LORNE & TROTT
[2012] FamCA 976
FAMILY COURT OF AUSTRALIA
LORNE & TROTT [2012] FamCA 976
FAMILY LAW – PROPERTY - DE FACTO RELATIONSHIP – Assessment of value of property pool – Contribution – Section 90SF(3) matters – Just and equitable order – Wife awarded 60 per cent and husband 40 per cent of the parties’ property and assets – Contribution assessment 60 per cent husband 40 per cent wife – Section 90SF(3) matters assessed 20 per cent in favour of wife – Weir and Weir – Wife alleged non disclosure by husband – Not established
FAMILY LAW – INTERIM SPOUSAL MAINTENANCE – DE FACTO RELATIONSHIP – REVIEW OF INTERIM ORDER OF PRINCIPAL REGISTRAR – Original hearing – Principal Registrar’s interim spousal maintenance order confirmed
Family Law Act 1975 (Cth) s 37A(9), s 37A(10), s 90SE, s 90SF, s 90SM
Child Support (Assessment) Act 1989 (Cth)Family Law Rules 2004 rr 13.07(b), 18.10
Chang and Su (2002) FLC 93-117
Farmer and Bramley (2000) FLC 93-060
Figgins and Figgins (2002) FLC 93-122
Franklin & Franklin [2010] FamCAFC 131
Gould & Gould [2007] FamCA 609
Harris v Caladine (1991) 172 CLR 84
Kannis and Kannis [2002] FamCA 1150
Kessey and Kessey (1994) FLC 92-495
Parrott v The Public Trustee of New South Wales (1994) FLC 92-473
Phillips and Phillips (2002) FLC 93-104
Pierce and Pierce (1999) FLC 92-844
Weir and Weir (1993) FLC 92-338
APPLICANT: Ms Lorne
RESPONDENT: Mr Trott
FILE NUMBER: BRC 11460 of 2010
DATE DELIVERED: 27 November 2012
PLACE DELIVERED: Brisbane
PLACE HEARD: Brisbane
JUDGMENT OF: O’Reilly J
HEARING DATE: 1, 2 and 4 May 2012
(Further written submissions
28 September 2012 and 9 October 2012; further evidence 30 October 2012; further written submissions
1 November 2012)REPRESENTATION
COUNSEL FOR THE APPLICANT: Mr Gordon
SOLICITORS FOR THE APPLICANT: Universal Law
COUNSEL FOR THE RESPONDENT: Mr Blond
SOLICITORS FOR THE RESPONDENT: Okamoto Lawyers Orders
IT IS ORDERED
Property
Pursuant to s 90SM of the Family Law Act 1975 (Cth) (the Act) the property and assets of the parties and either of them be divided as follows so as to effect so far as may be possible a 60 per cent division to the wife and a 40 per cent division to the husband:
1.The husband have:
a. item 1, the property at 1 B Street, Suburb C, valued at $460,000
b. item 4A, the chattels listed in exhibit 3 with no marking, valued at $56,000
c. item 5, the business B Pty Ltd, valued at nil.
Total value: $516,000.
2.The wife have:
a. item 6, her motor vehicle 1, valued at $1000
b. item 7, her motor vehicle 2, valued at $5000
c. item 8, her home contents, valued at $2000
d. item 9, her shipping container, valued at $2650.
Total value: $10,650.
3.The husband immediately must list items 2 and 3, the properties at 2 and 3 B Street, Suburb C (the properties) for sale with each of:
a. Ray White Commercial
b. The Professionals Suburb C and
c. E Pty Ltd, Suburb F.
4.If there be no sale of the properties within 90 days from the listing date, in respect of such property or properties unsold, the husband must arrange an auction or auctions to be conducted by such real estate agent/s and auctioneer/s as Mr G, registered valuer, advises to the parties, with the reserve price or prices to be advised by Mr G.
5.In respect of the sale of the properties, the proceeds of sale be applied in the following manner and priority:
a. costs of sale, including commission, advertising, auction costs and the like
b. in respect of 3 B Street, Suburb C, full payment of the mortgage encumbering it (item 10)
c. in respect of 3 B Street, Suburb C, payment of the husband’s credit card debt to Bank of Queensland Limited, limited to $1000, but with no accretion on that amount (item 11)
d. the balance net proceeds of sale must be held in the trust account or trust accounts of one or either of the parties’ solicitors until such time as the 60 per cent wife and 40 per cent husband division, so far as may be possible, can be calculated on the final basis.
6.Pending the sale of the properties, the husband must:
a. not mortgage 2 B Street, Suburb C
b. not increase the mortgage in relation to 3 B Street, Suburb C beyond $300,000
c. apply the full net rental he receives from 3 B Street, Suburb C towards the mortgage in respect of that property and
d. continue to pay to Bank of Queensland Limited the usual periodic mortgage payments due and continue to pay all outgoings in relation to both properties until settlement of the sales.
7.The husband immediately must arrange an auction of the chattels and things referred to at item 4B, such auction to be conducted within 45 days from the date of this order, and ensure that the full net sale proceeds are paid into the trust account of Okamoto Lawyers to be applied in the following manner and priority:
a. costs of sale, including commission, advertising, auction costs and the like
b. the balance net proceeds of sale must be held in the trust account of Okamoto Lawyers until such time as the 60 per cent wife and 40 per cent husband division, so far as may be possible, can be calculated on the final basis.
8.If the net proceeds of sale referred to in paragraphs 5d and 7b are insufficient for the wife to have 60 per cent of the parties’ net property and assets overall (having regard to the value the wife is to receive by way of paragraph 2 above) the wife is to receive the full net sale proceeds, with nil to the husband; however, the husband is not to be required to sell 1 B Street, Suburb C to make up any shortfall to the wife, nor to pay to the wife any cash sum to make up any such shortfall.
9.Otherwise the parties are to retain all assets of any kind and financial resources of any kind in their respective name or possession.
10.The parties must do all things necessary and sign all documents necessary to give effect to this order.
11.If either party should default in the performance of paragraph 10, pursuant to s 106A(1) of the Act a Registrar is appointed to do all things and sign all documents necessary in the name of the parties to put into effect this order.
12.If any part of this order is unclear, so that clarification of any part of it is required, or there be any amendment required under the slip rule, or any further machinery orders are required, the parties by their solicitors or themselves, on notice to each other, may arrange a relisting of the matter by arrangement with the Case Management Judge.
Interim spousal maintenance order –review
13.In relation to the husband’s application in a case filed 24 August 2011 for review of the interim spousal maintenance order made by the Principal Registrar on 28 July 2011, the order of the Principal Registrar is confirmed, and the husband’s application in a case otherwise is dismissed.
Interim spousal maintenance order – otherwise
14.The interim spousal maintenance order made by the Principal Registrar on 28 July 2011 (except for any arrears) is discharged with effect from the date of payment to the wife’s solicitors of the full cash amount payable to the wife pursuant to the s 79 property order.
NOTATION:
1.The reference in this order to item numbers is a reference to the items set out in the schedule in the reasons for judgment.
IT IS NOTED that publication of this judgment under the pseudonym Lorne & Trott is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)
FAMILY COURT OF AUSTRALIA AT BRISBANE FILE NUMBER: BRC 11460 of 2010
Ms Lorne Applicant
And
Mr Lorne Respondent
REASONS FOR JUDGMENT
The parties and their applications
1.Ms Lorne (the wife) and Mr Trott (the husband) each seek a just and equitable property settlement by way of order under s 90SM of the Family Law Act1975 (Cth) (the Act).
2.Although the parties were in a de facto relationship, it is convenient to refer to them as the wife and the husband, as occurred during the trial.
3.The husband seeks also review of an interim spousal maintenance order made by the Principal Registrar on 28 July 2011.
Relevant background facts
2.The parties are each 44 years.
3.They commenced cohabitation and a de facto relationship in early 1995.
4.The husband asserts that the relationship ended in October 2009, so that its duration was about 14 years.
5.The wife asserts that the relationship ended in July 2010, so that its duration was about 15 years.
6.Counsel agreed however that it is not necessary for me to determine this aspect of the matter as nothing turns on it.
7.The parties have 3 children, H 13 years, J 5½ years and K 3½ years.
8.Pursuant to consent parenting orders made on 11 January 2011, H lives with the husband and J and K with the wife. The parties have equal shared parental responsibility for all 3 children for the major long-term issues.
9.The orders provide for H to spend time with the wife at all times as may be agreed between the parties and failing agreement all reasonable times that H might request, and for telephone communication each Sunday at 4pm.
10.Unfortunately, the wife and H presently are estranged. The wife has made considerable effort to restore the relationship. However H presently is not able to do so. The wife hopes that counselling, yet to be arranged, will facilitate restoration of the relationship and also the relationship between H and her 2 younger siblings.
11.The orders provide for J and K to spend time with the husband at all times as may be agreed between the parties but failing agreement in alternate weeks, in 1 week from Friday 5pm until Sunday 5pm (2 nights) and in the other week Wednesday 3pm until Friday 9am (2 nights) (totalling 4 nights per fortnight), special days and school holidays.
12.There are 2 notations to the orders which provide, relevantly, first that the husband is willing and able to care for J and K outside the stipulated times, and that if J and K should spend time with the husband outside the stipulated times he will return the children to the wife strictly in accordance with any such agreement; and secondly that the husband will assess in 2012 and beyond whether the alternate weeknight times interrupt J’s and K’s needs and routine and if so that he may “elect” not to spend the Wednesday-Friday time with J and K.
13.At the time of the trial, J and K were not spending the Wednesday-Friday time with the husband. The wife said that she had offered to the husband that instead J and K spend each weekend with him Friday 5pm until Sunday 5pm (to ensure 4 nights per fortnight) but that the husband had not availed himself of this offer.
14.H, who I have mentioned is 13 years, attends the Suburb C High School in Year 8. J, 5½ years, attends “kindy” (or “prep”) and K, 3½ years, largely is at home with the wife, although, as I understood the evidence, attends day care on 2 days per week, for 2¼ hours per day, that is, about 4½ hours per week.
15.J is a special needs child, who suffers L Syndrome, apparently a genetic disorder, which she has suffered from birth. I will deal further with this aspect of the matter when dealing with contribution and the s 90SF(3) matters.
16.The husband is a tradesman operating a business styled D Pty Ltd at 1 B Street, Suburb C, which premises is owned by him. The main focus of the husband’s business is work for Queensland Transport. The premises at 1 B Street, Suburb C is licensed by Queensland Transport, the requirements for such being that the licence applicant holds the requisite trade certificate and that the premises have passed a Workplace Health and Safety inspection. D Pty Ltd Licence is No …, and the husband’s Licence is No ... The annual renewal fee for the premises is $50. Queensland Transport fees payable by the public, $66.00 currently, which is the amount the husband charges. The husband also however, at the same premises, operates another business of onselling to M Pty Ltd, a merchant dealer at Suburb F.
17.The husband described to Mr N, a single expert witness engaged to value the husband’s business, that his typical work day is about 4 hours for Queensland Transport and about 4 hours on the onselling part of his business and that his business is an “owner/operator business”: Mr N’s report dated 30 November 2011 (date of valuation 9 November 2011) annexed to his affidavit filed 9 February 2012: see pars 5.14-5.17 of the report. The husband, in oral evidence, said that the greater part of his working day is taken up with the Queensland Transport work, and that not much of his time is applied to the onselling side of his business. He said that Queensland Transport issues booklets with serial numbers in relation to all work conducted, so that there is no possibility of concealing income in relation to the Queensland Transport side of his business, and that in relation to M Pty Ltd, although he does not keep records himself of business materials which he purchases which consequently he sells to M Pty Ltd, he relied on the records of O Pty Ltd as a complete record of this income, adding that he only onsells to the one dealer: ex 21.
18.The relevance of this, as will be seen, is an allegation by the wife that the husband conceals income, and has failed in relation to his disclosure obligations concerning his income and other matters, which, as will be seen, I will determine in the husband’s favour and against the wife.
19.It will be noted that the husband described the dealer he uses as “M Pty Ltd”, whereas ex 21 comprises records of O Pty Ltd. It may be that one is a trading name, or a subsidiary, of the other. However, nothing turns on this. No issue was raised at the trial as to the name difference and there is no reason to doubt the husband’s evidence that all of his business was conducted with the one dealer.
20.The husband owns also 2 and 3 B Street, Suburb C. The three properties, 1, 2 and 3 B Street present in 1 line as street frontage on B Street. The property at 2 B Street is unencumbered. The property at 3 B Street is encumbered to the extent of $300,000 by a mortgage in favour of Bank of Queensland Limited.
21.Whilst no finance is owing in respect of 1 B Street, the title extract shows an unreleased mortgage to Bank of Queensland Limited. As I understand the matter, the non release appears to have been an oversight rather than it being collateral to the mortgage in relation to 3 B Street. However it appears that nothing turns on this. Certainly, the husband said in his oral evidence that he had thought that the mortgage in relation to 1 B Street had been released after discharge of the debt owing on 1 B Street.
22.The valuations in evidence in relation to 1, 2 and 3 B Street, prepared by Mr G, registered valuer, describe each property as having a warehouse as the main improvement on each property. It is common ground however that 1 B Street (as noted in the valuation concerning it, and as depicted in photographs in the valuation concerning it) includes a residence comprising a 1 bedroom flat. The husband, in his evidence, described the residence section at 1 B Street as a “2 storey dwelling”. I will come to this later.
23.The husband presently lives at 1 B Street, with H, who, according to other evidence, has her own private section of the structure.
24.The husband has not repartnered.
25.The wife is not in employment. Before the commencement of the parties’ relationship she had undergone a 4 year training course in the beauty industry, and engaged in employment for 7 years in this industry. However, physical difficulties, to which I will refer later, had effect that before she met the husband, she was unable to continue full time work and thus had attended a TAFE course, and for a time was engaged in ‘piece work’. However, such proved not very remunerative. The wife also, for about 18 months, worked for P Pty Ltd.
26.Now, having in effect the full time care of J and K, with the exception of the 2 nights per fortnight which they spend with the husband, the wife said that ‘piece work’ is not a pursuit which again she could take up, it being very time consuming and not very remunerative. Further, the wife explained in her evidence that the ages of J and K, 5½ years and 3½ years, are such that in the rented premises in which she, J and K reside she is unable to have necessary machinery set up for that purpose to ensure the children’s safety in relation to machinery, and so forth. The wife thus describes her role as homemaker, and being fully occupied with her mothering of J and K, in particular having regard to J’s special needs.
27.The wife receives a Centrelink parenting payment in relation to J and K $443 per week and in addition a carer’s allowance for J $55 per week.
28.The premises in which the wife, J and K live is at Suburb Q in New South Wales.
29.The wife has not repartnered.
Nature and value of the asset pool
30.The parties each provided balance sheets (wife, folio 53; husband, folio 54).
31.During the trial, some matters became the subject of agreement, and some remained in dispute.
32.I set out below a schedule, being a composite of both parties’ balance sheets, showing agreement in respect of the inclusion and value of items 1-9 (assets) and items 10 and 11 (liabilities), but dispute as to items 12-18.
33.The parties’ initial balance sheets (folios 53 and 54) were modified during argument to split item 4 into 2 items, 4A and 4B. By email correspondence to the Associate, 26 June 2012, the value of items 4A and 4B were agreed.
34.As will be seen, I have determined items 12-14 (alleged liabilities) against the husband, and items 15-18 (alleged assets) against the wife, and I have concluded thus that the parties’ assets have the value of $1,722,995.
35.Taking out the agreed liabilities of $301,000, which the parties agreed should be regarded as pool liabilities, I have determined thus that the net pool has the value of $1,421,995.
36.Below the schedule, I will address each item in turn, as to agreement, or where there is dispute, my determination and reasons for such.
SCHEDULE
Ownership
Description
Wife’s value
Husband’s value
ASSETS
1
H
1 B Street Suburb C
$460,000
$460,000
2
H
2 B Street Suburb C
$510,000
$510,000
3
H
3 B Street, Suburb C
$630,000
$630,000
4A
H
Chattels held at 1 B Street and R Town, exhibit 3, non-highlighted items
$56,000
$56,000
4B
H
Chattels held at 1 B Street and R Town, exhibit 3, highlighted items
$56,345
$56,345
5
H
Business “D Pty Ltd” (plant and equipment)
Nil
Nil
6
W
Motor vehicle 1
$1,000
$1,000
7
W
Motor vehicle 2
$5,000
$5,000
8
W
Home Contents
$2,000
$2,000
9
W
Shipping Container
$2,650
$2,650
Total
$1,722,995
$1,722,995
LIABILITIES
Ownership
Descriptions
Wife’s value
Husband’s value
10
H
BOQ Mortgage 3 B Street
$300,000
$300,000
11
H
Bank of Queensland Master Card
$1,000
$1,000
12
H
Personal Loan (Ms S)
0
$4,000
13
H
Personal Loan (Mr T)
0
$7,000
14
H
Personal Loan (Mr U)
0
$1,000
Total
$301,000
$313,000
DISPUTED ITEMS
15
H
Contents of 2 B Street
E$50,000
Nil – Husband says items owned by third parties
16
H
Motor vehicle 3 – rare collector’s item
E$40,000
Husband says sold mid 2009 for $1000
17
H
Motor vehicle 4– rare collector’s item
E$40,000
Husband says sold September 2009 for $500
18
H
Motor vehicle 5 – rare collector’s items
E$40,000
Husband says sold February 2009 for $2000
Pool matters
Items 1, 2 and 3
37.The valuations in the schedule are as provided by Mr G, registered valuer, as appendices 3, 4 and 5 to a report by him attached to his affidavit filed 30 January 2012, the date of the valuations being 16 August 2011.
38.Mr Blond of Counsel, for the husband, cross examined Mr G as to whether certain matters put to him had the effect of higher or lower valuations of these 3 properties at the time of the trial. Mr G firmly rejected this, describing that the location, class of property, and that such are “tightly held” has effect that his valuation opinion at the time of the trial remained as per his 16 August 2011 valuations.
39.The husband would like to retain item 1.
40.It is common ground that items 2 and 3 be sold.
Items 4A and 4B
41.Mr G provided, as appendix 6 to his report, a 4 paged plant and equipment valuation of some 57 items, or categories of items, totalling $110,354.
42.There is a typographical error however.
43.The total of the specified values is actually $112,325.
44.The husband strongly disagreed with Mr G’s valuation of 16 items or categories of items.
45.Exhibit 3 is a copy of appendix 6 showing highlighted markings in relation to these items. The husband said that he would like to keep all of the non-highlighted items, but not the highlighted items. Thus, during the trial, Counsel agreed to item 4 being split into items 4A and 4B, item 4A being the items which the husband would like to keep, and item 4B those which, the parties agreed, should be sold at auction.
46.According to ex 3, the value of the chattels in item 4A is $56,000, and the value of the chattels in item 4B is $56,345. (Counsel agreed these figures in email correspondence with the Associate after the trial).
Item 5
47.Initially, the parties had included in the schedule that item 5, the business D Pty Ltd (plant and equipment) should be valued at $36,250.
48.During the trial however, the parties agreed that item 5 should be valued at nil, rather than the value placed on the business by Mr N, the single expert valuation witness. Mr N had adopted the value of the plant and equipment, as assessed by Mr G, at $36,625; and the value of the business on the capitalisation of earnings method at $5,000. See pars 9.3.1f and 9.3.2d of Mr N’s valuation; and his summary section at 10.1 (Reconciliation of Approaches), value $5000 on the capitalisation of earnings method, and $36,250 on the net tangible asset basis (there being no explanation in Mr N’s report for the difference between $36,625 and $36,250).
49.By the time of the trial however, it was common ground that all of the plant and equipment relating to Mr N’s net tangible asset valuation, $36,250, was subsumed in item 4.
50.After the trial, I posed a question for the parties, by way of email from the Associate sent on 14 June 2012, whether, the plant and equipment now being wholly taken up in item 4, the business should be “treated” as having no plant and equipment, such that for the purpose of item 5, the capitalisation of earnings value $5000 should be adopted, such that otherwise the husband in effect would retain the business with the capitalisation of earnings method valuation $5000 but not accounted for in the pool.
51.In response to the email however, the parties’ solicitors subsequently advised, jointly:
2.In relation to the value of the business: counsel understand that it was agreed during the trial that the value of the business be listed as nil. After discussions it has been agreed that this should still be the case.
52.I have therefore included item 5 as nil value.
Items 6, 7, 8 and 9
53.These values are agreed.
Item 10
54.It is agreed that the husband has a mortgage in respect of 3 B Street, $300,000 at the time of the trial, to be regarded as a pool liability.
Item 11
55.It is agreed that the $1000 on the husband’s Mastercard, although incurred post separation, was for joint purposes, and thus to be regarded as a pool liability. Interest was not claimed, possibly because the amount already had been paid.
Items 12-14
56.On 28 July 2011, the Principal Registrar ordered that by way of interim spousal maintenance the husband pay to the wife $500 per week, the first payment to be 29 July 2011, and $18,000 to be paid to the wife’s solicitors, by 26 August 2011, for arrears of the wife’s rent and an AAPT amount outstanding, with the balance if any to be paid to the wife.
57.I will refer below to my determination as to the husband’s application for review of that order.
58.The husband said that he borrowed the 3 amounts in items 12-14, totalling $12,000, in order to meet payment of the $18,000 lump sum.
59.Counsel agreed that if on review I do not set aside the Principal Registrar’s order I should ignore the husband’s claims at items 12-14, as the husband’s borrowings, in such case, would be his sole liability in relation to performance of the Principal Registrar’s order.
60.As will be seen, on the husband’s application for review, I will confirm the Principal Registrar’s order so that for the purpose of the pool I will ignore items 12-14 as the husband’s own liability for spousal maintenance.
Item 15
61.The wife said that appendix 6 to Mr G’s report (ex 3 in the proceedings) does not include several items located at 2 B Street, which she said are of the value of E$50,000. She said that the husband used the yard at 2 B Street for “storage”, that the yard was “full of [items] to be sold”. The wife made reference also to a vintage caravan at 2 B Street, which belonged to her grandmother, but which she agreed in cross examination has “holes in the roof”, was “rusted out” and that it was of little or no value. I will therefore make no further reference to this caravan, as it comprised no part of the wife’s claim.
62.The wife said that Mr G did not value these items at 2 B Street because the husband had told Mr G that the items belonged to the husband’s cousin.
63.Appendix 6 (ex 3) lists plant and equipment items mostly at 1 B Street, with some at R Town, a reference to the wife’s parent’s property, and 1 item only at 2 B Street (bottom of the second page) being a 20 foot container valued at $500 (which, presumably, the husband told Mr G was his). The container is included in item 4A.
64.Mr G’s report concerning 2 B Street records (appendix 4, p 41) that the tenancy details of 2 B Street were “Currently owner occupied by a caretaker”. The husband gave evidence, which I accept, that his cousin occupied 2 B Street in that capacity, and kept plant and equipment of his own at 2 B Street.
65.There is no rational basis to question the husband’s honesty in this regard, and I accept his evidence. In doing so I have carefully considered the wife’s evidence as to what she saw at 2 B Street, but would conclude, by my acceptance of the husband’s evidence, that what she saw and described belonged to the husband’s cousin.
66.The result is that I will exclude item 15 from the pool.
Items 16, 17 and 18
67.The wife alleges, and the husband disputes, that during the relationship the husband owned 3 “rare collector’s items”, namely motor vehicles, with the descriptions included in the schedule. The wife said that at motor vehicle auctions or shows, including those conducted by V Pty Ltd, the husband would point to certain vehicles, with estimated values of up to $80,000 per vehicle, and would say to the effect “I’ve got one of those”, and “Mine is better than that” and that the husband “would always say” that these 3 motor vehicles were his “retirement fund”. The wife said that the husband had told her that these 3 vehicles were “rare and valuable” because they were models which had raced.
68.During cross examination by Mr Blond, the wife was shown photographs of certain motor vehicles (or more accurately, car bodies) some without seats, a motor or wheels, in rusted and poor condition, since sold, which, on his instructions, it was put to her were photographs of the 3 motor vehicles the subject of her claims. The wife said that she did not accept that the photographs shown to her were of the 3 motor vehicles the subject of her claims because the husband over the years had bought and sold many vehicles, and that “cars would be moved back and forth” from various venues. The wife said that the 3 vehicles the subject of her claims were ones she had seen at the husband’s work premises, saying “I’ve seen these cars. They were not rusted. They had motors in them. I have seen them on hoists with covers” and that “the [motor vehicle 3] and the [motor vehicle 2] always sat on a hoist”. It was put to her that the husband had never owned a motor vehicle 1, but a different model; never owned a motor vehicle 3, but a different model; and never owned a motor vehicle 2 but a different model. The wife said however that she was “not interested in old cars”, that being part of the husband’s business, while in their relationship she had been the homemaker and parent, but that she clearly recollected seeing the 3 motor vehicles the subject of her claims, and clearly recollected what the husband had told her about them.
69.When put to her that the husband had sold 3 cars of the description put to her, by the husband not the models specified by her for $1,000, $500 and $2000 respectively in mid 2009, September 2009 and February 2009 (separation having occurred in either October 2009 (husband) or July 2010 (wife)), the wife said as to the photographs and those sale prices “I do not believe that these were the cars sold because [Mr Trott] kept them for so many years and could never sell them for such small amounts of money”, and “he would not have taken up space in the workshop to store them there if they were worth such a small amount of money.”
70.This cross examination of the wife was on 1 May 2012.
71.On 2 May 2012, the husband filed a supplementary affidavit, which I will set out, for the effect of its apparent cogency (presently relevant paragraphs only):
2.I refer to paragraph 85 of [Ms Lorne’s] affidavit sworn 2 November 2011 and refute her suggestion that I currently have in my possession, three rare collector’s cars, namely a [motor vehicle 1], [motor vehicle 2], and a [motor vehicle 3].
3.I have never owned a [motor vehicle 1], but I have owned a [model 1] in the past.
4.Sometime in 2003 or thereabouts, I purchased a used white [model 1] from a private seller in [Suburb W] for $2,000.00
5.I found the car in the Trading Post.
6.The [model 1] was stored at [Ms Lorne’s] parents’ residence in [R Town] for a few years, then I moved it to [1 B Street] in 2008 until it was eventually sold sometime in July 2009.
7.There were too many issues with the motor and gear box and I decided it was going to cost me too much money and time to keep it.
8.The [model 1] was never roadworthy so it was never driven on the road.
9.I removed the motor and gear box and sold the car body for $1,000.00
10.I banked the $1,000.00 cash on 28 July 2009. Annexed hereto and marked with the letter “A” is a true copy of Bank of Queensland Transaction Acknowledgment dated 28 July 2009.
11.In relation to the “[motor vehicle 2]”, I believe that [Ms Lorne] is referring to a [model 2] that I purchased sometime in July 2003 for $150.
12.From my knowledge of cars, there was no [motor vehicle 2] manufactured before 1970.
13.The [model 2] was purchased just for its body shell, it was never roadworthy or driven on the road.
14.Because the [model 2] shell started rusting away parked at [R Town], I decided to sell it in 2009.
15.Sometime in September 2009, it was sold for $500.00 at the Suburb X Swap Meet.
16.On 26 September 2009, I banked the $500.00 cash at the local branch of BOQ. Annexed hereto and marked with the letter “B” is a true copy of Bank of Queensland Transaction Acknowledgement dated 26 September 2009.
17.In relation to the [motor vehicle 3], I believe [Ms Lorne] is referring to a base [model 3] which had [motor vehicle 3] stickers on it.
18.I purchased it second-hand at an auction in [Suburb Y] sometime in July 2005 for $800.00.
19.The [model 3] sat around the workshop at [1, B Street] for a few years, and then was parked under the house at [C Street, Suburb C] for 6 to 12 months in 2008.
20.This car was never at [R Town].
21.[Ms Lorne] would have seen it many times as it was parked next to the laundry where we lived at the time.
22.The [model 3] was not roadworthy, and it was never driven on the road. The seats were ripped, the motor needed major work, breaks needed repair, and the body shell was starting to rust.
23.Like with the [model 2] and [model 1], it would have cost me money to keep it so I decided to sell it.
24.Sometime in February 2009, I sold it privately for $2,000.00
25.I banked the $2,000.00 cash on 3 March 2012 (sic). Annexed hereto and marked with the letter “C” is a true copy of Bank of Queensland Transaction Acknowledgment dated 3 March 2009.
26.I therefore confirm that none of the three alleged vehicles are in my possession or ownership. The proceeds of sale of all three vehicles were banked and applied towards the BOQ mortgage (original emphasis).
72.“R Town” in the husband’s affidavit is a reference to the wife’s parents property; and C Street, Suburb C a reference to a property which the husband owned between April 1998 and July 2009.
73.Annexure C shows the deposit date 3 March 2009. Plainly, the husband’s reference to “3 March 2012” in par 25 of his affidavit is a typographical error.
74.The husband was cross examined in detail as to how he could extract and provide the three annexures to his affidavit, annexures A, B and C, as relating in particular to these three motor vehicles, given the nature of his business. The husband said however, which I accept, that motor vehicles which he purchased as part of his business, were all sold to the one purchaser (see, again, ex 21) such that he is able to recall specifically the sale of the three motor vehicles.
75.The annexures A, B and C do not show discrete deposits, but composite deposits, and not to the husband’s Bank of Queensland Limited mortgage account, but seemingly to his business account D Pty Ltd. The husband however did not say that the 3 amounts were deposited “to” the Bank of Queensland Limited mortgage account, but that they were “banked”, and “applied” towards the Bank of Queensland Limited mortgage (husband’s affidavit, par 26, above).
76.Thus, I would infer, that if the husband’s evidence as to the sale amounts, and application to the Bank of Queensland Limited mortgage is to be accepted, he was or may have been in the habit of paying the Bank of Queensland Limited mortgage from his business account. Usually, required mortgage payments are for fixed amounts with fixed periodic payment dates. However, as many mortgage accounts have the facility for extra or additional payments, perhaps this is what the husband intended to convey by his affidavit, par 26.
77.At first blush, it is a difficult contention for the husband to isolate these 3 cash amounts, deposited seemingly to his business account, as necessarily having being applied specifically to the Bank of Queensland Limited mortgage account as opposed to, for example, his business expenses, particularly as the Bank of Queensland Limited mortgage account was not placed into evidence so as to show such specific deposits to it.
78.As will be seen, however, I do not think that anything turns on this.
79.Nonetheless, I will return to this aspect of the matter shortly.
80.First however I need to determine the wife’s claims.
81.Put shortly, it seems to me, and I find, that the wife has failed to discharge the evidentiary onus on her of proving on the balance of probabilities that the husband had 3 motor vehicles of the value she asserts. In her favour is the circumstance that the husband did not produce, or place into evidence, any purchase invoices for the husband’s purchases, which he said were $2,000 (model 1) $150 (model 3) and $800 (model 2); her evidence that the husband kept motor vehicles 2 and 3 on hoists in his workshop and would not have done so having regard to space in the workshop if they were not valuable; and her evidence, which I accept, of the discussions the husband had with her on various occasions at motor vehicle auctions or shows that his 3 motor vehicles were “rare and valuable” and were for his “retirement fund”.
82.However, against the wife is that the husband’s affidavit, pars 2-26, unless a complete fabrication, but with no overt indicia of such, on its face seems cogent, with cogent detail, with no rational basis thus for me to reject the husband’s evidence, with effect that I accept it.
83.I am unable to reconcile the wife’s evidence as to the husband saying to her that the 3 vehicles she described were “rare and valuable” and were for his “retirement fund”, which I have said I accept. I can only think that, perhaps, the husband had in mind that ultimately he would restore the 3 vehicles and sell them at prices much greater than the 2009 sale prices, but, for reasons explained in his affidavit (pars 7, 14, 22, 23), subsequently decided not to do so. I make no such finding but merely observation as to that possibility.
84.Be that as it may, I am able to assess the evidence overall on the balance of probabilities, and find that the wife has failed to discharge the evidentiary onus on her of the actual existence of 3 “rare and valuable” motor vehicles, at the value E$40,000 each, or values greater than the purchase and sale prices as to which the husband gave cogent evidence.
85.I must reject therefore her claims at items 16, 17 and 18, for want of proof.
86.The next question which arises is the use to which the husband says he put the $3500 he achieved in relation to the 3 sales. At first, I considered whether this should be an “add back” against him. However, there are several reasons this cannot be so. First, according to the husband’s evidence, which I have said I have no rational basis to reject, and thus accept, the moneys were received by the husband and banked pre-separation. Secondly, whether banked to the husband’s business account and used for his business expenses, or applied to the Bank of Queensland Limited mortgage account, because the parties’ separation was not until, on the earlier of the competing dates, October 2009, no question of add back as to the use of these moneys post separation can arise, and indeed was not argued.
87.Moreover, as the moneys were received pre-separation, it is immaterial whether they were used for business expenses or reduction of the Bank of Queensland Limited mortgage.
Conclusion as to pool value
88.Having regard to my determinations above I would conclude that for the purpose of the s 79 property proceedings the pool should have the attributed net value of $1,421,995.
89.It is agreed that items 2 and 3, namely 2 and 3 B Street, and item 4B, certain of the ex 3 chattels, be sold.
90.As will be seen, I will order that the liabilites items 10 and 11, totalling $301,000, be paid from the sale of 3 B Street.
Contribution
Principles relevant to the assessment of contribution
91.In Kessey and Kessey (1994) FLC 92-495 (Full Court) at 89,151 the Full Court made clear that ultimately all that is necessary is to evaluate the weight that should be given to each party’s contributions relative to the contributions of the other party:
… In many – indeed probably in most – property settlement cases the Court has to evaluate and assess contributions to property in the absence of precise valuations of the contributions in question. Indeed, where the contributions to property are indirect or non-financial, precise valuation is impossible, and even where the contributions are direct or financial so that a valuation might be provided, other factors (not capable of precise mathematical statement) may well have eroded the initial value of such contributions. In a case such as the present, it is not necessary to arrive at precise mathematical valuations of the parties’ contributions - all that is necessary is to evaluate the weight that should be given to each party’s contributions relative to the contributions of the other party. (italics and bold added)
92.In Pierce and Pierce (1999) FLC 92-844 (Full Court) at 85,881 a differently constituted Full Court (except for Baker J) said:
28.In our opinion it is not so much a matter of erosion of contribution but a question of what weight is to be attached, in all the circumstances, to the initial contribution. It is necessary to weigh the initial contributions by a party with all other relevant contributions of both the husband and the wife. In considering the weight to be attached to the initial contribution, in this case of the husband, regard must be had to the use made by the parties of that contribution. In the present case that use was a substantial contribution to the purchase price of the matrimonial home: … (italics and bold added)
93.In Farmer and Bramley (2000) FLC 93-060, Kay J clearly stated 2 things, namely:
The Court’s task is to evaluate all of the contributions from the time of the commencement of the parties’ relationship until the time of the hearing and to give such weight to such contributions as the Court thinks is appropriate in the circumstances (par 68); and
There is nothing in the legislation that requires s 79(4)(a)(b) and (c) contributions to be measured only in terms of what either party contributed to the assets of which the parties are presently possessed (par 69).
94.In Figgins and Figgins (2002) FLC 93-122 (Full Court) Nicholson CJ and Buckley J made the timely reminder, at par 134:
134.… Marriage is and should be regarded as a genuine partnership to which each brings different gifts. …
Analysis and submissions
Initial contribution
95.In early 1995, when the parties commenced their relationship and cohabitation, the husband already owned 1 B Street, which he had purchased in January 1992, about 3 years earlier, for $102,000. He paid $56,605 for the deposit, stamp duty, legal costs and part payment, and borrowed $50,000 from Bank of Queensland Limited. In July 1994, the husband paid $35,000 from his own funds to construct a workshop and a 2 storey dwelling, completed in October 1994.
96.In early 1995, the time when the parties commenced their relationship and cohabitation, the mortgage on 1 B Street was about $34,000. The husband estimates that his “equity” at that time was “well over $100,000”. There is no valuation evidence to this effect. However, what is able to be ascertained is that the husband’s initial equity may have been of the order of $50,000 at settlement (after his initial contribution of $56,605, but with other costs, namely stamp duty and legals, about half of the purchase price $102,000); there was the $35,000 construction cost; and the circumstance that the initial mortgage of $50,000 as at early 1995 had been reduced to $34,000, indicating a reduction in the debt to Bank of Queensland Limited of $16,000 capital. The aggregate of say, $50,000, $35,000 and $16,000 is a little over $100,000 direct financial contribution by the husband to 1 B Street prior to the commencement of the relationship, whatever may have been its value 3 years later as at early 1995. Further, payment by the husband of stamp duty and legals needs to be taken into account, and the circumstance that the husband had paid interest on the mortgage between January 1992 and early 1995. On any view, even if the husband’s “equity” in 1 B Street was not “well over $100,000”, it is plain at least that his pre-existing monetary contribution to the property, including interest, well exceeded $100,000.
97.The husband also had his business D Pty Ltd, tools and equipment, and a utility motor vehicle which the husband estimates to have been of about $20,000 value at the time.
98.The wife acknowledges that at the commencement of the parties’ relationship and cohabitation she had no assets of significant value.
Contribution during the relationship
99.The husband earned income from his business D Pty Ltd.
100.Prior to the relationship the wife had worked full time in the beauty industry, 4 year trained, having worked subsequently as such for a further 7 years. She had suffered however some physical difficulties in relation to her right hand or right thumb, which the wife attributed to her work, and from standing, a difficultly she had from childhood. Thus, even before meeting the husband, she had ceased to work on a full time basis as she was unable physically to do so. She then had worked part time while studying at a TAFE. She commenced to do “piece work” from home, then worked for about 18 months for P Pty Ltd.
101.It is uncertain on the evidence exactly when the wife worked for P Pty Ltd, and whether or not that employment continued after the commencement of the parties’ relationship.
102.Some part of that employment may have, however, continued after the commencement of the parties’ relationship, as the wife deposed that she “ceased working” when she became pregnant with H in early 1998.
103.Her role throughout the balance of the relationship, from early 1998 until separation in either October 2009 or July 2010, that is, a further 11 or 12 years, was solely as homemaker and parent. Indeed the wife said that after she gave birth to H the husband had said to her that he did not want her to work and that “Your job is being a mother”, saying that in any event he could earn more money than her.
104.The wife said in her affidavit filed 3 November 2011:
105.Over the years I offered to work weekends and for [Mr Trott] to care for the children. [Mr Trott] said, “No I can make more money in an hour than you can in a day. Your job is the kids”.
106.Around 2005 [Mr Trott] gave up drinking alcohol. After this [Mr Trott] would return home around 8.30 pm each evening instead of 11:00 pm. [Mr Trott] would eat his meal that I had cooked and fall asleep on the lounge. He hardly saw the children.
107.I attended all of [H’s] preschool and school functions and arranged and took her to her after school activities such as ballet.
108.Prior to the birth of each child [Mr Trott] promised that he would be home more after the baby was born. [Mr Trott] always continued to spend long hours at the workshop away from the family. Consequently I took care of all the housework, cooking, shopping and laundry and attended to the children with no help. [Mr Trott] expected a meal on the table every night.
105.The wife said thus that while she attended to all of the children’s needs, the husband spent long hours at the workshop away from the family. She said further (pars 109-116) that when J was born with the genetic disorder L Syndrome, J was unable to feed properly and the wife fed her through a tube 3 hourly for 18 months, in addition to being the full time carer for H, then 7 years old. The wife said that she attended all of J’s appointments with her paediatrician since her birth and all other doctors’ appointments for the children, although the husband did attend J’s 6 monthly clinics at the Z Hospital in Brisbane. She said that the husband, apart from offering no additional help with J, began sleeping at his workshop 2-3 nights per week, and that after K was born he continued to sleep at the workshop regularly so that she cared for all 3 children pretty much on her own, taking them to all appointments and school activities in addition to doing all of the housework, laundry, cooking and shopping for the family, while the husband “showed no real interest in the children”, with the exception of H who sometimes he would take swimming on a Sunday afternoon and that “We never went on family outings or holidays”, adding “[Mr Trott] never liked spending money”.
106.The wife put it thus that in essence it was the husband’s “requirement” that she stay in the home in the homemaker and parenting role, while the husband pursued his business interests.
107.The husband said in his oral evidence, somewhat crisply, that he ended the relationship when he did because the wife “was not looking after me properly”, saying “She wouldn’t make me dinner, I had to do my own washing” and “I even had to have toast for dinner”. He said “For 12 months I put up with that, but then I couldn’t put up with it anymore”.
108.The husband showed no insight into the time and energy the wife put into caring for J, in particular by having to tube feed her 3 hourly for 18 months, and attending many medical appointments with her.
109.The husband said that the wife had started “drinking”, but “managed to convince everyone” that she was not. The wife said that whilst occasionally she would drink alcohol, soon after the relationship concluded she was required to undergo alcohol tests in relation to the parenting proceedings and that all of the tests showed “no indication” of any drug or alcohol problem.
110.The husband said that he also helped with the family and the children, and disputes that the wife was solely responsible for home duties. He said that the wife was always “disorganised” in relation to household chores and the needs of the children, and that ever since H was born he has done his own washing, adding “This is because washing was never done in time if left to [Ms Lorne], and I could separate my clothes from the children’s clothing”. Thus, it appears, the husband at times did his own laundry, but did not assist with the children’s laundry, which he could “separate”. He said further that he was responsible for feeding J “two or three times a day including the 1:00am feed every morning”, and tube fed her.
111.Contrary to his oral evidence that “She [the wife] wouldn’t make me dinner”, he said in his trial affidavit “I simply did not expect [Ms Lorne] to cook for me; I remember cooking toast for myself on many occasions”: see his affidavit, pars 50-52.
112.However, whilst these matters may well be so, the wife’s evidence as to her full time care of the children and the home is detailed and cogent, and I find on the balance of probabilities, by my acceptance of the wife’s evidence, that for the last 11 or 12 years of the relationship she carried the significant burden of managing almost all household matters solely, and that her burden was significantly increased because of J’s health and other difficulties caused by her L Syndrome. In relation to this, I would refer to ex 5, limited (for present purposes) to the pre-separation material 2007-2009/2010, indicating not only the necessity of tube feeding for J, but also as to her gross motor delay and intellectual disability, difficulty walking and affected balance and mobility.
113.In relation to the husband’s financial contribution during the relationship, the $34,000 remaining mortgage at the commencement of the parties’ relationship in relation to 1 B Street was paid out by him.
114.In April 1998, the husband purchased a home at C Street, Suburb C for $124,000. He paid $11,000 deposit. He borrowed $25,000. His mother assisted with $28,000 and then a further $19,000. He then paid $39,000 from “savings”. This property was sold in July 2009 for $420,000, an increase in value of some $296,000.
115.In February 2009, somewhat towards the end of the parties’ relationship (husband October 2009, wife July 2010) the husband purchased 2 and 3 B Street for $550,000 and $495,000 respectively, a total of $1,045,000.
116.In relation to 2 B Street, the husband said in his affidavit (pars 33 and 34(a)), that C Street, Suburb C was offered as security, and in addition he arranged a mortgage over 11 B Street. He said that he borrowed $281,060.30 by way of a Bank of Queensland Limited home loan, and arranged a line of credit borrowing of $249,348.40; his parents contributed $10,000 and he paid $20,420.28 from his “own funds” to make up the settlement amount required of $560,828.62.
117.In relation to 3 B Street, the husband said in his affidavit (par 34(b)), that the contract provided for settlement in 6 months, that is, about August 2009. He arranged a Bank of Queensland Limited business term loan of $315,000, and applied from the sale proceeds from C Street, Suburb C $127,287.31, as the sale price for 3 B Street was “discounted” to $442,287 because GST was not payable.
118.In par 34(c) of his affidavit, the husband said that thus, in relation to both 2 and 3 B Street, $20,420.28 was paid from “my own immediate funds”.
119.Before his cross examination, the husband told his Counsel, Mr Blond, which had been opened, and then the subject of evidence, that by way of “correction” of par 34(a) of his affidavit, in which the husband had deposed to a borrowing from Bank of Queensland Limited by way of home loan of $281,060.30, that this was an error, and that this amount had not been borrowed from Bank of Queensland Limited by way of a “home loan” but had come from his “savings”. Indeed, ex 11 shows a withdrawal from the husband’s Bank of Queensland Limited Premier Investment Account of $281,060.30 on 18 February 2009, which, together with a further withdrawal of $20,000.00 on the same date, effected the closure of that account.
120.In an earlier affidavit, filed 19 May 2011, the husband had contended that an amount described as a “shortfall” (cf par 34 of his trial affidavit) had come from his own funds; but in a later affidavit filed 20 October 2011, and in his trial affidavit filed 4 November 2011, this was “corrected” to provide as per par 34 of his trial affidavit: see ex 13.
121.Exhibit 11, however, the Premier Investment Account, makes the position clear.
122.In relation to 2 B Street, the husband then said that after the sale of C Street, Suburb C, he applied $217,598.96 from the sale proceeds of that property to fully discharge the loan and mortgage on it (seemingly July or August 2009).
123.The sale price of C Street, Suburb C the husband had said was $420,000. As there had been no borrowings in respect of it, apart from the $25,000 referred to earlier (unless his mother’s “assistance” with $28,000, and then $19,000, also was borrowed, which is not clear), if the husband applied $217,598.96 towards 2 B Street and then $127,287.31 towards 3 B Street, such amounts to $344,886.27.
124.At the time of the trial, there was no evidence from the husband as to the use to which the balance sale proceeds of C Street, Suburb C were put. If the sale proceeds were $420,000, then less the amount to which he has referred, $344,886.27, it would appear that approximately $75,113.73 seemingly had not been the subject of any specific evidence by him. Presumably, some of this amount, but not all of it, may have been applied to sale costs including commission, or typical settlement adjustments. However, such could not have amounted to $75,113.73.
125.Exhibit 12, in so far as was tendered at the trial, showed 2 different Bank of Queensland Limited Premier Investment Accounts, the first, commencing on 2 October 2009 with the opening balance of $63,398.78, with closure on 7 October 2009 by the withdrawal of $63,399.56 to zero balance (including a small amount of interest, .78 cents); and the second account, commencing seemingly on 7 October 2009 (the same date) with a deposit of $60,000, , ultimately closed on 8 October 2010 by the withdrawal of $63,160.55, in two amounts of $12,509.73 and $50,650.82 respectively.
126.Having regard to the timing of these transactions, in preparing these reasons I considered that, perhaps, both accounts represented the balance proceeds of sale of C Street, Suburb C, although this was not clear.
127.The husband said (trial affidavit, par 38) that during 2009, with a view to increasing his “investment” (seemingly, 2 and 3 B Street) he applied for a Material Change of Use and Rezoning in relation to 2 B Street, which cost him “about $40,000 including infrastructure charges and roughly $30,000 for the application and approval”. The husband’s affidavit, on its face, was not clear whether the expenditure was $40,000 plus $30,000, that is $70,000, or whether the $30,000 was included in the $40,000. Be that as it may, the husband deposed that this expenditure was during 2009; and as late as 8 October 2010 it appears that the husband still had $63,160.55 in an account.
128.The husband said further (trial affidavit, par 48), that he also conducted renovation works at 2 B Street, seemingly by his own labour, as the husband described this as a “non financial contribution”, such as a mezzanine floor “at the cost of $1,500” which seemingly is a reference to materials, over and above his labour contribution.
129.The gap in the husband’s evidence relating to the use to which he put the balance sale proceeds of C Street, Suburb C led me to cause the Associate to send the following to Counsel and solicitors by email 18 September 2012:
Her Honour proposes to give judgment in this matter shortly but requiresCounsels assistance in one respect.
Her Honour notes that exhibit 12 comprises:
·Premium Investment statement account no … with the opening balance of $63,398.78 as at 2 October 2009 and closure on 7 October 2009 by the withdrawal of that amount to zero (including a small amount of interest .78c), and including the words on the statement “Account closing tfr to term deposit” $58,399.56
·Premier Investment statement account no … opening balance zero and opening deposit $60,000 marked “Deposit from …” and the notation towards the foot of the statement “Matures on 7/10/10 Interest rate 5.25 per cent p.a.”
·Premier Investment statement account no … 8 April 2010 to 7 October 2010 showing interest $3,150 paid seemingly on 7 October 2010 and showing “Investment renewal” $63,150 ($60,000 + $3,150) and the notation towards the foot of the statement “Renewal 7/10/10: Maturity 7/10/11 Interest rate 6.10 per cent p.a.”
·Premier Investment statement account no … 8 October 2010 – 8 October 2010 with the opening balance $63,150 8 October 2010 and closure 8 October 2010 by the withdrawal of 2 amounts $12,509.73 (to business loan) and $50,650.82 “Account closing tfr to …”. A notation towards the foot of the statement records “Effective 8/10/10: Maturity 7/10/11 Interest Rate is 6.10 per cent p.a.”. However clearly this did not occur, because the moneys were withdrawn on 8 October 2010.
Her Honour has the following questions
1.Is there any evidence as to the source of the $63,398.78 in account …?
2.Were statements on this account prior to 2 October 2009 disclosed? (e.g. July 2009 – October 2009?)
3.Is there any reason why her Honour ought not infer that the source of this account (possibly opened in July 2009) was the balance proceeds of [C Street, Suburb C] (sold $420,000 July 2009; $217,598 put towards settlement [2 B Street]; $127,287 put towards settlement [3 B Street]; thus balance $75, 145 not accounted for (apart from, possibly, a small amount in sale costs and commission which could not have amounted to $75,145).
Conclusion
288.Accordingly, I accept the submission of Mr Blond of Counsel, for the husband, that the particular facts and matters in the case do not attract application of the Weir principle.
The “fourth step”
289.In Phillips and Phillips (2002) FLC 93-104 at 88, 985, the Full Court made clear its acceptance of the principle that at times the application of percentages does not necessarily produce a just and equitable result; that it is the order which is to be just and equitable, not just the underlying percentage division of the net value of the parties’ assets; that in any event it is the real impact in money terms which is ultimately the critical issue; and finally that in the consideration of whether the result is just and equitable it is the justice and equity of the actual order, not just the percentage distribution, which must be considered.
290.It is common ground that the husband will have the property at 1 B Street, valued at $460,000; the item 4A chattels listed in exhibit 3, valued at $56,000; and his business D Pty Ltd, valued at nil, an aggregate value of $516,000.
291.It is common ground also that the wife have her motor vehicle 1 valued at $1,000, her motor vehicle 2 valued at $5,000, her home contents valued at $2,000 and her shipping container valued at $2,650, an aggregate value of $10,650.
292.It is common ground also that the properties at 2 and 3 B Street are to be sold, as well as the item 4B chattels.
293.To effect a division of wife 60 per cent/husband 40 per cent would mean that, on the present figures in the schedule, the wife would need to be paid sufficient from the net proceeds of sale of 2 and 3 B Street and the item 4B chattels to equate to 60 per cent of the pool when calculated after those net sale proceeds are received and the net value of the pool then thus can be recalculated accordingly.
294.I have considered whether, if (which presently is not anticipated) the net sale proceeds of 2 and 3 B Street and the item 4B chattels are insufficient to provide the wife with 60 per cent of the net value of the pool as then recalculated the husband should be required to sell 1 B Street to make up any shortfall. However, in my view such would not be a just and equitable result, not only by reason of the husband’s prior ownership of that property, but also because for many years now he has conducted his business from that property, and now also resides there with H. It would not be just and equitable, in my view, for the husband, for example, to be required to sell this property and relocate his business, or to sell it and hope to lease it back to continue his business at the same address. I take into account also that Mr G said that the position of 1 B Street is in a “good strip” for the husband’s particular business (or words to that effect). If 1 B Street should be sold, there is no necessary conclusion, thus, that the husband could lease it back to continue his business there. Further, if he should be required to move his business conceivably there may be considerable cost impact. In addition, the husband would be required to find a home in which he and H could live.
295.The wife wants and needs sufficient moneys to buy a home so that she is not “tied to rental” which, according to the spousal maintenance matters to which I have referred, to date she has not been able to afford. With a cash property settlement, she wishes to purchase a home outright for herself, J and K, that is, with no mortgage, on the basis that because she does not have any present or anticipated future capacity for gainful employment she is unlikely to be able to purchase subject to mortgage.
296.If the valuation figures in the schedule for 2 and 3 B Street and the item 4B chattels are reasonably accurate (which, according to Mr G they are, at least in relation to 2 and 3 B Street), on my calculation the net proceeds of sale, after payment of the $300,000 mortgage and $1,000 credit card debt, plus costs of sale, should be of the order of at least $800,000 being sufficient to pay the wife a 60 per cent division (including the value of her items mentioned above). If however at the end of the day there should be a shortfall, the husband nonetheless in my view, for reasons already explained, ought not be required to sell 1 B Street to make up any shortfall which, according to the trial valuations I have mentioned, if there be one, is likely to be small.
297.I have considered also whether, if there be a shortfall for the wife the husband should be required to borrow such sum and pay it to the wife. However, such in my view should not be required of him. In particular, if 2 and 3 B Street should not realise the values estimated by Mr G, then it logically would follow that 1 B Street conceivably also would be of less value than estimated. Whilst I make no finding in this regard, as not open on the evidence, such conclusion would seem to have logical inevitability, particularly having regard to the circumstance that the 3 properties are in a contiguous street line in a business strip.
298.Finally, it was not suggested or submitted that any part of the order in relation to the wife should be considered as spousal maintenance pursuant to s 77A of the Act. On the contrary, the parties treated the s 79 part of the proceedings and the spousal maintenance part of the proceedings discretely.
Conclusion
299.I am satisfied that the division I propose to make is just and equitable and will order accordingly.
Spousal maintenance – review of decision
Background
300.On 28 July 2011, the Principal Registrar ordered that the husband pay to the wife $500 per week spousal maintenance, the first payment to be made on 29 July 2011, and $18,000 by 26 August 2011 for the payment of the wife’s rental arrears at Suburb Q and an outstanding AAPT account as previously mentioned.
301.I have mentioned earlier that the husband’s evidence is that he complied with the Principal Registrar’s order “with difficulty”, such that he borrowed the amounts in items 12-14 of the schedule and is still indebted to the lenders regarding these amounts. In this regard, and in particular in relation to his payment of $500 weekly, I will refer also to the husband’s evidence: Transcript 4 May 2012, T5/40-T6/18. Later in his evidence, as I recall, the husband reiterated his difficulty in making the payments ordered.
Principles upon review
302.The review, as is understood, is an original hearing: see s 37A(9) and (10) of the Act; Family Law Rules 2004, r 18.10; Harris v Caladine (1991) 172 CLR 84 per Mason CJ and Deane J at 95-6; Brennan J at 106; Dawson J at 125-6; McHugh J at 164. Although an original hearing, it is open to me nonetheless to examine and consider the reasons of the Principal Registrar: Parrott v The Public Trustee of New South Wales (1994) FLC 92-473 at 80, 904.
Principles relating to spousal maintenance – need/capacity
303.Sections 90SE and 90SF of the Act apply, which I need not set out. It is sufficient to observe that s 90SF(1) provides that in exercising jurisdiction under s 90SE, the Court must apply the principle that a party to a de facto relationship must maintain the other party only to the extent that the first mentioned party reasonably is able to do so; and only if the second mentioned party is unable to support himself or herself adequately, whether by reason of having the care and control of a child of the de facto relationship, or by reason of physical or mental incapacity for appropriate gainful employment or any other adequate reason; and that in applying the principle the Court must take into account the matters in s 90SF(3).
Materials
304.In relation to the review the husband relied upon the application in a case for review filed 24 October 2011, his trial affidavit filed 4 November 2011, pars 63-81, and his financial statements filed 19 May 2011 and 20 October 2011.
305.The wife relied upon her application in a case for spousal maintenance filed 19 May 2011, her trial affidavit filed 3 November 2011, various paragraphs, as read into the transcript, the Principal Registrar’s order made on 28 July 2011, the Principal Registrar’s reasons for judgment 28 July 2011, the order of Forrest J 24 October 2011, the joint balance sheet prepared for trial and the wife’s financial statements filed 3 May 2011 and 21 October 2011.
Analysis of the evidence, the submissions and conclusion
306.I have had the advantage of conducting the parties’ property proceedings, and of considering thus all of the matters relevant pursuant to s 90SF(1) and (3), to which I would refer without unnecessary repetition. In particular, I would refer to the s 90SF(3) analysis above.
Submissions
307.Mr Blond of Counsel, for the husband, submitted that whilst the husband conceded the need for spousal maintenance for the wife, at no time since the order of the Principal Registrar was made has the husband had the capacity to pay spousal maintenance for her.
308.Mr Gordon of Counsel, for the wife, submitted that the very fact that the husband paid the spousal maintenance as ordered by the Principal Registrar evidences that he did have that actual capacity.
309.Each of Mr Blond and Mr Gordon provided written submissions, to which I would refer without setting out.
Conclusion – wife’s need
310.The wife, as I find, was unable to engage in gainful employment at the date of the Principal Registrar’s order, and has not been able to do so since. Her own needs, from the date of the order onwards, have included rental, food, clothing and basic amenities, with no capacity adequately to fund these herself, not only by reason of some infirmity herself, but in particular and more relevantly by reason of the care of J and K who are very young, J being a special needs child with the difficulties described by Dr FF: see above at pars 14 - 15, 25 - 27, 161 - 167, 211 - 212, 218 - 222, 230 - 232. I would refer also to the wife’s two financial statements.
311.Based on this analysis I am left in no doubt that the wife, from at least the date of the Principal Registrar’s order, has had the need for spousal maintenance, and in the amount ordered.
Conclusion – husband’s capacity
312.The husband, as I find, at the date of the Principal Registrar’s order and at all times since that date reasonably has had the capacity to pay spousal maintenance for the wife, and in the amount ordered. In reaching that conclusion I would refer to the above at pars 8, 16 - 17, 19, 56 - 58, 162 - 164, 210, 213 - 217, 229.
313.Although the husband has made the payments “with difficulty”, as mentioned already, at all times since the order was made the husband has had the benefit of a reasonable net income and considerable asset ownership with relatively little encumbrance.
314.Moreover, the asset ownership, to some extent, derived from the former matrimonial home as to which, as is plain, the wife made indirect contribution: s 90SF(3)(j).
315.Based on this analysis I am left in no doubt that the husband, from the date of the Principal Registrar’s order, had and since has had the capacity to pay spousal maintenance to the wife, and in the amount ordered.
Conclusion
316.I will thus confirm the Principal Registrar’s order for interim spousal maintenance.
317.The wife’s need will continue until she receives her property settlement. In the meantime there is no reason to think that the husband’s financial circumstances will change significantly.
318.I will order therefore that the interim spousal maintenance order be discharged on the date on which the wife’s solicitor receive her full property settlement and thus be able to pay her a cash sum, according to the orders which I will formulate.
I certify that the preceding 318 (three hundred and eighteen) paragraphs are a true copy of the reasons for judgment of the Honourable Justice O’Reilly
Associate:
Date: 27 November 2012
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