Lynas & Lynas

[2022] FedCFamC2F 1287

Federal Circuit and Family Court of Australia

(DIVISION 2)

Lynas & Lynas [2022] FedCFamC2F 1287

File number(s):

SYC 3165 of 2017

Judgment of:

JUDGE MORLEY

Date of judgment:

23 September 2022

Catchwords:

FAMILY LAW – property – application for adjustment of property pursuant to section 79 – where marriage was long – assessment of initial and post separation contributions – assessment of addbacks – Court finds it is just and equitable to make an order of the adjustment of property 47.5% to the wife and 52.5% to the husband

Legislation:

Family Law Act 1975 (Cth), ss 75, 78, 79.

Cases cited:

AJO v GRO (2005) 191 FLR 317

Bevan & Bevan (2013) 279 FLR 1

Dickons & Dickons [2012] FamCAFC 15

Fields & Smith [2015] FamCAFC 57

Fontana & Fontana [2018] FamCAFC 63

Grier & Malphas (2017) 55 Fam LR 107

Hickey & Hickey & Attorney-General for the Commonwealth of Australia [2003] FamCA 395

Masoud & Masoud [2016] FamCAFC 24

Shan & Prasad [2018] FamCAFC 12

Stanford & Stanford (2012) 247 CLR 108

Talbot & Talbot [2015] FamCAFC 132

Trevi & Trevi [2018] FamCAFC 173

Vass & Vass [2015] FamCAFC 51

Division:

Division 2 Family Law

Number of paragraphs:

177

Date of hearing:

6-7 September 2021

Place:

Sydney

Counsel for the Applicant:

Mr Breeze

Solicitor for the Applicant:

Prime Lawyers

Counsel for the Respondent:

Mr Battley

Solicitor for the Respondent:

Bainbridge Legal

ORDERS

SYC 3165 of 2017

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)

BETWEEN:

MS LYNAS

Applicant

AND:

MR LYNAS

Respondent

order made by:	JUDGE MORLEY
DATE OF ORDER:	23 september 2022

THE COURT ORDERS THAT:

1.Pursuant to section 79 of the Family Law Act 1975 (Cth):

(a)That subject to compliance by the parties with order 1(g), the parties shall forthwith sign all documents and instruments and do all things necessary to list for sale the property at B Street, Suburb C in the State of New South Wales (‘the B Street, Suburb C property’) at a listing price agreed upon between them with a real estate agent agreed upon between them and shall proceed to a sale of the property at a sale price agreed upon between them and following such sale the proceeds of sale shall be applied as follows:-

(i)In adjustment of rates on settlement;

(ii)In payment of agent’s commission (if any) on sale;

(iii)In payment of legal and all other proper costs of sale;

(iv)In payment of a sum sufficient to discharge the first registered mortgage over the B Street, Suburb C property;

(v)In division of the then remaining balance of the proceeds of sale between the parties in such amounts as to achieve an overall division between them of 52.5% to the husband and 47.5% to the wife where the husband has $424,962.16 prior to the division of the proceeds of sale and the wife has $158,077.92 prior to the division of the proceeds of sale.

(b)That in the event that the B Street, Suburb C property does not sell by private sale within three months from the date of this order then the parties shall sign all documents and instruments and do all things necessary to list the B Street, Suburb C property for sale by public auction with an auction agent agreed upon between them at a reserve price agreed upon between them and shall proceed to a sale at a sale price agreed upon between them and the parties shall be equally responsible for all costs and expenses of the auction payable prior to the auction sale and following such sale the proceeds of sale shall be applied as provided for in order 1(a).

(c)That in the event that order 1(b) operates and the B Street, Suburb C property does not sell by public auction in accordance with order 1(b) then the B Street, Suburb C property shall be resubmitted for sale by private treaty in accordance with the provisions of order 1(a) hereof and the B Street, Suburb C property shall be resubmitted for sale by public auction at six (6) monthly intervals from the last public auction and be resubmitted for sale by private treaty between such auctions, until the B Street, Suburb C property shall be sold and upon such sale either by public auction or private treaty the proceeds of sale shall be applied as provided in order 1(a) hereof.

(d)That in the event that the parties are unable to reach agreement in relation to an auction agent or a real estate agent then the parties shall and do hereby appoint the President for the time being of the New South Wales Division of the Australian Property Institute or their nominee to determine such disputed matter or matters and the parties shall thereafter act in accordance with that determination and the parties shall be equally responsible for the costs and expenses of the President or their nominee in making such determination. 

(e)That in the event that the parties are unable to reach agreement in relation to a listing price, a reserve price or a sale price whether a sale by public auction or by private treaty then the parties shall and do hereby appoint the President for the time being of the Real Estate Institute of New South Wales or their nominee to determine such disputed matter or matters and the parties shall thereafter act in accordance with that determination and the parties shall be equally responsible for the costs and expenses of the President or their nominee in making such determination. 

(f)That within 28 days, the husband do all things and produce all documents necessary for the wife to sign in order for her to:

(i)Transfer to the husband all of the wife’s shares in D Pty Ltd;

(ii)Transfer to the husband all of the wife’s shares in E Pty Ltd; and

(iii)Resign from any office held by her in either D Pty Ltd or E Pty Ltd, including, but not limited to, as director of E Pty Ltd.

(g)That simultaneously with the transfer referred to in Order 1(f) the parties do all acts and things and sign all documents necessary to cause:

(i)The wife to be discharged as a guarantor for the G Street, Suburb H Mortgage;

(ii)The B Street, Suburb C property to be discharged as security for the G Street, Suburb H Mortgage;

(iii)The wife to be discharged as a guarantor for the business overdraft;

(iv)The B Street, Suburb C property to be discharged as security for the business overdraft;

(v)The wife to be discharged as guarantor for the business credit card; and

(vi)For the B Street, Suburb C property to be discharged as security for the business credit card.

(h)That within 7 days of the date of these orders, the parties do all acts and things and sign all documents necessary to direct Prime Lawyers to distribute funds held in their Trust Account as follows:

(i)The sum of $145,872.32 be divided equally between the parties; and

(ii)Any interest accrued so as to increase the total greater than 145,872.32 to be divided 52.5% to the husband and 47.5% to the wife.

(i)That the husband is solely responsible as between himself and the wife for payment of the capital gains tax assessed as payable by him in relation to the sale of the property at J Street, Suburb K in the State of New South Wales (‘the J Street, Suburb K property’) and the wife is solely responsible as between herself and the husband for payment of the capital gains tax assessed as payable by her in relation to the sale of the J Street, Suburb K property.

(j)That the Husband is the sole owner in law and in equity as between himself and the wife of all real property, personal property, financial assets and financial resources in his power, possession or control other than as dealt with specifically elsewhere in this order, and including, but not limited to, the Motor Vehicle 1, his savings with Bank L, his shareholding in D Pty Ltd, E Pty Ltd, M Pty Ltd and N Pty Ltd, and his superannuation entitlements with Super Fund O and with Super Fund P.

(k)That the wife is the sole owner in law and in equity as between herself and the husband of all real property, personal property, financial assets and financial resources in her current power, possession or control other than as dealt with specifically elsewhere in this order, including but not limited to, the Motor Vehicle 8, her savings in her CBA Gold Saver account, her savings in her NAB Classic account, her superannuation entitlements with Super Fund P, and all property to be received by her as a beneficiary of her late mother’s estate.

2.That in the event that either party refuses or neglects to comply with any part of this order in relation to the execution of any deed, instrument or document the Court appoints and authorises pursuant to section 106A of the Family Law Act 1975 (Cth) the Registrars of the Federal Circuit and Family Court of Australia to execute such deed, instrument or document in the name of the party who so refuses or neglects and further appoints those Registrars to do all acts and things necessary to give validity and operation to the deed, instrument or document.

Note:   The form of the order is subject to the entry in the Court’s records.

Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).

Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.

IT IS NOTED that publication of this judgment by this Court under a pseudonym Lynas & Lynas has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

REASONS FOR JUDGMENT

JUDGE MORLEY:

Introduction

1. The applicant wife, Ms Lynas ("the wife") and the respondent husband, Mr Lynas ("the husband") commenced cohabitation sometime in 1993 or 1994. The parties married in 1995 and separated in August 2012. They had two children during their marriage, Mr Q born in 1996 and Ms R born in 1997, and the wife had a son from a previous relationship, Mr S, who was 6 months of age at the commencement the parties' cohabitation. The wife and the husband have been unable to resolve the property settlement issues arising from the breakdown of their relationship.

2. A final hearing took place on 6 and 7 September 2021 and judgment was reserved. The wife was represented by Mr Breeze of Counsel and the husband was represented by Mr Battley of Counsel.

3. At hearing the wife sought a final result dividing the property pool between the parties 60% to 65% to the wife and 35% to 40% to the husband. The husband sought a final result dividing the property pool 65% to the husband and 35% to the wife.

4. I apologise to the parties, their adult children and the legal practitioners involved for the excessive delay in the making of final orders and publication of these Reasons.

   The Proceedings

5. The proceedings were commenced by the wife filing an Initiating Application on 25 May 2017, to which the husband responded on 25 August 2017. At the first four Court events on 28 August 2017, 11 April and 13 September 2018, and 3 February 2020 directions were made by consent between the parties in relation to disclosure and valuation.

6. Due to the husband's failure to appear before the Court on 5 June and 13 August 2020, the matter was listed on 8 October 2020 for an undefended hearing of the wife's application. On that day the husband appeared represented by Mr Battley of Counsel, who successfully convinced the Court, over the objection of the wife through Mr Breeze of Counsel, that the interests of justice required that the husband be given a further chance in the litigation, and the matter was listed for a final defended hearing on 6 and 7 September 2021. Directions were made for the filing of written submissions in relation to the issue of the wife's costs of preparation for an undefended hearing, that issue being resolved by consent order made on 2 November 2020 that the husband pay the wife's costs in the sum of $14,000.

7. The parties attended a Conciliation Conference with the Registrar on 4 August 2021, but the matter did not settle. The final hearing proceeded.

   The material relied upon at hearing

8. The wife relied upon the following materials:

   (a)Case Outline prepared by her Counsel and including a minute of the orders sought;

   (b)Amended Initiating Application filed 21 May 2021;

   (c)Affidavit of the wife adopted pursuant to the practice direction and filed on 13 August 2021;

   (d)Affidavit in Reply by the wife adopted pursuant to the practice direction and filed on 27 August 2021; and

   (e)Financial Statement of the wife adopted pursuant to the practice direction and filed on 13 August 2021.

9. At the commencement of the wife's oral evidence on hearing she swore both of her affidavits and her financial statement.

10. The husband relied upon the following materials:

    (a)Case Outline document prepared by his Counsel and including a minute of the orders sought;

    (b)Amended Response filed 4 June 2021;

    (c)Affidavit of the husband adopted pursuant to the practice direction and filed on 13 August 2021 and the exhibit to the affidavit;

    (d)Financial Statement of the husband sworn and filed 23 April 2021;

    (e)Affidavit of Ms T adopted pursuant to the practice direction and filed on 13 August 2021; and

    (f)Affidavit of Ms U adopted pursuant to the practice direction and filed on 13 August 2021.

11. At the commencement of the husband’s oral evidence on hearing he swore his affidavit and Financial Statement.

12. The only exhibit is a Joint Balance Sheet marked ‘Exhibit A’. By the very good work of Counsel and their instructors and the good sense of the parties, the Balance Sheet reflects agreement as to all assets, liabilities and superannuation entitlements in relation to both inclusion and value, and notes two issues in relation to addbacks asserted by the husband.

13. The wife was cross examined by Mr Battley for the husband and re-examined by Mr Breeze. The husband was cross examined by Mr Breeze and there was no re-examination. Ms U was cross examined by Mr Breeze, with no re-examination, and Ms T was cross examined by Mr Breeze and then briefly re-examined.

14. Both Council made oral submissions at the end of the hearing in addition to the written submissions provided in the Case Outline documents.

    The competing proposals of the parties

15. The wife sought the following orders as set out in her counsel’s case outline document:

    [D] Pty Ltd/[E] Pty Ltd

    1.Within 28 days, the Respondent do all things and produce all documents necessary for the Applicant to sign in order for her to transfer to the Respondent, the Applicant’s shares in [D] Pty Ltd and in [E] Pty Ltd.

    2.Simultaneously with the transfer referred to in Order 1 the Respondent do all things and produce all documents necessary for the Applicant to sign in order for her to resign as a director of [E] Pty Ltd.

    3.Simultaneously with the transfer referred to in Order 1 the parties do all acts and things and sign all documents necessary to cause:

    a.   The Applicant to be discharged as a guarantor for the [G Street, Suburb H] Mortgage;

    b.   The [B Street, Suburb C] property to be discharged as security for the [G Street, Suburb H] Mortgage;

    c.   The Applicant to be discharge as a guarantor for the business overdraft;

    d.   The [B Street, Suburb C] property to be discharged as security for the business overdraft;

    e.   The Applicant to be discharged as guarantor for the business credit card; and

    f.    For the [B Street, Suburb C] property to be discharged as security for the business credit card.

    [M] Pty Ltd and [N] Pty Ltd

    4.Simultaneously with the transfer referred to in Order 1, the Applicant transfer to the Respondent all her right, title and interest if any, in the entities known as [M] Pty Ltd and [N] Pty Ltd.

    The [B Street, Suburb C] Property

    5.That the parties do all things and sign all documents to cause the [B Street, Suburb C] property to be listed and sold by private treaty by a real estate agent appointed by agreement by the parties and failing such agreement, an agent nominated by the President of the Real Estate Institute of NSW or their nominee with the costs of such nomination equally shared by the parties and the listing price, unless agreed be in accordance with the recommendations of such agent.

    6.For the purposes of Order 7 and Order 9, where applicable:

    a.   The parties shall accept any reasonable offer at or above the listing price.

    b.   The parties do all acts and things and sign all documents required to instruct a solicitor agreed by the parties and in default of agreement, a solicitor nominated by the President of the Law Society of New South Wales, to act on behalf of the sale of the former matrimonial home with the costs of such nomination to be borne equally.

    c.   The proceeds of the sale of the [B Street, Suburb C] property to be disbursed as follows:

    i.Payment of agent’s commission and advertising expenses and legal expenses of the sale;

    ii.In adjustment of rates and taxes;

    iii.In payment of the remaining home mortgage registered against the title to the said property;

    iv.The balance so remaining be disbursed as to 60% to the Applicant 40% to Respondent.

    7.In the event that the [B Street, Suburb C] property fails to be sold by private treaty within a period of 3 months of the property being listed for sale, the parties do all things and sign all documents to cause the [B Street, Suburb C] property to be sold by auction at the earliest possible date at a reserve to be agreed between the parties and failing such agreement, then at such price recommended by their appointed real estate agent.

    Prime Lawyers Trust account funds

    8.Within 14 days the parties cause their accountant to ascertain the amount of Capital Gains Tax payable from the 19 September 2019 sale of the jointly owned property known as [J Street, Suburb K].

    9.Within 7 days of the receipt of such advice from their accountant the parties direct Prime Lawyers to pay this liability from these funds held in their Trust account and the balance remaining be paid to the parties to give an overall adjustment, of the total net asset pool, of 60% to the Applicant and 40% to the Respondent.

    The boat and associated items

    10.That the Respondent shall be and is hereby declared to be the sole and absolute owner at law and in equity as against the Respondent of the things known as the [V inflatable boat], 35 HP motor, assorted fishing gear, air compressor, generator and tools once he complies with Order 11.

    11.Further, and within 14 days of the date of this order, the Respondent shall attend upon the location where the items at Order 10 are stored, and shall take possession of them at his expense.

    Sole Owner and Debt Orders

    12.That the Applicant shall be and is hereby declared to be the sole and absolute owner at law and in equity as against the Respondent:

    a.Any real property registered in her name and not otherwise subject to these orders;

    b.Any motor vehicle in her possession;

    c.All items of furniture and contents and items within the [B Street, Suburb C] Property;

    d.All savings or monies in her possession, custody or control, other than stated in the foregoing orders;

    e.Any shares in her possession, custody or control;

    f.Her contributions and accumulated entitlements with respect to or arising from her membership of any superannuation fund; and

    g.Her employment related entitlements including but not limited to annual leave, sick leave and long service leave.

    13.That the Respondent shall be and is hereby declared to be the sole and absolute owner at law and in equity as against the Applicant:

    a.Any real property registered in his name and not otherwise subject to these orders;

    b.Any motor vehicle in his possession;

    c.All items of furniture and contents in his possession;

    d.All savings or monies in his possession, custody or control, other than stated in the foregoing orders; and

    e.His contributions and accumulated entitlements with respect to or arising from his membership of any superannuation fund.

    14.The Applicant and Respondent remain liable for any debts held in their  name or any entity operated or controlled by them at the date of these Orders and in this respect, they indemnify and keep indemnified the other party in relation thereto.

    Indemnities

    15.Except as specifically provided for by any Order, the Applicant and Respondent shall each be responsible for their own debts and liabilities as at the date of the making of these Orders.

    16.The Applicant indemnifies the Respondent from and in respect to all actions, claims, suits and demands as may be made against the Respondent in relation to all liabilities in the name of the Applicant and or any entities operated or associated with them.

    17.The Respondent indemnifies the Applicant from and in respect to all actions, claims, suits and demands as may be made against the Applicant in relation to all liabilities in the name of the Respondent and or any entities operated or associated with them.

    Costs

    18.The Respondent pay to the Applicant, her costs of and incidental to this Application.

    Other orders

    19.Both parties do all acts and things and execute all documents, authorities and writings as are necessary to give effect to all or any of these Orders within 24 hours of such notice.

    20.That pursuant to s. 106A of the Act a Registrar of the Federal Circuit Court of Australia is authorised to execute any document or do such thing as required to give effect to these Orders in the event of a default of a party to execute such document or do such thing as necessary under these Orders.

1. The husband sought the following orders as set out in his Counsel’s Case Outline document:

   1.That within 28 days of the making of these orders, the Applicant wife do all such acts and things and sign all necessary documents so as to transfer to the Respondent Husband unencumbered all her shares in:

   1.1[E] Pty Ltd ACN … (‘[E Pty Ltd]’); and

   1.2[D] Pty Ltd ACN … (‘[D Pty Ltd]’).

   2.That simultaneously with the transfer set out in Order 1, the Applicant Wife shall do all acts and things and sign all necessary documents so as to resign as a director or any associated role held by her in [E Pty Ltd].

   3.That simultaneously with, and upon compliance with Orders 1 and 2, the Respondent Husband shall do all such acts and things and sign all necessary documents so as to:

   3.1Discharge the Applicant Wife from any guarantee given in relation to the operation of the business, [E Pty Ltd] and [D Pty Ltd]; and

   3.2Cause the [B Street, Suburb C] property to be discharged as security for the commercial property situate at [Shop F, G Street, Suburb H] and more specifically described as folio identifier […].

   4.That within 14 days of the making of these orders, the parties immediately do all acts and things and sign all documents necessary to list the [B Street, Suburb C] Property for sale by private treaty with a real estate agent agreed between the parties and at a price agreed between the parties or failing agreement within 14 days then at a price determined by the President from time to time of the New South Wales Division of the Australian Property Institute or his nominee.

   5.If the [B Street, Suburb C] Property is not sold within three months after the date of listing pursuant to Order 3 then the parties shall forthwith do all acts and things and sign all documents necessary to list the property for sale by public auction with an auctioneer agreed between the parties and at a reserve price agreed between the parties or failing agreement as determined by the President from time to time of the New South Wales Division of the Australian Property Institute or his nominee.

   6.In the event that the [B Street, Suburb C] Property is not sold by public auction as provided for above then the parties shall do all things necessary to relist the property on the market for sale by private treaty with the real estate agent agreed between the parties and at a price agreed between the parties or failing agreement as determined by the President from time to time of the New South Wales Division of the Australian Property Institute or his nominee.

   7.That the proceeds of sale of the [B Street, Suburb C] Property be dispersed as follows:

   7.1In payment of the costs of sale including real estate agent’s fees, legal fees and auctioneer’s fees, if any;

   7.2In payment of the mortgage to encumbering the property;

   7.3In payment of any rate adjustments as at the date of settlement of the sale;

   7.4With respect to the balance remaining, in payment to the parties a sum of monies to effect a division of net assets to equate to 65% to the Respondent Husband and 35% to the Applicant Wife, having regard to all other assets and liabilities each party retains in accordance with these Orders.

   8.That within 7 days of the date of these orders, the parties do all acts and things and sign all documents necessary to direct Prime Lawyers to distribute funds held in their Trust Account as follows:

   8.1In payment of the parties’ Capital Gains Tax liabilities arising from the sale of the property situate at [J Street, Suburb K] NSW; and

   8.2With respect to the balance remaining if any, in payment to the parties in equal shares.

   9.That each party be declared the sole owner in law and in equity of all items of real property, personalty, chattels and financial resources in their name, possession or control not otherwise dealt with in these Orders including but not limited to bank accounts, any choses in action and superannuation benefits.

   10.That in the event that either party refuses or neglects to execute any deed or instrument the Registrar of Deputy Registrar of the Federal Circuit Court of Australia be and is hereby appointed pursuant to section 106A of the Family Law Act 1975 to execute such deed or instrument in the name of such party and do all acts and things necessary to give validity to the operation of the deed or instrument upon being satisfied by affidavit of such neglect or refusal.

   The evidence

2. The parties met in about 1992 on the wife's evidence, or sometime in 1993 or 1994 on the husband's evidence. They commenced their cohabitation sometime in 1993 or 1994 and married in 1995.

3. At the commencement of cohabitation, the wife had a six month old son, Mr S, from a previous relationship. Mr S was a member of the household with the parties throughout the entirety of their cohabitation.

4. The parties' son, Mr Q, was born in 1996 and was an adult at the time of the hearing. The parties' daughter, Ms R, was born in 1997 and was also an adult at the time the hearing.

5. The parties separated in August 2012 when the husband left the matrimonial home at B Street, Suburb C (the B Street, Suburb C property). Despite the wife giving some evidence that the parties stopped talking to each other in October 2011, it was clear on all of the evidence that both parties regarded the separation as occurring in August 2012. Mr S, Mr Q and Ms R remained living with the wife.

6. After separation, the husband re-partnered with Ms U. The wife has not re-partnered.

7. The parties cohabited for a period of about two and a half years before Mr Q was born.

8. At the commencement of cohabitation the wife was not in employment and the husband was employed by Employer W as a tradesman.

9. In 1993, the husband established a business in partnership with Mr X under the business name “Company Y” at leased premises at G Street, Suburb H. The husband contributed the whole of the start-up finance of $20,000, saved by him from his employment with Employer W. Mr X did not contribute any funds for the start-up, but worked full-time in the business. A real property owned by the husband at Z Street, Suburb AB ("the Z Street, Suburb AB property") was used as a form of security for the commercial lease for the business premises. The husband asserts that the business was commenced shortly before the commencement of cohabitation.

10. In 1995 Mr X transferred his share of the business to the husband and the husband became a sole trader. The husband incorporated the business in 1997 as D Pty Ltd trading as Company Y ("the business"). The husband was at all times the sole director of the corporation and the husband and the wife were shareholders with one ordinary share each. Originally, the ASIC records indicated that the husband held his share beneficially and the wife did not, but those details were changed on 9 March 2018 to reflect beneficial holding by the wife.

11. The husband remained employed by Employer W as a tradesman until 1997 when he was made redundant. Originally, Mr X worked at the business full-time and the husband worked at the shop premises on Saturdays and on other days after hours, and at other times on administration outside of his employment hours with Employer W, then after his redundancy in 1997 he worked full-time in the business up to the time of the hearing. Between Mr X leaving in 1995 and the husband commencing full-time at the business in 1997, the husband employed his brother and another person to work full-time at the business. 

12. At about the time of Mr Q's birth in mid-1996 the husband took 12 months parental leave from his employment with Employer W. He says that he spent most of that time assisting the wife with parenting Mr S and Mr Q and with the homemaker role, whereas the wife says that he spent almost all the time working at the business. In cross examination it was put to the husband that during his year leave from Employer W he spent most of the time working in the business, to which he responded that he had had to declare the business to Employer W and it was a condition of his continued employment that he could not work in the business during periods of leave from Employer W - holiday leave, sick leave and even unpaid parental leave - and in complying with that condition he spent most of his year of parental leave at home as he deposed in his affidavit.

13. At the commencement of cohabitation the husband was the sole registered proprietor of a real property at Z Street, Suburb AB, ("the Z Street, Suburb AB property"), purchased by him in 1986 for $115,000, with an additional $7,000 paid for costs and stamp duty. The husband applied $30,000 from his savings and obtained a loan for $91,000 on mortgage security on the property. The Z Street, Suburb AB property was tenanted until the parties commenced their cohabitation, at which time the tenant was given notice to vacate and the parties and Mr S began living there. The husband estimated that he had approximately $35,000 equity in the Z Street, Suburb AB property at the time cohabitation commenced.

14. The husband sold the Z Street, Suburb AB property in 1996 for $110,000. On the husband's trial affidavit evidence he received $40,000 net from the sale and applied the whole of those monies towards living expenses in the succeeding years. On the wife's evidence the husband received $20,000 from the sale, which he "retained". In cross examination the husband admitted that he could not recall the precise amount he received net from the sale, that the sum could have been $37,000, but that the amount received was definitely more than the $20,000 the wife asserted.

15. At the commencement of cohabitation the husband owned a Motor Vehicle 2 and a Motor Vehicle 3, each valued at about $5,000.

16. The wife was not in employment at the commencement of cohabitation, her only income being a pension as sole parent for Mr S. Mr S's father had taken up residence in New Zealand and he paid no child support to the wife for Mr S until relevant legislation was established between Australia and New Zealand and he began paying child support when Mr S was 13 years old. In about late 2002 Mr S was diagnosed by a paediatrician as having Attention Deficit Hyperactivity Disorder (“ADHD”).

17. There was much conflicting evidence between the parties both in their evidence in chief and during cross examination as to the hours worked by the husband during cohabitation and his availability to assist the wife with the parenting of the children and with the homemaker role. Similarly, there was conflicting evidence as to the extent of the wife's participation in the business.

18. The parties lived in the Z Street, Suburb AB property from about the commencement of cohabitation until they purchased AC Street, Suburb AB ("the AC Street, Suburb AB property") in 1996 and moved to reside there. When the AC Street, Suburb AB property was sold sometime in 1999 or 2000, the parties resided in rented premises in AD Street, Suburb AB whilst they built a home on vacant land they purchased at AE Street, Suburb AF ("the AE Street, Suburb AF property"), which they occupied on completion in 2001. In 2003 the parties moved to a property they had purchased in 2002 at J Street, Suburb K ("the J Street, Suburb K property"). In 2006 the parties purchased a property at B Street, Suburb C ("the B Street, Suburb C property") and leased out the J Street, Suburb K property. They were residing at the B Street, Suburb C property at the time of separation.

19. The wife's evidence is that prior to and during her pregnancies, and continuing after the children were born, she assisted the husband with the business, detailing the work undertaken by her in paragraph 16 of her trial affidavit. In somewhat contradictory terms she says in paragraph 17 of that affidavit:

    Once the children commenced school I returned to working with [Mr Lynas] in the business.

20. It would seem from a question put to the husband in cross examination by Mr Breeze that the parties agreed that the wife would stay home and care for Mr S between the commencement of their cohabitation and about mid 1996, from which time she commenced assisting the husband with the business to whatever degree. The wife says that from 2000 she worked three days per week at the business and then worked full-time in the business once both Mr Q and Ms R were at school, from 10:00AM until 3:30PM or 4:00PM weekdays, only ceasing that full-time work in late 2002 when Mr S was diagnosed with ADHD.

21. The husband's evidence is that the wife at no time worked full-time in the business, but worked part-time, her hours of work varying from year to year. He asserts that prior to Mr Q's birth the wife worked between 10 and 15 hours a week at the business, and that after Mr Q and Ms R had been born the wife's involvement reduced to around eight hours per week from 10:00AM until 2:00PM twice a week while the children were at daycare, and then once the parties moved to live at the J Street, Suburb K property in 2003 the wife ceased any work for the business.

22. During his cross examination the husband conceded that "from time to time" the wife performed various tasks in the business, including preparing paychecks for employees, paying bills and accounts, doing banking, conducting a pay audit for the business for workers compensation purposes, attending to paperwork in relation to sales tax, general filing, unpacking stock, ordering goods from suppliers, chasing orders paid but not filled, cleaning the windows, toilet and kitchen and vacuuming the store premises, breaking down boxes, letterbox drops of flyers early on in the business, and some paperwork.

23. The dispute in the parties' evidence as to the hours worked by the husband in the business relates to their contradictory evidence in relation to his contribution as homemaker and parent. The husband asserted that while the parties were living at the AE Street, Suburb AF property he left for work at 6:30AM and returned home at 6:30PM and once they moved to the Region AG he left for work at 5:30AM and returned home at 8:00PM. The wife asserted in cross examination that even while the parties were living at the AE Street, Suburb AF property the husband would not return home from work Monday to Saturday until 9:00PM, after the children were in bed.

24. The parties purchased the AC Street, Suburb AB property in 1996 for $185,000, $55,000 coming from savings and a loan of $138,000 from Westpac Bank secured on the AC Street, Suburb AB property by mortgage. The parties moved from the Z Street, Suburb AB property, which was then put up for sale and sold in 1996, to live at the AC Street, Suburb AB property until it was sold in 1999 or 2004 for $228,500, from which the parties received $60,000 net, which they paid towards purchase of the AE Street, Suburb AF property.

25. At about the time of purchase of the AC Street, Suburb AB property the parties opened their first joint bank account.

26. In late 1997 the husband received a redundancy payment on leaving Employer W of about $40,000. The monies were expended on purchasing a Motor Vehicle 4 for $22,000, and a Motor Vehicle 5 for $5,000, and the remainder on living expenses.

27. In 1999 or 2000 the parties purchased the AE Street, Suburb AF property as vacant land for $175,000, applying the $60,000 received net from the sale of the AC Street, Suburb AB property and monies borrowed and secured by mortgage on the AE Street, Suburb AF property, borrowing a total sum of $320,000 to build a home on the property. On completion the parties moved from their rented premises at AD Street, Suburb AB to live at the AE Street, Suburb AF property in 2001. After the parties purchased the J Street, Suburb K property and moved there in late 2003, the AE Street, Suburb AF property was vacant for about nine months and then tenanted with the rental income applied to payment of the loan account secured by mortgage. The parties sold the AE Street, Suburb AF property in 2006 for $750,000, receiving about $485,000 net, the whole of which they applied to purchase of the B Street, Suburb C property.

28. In early 2002 the parties purchased the J Street, Suburb K property for $167,000, borrowing the whole of the purchase price and purchase costs with the loan secured by mortgage on the J Street, Suburb K property. The wife says in paragraph 40 of her trial affidavit that the family moved into the J Street, Suburb K property in 2002 and then in paragraph 92 of that affidavit asserts that the parties moved to the Region AG in late 2003. The husband says that the move to the Region AG (necessarily the J Street, Suburb K property) occurred in 2002 at paragraphs 53 and 54 of his trial affidavit.

29. In late 2006 the parties purchased the B Street, Suburb C property for $615,000 and moved there from the J Street, Suburb K property, and remained living at the B Street, Suburb C property until separation. After that move the J Street, Suburb K property was tenanted and then sold on 19 September 2019 pursuant to a court order in these proceedings, with the parties netting about $220,000, with $30,000 being distributed to each of the parties pursuant to interim order and a balance of $145,872.32 being retained in the trust account of the wife's solicitors pending final orders.

30. In early 2003 the parties incorporated “E Pty Ltd”, both the husband and wife became directors and shareholders. In late 2003 that company purchased shop premises at Shop F, G Street, Suburb H, for either $395,000 on the wife's evidence or $375,000 on the husband's evidence, and the business moved from G Street, Suburb H to the new premises. The husband said in cross examination that the wife and others assisted him to move the business the 120 metres from the old to the new premises. E Pty Ltd borrowed $398,000 from National Australia Bank to cover the purchase, stamp duty and costs by interest only loan, such interest being paid with the rent paid by D Pty Ltd to E Pty Ltd for the premises.

31. In 2003 the husband and a then employee incorporated “M Pty Ltd”, and at some time in 2007 or 2008 that employee transferred his or her interest in that corporation, presumably meaning that employee’s shareholding, to the husband who became the sole shareholder and sole director. The company provided IT services and then in 2014 began to perform property maintenance at the shopping complex at G Street, Suburb H.

32. In 2011 “N Pty Ltd” was incorporated - the evidence does not indicate shareholders and directors or any business activity - and since 2013 the corporation has not traded.

33. The parties’ evidence conflicted markedly in relation to the husband's participation in the parenting of the children and the homemaker role - cooking, cleaning, washing, ironing, shopping and so forth. The wife asserted that she was solely responsible for the homemaker role, whilst the husband gave evidence that he assisted "around the house with chores", washing dishes after meals, cleaning up dining and kitchen areas and assisting with the laundry. He said that he attended to most of the outdoor yardwork including mowing the lawns, trimming hedges and killing weeds.

34. During his cross examination the husband accepted that the wife did the greater part of the homemaker duties.

35. In relation to the parenting role the husband said at paragraph 35 of his trial affidavit:

    Whilst [Ms Lynas] attended to more of the parenting responsibilities during our relationship, I was actively involved in the care of the children when I was home from work.

36. Mr Q and Ms R's paternal grandmother assisted with the care of the children on a weekly basis until they commenced school.

37. The wife asserted that both she and husband attended to the outside garden maintenance until Mr Q was 12 or 13 years of age, at which time the husband taught him to mow the lawn, which Mr Q did from that time onwards. During his cross examination it was put to the husband that the wife helped him mow the lawn, to which he responded "rarely", but he accepted that when Mr Q was about 13 years old he taught him to mow the lawn and that from then on Mr Q was mainly responsible for that activity.

1. Similarly, during the wife's cross examination it was put to her by Mr Battley that it was an exaggeration for the wife to say that the husband did not contribute at all to the welfare of the children, meaning there parenting day-to-day, to which she replied, "he had some involvement, yes" .When Mr Battley put to the wife that, "it's more correct to say that you were a significant carer of the children, but not the exclusive care of the children" the wife agreed, but she did not concede that the husband made a substantial contribution to the care of the children, saying that his contribution was, "as a working father there on weekends, but as to constant care, no." She clarified that her evidence was not a criticism of the husband in that regard because he was attending to his role as breadwinner for the family.

2. In relation to the early years of the relationship before Mr Q and Ms R were born, the husband conceded during cross examination that while he was still employed by Employer W he was not available to assist with Mr S's parenting.

3. The husband was heavily involved in each of Mr S, Mr Q and Ms R playing sports (often erroneously referred to as sports) at representative levels including in state competitions.

4. The parties separated in August 2012. The husband moved out of the B Street, Suburb C property. The wife remains residing in that property, as did each of the children until becoming independent adults.

5. In August 2015 the J Street, Suburb K property was damaged by tenants. The husband paid for repairs to the property at a cost to him of $9,422 and the property was then re-tenanted at a rental of $400 per week.

6. From separation in August 2012 until March 2016 both the husband and the wife had access to the joint NAB account, into which D Pty Ltd paid a wage for both the husband and the wife. The wife was not actually employed through that time. In that she took no part in the conduct of the business, but nevertheless by arrangement put in place by the husband during the cohabitation the wage for both parties continued to be paid to the joint account. Throughout that period also, both the husband and the wife had access to the banking account of D Pty Ltd. Both parties used their credit cards for expenses during that period and those credit cards were paid from the parties' joint account with National Australia Bank.

7. Both parties included in their evidence some meticulous mathematical calculations of the sums of money received by each from their joint account and from the company account during the period from separation in August 2012 until March 2016.

8. It is agreed evidence that between 30 August 2012 and 29 March 2016 a sum of $616,975 was transferred from the company accounts of D Pty Ltd to the parties' joint NAB account ending #...88, being the salaries for the husband and wife referred to above and some "top ups to prevent over drawing".

9. The loan accounts secured by mortgage on the B Street, Suburb C property and on the J Street, Suburb K property were paid from the joint NAB account. In relation to the J Street, Suburb K property such payment was of course supplemented by the rental income generated by that property at times, not defined in the evidence, between when the parties moved out in late 2006 to the B Street, Suburb C property and when it was sold in September 2019. In addition, the husband paid $10,119.71 from his personal account towards the J Street, Suburb K property loan account, as well as sums for house insurance and council rates.

10. In relation to the B Street, Suburb C property, occupied by the wife and children from separation, the mortgage was paid from the joint NAB account until the wife took up casual employment as a factory worker in 2016, becoming a full-time employee in about 2018.

11. The wife conceded during her cross examination that the husband was correct in his evidence that over 43 months from separation in August 2012 until March 2016 she withdrew $183,940 from the parties' joint account. However, I bear in mind that throughout that period of time the husband, who was in full control of the business, was paying a salary to the wife into the joint account. The husband conceded during his cross examination that the joint NAB account was the family's general living account during their cohabitation, into which the income from the business was paid and from which all the family’s personal expenses was paid, except what was paid on the parties’ credit cards. On the evidence, the parties' credit cards were paid from the joint account.

12. The husband conceded in his cross examination that he was aware of the payments and withdrawals being made by the wife out of the joint account after separation, that he had access to all of the statements for that account throughout the relevant period, that he was authorised to discuss any matters relating to that account with the National Australia Bank throughout the relevant period and that he was therefore aware of the monies being withdrawn and expended by the wife from the joint account from August 2012 through to March 2016.

13. The wife accepted during her cross examination that the husband was correct in his evidence that a sum of $77,264 was paid out from the parties joint NAB account during the period August 2012 to March 2016 to pay her various credit card accounts. The wife gave evidence that a sum of $175,944.14 was paid out from the joint NAB account between 3 September 2012 and 8 February 2016 to pay the husband's credit cards, evidence which the husband accepted in his cross examination.

14. It was common evidence between the parties in the cross examination that the direct deduction arrangements applied to the joint NAB account for payment of the parties' various credit cards had been set up principally by the husband during cohabitation and continued uninterrupted until March 2016. Once again, the husband was either fully aware of that expenditure for the wife's credit cards and his own credit cards during the relevant time and so acquiesced in expenditure from the joint account, or simply did not care - the former being the more likely scenario implied on the evidence.

15. Between 20 February 2016 and 4 October 2016 the wife spent $11,320.09 on the husband's Bank AH credit card without his permission.

16. The parties practice from separation in August 2012 of each living out of the joint NAB account fed from the business came to an end between March and May 2016 in consequence of withdrawals made by the wife from the business account, an NAB Business Everyday account ending #...35, without the husband's consent. Between 24 and 29 March 2016 the wife withdrew $6,000 from that account, and on 9 May 2016 she withdrew $60,000 from that account. The wife's evidence is that she applied the whole of that sum towards living expenses for herself and the children, noting that both Mr Q and Ms R were over 18 years of age at that time.

17. Finally, there is evidence that between 1 December 2016 and 31 August 2017 the wife withdrew a total of $3,296 from the NAB Home Loan account ending #...99 secured on the J Street, Suburb K property by transferring those sums to her personal NAB account ending #...13. Between 1 August 2016 and 31 August 2017, the wife deposited $1,824 into account ending #...99, making the total depletion by her on that account through these transactions $1,472, not $3,296.

18. The husband gives evidence that between August 2012 and March 2016 he paid for the Foxtel connection at the B Street, Suburb C property, private health cover for himself, the wife and the children, the building insurance (referred to in his evidence as "home insurance") and electricity accounts for the B Street, Suburb C property.

19. During his cross examination the husband agreed that the practice of paying all accounts other than those paid with credit cards, withdrawing cash, paying credit card balances for husband and wife, and paying the loan accounts secured on the B Street, Suburb C property and the J Street, Suburb K property from the joint NAB account prior to separation was simply continued after separation, the only change being that on occasions the wife overdrew that account, that he continued to pay his own and the wife's wage or salary into that account from separation until March 2016, that he was regularly able to "track" the transactions on that account and so regularly saw expenditure and withdrawals from that account, that he was aware that the loan accounts were continuing to be paid from that account, that he was aware that all of the credit cards were continuing to be paid from that account, and that until March 2016 he took no action to prevent any of those expenditures.

20. The husband paid no formal or voluntary child support, agreed, termed or recognised as such, to the wife for the support of Mr Q and Ms R following separation.

21. In paragraph 64 of his trial affidavit the husband refers to the wife retaining possession of "the company vehicles" after separation. It is not known from the evidence which company is being referred to - the D Pty Ltd or E Pty Ltd. The wife retained use of an Motor Vehicle 6 until 2017 while the company paid loan payments relating to the purchase of that vehicle of $906.12 per month, though the wife gives evidence in paragraph 100 of her trial affidavit that the loan "would have been paid out in 2014". The wife "retained access to the company’s Motor Vehicle 7 " from some unspecified date until June 2020. The vehicle was used largely by Mr Q and eventually returned to the husband at the husband's demand in June 2020.

22. In paragraph 72 of her trial affidavit the wife gives evidence that on 24 August 2018 she received notification from a credit management officer in relation to unpaid rates for the J Street, Suburb K property and was notified that a judgement had been entered against the husband and the wife in relation to the B Street, Suburb C property. The wife gives evidence that she "started to pay the following amounts - council rates - 02.02.18 $1000 16.08.18 $200 Water rates 02.08.18 $1000 16.08.2018 $200", however, if the wife received that notification on 24 August 2018 it cannot be the case that she then "started to pay" the amounts deposed on 2 February 2018 or 16 August 2018. On 28 February 2019 $3,850.09 was garnisheed from her personal bank account through a Local Court Garnishee Order in relation to the B Street, Suburb C outstanding rates. It seems that the rates in relation to the property had gone into arrears again and on 13 November 2020 the husband paid $8,757.14 to satisfy outstanding rates.

23. The wife's mother, Ms AJ, passed away after the parties separated leaving a will dated 2013, which left a legacy of $10,000 to the wife to be paid after termination of a life estate to the deceased's husband. Family provision proceedings were taken by the wife and one of her sisters and the proceedings were settled on the basis that the wife would receive 20% of the remainder in the estate after termination of the life estate. The life estate terminated in 2021 with the death of the life tenant. On the evidence the estate consists of $417,000 in a trust account and the value to the estate, if any, of an aged care unit in an aged care facility. At the time of the hearing the wife had become aware that the life tenancy had terminated, but she had not received her share of the estate. As will be seen when the matrimonial property pool is examined, there is no evidence as to the value, if any, to the estate of the estate interest, if any, in the aged care unit. On the evidence, 20% of $417,000 is $83,400.

24. In 2015 the husband's mother passed away and from her estate he was to receive an inheritance by legacy of $210,231. A family provision claim was made on the estate by Mr Q and Ms R and settled on the payment of $15,000 to the children plus $10,000 for their legal costs. The husband's legal costs, paid by him, where $11,495. Accordingly, the husband's legacy was reduced to about $170,000, the whole of which he applied to the business - the wife accepted the husband's evidence in this regard in her cross examination.

25. In addition to the husband applying his legacy from his late mother's estate to the business he gives evidence of expending other sums from his personal monies towards expenses of the business. These expenditures, if dealt with properly, would constitute a director's loan account owed by D Pty Ltd to the husband, forming an asset in the husband's hands and a liability for the company. The company, and therefore the business owned by the company, has been valued at nil value by agreement between the parties based upon valuation materials not in evidence. The evidence does not indicate when the sum of $170,000 was received by the husband or when he applied those monies to the needs of the business. The wife has not received any benefit from the business past her withdrawal of $60,000 from the company account in May 2016 and the parties' shareholding in the D Pty Ltd has an agreed nil value in the matrimonial property pool. No loan account owed by the Corporation to the husband is noted as an asset on the agreed balance sheet.

26. The husband's witness was Ms T, a real estate property manager employed by the AK Real Estate who specialises in managing rental properties in the Region AG area, including B Street, Suburb C, deposed as having more than 40 years of experience in the field and extensive knowledge of the property market in that area. Attached as Annexure A to Ms T's affidavit is a summary of her opinion of the market rent payable for the B Street, Suburb C property for the period from 2012 to August 2021, indicating estimated weekly rental for the property on a yearly basis through that time.

27. Ms T was cross examined by Mr Breeze for the wife and when asked why the summary of market rent payable for the B Street, Suburb C property was expressed as an estimate. Ms T responded that she had not seen the property each year being dealt with and when the property had not been physically inspected the term used was a rental estimate as it was not able to be an accurate appraisal for each year.

28. The husband's other witness was Ms U, his partner. Ms U deposed that she had been in a relationship with the husband since 2013. Neither Ms U nor the husband give evidence as to when they commenced cohabitation. Ms U is employed as a hospitality worker, working 35 hours a week and earning "around $53,000 per annum." Ms U does not own any real property and had $1,100 in a bank account at the time of completing the affidavit. She has a superannuation entitlement. Ms U was cross examined by Mr Breeze for the wife and confirmed in her cross examination that she had on occasions assisted the husband with the business at the shop premises for wages.

29. Neither of the parties was cross examined or impeached in any way in relation to their evidence in their respective Financial Statements.

    Submissions

30. Mr Breeze for the wife noted that most of the matrimonial property pool was agreed, and identified the issues relating to the composition of the pool as being the wife's interest in her late mother's estate and the husband's assertion that the sum of $66,000 withdrawn by the wife from the bank account of D Pty Ltd should be added back to the pool.

31. Mr Breeze submitted that the wife's interest in her late mother's estate must be taken into account, but that it should be put into a separate pool and then disregarded in relation to the percentage based division between the husband and the wife of the rest of the matrimonial property pool. He noted that on the evidence, the wife had not received her legacy from the estate and that it was unclear when she would do so. He submitted that as a period of nine years had passed since the parties’ separation and the wife had still not received her inheritance, that circumstances provided a good reason why it should be dealt with in a separate pool and disregarded in relation to the percentage division. He noted that on the evidence the husband agreed he had made no contribution to of the property constituting the deceased's estate or to the deceased's welfare. In effect, the submission was that the Court take a two pool approach, with the wife's inheritance from her late mother in one pool and the balance of the matrimonial property in the other pool, that the wife's inheritance be allocated solely to her without alteration of interest, and the percentage division determined to be an appropriate alteration of the interests of the parties in the property pool be applied only to the remaining property pool. Mr Breeze did not submit that there should be any consideration of adjustment under section 75(2) between the parties in consequence of the wife receiving her inheritance by such an order.

32. Mr Breeze further submitted that the approach he advocated in relation to the wife's inheritance was appropriate on the basis that the husband's inheritance from the estate of his late mother had been applied entirely to the financial needs of the business with the result that the wife did not and would not enjoy any benefit of the husband's inheritance.

33. In relation to the $66,000 withdrawn by the wife between March and May 2016 from the company account, Mr Breeze submitted that as the wife had applied all of those funds "to pay bills and living expenses", her evidence in paragraph 68 of her trial affidavit not having been shaken in cross examination, it had not been wasted, but had been irretrievably dispersed and was not an appropriate add back.

34. Mr Breeze referred to the law relating to property settlement under section 79 of the Act and submitted that on consideration of the parties’ contributions the Court would find that the contribution based division between the parties favoured the wife as to 55%, with the husband at 45%. In referring to the husband's initial contribution of, in particular, the Z Street, Suburb AB property he submitted that the benefit to the husband of the contribution had been eroded over the long period between the commencement of cohabitation in 1993 or 1994 and the time of hearing in September 2021, being 27 years. He referred to the well-known authorities from the days of what was known (erroneously as the Full Court eventually determined) as the "erosion principle" of Money & Money[1] and Bremner & Bremner.[2] Mr Breeze submitted that the husband's initial contributions "would have no effect now, would carry very little if any weight in an overall assessment of contributions."

    [1] Money & Money (1994) FLC 92-485.

    [2] Bremner & Bremner (1995) FLC 92-560.

35. Mr Breeze submitted that the non-financial contributions overwhelmingly favoured the wife due to her contribution as parent and homemaker. In relation to financial contributions, Mr Breeze conceded that the husband had been the greater financial provider for the family unit, but submitted that on the evidence the Court would find that the wife had also made a significant contribution due to her work in the business.

36. In relation to post-separation contributions, Mr Breeze noted that when the parties separated in August 2012 Mr Q was 16 years of age and Ms R was about to turn 15 years of age and that they remained in the wife's care until reaching 18 years of age and that the husband paid no specific child support to the wife of the financial support of the children. He submitted that the monies withdrawn by the wife from the parties' joint NAB account from separation until March 2016 and expended by her on living expenses were counterbalanced by the funds used by the husband through that same time. He submitted that the husband's acquiescence in the wife's use of those funds from separation until March 2016 constituted the parties' joint use of joint monies flowing from a jointly owned business - each of the parties being an equal shareholder in the corporation.

37. In relation to any adjustment between the parties on consideration of the matters in section 75(2), Mr Breeze noted the parties were of similar age, that it had been a long marriage and that on the evidence the husband had an ongoing capacity to generate income from the business that dwarfed the wife's income earning capacity and he referred to Best & Best[3] where it was said that the most valuable asset a party could take out of the marriage was a substantial, reliable income earning capacity. He referred to the wife having no partner whilst the husband shared his financial circumstances with Ms U who had a yearly income of about $53,000 to add to the husband's household. Mr Breeze submitted that there should be an adjustment of between 5% and 10% to the wife for the section 75(2) considerations.

    [3] Best & Best [1993] FamCA 107.

1. Mr Breeze referred to the parties' superannuation entitlements as reflected on the Joint Balance Sheet and noted that neither party sought any superannuation splitting order. By inference the submission is that the parties' superannuation entitlements form part of the matrimonial property pool with all other elements except the wife's interest in her late mother's estate.

2. Mr Battley submitted on behalf the husband that the husband's initial contributions of his equity in the Z Street, Suburb AB property, his motor vehicles owned at commencement of cohabitation and the $40,000 redundancy received by him in 1997 when leaving Employer W, together with his recent establishment of the business constituted significant initial contributions that must be taken into account to the husband's advantage as part of the holistic assessment of contributions, and that contrary to what had been submitted by Mr Breeze for the wife, there was no case that justified those initial contributions being regarded as "extinguished", and referred to the well-known authority of Pierce & Pierce.[4]

   [4] Pierce & Pierce [1998] FamCA 74.

3. In relation to contributions after separation, Mr Battley submitted that the monies coming to the wife's benefit post-separation by her withdrawals from the joint account, the payment of her credit card debts from the joint account and her enjoyment of occupation of the B Street, Suburb C property from separation until October 2016 during which the loan account secured by mortgage on the B Street, Suburb C property was paid from the joint account should all be regarded as contributions made by the husband as the monies funding the joint account came from the corporate account of D Pty Ltd, generated by the husband's conduct of the business without contribution by the wife. Mr Battley also referred to the other contributions referred to in the husband's evidence and not contradicted by any other evidence that went to the benefit of the property of the parties for payment of rates mortgages and so forth.

4. Mr Battley submitted that the husband had made a significant contribution to the welfare and financial support of Mr S and that pursuant to the well-known authority of In the marriage of Robb,[5] that contribution must be reflected and given weight in consideration of any adjustment between the parties under section 75(2)(o).

   [5] In the marriage of Robb (1994) 18 Fam LR 489.

5. In relation to the addback asserted by the husband on the Joint Balance Sheet of the $66,000 withdrawn by the wife from the company account between March and May 2016, Mr Battley submitted that the Court may deal with it as an add back or could take it off the balance sheet and consider it a financial resource in the hands of the wife and so be a matter for consideration under section 75(2).

6. In relation to the wife's entitlement under her late mother's estate Mr Battley submitted that it was clear that her entitlement had a value of at least $83,400 being 20% of the funds in trust with the likelihood that there would be more from the estate interest in the aged care unit.  Though the evidence did not indicate what that may be, Mr Battley submitting that such a lack of evidence was due to failure of proper disclosure on the part of the wife. He submitted that on that basis there could be further weight given to the contributions by the husband on the holistic assessment due to the wife's failure of disclosure.

7. Mr Battley submitted that the contributions based assessment between the parties would be found to be 65% in favour the husband and 35% to the wife. He submitted that there was no basis for any adjustment between the parties in relation to the matters to be considered under section 75(2) of the Act. As a summary, Mr Battley submitted that each party had expended their energies to their utmost during their cohabitation and post-separation and that the matter would be a "50/50" matter but for the extraordinary contributions of the husband at commencement of cohabitation and post-separation, those contributions by the husband justifying a division 65% of the husband at 35% to the wife.

   The law

8. The law relating to the alteration of property interests between two parties to a marriage is governed by section 79 of the Act.[6] Relevant in this case, section 79(1) vests the Court with power to alter the interests of the parties in property,[7] and the power to make orders providing for the settlement or transfer of property, as determined by the Court.[8]

   [6] Family Law Act 1975 (Cth) s 79.

   [7] Family Law Act 1975 (Cth) s 79(1)(a).

   [8] Family Law Act 1975 (Cth) s 79(1)(d).

9. However, the Court must not make an order under section 79 unless the Court is satisfied that, in all of the circumstances, it is just and equitable to do so.[9] The legislative process required by section 79 was considered by the High Court in Stanford & Stanford.[10]

   [9] Family Law Act 1975 (Cth) s 79(2).

   [10] Stanford & Stanford (2012) 247 CLR 108.

10. In that decision, the High Court held that section 79(2) requires that at the outset of the Court’s decision-making process the Court must consider whether or not, in all the circumstances, it is just and equitable to make an order under section 79(1) altering the interests of the parties to the marriage in property.

11. In considering the proposition posed by this first step, a Court should start by identifying items under the following categories:

    (a)The existing legal and equitable interests of the parties in property, according to ordinary common law and equitable principles;

    (b)The existing liabilities of the parties, according to ordinary common law and equitable principles and under legislation; and

    (c)The rights of the parties, if any, according to ordinary common law and equitable principles and under legislation, in relation to any asserted resources of the parties that may, if it is considered just and equitable to proceed with the property settlement, be taken into account in the Court’s consideration of the matters referred to in section 75(2) of the Act, to which section 79(4)(e) directs the Court’s attention.[11]

    [11] Stanford & Stanford (2012) 247 CLR 108; see, especially, [37].

12. That the interests as described above are ‘existing’ is of importance, as the Court noted, because the text of the section gives reference to ‘altering’ the interests.[12]

    [12] Stanford & Stanford (2012) 247 CLR 108, [37].

13. I further note the comments of the High Court in Stanford at paragraph 42 which I reproduce in full here:

    In many cases where an application is made for a property settlement order, the just and equitable requirement is readily satisfied by observing that, as the result of a choice made by one or both of the parties, the husband and wife are no longer living in a marital relationship. It will be just and equitable to make a property settlement order in such a case because there is not and will not thereafter be the common use of property by the husband and wife. No less importantly, the express and implicit assumptions that underpinned the existing property arrangements have been brought to an end by the voluntary severance of the mutuality of the marital relationship. That is, any express or implicit assumption that the parties may have made to the effect that existing arrangements of marital property interests were sufficient or appropriate during the continuance of their marital relationship is brought to an end with the ending of the marital relationship. And the assumption that any adjustment to those interests could be effected consensually as needed or desired is also brought to an end. Hence it will be just and equitable that the court make a property settlement order. What order, if any, should then be made is determined by applying s 79(4).[13]

    [13] Stanford & Stanford (2012) 247 CLR 108, [42].

14. I will examine the matrimonial asset pool and the existing interests of the parties, before determining whether it is just and equitable to make a property adjustment order.

15. If the Court determines that it is just and equitable to make an order under section 79, the Court must then consider what orders are appropriate to be made. In doing so, I will follow the four-step process set out in Hickey & Hickey & Attorney-General for the Commonwealth of Australia.[14]

    [14] Hickey & Hickey & Attorney-General for the Commonwealth of Australia (‘Hickey’) [2003] FamCA 395, [39].

16. In Hickey, the Full Court of the Family Court set out a process of four inter-related steps that must be taken by a court when determining a property application:

    (a)First, “the Court should make findings as to the identity and value of the property, liabilities, and financial resources of the parties at the date of the hearing”;[15]

    (b)Second, “the Court should identify and assess the contributions of the parties within the meaning of section 79(4)(a), (b), and (c), and determine the contribution-based entitlements of the parties expressed as a percentage of the net value of the property of the parties”; ^[16]

    (c)Third, “the Court should identify and assess the relevant matters … (“the other factors”) including…the matters referred to in section 75(2) so far as they are relevant…”;[17]

    (d)Fourth, “the Court should … resolve what order is just and equitable in all the circumstances of the case”.[18]

    [15] Hickey [2003] FamCA 395, [39].

    [16] Hickey [2003] FamCA 395, [39]. See also Family Law Act 1975 (Cth) s 79(4)(a)-(c):

    [17] Hickey [2003] FamCA 395, [39].

    [18] Hickey [2003] FamCA 395, [39].

17. The Full Court pointed out in Hickey that pursuant to the wording of section 79, there can only be one property settlement order at any one time, and that the one property settlement order is final, subject only to anything that may be properly done pursuant to section 79A of the Act.[19]

    [19] Hickey [2003] FamCA 395, [47].

18. The Full Court held in Fontana:[20]

    … Indeed, the authorities are consistent in finding that assessing contributions is not an accounting exercise but a holistic one (Brandt & Brandt (1997) FLC 92-758; Norbis & Norbis (1986) 161 CLR 513).[21]

    [20] Fontana & Fontana [2018] FamCAFC 63.

    [21] Fontana & Fontana [2018] FamCAFC 63, [27].

19. The Court is required to consider the parties’ contributions made on and from the commencement of their relationship, during their relationship, and following separation.[22]

    [22] See, eg, Jabour & Jabour [2019] FamCAFC 78.

20. The approach to determining the appropriate percentage of the net value of property in relation to the contributions of the parties, at step two of the four-step process, requires an assessment of contributions by, or on behalf of, each of the parties in a holistic manner, rather than attaching specific contributions to a specific item of property and making a determination upon that basis. To do the latter would be to disregard the whole of the contributions made during the whole of the relevant period of the relationship by or on behalf of each of the parties.

21. As the Full Court said in Dickons & Dickons[23] at paragraphs 14 to 16:

    [14]As is plain from earlier decisions of this Court, regard must be had to the use made of contributions of various types so as to compare the contributions made by each of the parties during the course of, and over the length of, their relationship (see, for example, In the Marriage of Pierce (1998) FLC 92-844) But that is an entirely different proposition to, as it were, causally linking contributions with their asserted financial “product” or “value”. The former recognises that the nature, form and extent of contributions made by each of the parties might differ; the latter suggests that the absence of a causal link counts as no contribution at all.

    [15]The search for a causal link might be seen to come instinctively to the necessary inquiry and all the more so when regard is had to s 79(4)(a) which refers to financial contributions made “...directly or indirectly...” “...to the acquisition, conservation or improvement of any of the property ...” and goes on to also refer to the financial contribution made “...otherwise in relation to any of that last-mentioned property...” The terms of that sub-paragraph might, naturally enough, be seen to suggest a causal link between those contributions and the “financial product” which those contributions of that type are said to have produced. That same requirement might also be seen to suggest that relevant contributions of that type can be seen to be quantifiable – or, at least, conceptualised – in monetary terms, in contradistinction to contributions made pursuant to s 79(4)(c).

    [16]While that apparent “causal connection” might be seen in s 79(4)(a) (and (b)), no such connection is apparent from the terms of s 79(4)(c); contributions of that latter type are not linked by the words of the sub-paragraph to the “...acquisition, conservation or improvement of any of the property...” or, indeed, to “property” at all. This is not a legislative oversight; the 1983 amendments to the Act which inserted the current s 79(4)(c) were specifically intended, relevantly, to remove any suggestion that there needed to be a causal link between contributions of that type and any particular asset or property. The Explanatory Memorandum to the Family Law Act Amendment Bill 1983 provides, at Clause 36, that a specific purpose of the re-casting of s 79(4) was, relevantly, to:

    ... revise sub-section 79(4) to remove the possibility of an interpretation of the sub-section requiring that there be a nexus between a spouse’s contribution and a specific item of property in section 79 proceedings ...[24]

    [23] Dickons & Dickons [2012] FamCAFC 154.

    [24] Dickons & Dickons [2012] FamCAFC 154, [14]-[16].

22. The Court is required to make a holistic value judgment in the exercise of a discretionary power of a very general kind.[25] The principle was expressed succinctly by the Full Court in the joint judgment of Bryant CJ and Ainslie-Wallace J in Fields & Smith[26] at paragraph 168:

    ...the task is to consider the contributions holistically over the whole period from the commencement of cohabitation to trial, and the analysis requires the Court to weight all of the contributions of all types prescribed by section 79(4) made by both parties across the entirety of the relationship until the time of Hearing, including the post-separation period.[27]

    [25] In the Marriage of Harris (1991) 104 FLR 458, 464.

    [26] Fields & Smith [2015] FamCAFC 57.

    [27] Fields & Smith [2015] FamCAFC 57, [168].

23. The Full Court has been repeatedly clear that the approach to property settlement under section 79 of the Act is not an accounting exercise. Here, I note the comments of the Full Court in Grier & Malphas[28] at paragraph 129, where Murphy and Kent JJ said:

    As the Chief Justice points out, with those principles in mind, the trial judge adopted a broad-brush approach to the parties’ respective expenditure. Nowhere error is established by reason alone of that approach; authority eschews “overly pernickety analysis” and section 79 demands neither an audit nor an exercise in accounting. However, when significant sums of money are said by one party or the other to have been “wasted” or to amount to a unilateral “premature distribution of property” and the evidence is suggestive of either or both, an analysis of the relevant sums and their use is needed.[29]

    Is it just and equitable to make an order under section 79 of the Act altering the interests of the parties in the matrimonial property pool?

    [28] Grier & Malphas (2017) 55 Fam LR 107.

    [29] Grier & Malphas (2017) 55 Fam LR 107, [129].

24. As pointed out by the High Court in Stanford, the Court's first task is to determine if it is just and equitable in all the circumstances to make an order under section 79 altering the interests of the parties to the marriage in the property. The starting point for that determination is to identify, according to ordinary common law and equitable principles, the existing legal and equitable interests of the parties in the property.

25. The parties agreed at hearing on almost all of the property and liabilities for identification of the matrimonial property pool, the only issues being as to the treatment of the wife's anticipated inheritance from her late mother's estate and the husband's assertion that the sum of $66,000 withdrawn by the wife from the corporate account of D Pty Ltd on:

    (a)24 March 2016 - $2000;

    (b)29 March 2016 - $4000; and

    (c)9 May 2016 - $60,000,

    should be added back to the matrimonial property pool. Those issues must be resolved so that the matrimonial property pool and the relevant interests of the parties in the property can be identified.

26. The wife submits that she should have her inheritance from her mother's estate free of any adjustment in favour of the husband and free of any consideration of her retention of that interest in assessing any adjustment between the parties. The husband submits that the known value of her interest in the estate - $83,400 - should either be included in the matrimonial property pool and considered when adjusting contributions, or allocated to the wife in a separate pool as she proposes, but in consequence there be no basis for an adjustment in favour of the wife under section 75(2).

27. The task at present is to identify what property should compose the matrimonial property pool and the interest of each of the parties in the property, not how, if at all, the parties' interests in the property should be altered. The submission on behalf of the wife concedes that at least the sum of $83,400 should be included in the matrimonial property pool and I find that it will be so included at that value.

28. As the husband's case as run up until submissions was based upon the sum of $66,000 withdrawn by the wife from the corporate account being added back as notional property in the matrimonial property pool, Mr Battley indicated during submissions that it was also open to the Court to regard that sum as a resource of the wife and bring it into consideration when assessing any adjustment to be made between the parties under section 75(2) of the Act, submitting that if that course is taken then it would cancel any adjustment otherwise considered appropriate in favour of the wife.

    Addbacks

29. The approach adopted by trial judges to the concept of ‘addbacks’ over the years since the commencement of the Act has varied between placing back into the matrimonial asset pool no-longer existent assets as “notional assets” and giving them a value and dealing with them as if they still existed, to taking any such notional assets into account at step three of the four-step process when considering the matters referred to in section 75(2) of the Act and, in particular, at section 75(2)(o), “any fact or circumstance which, in the opinion of the Court, the justice of the case requires to be taken into account.”[30]

    [30] Family Law Act 1975 (Cth) s 75(2)(o).

30. In AJO v GRO (2005) 191 FLR 317,[31] at paragraphs [30] to [31], the Full Court identified three types of addbacks that are commonly encountered in property settlement decisions:

    [31] AJO v GRO (2005) 191 FLR 317.

    [30]To date, three clear categories of cases have emerged where the Court has determined that it is appropriate to notionally add back to the pool of assets, that is, assets that no longer exist. They are:

    (a)Where the parties have expended money on legal fees. In DJM v JLM (1998) 23 Fam LR 396 the Full Court said (at 410-411):

    11.6 For reasons set out in Farnell, s 117 provides that each party to proceedings under the Family Law Act shall bear their own costs unless the Court otherwise orders. Failing to add back monies expended by parties on costs frequently has the effect of defeating the policy of s 117 by permitting the pool of available assets for distribution between the parties to be diminished by any monies that either of the parties have managed to spend on their costs up to the date of trial. We are of the view that the normal approach ought be to add costs already paid back into the pool. Whilst there may be cases where that approach is inappropriate, the reasons why it is not taken ought normally be spelt out.

    (b)Where there has been a premature distribution of matrimonial assets. In In Marriage of Townsend (1994) 18 Fam LR 505 Nicholson CJ as he then was with whom Fogarty and Jordan JJ agreed, said (at 509):

    In my view, what occurred in this case, as I said during the course of argument was, in fact, a premature distribution of a proportion of the matrimonial assets. What the Husband did was to distribute to himself an asset in which the Wife had a legitimate interest. In such circumstances I consider that it would be unjust in the extreme to simply treat such conduct by the Husband as a matter to which regard should be had under section 75(2). It seems to me that the Husband has had the benefit of that money. Had he retained, for example, the taxi licence instead of selling it, that would have been brought into account as an item of property which would have been dealt with in the same way as the remaining items of property in this case. Accordingly, I am of the view that the correct way in which to deal with the Husband’s receipt of those moneys is to bring them into the pool of assets on a notional basis and make a distribution accordingly.

    (c)In the circumstances outlined by Baker J in In Marriage of Kowaliw [1981] FLC 91-092 at 76,644: As a statement of general principle, I am firmly of the view that financial losses incurred by parties or either of them in the course of a marriage whether such losses result from a joint or several liability, should be shared by them (although not necessarily equally) except in the following circumstances:

    •(a) where one of the parties has embarked upon a course of conduct designed to reduce or minimise the effective value or worth of matrimonial assets, or

    •(b) where one of the parties has acted recklessly, negligently or wantonly with matrimonial assets, the overall effect of which has reduced or minimised their value.

    Conduct of the kind referred to in para. (a) and (b) above having economic consequences is clearly in my view relevant under sec 75(2)(o) to applications for settlement of property instituted under the provisions of sec 79.

    [31] As the Full Court said in Browne v Green [1999] FLC 92-873 at 86,360:

    [44] We agree with her Honour that the principles stated by Baker J in Kowaliw certainly do not constitute any form of fixed code. They are no more than guidelines for use in the exercise of the discretionary jurisdiction conferred by s 79 of the Family Law Act 1975. Nevertheless, they have over the considerable period of time since they were enunciated, become a well accepted guideline in this jurisdiction — a guideline the use of which assists in the achievement of the important goal of consistency within the jurisdiction.[32]

    [32] AJO v GRO (2005) 191 FLR 317, [30]-[31].

1. I find that the matrimonial property pool is composed as follows:

Item	Ownership	Description	Value
Assets
1	Joint	B Street, Suburb C NSW - valuation	$1,250,000
2	Joint	Funds held in the trust account of prime Lawyers (sale proceeds of J Street, Suburb K property)	$145,872.32
3	Joint	E Pty Ltd - valuation	$218,846
4	Joint	Household contents in marital home - 2012	$4,000
5	Husband	D Pty Ltd – valuation	Nil
6	Husband	M Pty Ltd – valuation	$39,020
7	Husband	N Pty Ltd – valuation	$976
8	Husband	Motor Vehicle 1	$5,000
9	Husband	Bank L	$4,371
10	Husband	Bank AH account ending #...48	Nil
11	Wife	CBA GoalSaver account ending #...11	$1,038
12	Wife	NAB Classic account ending #...13	$2,075
13	Wife	Motor Vehicle 8	$4,000
14	Wife	V inflatable boat 35 HP Johnson motor, assorted fishing gear, air compressor, generator tools	$6,000
15	Wife	Interest in the estate of the late Ms AJ	$83,400
16	Husband	Super Fund O accumulation fund	$38,495
17	Husband	Super Fund P accumulation fund	$45,318
18	Wife	Super Fund P accumulation fund	$68,028.76
Subtotal			$1,916,440.08
Liabilities
19	Joint	Loan secured by mortgage on the B Street, Suburb C property	$13,490.22
Subtotal			$13,490.22
NET TOTAL			$1,902,949.86

1. The parties separated in August 2012 and have not lived in a marital relationship since that time. There is not and will not be a common use of property. There is property in which the parties have a joint interest - the B Street, Suburb C property and the proceeds of sale of the J Street, Suburb K property and household contents in the matrimonial home. I have no difficulty in finding that it is just and equitable to make a property settlement order under section 79 of the Act in this matter.

   The parties’ contribution based entitlements

2. The husband made an initial contribution at the commencement of the parties’ cohabitation. He contributed:

   (a)His then equity in the Z Street, Suburb AB property, from which a sum of not less than $20,000 and not more than $40,000 was eventually realised on sale in 1996;

   (b)A Motor Vehicle 2 and a Motor Vehicle 3, though what happened to them thereafter and as to whether or not they proved of any benefit to the parties or for what period they may have been in use is not in the evidence; and

   (c)His period of employment with Employer W prior to cohabitation giving rise to the commensurate part of his redundancy payment of $40,000 received in 1997, with the period of his service with Employer W is not in evidence.

3. I accept that the husband had commenced the business in partnership with Mr X so close to the commencement of cohabitation - the business was commenced in 1993 and both parties' assert cohabitation commenced in 1993/1994 - that it was not an initial contribution by the husband, but commenced concurrently with cohabitation.

4. However, as a necessary corollary to my finding about the commencement of the business, I must also find that the husband made an initial contribution of the $20,000 savings he had accumulated "from my years of employment at Employer W" that were the entirety of the start-up funds for the business.

5. The parties purchased the AC Street, Suburb AB property in 1996 and I find that $55,000 was applied to a purchase from monies in the husband's bank account, as he asserts in paragraph 23 of his trial affidavit, but by that time the parties had been cohabiting for two and a half years and there is no direct evidence given by the husband that he held savings other than the $20,000 start-up money for the business at the commencement of cohabitation, so I find that the $55,000 savings are not an initial contribution by the husband, but are monies accumulated from the possible combination of the husband's earnings from his employment with Employer W and from the business.

6. I accept the evidence of the wife that from the commencement of the business she would assist the husband with the conduct of the business whilst remaining primarily responsible for the day-to-day parenting of Mr S who was during that relevant time under school age. That the monies were accrued in the husband's account is not surprising given that the wife was not in paid employment and the husband was at first a partner and then later a sole trader until 1997 in the business. The parties did not establish a joint account until the time of the purchase of the AC Street, Suburb AB property.

7. As indicated earlier, the parties gave competing evidence in relation to their individual contributions to the homemaker role and the parenting of, on the one hand, Mr S, and on the other hand the children, Mr Q and Ms R. I was encouraged in submissions by Mr Breeze to find that I would prefer the evidence of the wife over that of the husband, just as I was encouraged by Mr Battley to find the opposite. I do not make a finding against the credit of either of the parties. Both parties made admissions against their interest in the course of their cross examination and both gave their evidence in a forthright manner. It was submitted by Mr Battley that I would find the evidence during cross examination of the wife's dichotomy of understanding between perception and fact as being a basis to make a credit finding against her. Though that was, as always, most cogently put, I cannot accept the submission and I do not make a finding that I prefer the evidence of one party over that of the other in all cases of conflict of evidence, but must deal with any necessary item of conflicting evidence individually.

8. On all of the evidence, including the conflicting evidence of the parties, I find that the wife made the principal contribution in the homemaker role, including contributing at least co-equally with the husband to the outside maintenance of matrimonial home properties, and I also find that the wife made the principal contribution to the day-to-day parenting of the children, including Mr S. I make that finding on the basis that the husband's own evidence makes it plain that he was engaged in his employment and the business, and after 1997 in the conduct of the business for long hours six days a week and that his opportunity to contribute to the homemaker role and the day-to-day parenting of the children was therefore limited by that necessity.

9. It is plain on the evidence, and conceded by the wife in cross examination, that the husband was the principal financial provider for the family throughout the whole of the period of cohabitation. I find that though both husband and wife were being paid a wage by D Pty Ltd by deposit to their joint account after the time of separation in August 2012 and in continuing up to March 2016, the wife's actual participation in the business effectively terminated when the parties moved to reside at the J Street, Suburb K property no later than late 2003, though it may possibly have been earlier and even some time in 2002.

10. I find that the parties' contributions during the period of cohabitation, commencing sometime around the turnover from 1993 to 1994, and ending in August 2012, were equal. If Mr S's date of birth was provided in the evidence I could have made a more accurate assessment of the time of commencement of the cohabitation as both parties give specific evidence in their trial affidavit that at the time of commencement of cohabitation Mr S was six months old.

11. Assessment in relation to post separation contributions is a little more difficult.

12. It is clear that the wife was not involved in the running of the business from the time the parties moved to reside on the Region AG. Certainly she made no contribution to the conduct of the business in any direct sense from the time of separation. From separation until March 2016 the wife was paid a wage from the business without actually earning that wage in a commercial sense. The husband's admission in this regard gave rise to issue of an appropriate certificate.

13. The payment of a wage by the business to each of the parties from separation to March 2016 advantaged the husband in that he was income splitting and therefore paying less income tax than if he had received a higher wage, or his wage plus dividends as a result of the lower expenses of the business not paying a wage to the wife.

14. Both parties had use of the funds in the joint NAB account into which the wages from the business were paid, and, on the evidence other monies from time to time, and I have set out the evidence of the husband, accepted by the wife, as to the mathematical calculations of those monies earlier in these Reasons. Assessment of contributions, particularly in relation to a long relationship, that phrase including the period from cohabitation to hearing, is not a mathematical exercise and to reduce it to such is to sway toward appealable error.

15. For the period from August 2012 to March 2016 the husband was fully aware that the wife was living out of the monies in the joint account and that her credit cards were being paid from that account, just as he was living out of that account and having his credit cards paid from that account - he had set up the direct deduction arrangements. He made no move to cancel the availability of those funds to the wife, to limit her use, to cancel the direct deduction arrangements, or in any other way restrict her access to the funds throughout that period. Though the income was being derived from the business run by the husband, and to which the wife was making no direct commercial contribution, she was nevertheless a coequal shareholder that the husband - the original characterisation of the shareholdings not beneficially held being later corrected.

16. The wife had sole occupation as between herself and the husband of the B Street, Suburb C property from August 2012 until the hearing, with the mortgage being paid from the income generated by the husband conducting the business from August 2012 until March 2016. I take those circumstances into account in formulating an assessment of the contributions of the parties on a holistic basis.

17. The wife was making a post separation contribution to, amongst other things, enabling the husband to concentrate his time and energies upon the conduct of the business and so the generation of income off which both parties lived, in that she was a sole carer for Mr Q and Ms R post-separation. At separation Mr Q was 16 years of age and was a minor whom both parties had an obligation to support until turning 18 in 2014. At separation Ms R was about to turn 15 years of age and was a minor entitled to be supported by her parents jointly until turning 18 in 2015. The husband's evidence is starkly silent in relation to his part in the lives of Mr Q and Ms R post separation and I have only the evidence of the wife in paragraph 9 of her trial affidavit that post separation, the children did not spend time with the husband.

18. The business was the income generating asset that provided the funds applied by both the parties to the living expenses up until March 2016, and thereafter (except for the $66,000) by the husband alone. At the time of separation the business was a going concern and on the husband's evidence in enabled him to transfer a sum of $616,975 from the business earnings to the parties’ joint NAB account in the period from 30 August 2012 to 29 March 2016, an average of about $176,000 per year. The business had been developed and grown by the husband through the parties' cohabitation whilst he was freed to so develop the business by the wife's contribution as homemaker and parent. For that reason it is not the case simply that the use of monies by the wife from the joint account post separation was solely a direct contribution made by the husband. It cannot be seen in an isolated light but must form part of the continuous narrative of the parties’ contributions from the time of commencement of cohabitation up to the hearing.

19. I accept the husband's evidence, as did the wife, that he applied the whole of his inheritance, after the children's claim, from his mother's estate to the business. As I have said, on any occasion when a shareholder or director, or any other person for that matter, provides money to a corporation from their personal funds it gives rise to a debt, in these circumstances one would assume a director’s loan account owed to the husband by the company.  The financial statements of the corporation are not in evidence as the parties had agreed on questions of valuation, and no loan account owed by the corporation to the husband is reflected on the joint balance sheet Exhibit A. By agreement the parties’ shareholdings in the corporation have no value. Whether that valuation was arrived at taking into account a loan account in favour of the husband or not is not revealed in the evidence. 

20. It is common in the orders sought by each of the parties that the wife transfer her shareholding in that corporation to the husband, with no value assigned to the shareholding when altering the interests of the parties in the property so as to meet a final determination of appropriate division between them. On that basis I do not take the husband's inheritance into account as a significant contribution at full value. I am not told when it was received by the husband, but as his late mother passed away in 2015 and there was then a claim on the estate by the children that was settled, it is unlikely that the funds were available to be applied to the business much, if at all, before March 2016. Accordingly, the wife derived and derives no benefit from that infusion of those funds, if they are not represented by a loan account in favour the husband, as she had no income from the business past May 2016 when she withdrew the $66,000 and the shareholding of the parties (colloquially the business) has no value in the asset list.

21. I find merit in the submission by Mr Breeze that the wife's inheritance from her late mother's estate should be ultimately dealt with by placing it into a pool on its own with all of the other property in another pool and that in relation to the wife's inheritance pool I find that the husband has made no contribution and it should be retained by the wife solely. In making that finding I also accept the submission of Mr Battley that the wife's retention without adjustment of $83,400 in that manner is a proper matter to be considered in the third step of the four step process under section 75(2)(b), as a financial resource in the hands of the wife.

22. Similarly, as I have already determined, the wife's withdrawal and disbursement as living expenses of $66,000 from the corporation's account in March and May 2016 and the husband's contribution to the financial support and parenting of Mr S are matters to be considered under section 75(2)(o).

23. Taking all of the evidence relevant to an assessment of the contributions of the parties from commencement of cohabitation to the date of hearing into account and viewing those contributions on a holistic basis, I find that contributions favour the husband as being 55% by the husband and 45% by the wife, a differential of 10%.

    Is there a basis for an adjustment BETWEEN the parties under section 79(4) (d), (e), (f) or (g)?

24. The orders proposed by each of the parties would have no effect upon the earning capacity of either of the parties, each party proposing orders that enable the husband to retain his income generating asset, the business, by transfer to him of the whole of the wife shareholding in D Pty Ltd, and the proposed orders having no effect on the wife continuing to engage in income generating employment as a factory worker.

25. There is no other order made under the Act that affects either party to the marriage. Both Mr Q and Ms R are adults.

26. The only matter relevant to the Child Support (Assessment) Act 1989 (Cth) has been considered in relation to the parties contributions post separation.

27. At the time of hearing the husband was 58 years of age and the wife 57 years of age. There is no evidence to indicate otherwise than that each of the parties can continue working until their chosen retirement time and being so close in age there is no basis for any adjustment between them in relation to age, nor is there any evidence to indicate that there is any basis for an adjustment between them on the basis of state of health.

28. The husband deposes in his Financial Statement to an income of $2,685 per week being his wages from his employment by D Pty Ltd for his conduct of the business of the company, Company Y. He also deposes that his partner Ms U has a gross income of $1,143 per week, while she deposed in her affidavit that she has income of about $53,000 per year, which is about $1020 per week. The husband deposed that his weekly expenses are $2,676 per week, $9 per week less than his income. During his cross examination he gave evidence in relation to his Financial Statement that "everything has changed to some extent", but there was no evidence in relation to what those changes were or any correction of the figures stated.

29. The wife deposed in her Financial Statement to an income of $811 per week from her employment with Employer AL as a factory worker and she deposed to expenses of $764 per week, including figures stated in completing Part N of the form.

30. There is a disparity between the income and earning capacity of the husband and the wife, to the husband's advantage.

31. The wife has not re-partnered and so does not have the co-financial support of any other person as a financial resource in the way that the husband does with Ms U. However, I have determined that the wife will have her inheritance of $83,000 free of adjustment and in a pool considered on a separate basis to the rest of the property, and I must take that into some account as a financial resource, though I find that it is of less potential benefit as financial resource than that available to the husband.

32. I find that there is a basis for an adjustment between the parties consequent upon their disparity in income and earning capacity, being an adjustment in favour of the wife.

33. On the evidence neither party is eligible for or receives any pension, allowance or benefit under any law of the Commonwealth, of a State or Territory or of any other country or through any superannuation fund or scheme.

34. The husband provided financial support for Mr S throughout the period of cohabitation and to some degree after separation and up to whenever Mr S achieved 18 years of age in circumstances where Mr S was not his child and he was not under a statutory obligation to so provide for him. In addition, I find that the husband provided assistance to Mr S in the parenting role, though to a substantially less degree than the wife. In line with the decision of the Full Court in In the marriage of Robb I take those contributions by the husband into account under section 75(2)(o) as justifying an adjustment in favour of the husband.

35. The sum of $66,000 withdrawn by the wife from the corporate bank account of D Pty Ltd in March and May 2016, and expended by her on living expenses in circumstances where both Mr Q and Ms R had attained 18 years of age by that time, is also a matter I consider under section 75(2)(o). It was a depletion of the corporate funds to which she was not in law entitled. On the evidence of the husband it caused some financial difficulties for the corporation, which he met from his earnings. However, it took place some five years prior to the hearing and I consider that its effect is minimal in relation to any adjustment between the parties, but though minimal still a matter to be considered.

36. I find that the factor in favour of an adjustment in favour of the wife outweighs those factors in favour of adjustment in favour of the husband and that there should be an adjustment of 2.5% in favour of the wife to the contribution based entitlements, resulting in a finding that an appropriate alteration of the interests of the parties in the property should be made on the basis that the wife receive 47.5% of the matrimonial property pool not including her inheritance and the husband receive 52.5% of the matrimonial property pool not including the wife's inheritance, with the wife to receive her inheritance free from adjustment between the parties. The adjustment of 2.5% in favour of the wife equates to $45,489 where the net matrimonial property pool (that does not include the wife's inheritance) is $1,819,550.

    What orders altering interests of the parties in the property are appropriate, just and equitable to be made?

1. It is common between the parties that the husband will have the whole of the shareholding in the various corporations, and that the B Street, Suburb C property will be sold, not retained by the wife.

2. An order will be made that the wife is the sole owner in law and in equity as between herself and the husband of all property to be received by her as a beneficiary of her late mother's estate.

3. The wife seeks orders (10 and 11 in her minute of order) that the husband be the sole owner as between them of certain items of personal property being a V inflatable boat, a 35 HP Johnson motor, assorted fishing gear, an air compressor, a generator and tools ("the specific items"), and that the husband attend at the place where the items are stored within 14 days of orders and take possession of them at his expense. No evidence is available in relation to those items or where they are stored, and they appear on the Joint Balance Sheet Exhibit A at a value of $6,000 with an indication that they are in the possession of the wife. No order in relation to those items is sought by the husband in his minute of order, nor was any such orders sought by the husband in his Amended Response filed 4 June 2021.

4. As no evidence was provided about the specific items mentioned in the orders sought by the wife, and as the Husband seeks no order at all in relation to those specific items, I will not make those orders.

5. Each of the parties seek orders that each be "declared" the sole owner in law or in equity as between the parties of all property not otherwise specifically dealt with in the orders. Pursuant to what was said by the Full Court in Hickey & Hickey it is not appropriate to deal with the balance of property not mentioned specifically in final orders by the making of a declaratory order, which is an order under section 78 of the Act, but rather to deal specifically with the interests under section 79 of the Act.

6. An order will be made that the wife transfer to the husband the whole of her shareholding in D Pty Ltd and E Pty Ltd and resign any office held by her in those corporations. On the evidence no such order is required in relation to M Pty Ltd or N Pty Ltd as the wife holds no shareholding or offices in either of those corporations.

7. I will make an order that the proceeds of sale of the J Street, Suburb K property held in the trust account of the wife's solicitors, Prime Lawyers, be divided equally between the parties and that any interest accrued thereon, if any, so as to increase the total beyond $145,872.32 be divided 52.5% to the husband and 47.5% to the wife. Leaving aside any such interest each party would receive $72,936.16 from those funds.  I will further order that each of the parties be responsible for payment of that party’s assessed capital gains tax relating to the sale of the J Street, Suburb K property.

8. The husband will retain the Motor Vehicle 1, his savings with Bank L, the four corporations and the $72,936.16 from the J Street, Suburb K proceeds, being a total of $341,149.16. The husband will retain his superannuation entitlements with Super Fund O valued at $38,495 and Super Fund P valued at $45,318.

9. The wife will retain her Motor Vehicle 8, her savings in the CBA Gold Saver account and the NAB Classic account, the specific items, the household contents in the B Street, Suburb C property, and the $72,936.16 from the J Street, Suburb K proceeds, being a total of $90,049.16. The wife will retain her superannuation entitlement with Super Fund P valued at $68,028.76.

10. I will make the order sought by both parties that the B Street, Suburb C property be sold and I will order that upon sale, the net proceeds of sale be divided between the parties so as to achieve an overall division between them of 52.5% to the husband and 47.5% to the wife where the husband has $424,962.16 prior to division of the net proceeds and the wife has $158,077.92 prior to division of the net proceeds. The loan accounts secured on the B Street, Suburb C property will, of course, be paid out upon sale.

11. The wife sought an order in her minute of orders that the husband pay her costs of and incidental "to this Application". I will make a direction that any costs application is to be made by the filing of an Application in a Proceedings with supporting affidavit in compliance with Chapter 12 Part 12.5 Rule 12.13 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth). If an application is so filed, directions will be made in Chambers for filing and serving written submissions and for the matter to be dealt with on the papers in Chambers.

I certify that the preceding one hundred and seventy-seven (177) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Morley.

Associate:

Dated:       23 September 2022

(4) In considering what order (if any) should be made under this section in property settlement proceedings, the court shall take into account:

(a) the financial contribution made directly or indirectly by or on behalf of a party …
(b) the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party …;
(c) the contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage … including any contribution made in the capacity of homemaker or parent; …