Lincoln and Dallas

FAMILY COURT OF AUSTRALIA

LINCOLN & DALLAS

[2009] FamCA 136

FAMILY LAW – PROPERTY SETTLEMENT – Orders

Family Law Act 1975 (Cth)

APPLICANT:

Mr Lincoln

RESPONDENT:

Ms Dallas

FILE NUMBER:

MLF

1574

2006

DATE DELIVERED:

3 March 2009

PLACE DELIVERED:

Melbourne

PLACE HEARD:

Melbourne

JUDGMENT OF:

Mushin J

HEARING DATE:

12, 13, 14, 17 March and 15 December 2008

REPRESENTATION

COUNSEL FOR THE APPLICANT:

Mr Sweeney

SOLICITOR FOR THE APPLICANT:

Grice & Grice

COUNSEL FOR THE RESPONDENT:

Ms Stoikovska

SOLICITOR FOR THE RESPONDENT:

MW Law

Orders

IT IS ORDERED THAT:

An option be and is hereby granted to the wife to purchase the husband’s right title and interest in the former matrimonial home known as and situated at K, Victoria, being the land more particularly described in Certificate of Title Volume … Folio … ("the home").
In the event that the wife exercises the option referred to in paragraph 1 hereof, no later than 4 p.m. on 30 March 2009 the wife pay to the husband the sum of $239,680.
In the event that the wife makes the payment referred to in paragraph 2 hereof, contemporaneously therewith -
a) the husband provide to the wife a Transfer of Land in registrable form and further do all things and sign all documents necessary to transfer to the wife all his right title and interest in the home at her expense; and
b) the wife indemnify the husband and keep him indemnified against all liability past, present and future in respect of all outgoings and encumbrances on the home including all rates and taxes.
In the event that the wife does not exercise the option granted to her pursuant to paragraph 1 hereof, an option be and is hereby granted to the husband to purchase the home.
In the event that the husband exercises the option referred to in paragraph 4 hereof, no later than 4 p.m. on 27 April 2009 the husband pay to the wife the sum of $380,320.
In the event that the husband makes the payment referred to in paragraph 5 hereof, contemporaneously therewith -
a) the wife provide to the husband a Transfer of Land in registrable form and further do all things and sign all documents necessary to transfer to the husband all her right title and interest in the home at his expense; and
b) the husband indemnify the wife and keep her indemnified against all liability past, present and future in respect of all outgoings and encumbrances on the home including all rates and taxes.
In the event that neither the wife nor the husband exercises the option granted to each of them by paragraphs 1 and 4 hereof respectively, each of them forthwith do all things and sign all documents necessary to place the home on the market for sale wholly out of Court on terms and conditions including choice of agent and solicitor, reserve price, sale by public auction or private treaty and all other matters relevant thereto, the proceeds thereof to be disbursed as follows:
a)    all usual adjustments of rates, taxes and the like;
b)   any other sum necessary to enable the vendors to provide clear title to the purchaser;
c)   all costs of and incidental to the sale including all commissions, legal costs and disbursements; and
d)   as to the balance to an appropriate interest-bearing account ("the fund") to be disbursed in accordance with the following provisions of these orders.
For the purpose of these orders the term "net assets" be and is hereby defined as being the sum of $19,200 plus the fund PROVIDED HOWEVER that the parties' respective entitlements to superannuation benefits be and are hereby specifically excluded from the net assets.
The fund be disbursed in such proportions as to procure a net total of 60% of the net assets to the wife and 40% of the net assets to the husband on the basis that the wife has already received the sum of $3,200 excluding the fund and the husband has already received the sum of $16,000 excluding the fund.
The husband return to the wife, within 14 days hereof, the items specified in annexure NLD21 of the wife’s affidavit of evidence in chief filed 1 February 2008 and annexed to these orders marked “A”, if those items are still in existence and are within his possession and/or control.

BY CONSENT IT IS ORDERED THAT:

In accordance with s 90MT(1)(b) of the Family Law Act 1975, whenever a splittable payment within the meaning of section 90ME of the Act becomes payable to or on behalf of THE HUSBAND from his interest in the Public Sector Superannuation (the PSS), THE WIFE is entitled to be paid (by the Trustee of the PSS) 39% of the splittable payment and there shall be a corresponding reduction in the amount THE HUSBAND would be entitled to receive but for these orders.
The operative time for paragraph 11 herein is four days after the service of the sealed Final Orders on the Trustee.

IT IS FURTHER ORDERED THAT:

Save as provided herein and subject to the liberty to apply reserved herein, property in all items of personal property forthwith vests in the party presently having possession thereof.
All applications be otherwise dismissed.
General liberty to apply be reserved to both parties.
All exhibits be returned to the tendering party at the expiration of 28 days or further order.
All subpoenaed documents be returned to the person producing such documents.

IT IS CERTIFIED THAT:

Pursuant to Rule 19.50 of the Family Law Rules 2004 this matter reasonably required the attendance of Counsel.

IT IS NOTED that publication of this judgment under the pseudonym Lincoln and Dallas is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: MLF 1574 of 2006

MR LINCOLN

Applicant

And

MS DALLAS

Respondent

REASONS FOR JUDGMENT

Introduction

On 24 November 2008 I delivered reasons for judgment (“the reasons”) and made orders (“the orders”) with respect to parenting issues regarding the children of the marriage. The reasons are to be read in conjunction with these reasons for judgment. I ordered that it was in the best interests of the children to live with the mother for nine consecutive days in each fourteen day cycle and live with the father for the other five days. I held that the parties were to have equal shared parental responsibility for the long term care, welfare and development of the children and that each party have sole parental responsibility for the day-to-day care, welfare and development of the children whilst they are in their respective care.
I also delivered an interim judgment with respect to competing applications for alteration of property interests (“the interim reasons”) on that day. I made orders which referred the matter back into Court for the consideration of two issues. Those issues were:
·the valuation of K property (“the former matrimonial home”); and
·whether procedural fairness had been accorded to the trustee of a superannuation fund in respect of a superannuation splitting order agreed upon by the parties.
On 15 December 2008 the matter came back before me for mention. I will refer to issues arising out of that mention during the course of these reasons.

Background

As set out in the reasons, the father is 41 years old and employed within the public service. He has resided with his parents since the parties’ separation.
The mother is also 41 years of age and is employed on a part-time basis at a Community Health Service and in a private capacity. At trial she resided in the former matrimonial home with the 3 children of the marriage aged 10, 7 and 4 years of age.
The parties commenced cohabitation some time in 1989 and married in October 1991, at which time both parties were in paid employment. During the marriage, the parties purchased a number of properties. The father submits that his parents made significant financial contributions to these acquisitions. The mother disputed this. I will examine the issue in due course.
The parties finally separated on 2 March 2006. The father commenced proceedings in this Court on 16 May 2006.

The Asset Pool

The main asset is the former matrimonial home which, at the time of the trial, had an agreed value of $620,000. That resulted from a valuation by a single expert. As mentioned I referred this issue back into Court on 24 November 2008. That referral arose out of a concern relating to my general awareness that housing prices in Melbourne are, on one view, stagnant if not dropping. That raised a question in my mind as to whether my ability to do justice and equity between the parties was adversely affected.
During the mention on 15 December 2008 counsel for the husband submitted that because neither party had applied for the valuation of the former matrimonial home to be reopened, it would be inappropriate to do so, and indeed would amount to a miscarriage of my discretion. Counsel for the wife conceded that the issue had been initiated by me rather than on behalf of the wife, notwithstanding that she had at all times been legally represented. On balance, because no application had been made by either party I find that it would be unfair for the matter to be reopened on my initiative; therefore I accept the submission made by Mr Sweeney. Therefore I propose to include the former matrimonial home in the pool at a value of $620,000.
I note that a similar issue was raised with respect to the husband’s redundancy which I will consider in due course.
It is common ground that each of the parties has the use of a Holden motor vehicle, a 1997 Commodore and a 1982 Barina. They could not agree on the values of those vehicles and no corroborative evidence was called by either party. During the trial, both counsel submitted that one vehicle should be settled on each party in specie. In my view this constitutes a reasonable resolution of the issue, particularly in light of the inadequacy of the evidence.
It was also submitted that there were shareholdings in various public companies held by one or both parties, predominantly for the benefit of their children. There was no specific agreement with regard to the value of those shareholdings, however it was effectively agreed that any value was de minimis and should not be included in the pool of assets.
It was also agreed that each party was in possession of furniture and household effects, the value of which was approximately $10,000. Aside from the wife seeking the return of various specified items which the husband, through cross-examination, agreed to return if those items were still in existence, there was no submission made as to the treatment of those items. I find it appropriate in the circumstances that they be distributed in specie and excluded from the pool of assets.
Likewise, it was agreed that the wife owned various tools and chattels relating to her business which had minimal value and should not be included in the pool of assets.
It was common ground that both parties had retained monies from the Police Credit Co-operative. There was a dispute as to the amounts. Counsel for the wife asserted that the evidence demonstrated that her client had withdrawn $12,000 of which $4,000 had been used by her on reasonable living expenses for herself and the children. It was submitted that $8,000 should be added back as monies retained by the wife.
Any evidence supporting the wife's assertions is incomplete. The wife’s trial affidavit annexed receipts totalling a little over $4,000, most of which are living costs including groceries, children's clothing, bills and like matters. The details of many of those individual items are constituted by various notations by the wife but others are clear on their face.
Counsel for the husband correctly submitted that the wife had sworn at paragraph 34 of her affidavit filed 16 May 2008, that she had:
… withdrawn around $13,000 from the Police Credit Co-operative account and deposited those funds into an account in my own name. I also have had use of another $5,000 held by me on trust for the children in an account with the Police Credit Co-operative. As I indicated to the husband, those funds have been applied by me to assist me in meeting various expenses for the household given both that I am only working on a parttime [sic] basis, and given that the husband had not, until recently, provided any financial support for the children. Those funds have been applied to purchase a number of items required for the home given that the husband took various items without my consent on separation. This includes acquiring new bedding as the husband took most of the winter bedding and beds, and other items necessary to re-equip the house, items to which I have referred to later in this affidavit. I also paid to have a veranda fixed after it had collapsed. The balance of those monies withdrawn by me have been referred to in my Financial Statement.
Once again, the evidence is not entirely clear. I am satisfied in accordance with her affidavit the wife withdrew $18,000. The assertion that $5,000 of that money is being held in trust for the children does not, in my view, constitute a formal trust such as would lead to a finding that the wife did not have a beneficial interest in that money. Otherwise, the wife might be held to be in breach of the trust.
I am not satisfied that the wife's expenditure is restricted to $4,000. The receipts appear to be in addition to monies expended on the repair of a collapsed veranda and the replacement of items such as bedding, which were not challenged by the husband. I accept that the wife spent approximately $4,000 on living expenses but it is also appropriate to make a further allowance with respect to the repairs and replacements. In the circumstances, given the unsatisfactory state of the evidence, I have determined that the sum of $10,000 should be added back to the asset pool being monies retained by the wife from the Police Credit Co-operative.
It is common ground that the husband retained $19,000 from the Police Credit Co-operative. Whilst in earlier affidavit material the wife asserted that the husband had retained $23,000, her counsel conceded the lower sum in closing addresses.
During the trial, evidence was led with respect to a potential voluntary redundancy by the husband. The issue was raised by counsel for the wife during the mention on 15 December 2008. Ms Stoikovska submitted that since trial evidence had been sought with respect to the husband having taken a redundancy and that the husband, through his solicitors, had declined to provide any information. Mr Sweeney indicated that his client had taken a redundancy and had received a lump sum payment between $50,000 and $60,000. This matter was specifically anticipated during trial; evidence was led and submissions were made in relation to it. In the circumstances, and particularly as no application was made by either party prior to my initiation of the mention, I find that this issue will not affect my ability to do justice and equity between the parties. Accordingly I will treat it in the same way as I have decided the valuation issue that is I will decide the matter on the evidence as it stood at trial.
It is common ground that the husband's superannuation of $163,000 should be included in the pool of assets. The evidence regarding the wife's superannuation entitlements does not permit of a clear finding. The total sum was at $35,000 in her Financial Statement. In his trial affidavit, the husband asserted that the wife's total superannuation was valued at $27,400. At trial he submitted that that sum should be $45,470. There was no documentary evidence to establish the exact value. By virtue of the agreement with respect to the superannuation splitting order, as discussed above, it is unnecessary for me to make a finding on this issue. The minutes of consent incorporate an agreement as to the values of the superannuation interests, which total approximately $200,000.
On the basis of the above findings, the gross asset pool available for distribution in these proceedings is calculated as follows:

Asset Ownership
Determined

value ($)

The former matrimonial home Joint 620,000.00

Funds retained by the husband for his benefit from the Police Co-operative Credit account The husband 19,000

Funds retained by the wife for her benefit from the Police Co-operative Credit account The wife 10,000

Total 649,000

The Liabilities

The only liability which is in dispute is a debt of the wife to the Police Credit Co-operative. The wife's Financial Statement quantified the debt at $2500 while the husband maintained it was $4,200. The husband did not provided any evidence in support of his assertion. Accordingly I would include the liability of $2,500 on the basis that it is an admission made by the wife against her own interest.
Two further liabilities were not challenged by either party. The first is the husband’s Coles Myer credit card, with $3,000 owing, in addition to the wife's $4,300 debt to Centrelink.
Accordingly, the liabilities relevant to these proceedings are found to be as follows:

Liability Ownership
Determined

value ($)

Wife’s debt to the Police Credit Co-operative The wife 2,500

Husband’s Coles Myer credit card The husband 3,000

Wife’s debt to Centrelink The wife 4,300

Total 9,800

Liability	Ownership	Determined value ($)
Total	9,800

Therefore, the net assets of the parties, excluding superannuation are $639,200. As previously discussed, the parties’ superannuation entitlements are valued at approximately $200,000.

The Parties’ Proposals

During the course of the trial the parties' amended their proposals regarding the division of the matrimonial property. Counsel for the husband submitted that in the event that I made children’s orders as sought by his client, which I determined not to do, the matrimonial property should be divided equally.
One of the most significant issues in the husband's case with regard to the alteration of property interests was that of contributions. It was alleged that the husband had made a greater initial contribution of $45,000. Furthermore that his parents had made significant contributions totalling $80,000 to the parties' property. The husband’s case is that this sum should be treated as a contribution made on behalf of the husband. While the husband’s proposal did not specifically provide a breakdown for contributions or factors needs factors, I have treated the submission as seeking at least a further 5% in favour of the husband over and above equality of contributions throughout the marriage. I will refer to that matter below.
Counsel for the wife submitted that the parties' property should be divided 65-35 in favour of the wife. The figure of 65% to be allotted to the wife included an adjustment of 15% for the wife for her future needs.

Discussion

The Act empowers me to make such alteration to the parties' property interests as I determine, provided that such alteration are just and equitable. In consideration of what orders should be made, section 79 provides that the Court should take in account:
a)the financial contribution made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
b)the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
c)the contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage and any children of the marriage, including any contribution made in the capacity of homemaker or parent; and
d)the effect of any proposed order upon the earning capacity of either party to the marriage; and
e)the matters referred to in subsection 75(2) so far as they are relevant; and
f)any other order made under this Act affecting a party to the marriage or a child of the marriage; and
g)any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage.

Section 75(2) provides:
a)the age and state of health of each of the parties;
(b) the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment;
(c) whether either party has the care or control of a child of the marriage who has not attained the age of 18 years;
(d) commitments of each of the parties that are necessary to enable the party to support:
(i) himself or herself; and
(ii) a child or another person that the party has a duty to maintain;
(e) the responsibilities of either party to support any other person;
(f) subject to subsection (3), the eligibility of either party for a pension, allowance or benefit under:
(i) any law of the Commonwealth, of a State or Territory or of another country; or
(ii) any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia;
and the rate of any such pension, allowance or benefit being paid to either party;
(g) where the parties have separated or divorced, a standard of living that in all the circumstances is reasonable;
(h) the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income;
(ha) the effect of any proposed order on the ability of a creditor of a party to recover the creditor’s debt, so far as that effect is relevant; and
(j) the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party;
(k) the duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration;
(l) the need to protect a party who wishes to continue that party’s role as a parent;
(m) if either party is cohabiting with another person—the financial circumstances relating to the cohabitation;
(n) the terms of any order made or proposed to be made under section 79 in relation to:
(i) the property of the parties; or
(ii) vested bankruptcy property in relation to a bankrupt
party;
(na) any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage; and
(o) any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account; and
(p) the terms of any financial agreement that is binding on the parties.

Contributions

The first step in my consideration is an assessment of the respective contributions of the parties. Pursuant to ss 79(4)(a) and (b) they include financial and non-financial contributions, made by or on behalf of the parties or either of them to the “acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them …” They also include, pursuant to s 79(4)(c), contributions to the welfare of the family constituted by the parties to the marriage and the children “including any contribution made in the capacity of homemaker or parent …”
Counsel for the wife submitted that all contributions were equal. Conversely, it was submitted on behalf of the husband that whilst contributions throughout the marriage were equal, initial contributions made by him together with contributions made on his behalf by his parents throughout the marriage should result in a greater, yet unspecified, weighting of contributions in his favour.

Initial contributions

The husband alleged that he had made pre-cohabitation contributions amounting to approximately $45,000. That sum comprised of $30,000 in cash and a motor vehicle worth $15,000. He asserted that the wife had approximately $10,000 in savings at that time. Accordingly the husband’s case is that his initial contribution was $30,000 more than the wife’s.
The husband’s evidence was that the parties purchased a property in 1991 for $80,000, with the purchase price comprising of $30,000 from his savings, $10,000 from the wife’s savings in addition to a gift of $20,000 from his parents. While the wife did not explicitly dispute those details, she swore that "at the time we formed the relationship we did not own any significant assets." In her oral evidence, the wife alleged that by the time they purchased their first home, the parties had acquired approximately $15,000 in savings. The husband was challenged during cross-examination and was unable to produce any evidence to substantiate his claim. I invited him to produce such proof. Nothing was forthcoming.
In cross-examination, the husband conceded that when the parties commenced cohabitation, it could not be said that the motor vehicle was valued at $15,000. He gave evidence that he purchased the vehicle three or four years earlier for that sum. In the circumstances, I am not satisfied that the husband has established these pre-cohabitation contributions.

Contributions throughout the marriage

Save for the contributions made by one or both of the husband’s parents which I will discuss below, the parties, through their counsel, agreed that contributions were otherwise equal throughout the marriage. Essentially, throughout their relationship the husband was the primary breadwinner and the wife the primary homemaker and parent. Each of them made contributions in the other's primary area.

Contributions made by one or both of the husband’s parents throughout the marriage

The husband alleged that there were numerous items to be included in this category. Regrettably for his case, a great deal of the evidence was open to corroboration by his mother who gave evidence. In many instances, the husband's mother failed to corroborate the husband, thereby weakening his case.
In my reasons for judgment delivered on 24 November 2008 with respect to the children of the marriage parenting, I made negative findings in relation to the husband’s mother’s credibility. As a result of my findings with regard to the husband’s mother's credit, I am very wary of her evidence.
The husband alleged that throughout the parties' marriage his parents had gifted the parties $80,000. The husband particularised those sums in his affidavit of evidence in chief. The first amount was alleged to be $20,000 contributed towards the purchase of the parties' first property in 1991. This contribution was denied by the wife.
During her evidence the husband’s mother generally adopted her son’s evidence with respect to the asserted parental contributions. She was however unable to specifically recall or corroborate many of the specific sums, including the $20,000. Given my concerns with regard to the husband’s mother's credibility, I find that the husband has not established these contributions to the requisite standard.
The husband alleged that his parents had made a further contribution of $10,000 to the purchase of a property at G in 1992. Again, the wife denied that contribution, the husband did not provide any evidence to substantiate it and it was not corroborated by the husband's mother. In the circumstances, I find that it has not been established to the requisite standard.
The husband alleged that upon the birth of the child H his parents had made a gift to both parties in the sum of $5,000 for the child's future education. The husband alleged that these monies were managed by the wife and ultimately transferred into her personal account. Thereafter he did not know what had become of it. The wife conceded that the husband's parents had made a gift of some gold jewellery and "not a big amount" of money. She asserted that it had not been as much as $5,000. The wife conceded that at some unspecified time, the paternal grandmother had loaned the parties the sum of $5,000 which, she alleged, had been repaid. The grandmother swore that the sum of $5,000 had been given to both parties in cash and made no mention of the wife's assertion that it had been repaid.
I am prepared to give the husband the benefit of a significant doubt and find that the sum of $5,000 was in fact contributed by his mother. However, in my view it is not a significant amount of money in the circumstances and constitutes a grandparental gift on the birth of a grandchild. Such a gift is, in my view, to be regarded as being in a different category to a gift for a capital purchase and should not, in the circumstances of this case, be given a great deal of weight.
Similarly, the husband alleged contributions by his mother of $3,000 on the birth of the child B and $2,000 upon the birth of the child O. In my view, those amounts should be treated in the same way.
The husband’s case proceeded on the basis that his parents contributed $10,000 towards the purchase of a motor vehicle in 1998. The wife disputed that allegation, the husband had no independent proof of it and it was not corroborated by his mother. Accordingly, I find that the husband has not established this contribution to the requisite standard.
The husband also alleged a contribution by his mother of $30,000 for the purchase of the former matrimonial home for $370,000. The wife disputed that contribution and produced several documents which are exhibits before me establishing that the parties' previous property, at G, had been sold in October 2001 for $385,000 together with various charges and expenses totalling $6,630. On this basis, the wife’s case was that the alleged contribution of $30,000 from the husband's mother unnecessary. The husband's mother swore that she had given the parties $29,000 cash, but not for the purchase of the property but rather its renovation. The husband alleged that at the time of this gift, the wife had been present and involved in the relevant discussions. That was denied by the wife.
The evidence with regard to this contribution is more persuasive than other evidence of a similar vein. In the circumstances, I am prepared to give the husband the benefit of a significant doubt and find at least $29,000 was sourced from the husband’s mother and applied to renovations of the former matrimonial home.
In addition to the contributions discussed above, the husband's mother asserted that from time to time she had given the parties cash sums in the vicinity of $50 or $100. The evidence did not corroborate the husband’s evidence of the wife being present and involved in all discussions surrounding cash gifts.
In examining the gifts made by the husband’s mother it is necessary to examine the remarks of Fogarty J in Gosper and Gosper (1987) FLC 91−818 at 76,167 – 168:
Where there has been a gift or advance by a relative to one or both of the parties to the marriage the first step is to determine the ownership of that benefaction…
…
The next step is to consider the application of sec. 79 to all of the property of the parties, including property received by one or both of them by way of benefaction from a third party. Traditionally this task is performed by firstly considering the question of contributions under sec. 79(4)(a) - and then, if relevant, the sec. 75(2) factors.
Where a gift is made solely to the donor’s relative (for example a gift by parents to their married daughter) and that spouse applies that property to the marriage, that is a direct financial contribution solely by that party and will be assessed in the ordinary way alongside other contributions by each party to the marriage. Cases such as Rainbird, Freeman and Read are examples of this.
In Pellegrino and Pellegrino (1997) FLC 92−789 Chisholm J observed at 84,727:
… parents often provide financial assistance to their married children. Often, perhaps usually, they do this in a way that benefits their child and their son or daughter in law. Often there is no specific evidence of their intention at the time. I think I can take judicial notice of the fact that frequently parents make such provision in a way that does not involve them formulating or specifically considering whether they intend to benefit their own child or both parties. They are happy to benefit both parties. The gift, as vividly illustrated by the provision of a home in this case, might inherently benefit both. Also, they will realise that their own child's happiness is bound up with that of their son or daughter in law, so that benefiting one will benefit the other indirectly. They may also have in mind other benefits associated with an extended family, being involved with grandchildren, and enriching the complex web of obligations and attachments that characterise extended families.
Looking at the entirety of the evidence I am satisfied that the husband’s mother contributed $29,000 towards renovations of the former matrimonial home in addition to a total of $10,000 by way of gifts from the husband’s parents for the children’s needs, I am satisfied that the total of $39,000 should be treated as a direct financial contribution made on behalf of the husband.
I note that in the circumstances, these contributions do not constitute a significant amount of money and in terms of their use they were not instrumental in the parties’ acquisition of property and wealth; therefore, it is appropriate that they should be given minimum weight, if at all. In my view, the proportion of such contributions does not exceed 2.5% in favour of the husband over and above equality.

Effect on earning capacity

The Act then requires that I consider the effect of any order which I might make upon the earning capacity of either party together with any other order which affects a party to the marriage or a child of the marriage. The orders which I made with regard to the parties' children on 24 November 2008 are relevant at this point. It is appropriate to consider those matters as part of my consideration of the s 75(2) and other factors.

Section 75(2) and other factors

Pursuant to s 75(2) the first factor I must consider is the age and state of health of each of the parties. Both parties are of the same age and there is no evidence to suggest that any issue of the health affects their respective capacities for gainful employment.
The second factor is the financial circumstances of each of the parties and their “physical and mental capacity … for appropriate gainful employment.” In the circumstances that factor is to be considered together with the factor of “whether either party has the key or control of the child of the marriage who has not attained the age of 18 years.” As a result of my orders of 24 November 2008 the wife has their primary care while the husband will spend substantial and significant time with them. That has a bearing on the capacity of each of the parties to obtain or retain for gainful employment. In this regard, the burden is greater on the wife than it is on the husband by virtue of her having greater time with the children.
At trial, the husband received an average weekly income of approximately $1,300 by way of salary. In his Financial Statement, he deposed that his personal expenditure amounted to approximately $1,460. The wife's deposed that her weekly average income was $891. She deposed that on average she expends $1,474 per week in addition to the liabilities referred to above. Her income comprised of the following:
·    Gross salary of $615
·    Family Tax Benefit of $44
·    $219 by way of child support from the husband
I note that as of a result of my orders of 24 November 2008, the husband’s child support may be slightly reduced with regard to the substantial and significant time which he will spend with the children. It is likely that the parties will have shared responsibility for the children’s material needs. Accordingly the wife’s obligations in that regard would be greater.
The wife deposed that she could increase her working hours. Despite this statement, I do not accept that she has the same capacity as the husband to earn income from gainful employment. All other things being equal, the difference between them is not very great but when the wife's primary care of the children is factored in, the significance is more substantial.
In addition, the husband has a greater history of employment than the wife, having worked full-time throughout the marriage mainly within the public service. By contrast, the wife is self-employed in the health services field and is dependent on government benefits for a significant part of her income. Additionally the husband has the assistance of his mother with the care of the children should he return to work, which is a service unavailable to the wife.
At the commencement of proceedings counsel for the wife submitted that pursuant to s 75(2)(o) I should consider the husband’s potential voluntary redundancy. Counsel for the husband submitted that it was inappropriate to factor in this issue as the husband had invited the Court to accept his greater earning capacity pursuant to s 75(2)(b) and consider this in terms of making any s 75(2) adjustment which, in essence, would benefit the wife. Counsel for the wife made no submission against this approach. I accept the submission made on behalf of the husband. In doing so I specifically ignore any information on this issue which was presented to the Court on 15 December 2008.
Otherwise, it was not submitted by Counsel for either party that there was any other factor in s 75(2) which would be relevant to my consideration of ensuring justice and equity between the parties in the making of any order altering the interests of the parties’ property.
In my view, the wife's greater responsibility for the children and her lesser earning capacity require an adjustment in her favour over and above my findings with regard to contributions. In my view, that should be in the range of 10% to 12.5%.

Justice and equity

Finally, I am required to consider the question of doing justice and equity to both parties. The adjustment in favour of the wife pursuant to s 75(2) would yield an ultimate result of either 57.5% per and 42.5% to the husband or 60% to the wife and 40% to the husband. In addition, as previously noted, superannuation benefits are to be equally divided between the parties.
The asset pool in this matter is relatively modest. Essentially, it consists of the former matrimonial home which, at the time of trial, had a value of $620,000.
Each party sought an order for the retention of the former matrimonial home. It would be highly desirable for the home not to be sold so as to avoid the deduction of substantial costs occasioned by such sale. Accordingly, each of them should have the opportunity of retaining the home but the first right of refusal should go to the wife because of her lesser means of obtaining an alternative property and the orders that she have the primary care of the children. I will provide for the wife to advise the husband within 21 days of these orders as to whether she is able to retain the home. If she is unable to do so, the husband will have the opportunity to retain it and if he is unable to do so, it will be sold.
As between the alternative results of a division of 57.5% or 60% to the wife, I have decided that justice and equity requires the higher figure. Again, that flows from the wife's lesser earning capacity and her need to be the primary carer of the children. Accordingly, the assets set out above will be divided as to 60% to the wife and 40% to the husband with the exception of their superannuation benefits which will be equally divided between them by way of a splitting order of the husband's superannuation, as agreed between the parties. I am satisfied that procedural fairness has been accorded to the trustee of the husband’s superannuation fund.

Taking a step back and looking at the practical effect of those orders the division outlined in the previous paragraph results in the total net assets, including superannuation, being divided approximately 57.6%/42.4% in favour of the wife. That approximation arises out of the lack of precision in the evidence with respect to the superannuation benefits. In all of the circumstances I am satisfied that that is a just and equitable result.

PROPERTY ORDERS

Both parties sought an option to purchase the former matrimonial home rather than it be sold. It is appropriate that the wife have the first option to purchase because she has the primary care of the children pursuant to the orders. To achieve that I have included the necessary calculations within my orders in this proceeding which achieve a net division of the assets in accordance with my determination.

I certify that the preceding seventy (70) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Mushin.

Associate:

Date: 3 March 2009

[2009] FamCA 136

3 March 2009

Key Legal Topics

Areas of Law

Family Law

Equity & Trusts

Legal Concepts

Remedies

Costs

Constructive Trust

Res Judicata

Asset	Ownership	Determined value ($)
The former matrimonial home	Joint	620,000.00
Funds retained by the husband for his benefit from the Police Co-operative Credit account	The husband	19,000
Funds retained by the wife for her benefit from the Police Co-operative Credit account	The wife	10,000
Total		649,000