M and M
[2008] FCWA 51
•13 MAY 2008
[2008] FCWA 51
| JURISDICTION | : | FAMILY COURT OF WESTERN AUSTRALIA |
| ACT | : | FAMILY LAW ACT 1975 |
| LOCATION | : | PERTH |
| CITATION | : | M and M [2008] FCWA 51 |
| CORAM | : | THACKRAY CJ |
| HEARD | : | 21, 22 AND 23 JANUARY 2008 AND WRITTEN SUBMISSIONS |
| DELIVERED | : | 13 MAY 2008 |
| FILE NO/S | : | PTW 3780 of 2006 |
| BETWEEN | : M |
Applicant/Husband
AND
M
Respondent/Wife
Catchwords:
PROPERTY SETTLEMENT - Contributions - Gifts by a parent of a party - decrease in asset needs
pool after separation
Legislation:
Family Law Act 1975 s 79, s 75(2)
Category: Not Reportable
Representation:
Counsel:
| Applicant | : | Ms S Vincent |
| Respondent | : | Mr R Butcher |
[2008] FCWA 51
Solicitors:
| Applicant | : | Siobhan M Vincent |
| Respondent | : | Butcher Paull & Calder |
Case(s) referred to in judgment(s):
Jones v Dunkel (1959) 101 CLR 298
Khademollah and Khademollah (2000) FLC 93-050
Kowaliw and Kowaliw (1981) FLC 91-092
Omacini & Omacini (2005) FLC 93-218
[2008] FCWA 51
1 I am required to determine disputes between [Mr M] (“the husband”) and
[Mrs M](“the wife”) concerning division of their property and payment of child
support.
The husband’s proposals
2 I was advised at the commencement of the trial that the husband proposed
a division of property in proportions 65:35 in favour of the wife. This was based on the assumption that the wife had made 55% of the contributions and should receive a 10% adjustment for s 75(2) factors. However counsel for the husband submitted in her closing address that the s 75(2) adjustment should be no more than 3%.
3 The orders sought by the husband were contained in a Minute provided just before trial. He wishes to keep:
• his shares in [RMR] Pty Ltd; • his interest in the [RMR] Superannuation Fund; • the interest of both parties in the [H] Superannuation Fund; • the balance of the proceeds of sale of the parties’ [former matrimonial home]; and • all other property currently in his possession or in his name. 4 The husband proposes to indemnify the wife in relation to the mortgage
registered against the [northern suburban] property and all of his other liabilities,
including an alleged liability to [his son].5 The husband proposes that the wife retain:
• the jointly owned unit in [the southern suburbs]; • the interest of both parties in [H] Pty Ltd; and • all other property in the wife’s possession or registered in her name. 6 The husband seeks that the wife indemnify him against all liability relating to
the unpaid outgoings on the [southern suburban] property. He also seeks indemnity in relation to orthodontic expenses and private school fees for the children of the marriage.
7 The husband seeks a departure order relating to child support assessments for the
three youngest children for the period since 1 December 2006, with the intention that
the rate of child support payable by him be fixed at $680 per month.
The wife’s proposals
8 I was advised at the commencement of the trial that the wife sought between
80 to 85% of the assets. This was based on the assumption she had made 70% of the contributions and that there should be an adjustment of between 10 to 15% in her favour on account of the s 75(2) factors.
[2008] FCWA 51
9 The orders sought by the wife were contained in her Papers for the Judge. She
wants to retain the [southern suburban] property, which is free of encumbrance, and the balance of the proceeds of sale of the [former matrimonial home] property. She will pay the children’s outstanding school fees and orthodontic bills, as well as the unpaid outgoings on the [southern suburban] property. She also sought specified items of chattel property and an order in relation to the division of photographs. She sought no order in relation to superannuation - with the intention that the husband would retain his interest in the [RMR] Superannuation Fund and each party would retain their member entitlement in the [H] Superannuation Fund. (Her counsel advised that the intention was that the husband’s entitlement would be rolled out of the [H] fund upon sale of a block of land [on the coast], which is the major asset of the fund).
10 The wife opposed the husband’s application for a child support departure order
and advised she was no longer pursuing an order under the child support legislation for
the husband to contribute to the children’s private school fees.
Brief background
11 The husband is aged 58 years and is employed as [an industrial safety] advisor. The wife is aged 46 years and does not work outside the home.
12 The parties met in 1980 and were married in September 1985. The husband was a [tradesman] and the wife was a public servant at the time of the marriage.
13 The wife told the husband in March 2006 that she wanted to separate but she did
not leave until 4 May 2006, when she moved into the home of [Mr G], with whom she
is now in a relationship.14 There were five children of the marriage – [[K] born in 1987, born in 1990, [A] born in 1992, [H] born in 1996 and [I] born in 1998.
15 The wife worked during the early part of the marriage as a public servant and as
a [fitness] instructor. She gave up working prior to the birth of [K] but later returned to part-time employment as an [instructor] and naturopath. The husband initially worked as a [tradesman] but then took a position as [a warden]. He later obtained qualifications in the field of health and safety and has since then worked extensively in [industry], mostly in contract positions. During the marriage the parties received significant assistance from the wife’s parents. In addition to a small parcel of [company] shares given to the wife, her parents made gifts totalling $260,000.
16 For the first few years of the marriage the parties lived in Perth, where they
acquired a duplex property. In 1991 they moved to [the north of Perth], where they had purchased a block of land, using the proceeds of sale of the duplex. The husband commenced constructing a substantial residence on the block as an owner/builder. The project was a drawn out affair and construction of the home continued over a period of about fourteen years. The husband was usually employed on a fly-in/fly- out basis and the [former matrimonial home] property was the parties’ base. The family also spent extended periods living in [the east of the state] (two stints in the 1990s) and [in the north of the state] (from 2001 to 2004).
[2008] FCWA 51
17 In August 2004 the parties acquired a block [on the coast] in the name of the [H]
Superannuation Fund, at a total cost exceeding $134,000. The manner in which this purchase was financed is in dispute.
18 In 2004 the husband obtained employment as a safety officer based in Perth.
Whilst living in Perth he resided with the wife’s parents, returning home to [the north of Perth] on weekends. The wife had become increasingly disillusioned with life in [the north of Perth], where she was repeatedly left alone with the children, usually without a motor vehicle. It was agreed the family would move to Perth and they would retain the [former matrimonial home] property as a holiday home.
19 The parties purchased a two bedroom unit in [the southern suburbs] in early
2006. It cost $557,000, but the total cost of acquisition, including stamp duty, was over $583,000. The parties borrowed $570,000 from the ANZ Bank to complete the purchase (with the [former matrimonial home] property being provided as security). The wife and children moved to Perth in April 2006 and took up residence in the home of the wife’s parents, where the husband had been boarding.
20 The marriage was severely troubled and the wife wanted to move into the
[southern suburban] property and enrol the younger children in the local primary school. She was unable to enrol them until she had an address in [the southern suburbs]. She therefore decided to move with the children into the [southern suburban] home of [Mr G]. [Mr G] was the real estate agent who had sold the [southern suburban] unit to the parties and he had been helping the wife look for rental accommodation in the area.
21 Whilst living in [Mr G]’s home, the wife spent time and money getting the
[southern suburban] unit ready for occupation. She and the children moved into the unit in June 2006. The husband had wanted to move into the [southern suburban] unit, even if the parties remained estranged, but the wife would not agree. He then moved out of the home of the wife’s parents into a motel.
22 On 27 June 2006, without notice to the wife, the husband acquired a three
bedroom, two bathroom unit in [the suburbs] at a cost of $380,000. The husband said he needed a home for himself and [J], who had decided to live with him, as well as a place for the other children to visit. The husband incurred stamp duty of $14,700 as well as nearly $2,000 in other costs when acquiring the [suburban] property. The husband sold the family motor vehicle for $14,700 to provide funds to acquire the [suburban] property. When doing so, he made clear to the wife he would not provide funds for her to have any form of transportation. He also incurred a liability of $30,000 on his credit card to assist meet the deposit and expenses associated with the acquisition of the [suburban] property. The husband obtained a “low-doc, high interest” loan of $342,000 to complete the purchase. The husband recalled the interest rate was originally 10% but it had increased to 11.5% by the time of trial, with payments amounting to more than $3,300 per month. The husband acknowledged that there were fees of $6,000 associated with the loan, which he believed were in addition to the $342,000 borrowed.
23 Following the acquisition of the [suburban] property, the husband proposed the
immediate sale of the [former matrimonial home] home, as he said he could not afford
[2008] FCWA 51
to pay the mortgage on both the [southern suburban] and [his suburban] properties, as well as paying child support. The wife was initially not prepared to agree to the sale but on 25 October 2006 she consented to an order for the sale. The property was placed in the hands of a local agent on 9 November 2006. As part of the agreement for the sale of the [former matrimonial home] home, the wife agreed she would not pursue her application for spousal maintenance and the husband agreed, inter alia, to make interest-only payments on the [southern suburban] mortgage. The Bank, however, indicated it was not prepared to receive interest only payments and the mortgage then fell into arrears, as the husband did not keep up the payments.
24 The parties had hoped to receive as much as $1 million for the [former
matrimonial home] property but a buyer could not be found. Ultimately after great perseverance, the ANZ Bank stepped in and sold the property to clear the [southern suburban] mortgage. The best offer received at the public auction was $740,000 and the property was sold at that price. Settlement took place in early October 2007. By this stage, the amount owing on [southern suburban] had increased from $570,000 to over $631,000. After discharge of the mortgage, payment of the agent’s commission and adjustment of rates and taxes, the parties were left with only $82,741, which was placed in the trust account of the solicitors acting for the ANZ Bank. The parties have been in dispute ever since about the disbursement of the proceeds. The consent order made in October 2006 had directed that the proceeds be used to discharge the [suburban] mortgage after the [southern suburban] mortgage was discharged, but the wife objected to this disbursement in view, inter alia, of the husband’s failure to honour his obligation to make payments on the [southern suburban] mortgage.
25 The matter proceeded to trial in January 2008 and I reserved my decision. The
parties agreed at the close of the trial to provide further evidence concerning the value of the real estate and shares, but this was not forthcoming within the time contemplated. It was not until 3 April 2008, after I had gone on long service leave, that advice was received that the parties had obtained up-to-date valuations of the [suburban] properties and had agreed the values. I was also advised that the valuer engaged by the parties had provided a valuation of the [coastal] property, but I was informed in correspondence that the husband wanted to relist the matter to seek an order permitting the property to be sold at a price less than the valuation and to make further submissions. The parties were both given the opportunity to make further submissions in writing. Only the wife elected to do so.
Credibility
26 I have reservations about the credibility of both the husband and the wife. Each
harbours considerable resentment towards the other and the level of bitterness is extreme. Their bitterness was exacerbated by the fact that their financial fortunes suffered a serious decline during the proceedings as a result of a number of factors, one of which was the mortgagee sale of the [former matrimonial home] property. Each of them blames the other for the fact that the property, into which so much was invested over so many years, was sold for much less than they had hoped to receive.
27 Whilst the Court is familiar with parties overestimating their own contributions
and undervaluing the contributions of the other, the husband’s evidence was
[2008] FCWA 51
remarkable in the way in which he sought to denigrate the efforts of the wife during a long marriage in which she raised five children in difficult circumstances and for a great deal of the time in his absence. I accept, at least to some extent, the wife’s assertion that the husband was a controlling spouse who became exceedingly angry when she terminated the relationship and moved quickly into a new relationship.
28 Whilst the husband denied it, I accepted the wife’s evidence concerning the
telephone conversation she overheard the husband having with [Mr G] in early May 2006. Even if the wife was by that stage in a relationship with [Mr G] (which she strongly and fairly convincingly denied), the husband was unaware of any romantic association and was speaking to [Mr G] only in his capacity as a real estate agent. During the course of this conversation, the husband signalled his intention to sell the [southern suburban] property and ensure the wife would end up “in the gutter”. I accepted the wife’s version of this conversation notwithstanding her failure to call [Mr G] to corroborate it. Whilst I recognise that threats such as these are not uncommonly made at times of marital stress, I consider that the husband’s bitterness not only motivated his subsequent actions, which I will discuss later, but also coloured his evidence to an extent that it became unreliable.
29 I consider the wife’s evidence was also coloured by her bitterness towards the
husband. It seemed likely this arose from her belief that she had been badly treated during the marriage and from her conviction that the husband has acted deliberately in a way which has diminished the value of the assets and significantly increased her legal costs. The wife’s credibility was not assisted by the fact that in her affidavit evidence she claimed to have undertaken an even greater share of the childcare and household duties than she actually did. It is possible that some responsibility for this overstatement of her case may be levelled at those who drafted her affidavit, but it was ultimately her responsibility to ensure her affidavit was correct. To her credit, in her oral evidence the wife was far more inclined to acknowledge the contribution made by the husband. I nevertheless was inclined to consider that even in her oral evidence, the wife continued to overestimate her contribution and did not appear to have a realistic appreciation of the full extent of the husband’s contributions.
30 The wife did make one clear error in her affidavit when explaining how the
parties had expended the last two gifts of $100,000 received from her parents. However, I accept she had become confused when trying to recall how the funds had been expended and had not deliberately set out to mislead the Court. Overall, I gained the impression that the wife was generally a fairly truthful witness. In those instances where there was a dispute on factual matters, I was inclined to prefer her evidence.
Property settlement approach
31 I am required to follow a four step process in dealing with applications for property settlement pursuant to the Family Law Act 1975. These are:
• identify and value the assets and liabilities of the parties; • assess each party’s contributions to the assets; • assess a range of factors set out in s 79(4)(d) to (g) of the Act; and [2008] FCWA 51
• consider whether the proposed orders are just and equitable.
The asset pool
32 I find the assets and liabilities of the parties (other than superannuation assets) to
be as follows:
Description Husband Wife $ $ Assets [Suburban] Unit 475,000 [RMR] Pty Ltd 3,100 [Boat] 1,500 Chattels - [suburban] 5,645 Bank Accounts 307 [Company] Shares 8,620 Jewellery 3,000 Chattels – [southern
suburban property]3,060 Partial property 15,000 settlement
[Southern suburban] 310,000 310,000 Unit [H] Pty Ltd Nominal Residual proceeds 33,870 33,870 [northern property]
Paid legal costs added 16,628 back Assets total
846,050 373,550 [2008] FCWA 51
Liabilities
[suburban] mortgage 342,000 Westpac Visa 30,011 ATO Assessment 1,779 Loan from [son] 5,771 [Private school] 17,027 [ Orthodontic Centre] 650
[Private School] 2,180 2,180
City of [Southern 1,828 1,828 suburbs] Rates
[Southern suburb] 2,030 2,030 Strata Fees [Southern suburbs] 519 519 Water Rates Liabilities Total 386,118 24,234 33 The net assets of the parties, excluding superannuation assets, are therefore
worth $809,248.
Superannuation assets
34 Both counsel submitted I should treat the parties’ superannuation interests as if they were property – i.e. the same way as all the other assets.
35 The husband and wife are both members of the [H] Superannuation Fund. It was
agreed their entitlements should be calculated in accordance with their respective contributions as shown in the accounts of the Fund. The husband’s contributions were $100,076 and the wife’s were $54,912. The wife’s interest is therefore 35.42% of the fund.
36 The major asset of the [H] Superannuation Fund is the block at [on the coast],
with the only other asset of the fund being a bank deposit of $5,673. The parties had jointly commissioned a valuation of the block[ on the coast], but this was not available at the time of trial. On 11 April 2008 an affidavit of the valuer [Mr C] was filed
[2008] FCWA 51
indicating that the market value of the property as at 9 February 2008 was $300,000. Whilst correspondence received from the husband’s solicitor after trial indicated that the husband thought the property was worth less than this amount, it is the only evidence of value available and I accept it. I was informed at trial that there is likely to be capital gains tax payable on sale of the [coastal] property. The precise liability will crystallise after the property is sold.
37 The husband also has an interest in the [RMR] Superannuation Fund, which was commenced after the parties separated. It was agreed the fund had a value of $7,356 but the husband’s interest in the fund is worth $6,096 (with the balance being held by the parties’ daughter, [K]).
Disputed assets and liabilities
38 Most of the items in the table of assets and liabilities above were agreed. The
only findings I need to make in relation to the disputed assets and liabilities are as
follows:[Company] shares
39 The parties have since trial agreed that these shares are worth $8,620.
ANZ Term Deposit/plastic surgery
40 The husband included in his schedule as an asset of the wife an amount of
$12,354 (being funds in an ANZ term deposit) and another sum of $10,500 (being a deposit paid by the wife after separation for what the husband described as “cosmetic surgery”). As counsel for the wife pointed out, this represented double-dipping, as the amount paid for the “cosmetic surgery” had come from the funds in the term deposit.
41 I do not propose to take any of these funds into account as I accept that the
money was disbursed to cover some of the cost of dental surgery which the wife was to undergo shortly after the trial concluded. The evidence did not indicate that the surgery was purely cosmetic, as the husband alleged.
Jewellery
42 The husband claimed the wife’s jewellery was worth $5,000. The wife placed
no value on it, although in her last statement of financial circumstances she had said she had “jewellery and cash” to a value of $500. In a previous statement sworn in 2006 she said she had jewellery and cash to a value of $3,000 and in cross- examination she said this figure probably related entirely to jewellery.
43 In my view, the party asserting the higher value of an asset should usually be
expected to provide evidence to support their assertion: Khademollah and Khademollah (2000) FLC 93-050 at [32]. However, given that the wife had originally valued her jewellery at $3,000, I do not consider it was encumbent upon the husband to obtain a valuation to prove at least this value. I have therefore included the wife’s
[2008] FCWA 51
jewellery at $3,000. I accept that one of the items of jewellery was a gift from the
wife’s parents, but there was no evidence to indicate its value.
[Boat]
44 The husband owned this boat prior to the marriage. He subsequently sold it for
$2,800 in 1987 but purchased it again in 1989 for $2,500. It is appropriate to include the boat in the pool, although when assessing contributions I will keep in mind that the husband owned it before cohabitation commenced.
Undisclosed property
45 Each party alleged the other had failed to make available for valuation all of the
furniture and chattel property in their possession. The husband was not challenged on this issue in cross-examination, but the wife was. The wife’s position was that it was not worth arguing about.
46 The wife acknowledged she had given some items of furniture to [Mr G]. She
said this was reimbursement for an amount in the region of $15,000 which [Mr G] had expended on “freshening up” the [southern suburban] unit. This included pulling up old carpets and laying cork tiles, which was for the benefit of the children who have allergies. The items given to [Mr G] included a mirror from the [former matrimonial home] home, one of three leather lounges, a dining room suite (albeit swapped with [Mr G]’s outdoor setting) and a TV unit. The wife should have disclosed this transaction in her trial affidavit - or in correspondence with the husband’s solicitors if the transaction took place after she had executed her affidavit. There was no evidence she had done so, and nor did she provide any documents to establish the extent of the expenditure allegedly incurred by [Mr G]. Whilst I was inclined to believe that the wife’s assertions were quite possibly true, in this instance her failure to produce any documents and to call [Mr G] to corroborate her evidence was fatal to her case: Jones v Dunkel (1959) 101 CLR 298. I am nevertheless left with no basis upon which I can determine how much the chattels in question are worth. I do note, however, that the items would have to be valued on a second-hand basis and there was no evidence to suggest that any were of special value.
47 There were also a number of items of furniture in the wife’s possession that were
not valued by the valuer who visited the [southern suburban] unit. These were a microwave oven, washing machine, refrigerator and dishwasher. The wife said she gave instructions to the valuer not to value these items for two reasons. First, she considered the husband had not made all his furniture and chattels available for valuation. Secondly, she knew the [southern suburban] unit was going to be valued and presumed the valuation would include all of the white goods which were in position at the time she moved into the property. I do not regard either of these reasons as having any legitimacy. The fact the husband had allegedly failed to make available all of his furniture did not make it right for the wife not to make available hers. Furthermore, a valuation of the [southern suburban] unit itself would not include anything other than fixtures and fittings and there could be no suggestion that the items in question were fixtures or fittings, save for the dishwasher.
[2008] FCWA 51
48 I have no basis on which I can place a value on the white goods that were not valued. It was put to the wife in cross-examination that the refrigerator cost $1,850 but there was no evidence of how much it or any of the other items cost. In my view, in the absence of any valuation evidence, the only way I can deal with this issue is to take into account under s 75(2)(o) the fact that the wife has comparatively new white goods which were not valued. I will also take into account that the wife disposed of a few items of furniture to [Mr G] without providing justification for having done so.
49 The husband also complained about the wife’s failure to obtain a valuation of the
stock of herbs and tinctures she had previously used in her naturopathy work. I was
not persuaded these had any commercial value.[H] Pty Ltd
50 The husband estimated that the assets of [H] Pty Ltd were worth $10,000. Although a set of accounts was provided as at 30 June 2007 indicating the company has no assets of value, there was no evidence of market value and the parties could not agree the value. Neither party wishes to continue trading through the company and in my view it should therefore be wound up.
51 I am prepared to hear further submissions from the parties concerning what
should become of the remaining assets of [H] Pty Ltd but at the present time I am inclined to the view that the easiest and cheapest way of distributing the assets is to allow each party to retain whatever property of [H] they have in their possession on the basis that the items in question are assumed to have no value. Given the proven inability of the parties to sort matters out quickly and sensibly, any other outcome is likely to result in the expenditure of more money on legal costs than the items in dispute are likely to be worth. The parties should meet the costs of winding up in equal shares, which will ensure each has the same incentive to resolve the winding up promptly and cheaply.
52 Whilst at one stage the company apparently had tax credits available, I was not
persuaded that these are likely to be of any commercial value in the event of a winding up. I will, however, give the parties liberty to apply for further orders and directions in relation to the winding up to deal with issues such as this and anything else that might arise.
Paid legal costs – interim property settlement
53 The husband included in his list of assets and liabilities a debt of $28,841 to
[a finance company]. This relates to monies borrowed to meet the husband’s legal costs. I do not consider it appropriate to include liabilities for legal costs in the table of assets and liabilities. Issues concerning responsibility for payment of legal costs will fall to be determined after the delivery of judgment.
54 Pursuant to an order made in December 2007, the wife received $15,000 from
the proceeds of the [former matrimonial home] home, which she used to pay counsel’s fees and to provide her solicitors with money on trust. For the reasons I have just indicated, it is not appropriate to take into account the wife’s expenditure on legal fees. It is therefore appropriate that the $15,000 be added back into the asset pool.
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55 In addition to the funds provided by [a finance company], the husband has paid
$16,628 in legal costs from his own resources. In his opening address, counsel for the wife advised that it was agreed that the wife’s interim property settlement of $15,000 and the husband’s paid legal fees “cancelled” each other out. It is therefore appropriate to add back this expenditure into the asset pool, since I have added back the wife’s interim property settlement.
Loans from Robert
56 The husband claimed he owed [his son] (from a previous marriage) two different
amounts. The first was $5,771 said to have been advanced recently to allow the husband to meet his child support arrears. I accept that [Mr M] provided these funds and I consider it proper to treat that payment as a liability in calculating the asset pool.
57 The husband also claimed he owed [his son] a further amount of $13,810. This
was said to be the total of various cash amounts [his son] had provided to the husband from the middle of 2007 until trial in January 2008 to cover his living costs. The amounts were not only said to have been paid in cash but were also never deposited into any account. The wife did not accept the husband’s claim. No mention had been made of the debt in the husband’s statement of financial circumstances sworn on 12 September 2007, notwithstanding that he claimed the liability had commenced to accumulate in the middle of 2007. The first reference to the liability was contained in his Papers for the Judge filed in January 2008.
58 The husband acknowledged he was aware that an adverse inference could be
drawn as a result of his failure to call [the son] to corroborate the alleged liability. I have already noted my reservations concerning the husband’s credibility. Given that all the payments were said to have been made in cash and never deposited into an account, and given the husband’s failure to refer to the liability in his statement of financial circumstances and in his trial affidavit, I was not persuaded that the husband owes [the son]the amount claimed.
[Private school] fees
59 The wife has a liability of $17,027 to [private girls’ school] relating to unpaid
school fees for [A]. The liability is said to be that of the wife alone because it was she who gave a guarantee to [the school] in June 2006 that she would ensure the fees were paid (at a time when the school was threatening to expel [A] because of non-payment of fees).
Orthodontic costs
60 The wife has an outstanding liability of $650 to the [local] Orthodontic Centre.
I see no reason to treat this liability any differently from any of the other liabilities. The purpose of preparing the list of assets and liabilities in property settlement proceedings is to ascertain the current financial position of the parties (save for “add backs” which are treated separately and which need to be included to ensure justice between the parties).
[2008] FCWA 51
Contributions
61 The husband’s position on contributions varied during the trial. His counsel
originally submitted that contributions should be assessed 55:45 in favour of the wife. This submission was made in the context of the husband having alleged in his affidavit that his contributions during the marriage were greater than the wife’s and that the gifts made by the wife’s family were gifts to both him and the wife.
62 At the conclusion of the first day of the hearing, counsel for the husband advised
that the husband now conceded that contributions should be assessed at 60:40 in favour of the wife, on the basis that the wife should receive a credit of 10% for the funds that had come from her family. When I pointed out that the assumption implicit in this proposition was that contributions were otherwise equal, counsel withdrew her submission and asked to be given time to reflect. The following morning, counsel advised that the husband’s case was that, save for the gifts from the wife’s parents, contributions should be assessed 55:45 in favour of the husband. Counsel indicated, however, that the wife should be given credit for only $180,000 out of the $260,000 that had been advanced by her family and that this credit should be reflected by an adjustment of 10%, which would result in an overall finding that contributions had been made 55:45 in favour of the wife.
63 Notwithstanding these concessions, it appeared at times during her closing
address that counsel for the husband was once again submitting that the wife should receive no credit at all for the gifts because her family had intended to benefit both the husband and wife. Ultimately, however, counsel for the husband again conceded that the wife should receive credit for $180,000 of the gifts totalling $260,000. It was submitted that gifts to a total of $80,000 should be ignored as the wife had allegedly expended significant amounts from the funds provided by her parents on the refurbishment and furnishing of the [southern suburban] unit. (The husband also claimed for the first time in his oral evidence that about $800 had been paid back to the wife’s family from the first gift they had made in 1994.)
64 The wife’s position throughout was that contributions should be assessed 70:30 in her favour. In closing, counsel for the wife submitted that the 70:30 assessment of contributions was justified because:
• the parties’ own contributions during the marriage were of equal value; • the gifts from the wife’s family were a contribution made on the wife’s behalf and would warrant a finding that the wife had made 60% of the total contributions to the time of separation; and • the husband’s conduct since separation had resulted in a significant diminution in the asset pool and his behaviour was such that it would be appropriate to assess contributions overall at 70:30 in the wife’s favour. Initial contributions
65 Neither party had any assets of great substance at the commencement of the
relationship. The wife had an old motor vehicle of negligible value and no other assets, apart from some “glory box” items. The husband had a comparatively new [motor vehicle] and the [boat]. He also had household furniture and a quantity of
[2008] FCWA 51
items which the parties were able to use in their first home. Although not mentioned in paragraph 23 of his affidavit (where he discussed his initial contributions), the husband also claimed he had savings of $9,800 which he said represented portion of a $12,000 settlement he had received from his previous marriage. The husband was subjected to only faint cross-examination on this issue but no evidence was produced to corroborate his claim. I was satisfied the husband had some savings but I was left in doubt as to their full extent.
66 Whilst I accept that the husband’s initial contribution was greater than that made
by the wife, counsel for the husband properly conceded in her closing address that the
disparity would be considered as being “largely insignificant”.Contributions during the marriage
67 The husband worked in a variety of capacities during the marriage. Initially he
worked for wages, but subsequently the parties set up their own company and the husband worked on a contract basis, moving from job to job. There were some times during the marriage when he was not employed. Much of the time the husband was employed on a fly-in/fly-out basis, which resulted in him spending the great majority of his time living away from home.
68 The wife was working at the commencement of the marriage, but spent most of
the marriage looking after the home and the children. She was not cross-examined on her assertion that the children were never placed in day care or babysat. She was left without a vehicle much of the time the husband was working away. She did some community work and also set up a home-based naturopathy business which earned her, according to the husband, about $10,000 per annum and according to her less than that.
69 The contributions of both parties were made under what can only be regarded as
difficult circumstances. As I have noted, the husband spent a considerable amount of time working on a fly-in/fly-out basis. I accept he worked exceedingly hard and probably under difficult conditions, as is commonly the case with that type of employment. On the other hand, the wife also made her contributions in difficult circumstances. She had five children to look after (and in the early years also had the husband’s [teenage son] in the home). Her care of the home and the children was often undertaken single-handedly, as the husband was away so much. Furthermore, during some periods the family lived in less than optimal accommodation – caravans, transportable homes, sheds and the like. During almost the entire time the parties lived in [the former matrimonial home it], was under construction, with the parties slowly occupying portions of the property as it was built.
70 The husband complained about housework being left undone when he returned
from his time away. I gained the impression this was not a major issue during the marriage and that he was quite prepared to chip in and assist around the home. My impression was that the husband became much more resentful of this after the separation when he reflected back on the marriage and the circumstances in which it ended. Whilst one can sympathise with the husband returning after a long period away to find the home in less than perfect order, one also needs to appreciate that the wife had a 24 hour a day job in caring for five children in his absence. She too could
[2008] FCWA 51
reasonably expect that during his short periods of time at home that the husband would step in to provide her with some respite. Neither party now appears to have any significant appreciation of the difficulties under which the other made their contributions.
71 The husband’s feeling of resentment is exacerbated by the fact that he almost
single-handedly built the [former matrimonial home] home (as well as making improvements to the first property the parties acquired in Perth.) The [former matrimonial home] house is of unique design and it was finished to a high standard. The husband considers that his efforts in building the house, with only modest assistance from the wife, ought to be reflected in my findings concerning contributions. Whilst I consider that the wife did somewhat more than the husband admits in the construction of the home, I accept that it was largely his project. The extent of the work done can be gauged in part by reference to the fact that whilst the parties spent over $322,000 on materials, they spent only about $26,500 on contract labour in the construction of the house. Nevertheless, the husband was at times undertaking this work when he was not working for reward. Whilst I accept that on occasions he would also have been supervising the children and involving them in the building activity, I find it was primarily the wife who was still caring for the children and the home whilst he was engaged in the construction of the house. I note also that whilst there was a great deal of work done in constructing the house, it was done over an inordinately large period of time, which inevitably would have resulted in some hardship for the wife (and of course the husband).
72 My overall finding is that the husband and the wife were both industrious and
hardworking people, who made a very significant contribution throughout their marriage. I am, however, not persuaded that the contributions of either should be regarded as being of any greater value than the contribution made by the other. I therefore conclude that the contributions during the marriage were of equal value.
73 I turn now to consider the impact of the gifts from the wife’s parents. Apart
from the [Company] shares, these total $260,000 and were made in the following
sequence:1994 $5,000
1997 $10,000
2000 $50,000
2004 $100,000
2005 $100,000
74 It will be noted that most of the monies provided by the wife’s family came
towards the end of the relationship. I find that some of those funds were used to acquire the [the coastal block] for the superannuation fund in 2004. The husband recalled that the [coastal] property was funded from the parties’ accrued superannuation contributions but I find that only portion came from this source and the balance was made up with funds paid into the superannuation fund from monies
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provided by the wife’s parents. Insufficient documentation was provided to allow a precise finding concerning the respective proportions and, in any event, such a finding is unnecessary.
75 The husband belatedly attempted to argue that only a portion of the funds
received from the wife’s family was spent on joint purposes. During the course of the trial, the husband’s counsel seized upon Exhibits 15 and 17 to suggest that the wife had retained in a term deposit nearly $86,000 from her parents following the separation. This line of questioning was in direct conflict with the way in which the husband’s case had been presented (see in particular paragraphs 119 and 198 of his trial affidavit). Reference to documents available to both the husband and his counsel (for example Exhibit 31) showed that almost all of the funds which had been invested in the wife’s term deposit had been transferred into a joint account in March 2006 (with the small balance remaining being the source of the funds used to meet the wife’s dental costs discussed above).
76 A variety of withdrawals were made from this joint account, including $23,778 to cover the stamp duty on the [southern suburban] property on 4 April 2006. By 26 April 2006 the funds in the joint account had been whittled away to $603. There was no credible evidence to suggest that the funds drawn from the joint account were spent on anything other than legitimate purposes and such evidence as there was suggested that the funds were more likely to have been spent at the direction of the husband than the wife. The husband was unable to produce the cheque butts which apparently related to this account as he said he never retained cheque butts. I accept the wife’s evidence that she would not have written any cheques drawn on this account as she had not been permitted access to a cheque book.
77 The husband’s other tactic to minimise the impact of the gifts from the wife’s
family was to claim (at least from time to time) that the funds should be regarded as a contribution made on his behalf as well as on behalf of the wife because the wife’s family had intended to benefit both him and the wife. It was abundantly clear from the evidence given by the wife’s father, who was a reliable witness, that whilst it was anticipated that the gifts would be spent on the entire family, the primary intention was to benefit the wife. The authorities also make perfectly clear that the gifts should be treated as a contribution made on behalf of the wife.
78 In my view, significant weight should be given to the gifts from the wife’s
parents since they totalled a substantial amount and were not in any way wasted on frivolities. Taking into account the somewhat greater contribution made by the husband at the time of marriage, the equality of contributions made during the marriage and the contributions made on behalf of the wife by her family, I conclude that contributions overall up to the time of separation should be regarded as having been made in proportions 60:40 in favour of the wife.
Contributions after separation
79 The husband continued to work and earn income as a safety advisor following
separation. For reasons I will discuss later, I consider the husband has not earned as much since July 2007 as he should have. He has also been responsible for supervising
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[J], although that was not a major exercise, given the boy’s age. The wife has
continued to take care of the younger children.80 Both parties allege that the conduct of the other in the period following
separation has reduced the value of the asset pool and should be taken into account. Whilst the parties each presented their cases on this issue from the perspective of contributions (or negative contributions), I consider it instructive to consider the judgment of the Full Court in Omacini & Omacini (2005) FLC 93-218 which summarises the circumstances in which it is appropriate to add back property that no longer exists into the asset pool. The Full Court said this:
“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...
(b) Where there has been a premature distribution of matrimonial assets...
(c) In the circumstances outlined by Baker J in Kowaliw and 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.”
81 The Full Court has also 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.”
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82 The Kowaliw guidelines were expressed to relate to losses incurred “in the course of a marriage”. I accept that in some circumstances different considerations may apply to losses made when the parties have separated; however, the position remains that losses sustained as a result of reckless or negligent conduct or as part of a course of conduct designed to reduce the value of assets should not be borne by the “innocent” party.
83 I will deal first with the husband’s assertion that the wife’s delay in agreeing to
the sale of the [former matrimonial home] property resulted in the property being sold at price much less than would have been achieved if it had been placed on the market when he initially proposed. The first thing to be said is that there was no evidence at all to support a finding that the wife had “embarked upon a course of conduct designed to reduce or minimise the effective value or worth” of the property nor was there any evidence to satisfy me that she had “acted recklessly, negligently or wantonly” in relation to the property.
84 These conclusions, in my view, are probably the end of the matter. However,
I should also say I was not satisfied that the wife’s delay led to the [former matrimonial home] property being sold for less than what could otherwise have been achieved. It is true the husband began to agitate for a sale in May 2006, prior to him acquiring the [suburban] unit, and that he continued to agitate for a sale after he acquired [the unit]. By letter dated 27 July 2006, the wife’s solicitors advised the husband’s solicitors that she did not wish to keep the [former matrimonial home] property and that if the husband did not wish to keep it, then it would have to be sold “in due course”. The wife’s solicitors noted that her only reservation was selling in a rising market and putting the money in an account. Her solicitors’ letter also said that if the husband’s income was as stated by the Child Support Agency
“it is not at all evident that the [former matrimonial home] property needs to be sold immediately. However, our client will review her position as soon as your client has provided the documentation which we have requested.”
85 The wife claims she was never provided with the documentation requested in her
solicitors’ letter, but in any event she consented to an order for the sale of the property
on 26 October 2006.86 An employee of a local real estate agent had appraised the [former matrimonial
home] property in February 2006 at a market price of between $950,000 and $1 million. On 25 October 2006, the principal of the same agency, [Mr I], advised the husband that the property would sell for “at least a minimum of $910,000 plus fees” - which was no doubt the basis upon which the parties consented the following day to an order that the property be sold for not less than $910,000 after payment of commission and expenses. In the email in which he provided this estimate, [Mr I] roundly criticised the employee who had provided the original appraisal in February 2006, saying he had been forced to “put her off”.
87 There is accordingly no credible evidence that the value of the
[former matrimonial home] property reduced in the period from May 2006 (when the husband first proposed the sale) until October 2006 (when the wife consented to an
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order for sale). Furthermore, [Mr I], who was called by the husband to give evidence, said in his affidavit that when the first appraisal was obtained in February 2006, “market interest enquiries were still rising” and he went on to say that “since April 2007, there has been a noticeable downturn in housing enquiries and sale prices have reduced”. If any credence can be placed on such flimsy evidence, it would favour the wife, since the inference is that the value of the property was increasing in the period between May 2006 and October 2006, just as the wife had asserted in her solicitor’s letter of 27 July 2006.
88 In any event, [Mr I]’s agency was unsuccessful in selling the property when it
was finally put on the market in early November 2006. Only a handful of people went through the house and the parties received only one verbal offer. That offer was made in early January 2007 at a price of $800,000. The wife's position then was that she would wait to see what the husband said about the offer and his position was that the offer was too low, which was also [Mr I]’s view. No further offers were received. Matters were in due course taken out of the parties’ hands when the bank stepped in and sold the property in October 2007 for $740,000. The husband was critical of the way in which the auctioneer conducted the sale (which was scarcely the fault of the wife) and he believes a better price should have been achieved even under mortgagee sale conditions. [Mr I] was of the same view, believing that the property should have sold for around $860,000 and possibly anywhere up to $920,000.
89 It is true that if the [former matrimonial home] property had sold sooner, there is
a possibility the mortgagee sale could have been averted, since the [southern suburban] mortgage would then have been discharged from the proceeds of sale. However, this is nothing more than speculation given that the parties did not receive a single written offer when the property was placed on the market, four or five months prior to the “noticeable downturn” mentioned by [Mr I] in his evidence. In all of these circumstances, the husband has failed to persuade me that the wife should be penalised for holding off agreeing to sell the property.
90 I turn now to consider the wife’s complaints concerning the husband’s conduct
following separation. In essence she says that had he not recklessly gone ahead and purchased the [suburban] unit, he would have been in a position to make the payments on the [southern suburban] unit, as well as meeting his other commitments. There would then have been no need for a mortgagee sale of the [former matrimonial home] property and the parties could have achieved a better price by an orderly private sale. The husband would also not have been so stretched financially and would have been able to meet the [southern suburban] mortgage payments, rather than allowing the balance on the mortgage to increase by more than $60,000.
91 I consider there is substance in the wife’s criticism of the husband’s behaviour.
The husband knew at the time that he could not afford to buy the [suburban] property as well as maintaining the payments on the [southern suburban] mortgage (about $3,000 per month) and his other commitments including child support. His ability to finance this additional purchase for more than a matter of weeks was entirely dependent on a very quick sale of the [former matrimonial home] property and that property was not even on the market. His solicitors said this was “eminently (sic) clear”
in their letter of 12 May 2006 to the wife’s solicitors when proposing the sale of [former matrimonial home]. No response was received to that letter and the
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husband’s solicitors wrote again on 25 May 2006 advising that it was “imminently (sic) clear” that the [former matrimonial home] property had to be sold. No response was received to that letter (other than a reply from the wife’s solicitors advising they were no longer acting for her). The husband then went ahead and bought the [suburban] property, knowing full well he did not have the means of servicing his commitments. As soon as he purchased the [suburban] property, the husband’s solicitors wrote to the wife’s solicitors on 21 June 2006 advising that he was able to service the mortgage over the newly acquired [suburban] property but was unable to meet the mortgage registered against the [southern suburban] property in which his (unemployed) wife and children were living.
92 When the wife ultimately agreed to the sale of the [former matrimonial home]
property, the husband agreed as part of the “deal” to make interest only payments on [southern suburban unit]. He was apparently subsequently informed by the Bank that this was not acceptable and he therefore chose not to comply with the order of October 2006, although it seems he did make payments totalling $3,280 from October 2006 to December 2006. In my view, it would be reasonable to infer that the Bank would have been even more patient if the husband had complied with his obligations under the order to make interest only payments on the [southern suburban] property.
93 The husband has also refused to pay the rates and strata fees on
[southern suburban unit] because he considered it was reasonable to expect that the person living in the property would pay the outgoings. He said the wife had always worked during the marriage and could earn money to make the payments and he also expected her to be able to contribute something towards the mortgage. He also did not pay any rates and taxes on [former matrimonial home] after separation as he said he could not afford it.
94 I accept that the husband was entitled to obtain independent accommodation,
especially if it is true - as he claimed - that the wife had put pressure on her family to get him to move out of their home where he had been boarding. However, it was most imprudent of the husband to purchase a new home prior to the sale of the [former matrimonial home] property, given that he knew he could not afford to meet the extra commitments. It was especially unwise to incur substantial credit on a credit card, not to mention taking on a high interest loan. The better course by far would have been for him to rent accommodation until [former matrimonial home] was sold. I did not accept the explanations he gave for not having done so.
95 In my view the husband was angry with the wife at the time he acquired the
[suburban] property. He had decided that if she could have a unit in which to live he would have one too. He was so enraged that he was prepared to put the family finances in jeopardy. In my view he acted recklessly and his actions ultimately diminished the value of the assets available for distribution. His actions are best understood in the context of his earlier threat that he would see the wife “in the gutter”.
96 The difficult issue that arises from these findings is to determine to what extent
the husband’s actions diminished the value of assets available for distribution. The husband’s own evidence indicates that the [former matrimonial home] property sold at the mortgagee auction for significantly less than would have been achieved by an
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orderly private sale. However, the evidence was flimsy and it is impossible to be precise as to how much was lost. What is clear, however, is that the debt owing on the [southern suburban] property increased significantly during the time the husband was not making payments. Account needs also to be made of the seepage of funds on the high interest loan and the credit card and the substantial cost the husband incurred when he had to hire a car for the business. It must, however, be remembered that the husband would have had to pay rent if he was not purchasing a home. It is also very important to keep in mind that the [suburban] property is now worth $95,000 more than was paid for it. This significant increment would not have been achieved if the husband had rented. Even taking into account these offsetting items, I am satisfied that there has been a significant (but ultimately unquantifiable) deterioration in the value of the asset pool as a result of the husband’s reckless actions.
97 The wife also complained that the husband allowed the gardens at the
[former matrimonial home] to deteriorate following the separation and both parties complained about the failure of the other to pay the water bill, which resulted in the supply of water for the garden being turned off. The garden had previously been well maintained and the photographic evidence indicated that it was a most attractive property. [Mr I]’s evidence suggested that the deterioration in the appearance of the grounds would have had an impact on the value of the property but whether this was reflected in the price ultimately obtained on the mortgagee sale is somewhat speculative. I am unable to apportion blame between the parties on this issue and it will therefore have no impact on the outcome.
98 The wife also claims that the husband has deliberately reduced his income
following the separation, thereby further damaging the financial position of the family. Prior to July 2007, the husband had arranged to carry out his professional work through [RMR] Pty Ltd, a company he had set up following the separation. [RMR] Pty Ltd carried out work under contract with [IPS]. [RMR] Pty Ltd ceased trading on 30 June 2007 and the husband thereafter has worked as an employee of [PL] Pty Ltd for an income of $65,000 per annum inclusive of superannuation. That company now has what appear to be almost identical contractual arrangements with [IPS] as [RMR] Pty Ltd had prior to 30 June 2007.
99 The husband explained the change in arrangements as having been made on the
If either party is cohabiting with another person—the financial circumstances relating to the cohabitation
130 The husband is insistent that the wife is living in a de facto marriage relationship
with [Mr G], with whom she has been in an intimate relationship since some time in May 2006. [Mr G] is aged 61 years. I accept the wife’s evidence that she and [Mr G] do not, in fact, live together although he does spend a fair amount of time with her, including some overnight periods.
131 It was noteworthy that [Mr G] attended each day of the trial. It appears [Mr G]
has been extremely supportive of the wife financially and emotionally during what have been difficult proceedings. They have been away on holidays together, which he has funded. Whilst such matters are never possible to predict with any degree of accuracy, it would seem likely that the wife and [Mr G] will, in due course, commence cohabitation. Whether or not their relationship will last is even more difficult to predict.
The terms of any order made or proposed to be made under section 79 in relation to:
(i) the property of the parties; or
(ii) vested bankruptcy property in relation to a bankrupt party
132 I have indicated the conclusion I have reached in relation to the assessment of
contributions pursuant to s 79. As a consequence of those findings, the wife will
receive a much greater share of the assets than will the husband.Any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage
133 I will discuss child support issues in greater detail below. The husband seemed
to dispute the assertion made by the wife that he had child support arrears of about $4,000 at the time of trial. He considered he had cleared his arrears with the cheque that he had received from [his son]. The basis of his belief in relation to arrears, however, was a statement from the Child Support Agency received some weeks prior to trial and it is possible further arrears accrued in the interim. In any event, this is a matter which will be taken care of by the Child Support Agency in due course.
134 Although the husband may have been erratic, as the wife alleges, in relation to
the payment of child support since the separation, the fact is that he is either
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completely up to date with his payments or only in arrears in relation to amounts recently accruing. As a consequence of the orders I intend to make in relation to the husband’s departure application, the husband will also have an obligation to pay child support for the youngest children at the maximum rate.
Any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account; and
135 There are no other matters that I consider relevant, apart from the issue
mentioned earlier in these reasons relating to the furniture in the possession of the wife
and [Mr G].The terms of any financial agreement that is binding on the parties.
136 There was no binding financial agreement.
Conclusion on s 75(2) adjustment
137 The s 75(2) factors of most significance are the wife’s obligation to house and
care for the three youngest children and the substantial disparity in the income of the parties. The impact of the latter factor is ameliorated to some extent by the fact that the husband is older than the wife and has a limited time left in the workforce and by the fact that the disparity in income will be diminished to an extent by the payment of child support. I must also take into account that as a consequence of the assessment of contributions, the wife will have significantly more of the assets than the husband.
138 Taking these and the other s 75(2) factors into account, I have determined that
there should be an adjustment of 10% in favour of the wife. The overall outcome
accordingly is that the wife will receive 73% of the assets.
Just and equitable?
139 As the final step in the process I am required to step back and consider whether
or not the outcome based upon assessment of contributions and the adjustment on account of s 75(2) factors brings about a result that is just and equitable. In determining whether or not the outcome is, in fact, just and equitable it is important to note the impact of the s 75(2) adjustment in dollar terms, rather than in purely percentage terms. The effect of the 10% adjustment in dollar terms is in the region of $100,000 but changes the disparity between the parties by double that amount.
140 Although the financial position of both parties is likely to be difficult for the
foreseeable future, I am nevertheless satisfied that the proposed outcome is just and
equitable.
Child support departure application
141 I turn now to the husband’s application for a child support departure order. This
part of the case was presented in a most unsatisfactory fashion. The husband simply
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annexed to his trial affidavit a large bundle of documents received from the Child Support Agency, most of which were irrelevant to the matter I was required to determine. Little attention was given to the child support issue at trial, with the parties’ entire focus being on the property settlement. No effort was made at trial even to address the statutory criteria applying to departure applications. It also transpired during the course of the trial that the husband was pursuing relief from his child support obligations through the Social Security Appeals Tribunal at the same time as he was making application to this court for a departure order. When I indicated that it was not appropriate to pursue simultaneous relief in two different forums, the husband elected to abandon his SSAT application.
142 The real issue for determination in dealing with the husband’s application for
a departure order is whether the husband should be assessed on the income that he claims to be earning from his employment or whether he should be assessed on the basis of his earning capacity. It is unnecessary to consider the school fees issue since the wife elected not to have this taken into account in the child support application.
143 There are two decisions of the Child Support Agency which resulted in the
issuing of the assessments which the husband now seeks to challenge. On 20 July 2006, Senior Case Officer Roberts determined that for the period from 6 July 2006 to 4 August 2007 the husband’s “child support income amount” be varied to $104,702 per annum, which was the “capped amount” at the time. The Senior Case Officer determined that the husband’s income should be calculated on the basis that it exceeded the capped amount. On 19 August 2007, Senior Case Officer Millsteed took the same view as Senior Case Officer Roberts and set the husband’s “child support income amount” at the new “capped amount” of $109,135 for the period from 5 August 2007 to 31 December 2008.
144 For the reasons I gave when considering the application for property settlement,
I am satisfied that at the relevant times the husband was (in reality) earning or had the capacity to earn an income in excess of the capped amount. In coming to my decision I am mindful of the provisions of s 117(7B) of the Child Support (Assessment) Act 1989 which provides as follows:
(7B)
In having regard to the earning capacity of a parent of the child, the court may determine that the parent’s earning capacity is greater than is reflected in his or her income for the purposes of this Act only if the court is satisfied that:
(a) one or more of the following applies:
(i) the parent does not work despite ample opportunity to do so; (ii)
the parent has reduced the number of hours per week of his or her employment or other work below the normal number of hours per week that constitutes full-time work for the occupation or industry in which the parent is employed or otherwise engaged;
(iii)
the parent has changed his or her occupation, industry or working pattern; and
[2008] FCWA 51
(b) the parent’s decision not to work, to reduce the number of hours, or to change his or her occupation, industry or working pattern, is not justified on the basis of:
(i) the parent’s caring responsibilities; or (ii) the parent’s state of health; and
(c) the parent has not demonstrated that it was not a major purpose of that decision to affect the administrative assessment of child support in relation to the child.
145 I am satisfied the husband’s earning capacity in the period after 1 July 2007 was
not reflected in his declared level of income because of his decision to change his working pattern. I am satisfied the change in working pattern was not justified by reason of the husband’s state of health or his “caring responsibilities”. Although the husband has had [J] in his care, he has in the past been able to earn a much higher level of income whilst based in Perth than he presently is earning. Most importantly, the husband has failed to demonstrate that a reduction in his child support assessment was not a major purpose in his decision to change his working pattern. On the contrary, I consider it likely that this was one of the dominant purposes in the change in his working pattern.
146 In these circumstances, I am not persuaded there is any basis for departure from
| the assessments issued by the Child Support Agency. The husband’s application will therefore be dismissed. |
| Orders |
147 I propose making the orders sought by the wife in paragraphs 3, 4 and 5 of her
Minute for the return of various documents and chattels and for orders in relation to the family photographs. The husband did not cross-examine the wife on paragraphs 169 and 170 of her affidavit in which she set out her case in relation to these orders.
148 I propose that the parties’ interest in the [H] Superannuation Fund be divided
equally between them. It would be unfair on the husband to require him to take too
large a share of the assets in the form of superannuation which he is unable to access.149 Subject to hearing from counsel for the parties, I therefore propose making the
orders set out below (which need to be read in conjunction with the Distribution Table below in which an assumption is made about the likely level of certain liabilities that cannot presently be calculated):
1. The wife shall transfer and assign to the husband her interest (if any) in:
(a) the unit at , [the northern suburb]; (b) the furniture and chattel property in the [the northern suburban] unit; [2008] FCWA 51
(c) [RMR] Pty Ltd;
(d) the [boat];
(e) all bank accounts in the husband’s name; and (f) any interest of the husband in the [RMR] Superannuation fund. 2. The husband shall indemnify the wife and keep her indemnified in relation to any liability she may have concerning:
(a) the amount owed to [a finance company] and secured by mortgage against the [northern suburban] unit; (b) the husband’s Westpac Visa Card; (c) the husband’s unpaid income tax assessment; (d) any amounts owing by the husband to [his son]; and (e) the husband’s liability to [a finance company]. 3. The husband shall transfer and assign to the wife his interest (if any) in:
(a) the unit at [the southern suburbs]; (b) the furniture and chattel property in the [southern suburban] unit and in the home of Mr [Mr G]; (c) the [Company] shares; (d) all bank accounts in the wife’s name; and (e) the wife’s jewellery. 4. The husband deliver to the wife the following:
(a) birth certificates for the children [A], [H] and[I]; (b)
yellow file containing school certificates and photographs for the said children;
(c) all medical records relating to the said children; (d)
two tracksuits belonging to the wife with State and Australian emblems;
(e) wife’s [sporting] trophies; (f) wife’s framed medallion collection of awards; (g) wife’s stamp collection albums [2008] FCWA 51
(h) three large framed photographs of the wife and [K] and one larged framed picture of [H]; (i) the swags for the said children;
(j) items of jewellery given to the said children for birthday and christening present; (k) one half of the DVDs; (l) toys used by the said children; (m) [H]’s wooden doll house; (n) brass sculpture of woman lying down. 5. The husband deliver up to the wife the negatives to the family photographs and the indexes to the family photographs.
6. The husband pay to the wife one half of the cost of copying the said photographs.
7. The husband shall within 28 days execute and deliver to the wife a registrable transfer of his interest in the [southern suburban] property and the husband and wife shall each pay one half of all costs associated with the transfer of the property into the name of the wife.
8. The wife shall indemnify the husband and keep him indemnified against all liability in relation to all outgoings associated with the [southern suburban] property.
9. The parties shall cause the remaining proceeds of sale of the [former matrimonial home] property to be disbursed in the manner following:
(a) in payment to the husband of the sum of $28,023 less one half of the cost of [A]’s fees at [the private girls’ school] for the balance of the 2008 school year; (b) in discharge of the arrears of school fees to [the private girls’ school] and [the private boys’ school] as at the date of trial; (c) in payment of the balance of [A]’s school fees for the balance of the 2008 school year; (d) in discharge of all outstanding outgoings in relation to the [southern suburban] unit; (e) in payment to the wife of the balance then remaining. 10. The husband and wife shall do all such acts and things as are necessary to wind up [H] Pty Ltd and each party shall pay one half of the costs
[2008] FCWA 51
associated with the winding up. Both parties shall have liberty to apply
in relation to the winding up.11. The husband and wife shall do all such acts and things as are necessary to sell the block of land at [on the coast] owned by the [H] Superannuation Fund. Upon settlement of the sale, the parties shall cause the assets of the funds to be divided into equal shares with one half of the fund being rolled out into a fund nominated by the husband and the balance being retained in the fund as the entitlement of the wife.
12. The husband and wife shall each meet one half of any capital gains tax liability that may accrue on the sale of the [on the coast] property and each shall pay one half of all administration and other costs associated with the [H] Superannuation Fund up to the date on which the husband’s interest is rolled out of the fund. The wife shall thereafter be responsible for costs associated with the said fund.
13. Both parties have liberty to apply in relation to the implementation of these orders on giving seven (7) days’ notice to the other party.
14. If either party intends to seek costs, they shall file and serve submissions in support of that application within 14 days.
15. The respondent to the application for costs shall file and serve submissions in response within 14 days of service of the applicant’s submissions.
16. The party applying for costs shall file and serve submissions in reply within 7 days of service of the respondent’s submissions.
17. The applications and response of the parties (save for applications concerning costs) be dismissed.
DISTRIBUTION TABLE
Description Husband Wife $ $ Assets
[Suburban] Unit 475,000 [RMR] Pty Ltd 3,100 [2008] FCWA 51
[Boat] 1,500 Chattels - [suburban property] 5,645 Bank Accounts 307 [Company] Shares 8,620 Jewellery 3,000 Chattels – [Southern suburban property] 3,060 Partial property settlement 15,000 [Southern suburban] Unit 620,000 [H] Pty Ltd
Residual proceeds [from the 28,023 39,717 former matrimonial home] Paid legal costs added back 16,628 [RMR] superannuation 6,096 [H] Pty Ltd Superannuation Fund 152,836 152,836 Assets total 689,135 842,233 Liabilities [Suburban] mortgage 342,000
Westpac Visa 30,011 ATO Assessment 1,779 Loan from [his son] 5,771 [The private girls’ school] 17,027 [Local] Orthodontic Centre
650
[2008] FCWA 51
[Private boys’ school] School 4,360 City of [southern suburb] Rates 3,656 [Southern suburban] Strata Fees 4,060 [Southern suburban] Water Rates 1,038
CGT on sale of [the coastal block], costs of 15,000 15,000 winding up [H] Pty Ltd and transfer of [Southern suburban property] etc, say
Liabilities Total 394,561 45,791 Nett 294,574 796,442 Percentage of 1,091,016 27% 73% I certify that the preceding [149] paragraphs are a true copy of the reasons for
judgment delivered by this Honourable Court
Associate
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