCAFC 238 at [66] that for the purposes of s 79 of the Act, there is nothing to suggest that any category of contribution needs to be quarantined and applied solely to particular assets. In my view, the authorities require evaluation of all contributions to the property of the parties, notwithstanding that the categories of property may be different. This view has been confirmed by subsequent Full Courts such as in Jabour & Jabour (2019) FLC 93-898, where their Honours observed that a primary judge should be cautious in emphasising the importance of an increase in value of a particular item of property at the expense of “the myriad of other contributions that each of the parties has made during the course of the relationship” (at [35]).
The consistent theme from the authorities is that the multifarious contributions over the relationship and subsequently of all types are to be assessed in a holistic way.
The wife contended in her Case Outline that I should adopt two pools to assess contribution. No submission was advanced as to why I should adopt such an approach. In Norbis v Norbis (1986) 161 CLR 513, Brennan J observed at 541:
The global approach is no more than a procedure for determining the exercise of the discretion. It is a procedure which tends to shorten the hearing so as to avoid sapping the finances of the parties and engendering further ill-feeling between them. The primary judge's adoption of the asset-by-asset approach in lieu of the global approach was not an error affecting the validity of the order which he made. There is no logical foundation for concluding that one approach should produce, at the end of the day, an order different from, or preferable to, the order which the other approach would produce. Either approach is capable of producing a just and equitable order.
I conclude that it is appropriate to adopt a one pool approach comprising the property and superannuation entitlements of the parties Such an approach avoids any risk of double dipping and more properly permits of a just and equitable outcome.
Guided by such Full Court determinations, I propose to assess the parties’ contributions and address where necessary the issues as raised by the parties in Exhibits 2 and 3 that have not otherwise been addressed in determining the pool of assets for division.
The parties following their marriage lived with each of the respective extended family members for periods of time. I recognise that each of the parents have made a contribution to the parties over the course of the relationship by providing rent-free accommodation in the early years of their marriage before the acquisition of the Suburb C property,
I find that the husband received $160,000 on the sale of the Suburb U property that he owned at the commencement of cohabitation. Whilst there was some cross-examination by the husband on the amount that he ultimately received, I accept the husband’s evidence. He was cross-examined on a document from a solicitor which indicated that the purchase price for his half-share was $280,000. Assuming the mortgage balance was approximately $200,000 at the date of marriage and assuming no reduction, then his half-share of the mortgage balance would have been approximately $100,000, giving rise to a receipt by him of approximately $180,000. I have no reason, therefore, not to accept the husband’s evidence as to $160,000.
The $160,000 that the husband received was largely applied to the purchase of the Suburb V property in the parties’ joint names, which was ultimately sold and the proceeds of sale were largely applied to renovations on 2 D Street.
The wife’s father purchased Suburb C property in or about mid-2001. The property was subsequently transferred to the parties by the wife’s father in mid-2004. The husband gives evidence that he understood that the property was being transferred to him and the wife jointly. As it was, the title was held as to 99 per cent in favour of the wife and 1 per cent in favour of the husband. The wife and her father denied that there had been ever any agreement to transfer the property into the parties’ names equally.
No submission was made by the husband’s counsel as to the finding that I should make in relation to this issue and in those circumstances, I do not need to resolve the factual dispute between the parties, particularly in circumstances whereby it represents whether it was held in the proportions as the title evidenced or alternatively, as the husband suggested, a substantial financial contribution on behalf of the wife by her family. The significance of that contribution is measured by the fact that the property was ultimately the subject of three loans, albeit one was obtained to pay the stamp duty on the transfer, which were utilised by the parties during the course of the marriage.
The parties were at issue about the extent of the husband’s contributions as opposed to the wife’s father’s contributions to the construction of a home on site of the Suburb C property. There was fairly limited cross-examination of the husband and the witness called in his case in relation to the work that they undertook on the property. The wife’s father was also cross-examined about the work that he and the husband undertook on the property. Each party adhered to their evidence. The wife’s father denied that the husband made any financial contribution to the construction of the property but conceded that the husband had been present on the site on a number of occasions.
The events that each of the husband and the wife’s father describe occurred over 20 years ago. The evidence of each of them is in some respect diametrically opposed and in other respects agreed. In that respect, it is not disputed that the husband did some work on the property. What is disputed is the extent of the work that was undertaken by him.
I am satisfied that the husband made a contribution to the works on what became the matrimonial home on the Suburb C property. I accept, however, that the vast majority of work that was undertaken on that property was undertaken by the wife’s father.
This particular assertion is not dissimilar to that considered by Robb J in Ak-Tankiz v Ak& Ak [2014] NSWSC 1044. In that case, his Honour said:
187 The principal evidence relating to these issues consisted of the uncorroborated evidence of the witnesses, or alternatively the only corroboration available was the testimony of other witnesses. The evidence distilled into the word of one witness against the word of one or more other witnesses. Most of the events relevant to the issues occurred many years ago. The evidence relevant to the issues generally consisted of a series of assertions, and counter-assertions by various witnesses. Evidence of the objective context was generally not available, so it has not been feasible to test the versions of events that were in contest by reference to the objective probabilities, based upon uncontroversial contemporary circumstances. Though the issues are not entirely irrelevant, their significance is limited, and their resolution has not been necessary for the purpose of determining the real issues in the case. Any attempt to resolve the issues by making judgments about the relative credibility of the individual witnesses on an issue-by-issue basis was likely to be based on illusory foundations.
If this were the only area of contribution by the wife’s family then its resolution may be more important. I am not satisfied, however, that, in the assessment of all of the respective contributions of the parties over the entirety of the relationship and subsequently, it does not loom large in the assessment process in a holistic sense.
In 2000, the wife, the wife’s mother and the wife’s two siblings purchased the Suburb M property for over $1,300,000 as tenants in common in equal shares. A mortgage of $850,000 was obtained and the wife’s father contributed the sum of $550,000. The terms of that advance being that the father would not have to be repaid until the property was sold. The property has remained tenanted throughout the course of the parties’ relationship. The mortgage over the property was paid from the rental income and the final balance of approximately $181,000 was discharged by the wife’s father in 2011. Thereafter, the rent, which had previously been applied to discharge the mortgage, was divided in five equal parts, one-fifth of it to each of the owners and one-fifth to the wife’s father to repay the loan of $181,000.
The husband points to no contribution made by him to the Suburb M property. The property has generated income, which following the discharge of the mortgage and until approximately early 2018 was received by the wife and applied to the benefit of the family. It represents a significant financial contribution by the wife over the course of the parties’ relationship.
In 2005, the husband's father purchased the W Town property in the name of the husband and his brother. I accept the evidence of the husband that neither he nor his brother made any contribution to the acquisition, conservation or improvement of that property. The husband sold his half-share in early to mid-2015 to his sister-in-law. The husband received approximately $98,000 of which $28,000 was paid to his father in repayment of monies advanced to effect renovations to 2 D Street, leaving the husband with approximately $70,000. That amount was expended by the parties in servicing mortgage repayments over the Suburb C property. The husband was not challenged on his evidence in that respect. I accept this is a contribution solely by him.
In 2008, the husband and wife and the wife's brother purchased a property at 1 and 2 D Street, Suburb E comprising of two units. The purchase price of the property including stamp duty was over $500,000. The funds to purchase the property were advanced by the wife’s parents pursuant to a loan agreement. The husband’s evidence was that the loan agreement, albeit it bearing his signature, was not signed by him. That said, however, the husband does not deny that the funds to acquire the property were provided by the wife’s family who themselves borrowed the money from the CBA. Nor does the husband deny that the parties are indebted to the wife’s family; he just puts in issue the amount of the loan.
In 2012, the property was divided such that 2 D Street was taken entirely by the parties and 1 D Street was taken by the wife’s brother. In 2018, the wife’s parents refinanced the loan they had initially taken to assist in acquisition of the property. The husband asserts that he and the wife in fact paid more than the brother did for their half-share of the loan repayments. Whilst the wife’s brother was not called to give evidence, I do not draw an inference that his evidence would not have assisted the wife’s case as I am not satisfied that the husband has established that the husband and wife actually paid more than their half-share of the payments. There was limited cross-examination of the wife and her mother on this topic. The husband’s evidence is at best superficial and absent any particularity. He could not point with any precision to any particular loan payment that he asserts was greater than the amount paid by the wife’s brother. The husband also asserts that there were various cash payments made by them in reduction of the debt to the wife’s patents. This was denied by the wife and her parents. The husband says that he did not even know that there had been a re-finance of the 2 D Street Property and says the following:
163.… I was never made aware of that refinance ever having occurred. I was not informed about it or the circumstances within which it was made, I did not consent to it, I have never been provided with any details about it and most importantly, I have no records now of what repayments were made into the previous loan prior to the refinance which would go towards showing what repayments were actually made.
In those circumstances and in the circumstances of other statements to that effect contained within his affidavit, the husband has not satisfied me that there is any evidence from which I could draw the conclusion that the husband invites, namely that the husband and wife made more than their share of the payments to the wife’s parents.
I accept the evidence of the wife’s family that the wife’s parents made a lump sum reduction from their own funds of $26,372.91 in reduction of the loan.
I also accept for the same reasons as above that from about early 2018, the husband and wife ceased making payments for the loan on 2 D Street. I accept the wife’s evidence and the submission of the wife’s counsel that between early 2018 and early 2023, the wife’s share of income from the Suburb M property was applied in reduction of the parties’ loan repayments for 2 D Street by approximately $84,000. The husband’s counsel did not put in issue the accuracy of that submission. I accept that the wife made these payments.
In or about early 2019, the husband left the former matrimonial home and for a period of time lived in rented premises. The wife has remained in occupation of the home at the Suburb C property.
As at the date of separation there were three loans secured against the home. No payments were made on those loans after 29 July 2019 other than one instalment made by the husband in the sum of $569 until the wife commenced making mortgage payments in September 2021. Subsequent to that period, the wife has made payments to the mortgage up until August 2022 of approximately $36,000. She has continued to make payments under the mortgage to date. Her counsel’s submission was that in total the mortgage payments to the date of trial made by the wife with the assistance of her partner is something in the order of approximately $52,000. The husband’s counsel did not contend that such assertion was incorrect. I accept that the wife made these payments.
I accept the evidence of both parties that they each made an application to the bank to attempt to seek a moratorium on mortgage payments.
A significant issue raised by the husband was that the wife’s conduct in relation to the parties’ business. In Exhibit 2, it is characterised as waste. The husband invokes the principles identified in Kowaliw & Kowaliw (1981) FLC 91-092 (“Kowaliw”), where Baker J said at 76,644:
As a statement of general principle. I am firmly of the view that financial losses incurred by parties or either of them in the course of a marriage whether such losses result from a joint or several liability, should be shared by them (although not necessarily equally) except in the following circumstances:
(a) where one of the parties has embarked upon a course of conduct designed to reduce or minimise the effective value or worth of matrimonial assets, or
(b) where one of the parties has acted recklessly, negligently or wantonly with matrimonial assets, the overall effect of which has reduced or minimised their value.
Conduct of the kind referred to in para (a) and (b) above having economic consequences is clearly in my view relevant under sec 75(2)(o) to applications for settlement of property instituted under the provisions of sec 79.
In Marlowe–Dawson v Dawson (No 2) (2014) 53 Fam LR 568, Kent J observed as follows after referring to Baker J’s statement in Kowaliw:
106. It may be accepted that the above statement by Baker J in Kowaliw (supra) and subsequent cases which have considered and applied it (see, for example, In the Marriage of Omacini (2005) 33 Fam LR 134; (2005) FLC 93-218; [2005] FamCA 195; In the Marriage of DJM and JLM (1998) 23 Fam LR 396; (1998) FLC 92-816; In the Marriage of A D and A C Townsend (1994) 18 Fam LR 505; (1995) FLC 92-569; Browne v Green (1999) FLC 92-873; Chorn & Hopkins (2004) FLC 93-204; Cerini & Cerini [1998] FamCA 143 (Cerini & Cerini); SMB & MFB [2006] FamCA 46; Polonius & York [2010] FamCAFC 228) establish guidelines for the exercise of the s 79 discretion as distinct from requiring the application of a fixed legal rule to the facts on which the operation of the rule depends. (Lovine & Connor (2012) FLC 93-515; [2012] FamCAFC 168 at [101]–[103]).
107. However it appears clear from those authorities that in the context of a claim of reckless, negligent or wanton conduct, as advanced here, at least two elements must be fulfilled for the guidelines to have application. First, that the conduct can be so characterised and, second that there exists a direct causal connection between the conduct so characterised and the loss or reduction of value so caused.
The husband’s counsel despite referencing it in the case outline made no submissions about waste. I am not satisfied that the husband has established the necessary elements of waste.
From March 2019 following separation the wife remained in occupation of the business premises and in control of the business. I am satisfied, consistent with the evidence, that the husband was excluded from the business premises and the wife retained, such as they were, the business profits. The evidence appears to be that the wife conducted the business until late 2019, albeit that the business was closed for what appears to be approximately a month in or about late 2019. The wife’s evidence was that she intended to re-open the business after Christmas but as a consequence of ill-health and then the intervention of COVID-19 she never re-opened the business.
It is clear from the correspondence between the solicitors that the husband was continually seeking to renter the business. I am satisfied that the wife resisted all of his attempts. It is agreed that the husband ultimately was permitted to re-open the business in mid-2020.
I accept the wife’s evidence that she suffered health problems in the early part of 2020. I also accept her evidence that she found the parties separation and in particular the loss of her relationship with the parties’ children exceptionally difficult. I am satisfied that at times she acted in a way which the husband perceived as an attempt to destroy the parties’ business and frustrate the operation of the business by the husband. I am satisfied that the filing of the Summons in the Supreme Court of New South Wales was in part driven by significant feelings of anger directed towards the husband, the emotional breakdown of the marriage and the loss of her children. The consequence of the proceedings in the Supreme Court were such that the parties incurred a significant loss by way of legal fees for no apparent gain. I am satisfied that one of the consequences of the wife’s application had it been successful would have been that the business would have failed, particularly given she sought a sale of the business premises. However, it did not fail.
I accept the evidence of the husband that subsequent to assuming occupation of the business premises in mid-2020, the husband has undertaken a significant amount of work to clean and restock the premises following its closure for approximately six months. Thereafter, the husband has managed solely to the exclusion of the wife the business which now no longer trades as a partnership; it being agreed that the partnership ended in or about mid-2020 and now proceeds as a sole trading business. I accept that the husband’s efforts have maintained to the extent possible the asset which he will retain. He has also had the benefit of receiving all of the net profit from the business in the period since he assumed occupation of the premises.
The circumstances of the parties’ separation have been clearly very painful for both the husband and the wife. Each feels significantly aggrieved by the conduct of the other and each seeks to apportion blame. I am not satisfied that either party acted entirely honourably in that period and I am not able to make the findings that the husband urges should be made from the tenor of his affidavit.
Following the parties’ separation, the twin girls resided with the wife until mid-2019 and the boys respectively came into the husband’s care in early 2020. Since that date, the husband has had all of the caring responsibility of the children and they have not spent any time with the wife. This includes in particular the role he has played as sole carer for Mr S. No child support was paid by the husband to the wife during the periods in which they resided with the wife nor was any financial contribution made by the wife to the husband until child support payments commenced in approximately April 2022. Since that date the wife has paid child support. I accept that the husband’s contributions in relation to the support and care of the children in the period post-separation have been significant.
I accept that each party’s parents have undertaken caring responsibility in relation to the parties’ children. I accept, however, that the far greater contribution was made by the wife’s family over that made by the husband’s family.
I accept that the wife’s parents have made financial contributions towards the benefit of the family including the payment of holidays for the parties to other countries as well as paying various school fees and other payments for the benefit of the parties and the children.
I accept the evidence of each party that they made a significant contribution as a homemaker and parent during the course of the parties’ relationship. In that respect, it seems from the evidence that the wife’s contributions were in a parenting and homemaker sense greater than those of the husband during the course of the relationship. However, I also accept the evidence of the husband that during the course of the relationship his contributions to operating the business that the parties conducted as a partnership were greater than those of the wife which left her time to attend to the majority of the parenting and homemaker contributions.
There seems to be an issue between the parties as to the extent to which the husband applied the sum of $7,800, being the net amount that he withdrew from his superannuation on hardship grounds. A part of it was paid towards mortgage payments and the balance otherwise retained by the husband.
I am satisfied in light of the above matters that each of the parties has made substantial contributions over the course of the relationship and in the period post separation. It is clear from the positions adopted by both parties that there is a recognition that the wife’s contributions are greater than those of the husband. The wife’s contribution in a financial sense are enormous. It includes the Suburb C and Suburb M properties. The husband points to no item of contribution to the Suburb M property. It has sat separate to the parties’ other assets. It is also apparent that over a number of years the Suburb M property provided a rental income to the wife, which she applied to the benefit of the family constituted by her, the husband and the children.
It would be an error to equate the current value of these properties in a proportional sense as that would be contrary to the mandate that I am required to assess the parties’ contributions in a holistic sense having regard to all of the contributions by both parties over this lengthy marriage. However, that does not mean that I should ignore the benefits of ownership of the Suburb C property which has provided accommodation and enabled the parties to secure borrowings that were used by them for their benefit during the course of the parties’ relationship together with the rent from the Suburb M property.
In that respect, as the Full Court observed in Williams & Williams [2007] FamCA 313:
26.We think that there is force in the proposition that a reference to the value of an item as at the date of the commencement of cohabitation without reference to its value to the parties at the time it was realised or its value to the parties at the time of trial, if still intact, may not give adequate recognition to the importance of its contribution to the pool of assets ultimately available for distribution towards the parties. Thus where the pool of assets available for distribution between the parties consists of say an investment portfolio or a block of land or a painting that has risen significantly in value as a result of market forces, it is appropriate to give recognition to its value at the time of hearing or the time it was realised rather than simply pay attention to its initial value at the time of commencement of cohabitation. But in so doing it is equally as important to give recognition to the myriad of other contributions that each of the parties has made during the course of their relationship.
Likewise, Brereton J in Kardos v Sarbutt (2006) 34 Fam LR 550 observed:
61.… If one party has a house worth $250,000 at the outset, and it appreciates during the relationship to be worth $750,000, the contribution is of a house which at separation is worth $750,000 — not of money worth $250,000.
While it is clearly agreed by the terms of the contribution assessments put forward by each of the parties that the wife’s contributions were greater than that of the husband, I am satisfied that a contribution assessment as contended for by the husband at 45 per cent is well outside the reasonable ambit of discretion in failing to give proper recognition to the significant contributions made by the wife. Likewise, the wife’s assessment of contributions by the husband at 20 to 25 per cent does not pay significant regard to his contributions over the course of the parties’ relationship and subsequently.
Doing the best I can in assessing each party’s contributions in a holistic way over the length of their relationship and in the period post separation, I assess the husband’s contributions at 32.5 per cent.
ADJUSTMENT UNDER SECTION 75(2) OF THE ACT
Each of the parties contended that there should be an adjustment in favour of the husband for the matters under s 75(2).
I accept that the respective percentage adjustments proposed by each party should perhaps be seen within the context of how they contended the contributions should be found. That said, however, the husband proposed that he should receive an adjustment of 10 to 15 per cent whilst the wife proposed that there should be an adjustment in favour of the husband as to 10 per cent.
I agree with the propositions advanced by each party that there should be an adjustment in favour of the husband.
The husband is aged 48 and the wife is aged 47.
The totality of the husband’s income according to his Financial Statement is $1,624 gross per week. I accept part of this includes various government benefits and child support payments. The totality of the wife’s income is according to her Financial Statement $1,251 gross per week.
The husband has the continuing care of two children who are aged 14, albeit he receives child support payments from the wife. On the basis of the current parenting arrangements, the wife does not spend any time with the children. I am unable to predict with any certainty as to whether or not that position will change. On the current evidence, the husband has had sole care of these girls for in excess of three and a half years.
I also recognise that the husband has the two adult children living in his household, one of whom has significant disabilities. In that respect Exhibit 24 is a letter from the treating psychiatrist for Mr S. It records as follows:
I am writing in the capacity of [Mr S’s] treating psychiatrist. He has been my patient since 24 August 2020 and been diagnosed with autistic spectrum disorder – […] ADHD, social phobia and [substance] misuse.
He is incredibly disabled by all his conditions and is heavily reliant on his father for assistance, attending and paying for appointments, prompting for ADLs and providing moral support.
I believe it is in [Mr S’s] best interests that he remains with his father.
…
(As per the original)
I accept the evidence of the husband as set out in his affidavit at paragraphs 205 to 210 in relation to his responsibilities on an ongoing basis for Mr S. This was not challenged. In Palumbo v Mandel (2019) FLC 93-929, the Full Court observed:
56.There is no doubt that s 75(2)(c) directs attention to children of the marriage who have not attained the age of 18 years. However, s 75(2)(o) is expressed in the widest terms and enables the Court to take into account “any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account”. It is well settled that s 75(2)(o) enables the Court to take into account the financial consequences to a party arising from that party’s care or support of an adult child.
57.In Lint & Lint [2011] FamCAFC 115 the primary judge made an adjustment in favour of a party by reason of that party’s care of an adult child who had autism. The primary judge also took into account that party’s expected “financial burdens” for a child who was then 17 years old that would arise once that child commenced tertiary studies. The Full Court in that case said at [183]:
…[T]he section 75(2) adjustment determined by the trial Judge included, as we have earlier indicated, a significant adjustment for the future care of the parties’ children. Nothing to which we have been referred demonstrates that the trial Judge’s discretion miscarried, or was based upon material errors of fact. Nothing to which we have been referred demonstrates that the section 75(2) adjustment determined by the trial Judge, which favoured the wife by approximately $1.4 million, was based upon inadequate recognition of the wife’s future parenting of the children.
58.In Zaruba & Zaruba (2017) FLC 93-776, an adjustment was made in favour of a party by reason of that party’s ongoing care of her adult daughter who had a significant disability, albeit, the adult daughter was not a child of the other party. In relation to this approach, the Full Court said at [130]:
His Honour found that “[the wife’s disabled daughter] is now 18 years old and whether the wife has a legal duty to maintain her remains an open question on the evidence” (at [156]). Given the combined effect of s 66C and s 66L of the Act in light of his Honour’s findings that the adult child suffers from a “significant disability”, it may be said that the wife does indeed have “a legal duty to maintain her”. Be that as it may, past care of that child, now an adult; receipt of the carer’s pension and the evidence of the modifications to the Mindarie property to which we have referred all point to the future care of the wife’s daughter being a significant matter pursuant to s 75(2)(o) of the Act.
59.A similar approach was taken in D & D [2004] FMCAFam 154 by Bryant CFM (as she then was) who made an adjustment in favour of a party who had full time care of the parties’ 26 year old child who had a significant disability. Bryant CFM determined that caring for the adult child was “a full time and unrelenting task which [the mother] will undoubtedly carry out for the rest of her life, at least until she becomes unable by virtue of her own health to do so” [31] and which justified a sizeable adjustment in the mother’s favour.
60.From these cases, it can be seen that cogent reasons were given for the adjustment arising from the care and support of adult children and the evidence was much more than mere speculation about whether the adult child would remain in that party’s care.
I take into account that the husband will in all likelihood be indefinitely responsible for this “incredibly disabled” adult who is heavily reliant upon his father. I also acknowledge, however, that Mr S also receives financial assistance from the National Disability Insurance Scheme (“NDIS”) but that the husband estimates that there are still expenses for Mr S that are not met by the NDIS payments.
The husband also has some health issues but I note in that respect that the wife has also had health issues in the past, both of them having suffered serious illness.
I recognise that the wife has re-partnered and has the financial benefits that come with re-partnering whilst the husband has not. I also recognise that the wife has received significant financial benefits from her family and I am satisfied that they have in the past represented a financial resource available to the wife. In that respect, they have made payments on the wife’s behalf post separation of in excess of $107,000, which have not been repaid by her and are not regarded by her as a liability in her Financial Statement. I also recognise that the wife’s liability for her share of the loan for the Suburb M property to her father which is taken into account in the pool of assets is not required to be repaid until a sale of the property. In that respect, there is no evidence of any intention to sell the property.
I recognise and take account of the fact the liability of the husband for the EE Finance Loan, FF Finance debt and other business debts will be his responsibility but that they are not taken into account in the pool of assets for division. I also recognise that each party will have an equal share of the responsibility to pay various business debts as and when they fall due.
In all the circumstances, I am satisfied that there should be, as each party recognised, a further adjustment in favour of the husband. I assess that adjustment at 12.5 per cent taking into account all of the matters that I have referred to above but in particular the real income disparity of the parties (ignoring government benefits), the husband’s full care of the twins, the caring responsibility for Mr S, and the fact that one of the liabilities of the wife does not have to be repaid until the sale of Suburb M property for which there is no evidence of any intention to sell.
The consequence of my findings is that the property of the parties should be divided as to 45 per cent in favour of the husband and 55 per cent in favour of the wife.
I am of the view that this is a just and equitable outcome.
The effect of my findings as against the pool of the assets is that the husband will receive assets having a value of $837,755. The husband will retain the business premises of 2 D Street, the parties’ business and the joint bank account at Item 9. He will also retain the items of property in his possession and be responsible for the loan to his father and his income tax liability. While in relation to Item 25, his share is $14,316.50, as it his accountant he will be responsible for the whole amount but I will credit him with $10,466.50, being the wife’s share. The wife will be responsible for indemnifying the husband in relation to the debts due to her family and in relation to those secured against the home.
On that basis, the husband will have net assets having a value of $559,634.50. The wife will have to pay to the husband $278,120.50. I will order that payment and the transfers and refinance occur simultaneously within 90 days.
As there will be required to be a payment to the husband, it seems pointless to have the husband assume the liability secured against the home that the wife seeks he assume. It would just have the effect of increasing the amount that the wife will have to pay to him.
Having regard to the dollar effect of the orders, I am satisfied that it is a just and equitable outcome.
I certify that the preceding one hundred and eighty-four (184) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Schonell. Associate:
Dated: 24 March 2023
Annexure A has been omitted to comply with Section 121 of the Family Law Act 1975 (Cth).
Annexure B has been omitted to comply with Section 121 of the Family Law Act 1975 (Cth).
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