MARSHMAN & MARSHMAN
[2015] FCCA 2794
•20 November 2015
FEDERAL CIRCUIT COURT OF AUSTRALIA
| MARSHMAN & MARSHMAN | [2015] FCCA 2794 |
| Catchwords: FAMILY LAW – Alteration of property interests – composition of the asset pool – assessment of contribution and future needs – credit issues. |
| Legislation: Family Law Act 1975, ss.75(2), 79 |
| Bevan & Bevan [2013] FamCAFC 116 Black & Kellner (1992) FLC 92-287 Hickey & Hickey & Attorney General for the Commonwealth of Australia [2003] FamCA 395 Oriolo & Oriolo (1985) FLC 91-653 Pierce v Pierce (1998) FLC 92-844 Stanford & Stanford [2012] HCA 52 Weir & Weir (1993) FLC 92-338 Williams & Williams [2007] FamCA 313 |
| Applicant: | MR MARSHMAN |
| Respondent: | MS MARSHMAN |
| File Number: | WOC 188 of 2014 |
| Judgment of: | Judge Altobelli |
| Hearing dates: | 16-17 April, 10 August 2015 |
| Date of Last Submission: | 11 October 2015 |
| Delivered at: | Sydney |
| Delivered on: | 20 November 2015 |
REPRESENTATION
| Counsel for the Applicant: | Mr Levy |
| Solicitors for the Applicant: | Phelps Reid Solicitors |
| Counsel for the Respondent: | Mr Maurice |
| Solicitors for the Respondent: | Helen Volk Lawyers |
ORDERS
Within 21 days, the parties are to submit an agreed Minute of Order reflecting and implementing these reasons for judgment.
If the parties are unable to reach agreement about an agreed Minute of Order as per Order 1 above, no later than 28 days hence, each party is to submit the Minute of Order they propose which reflects and implements these reasons for judgment.
IT IS NOTED that publication of this judgment under the pseudonym Marshman & Marshman is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT WOLLONGONG |
WOC 188 of 2014
| MR MARSHMAN |
Applicant
And
| MS MARSHMAN |
Respondent
REASONS FOR JUDGMENT
Introduction
These reasons for judgment explain the Orders that the Court has made in proceedings between the Husband and Wife about the division of their property.
Background
The Applicant Husband in this case is 53 years old. He describes himself as an (occupation omitted) and when he is not working as a fly-in/fly-out worker on an (omitted) of Australia, he lives in the (omitted) region of New South Wales.
The Respondent Wife in this case is 53 years old. She lives in (omitted), a suburb of (omitted) in the (omitted). She describes herself as a (occupation omitted).
They commenced cohabitation in 1988, married in 1990, and separated on 29 May 2013. They have two adult children, X, 23, and Y, 21.
After a relationship which spanned 25 years, the Husband and Wife accumulated a considerable portfolio of assets including real estate, vehicles and boats, bank accounts, furniture, shares and other items of property. There were also considerable liabilities, and not insubstantial superannuation entitlements. The Wife alleges that the Husband also had available to him financial resources that were associated with his employment.
The precise composition of the balance sheet was a major issue for determination by the Court. The Wife alleged, but the Husband denied, that he had not properly disclosed his financial circumstances to the Court. There was a disagreement about how, precisely, contributions should be assessed, and whether there should be any adjustment under s.75(2) of the Family Law Act 1975 (hereafter referred to as ‘the Act’). Issues of credit were raised, and need to be decided.
By the time of closing written submissions, the Wife submitted the contributions should be assessed in her favour as to 60 per cent, and thereafter there ought to be an adjustment of not less than 10 per cent in her favour under s.75(2) of the Act.
Conversely, the Husband submitted that contributions should be assessed as to 52.5 per cent in his favour, and that there was no basis for any adjustment to the Wife under s.75(2).
There was, initially, an issue about the valuation of the former matrimonial home, but that was determined by consent. There remains an issue about the valuation of a catamaran in the Husband’s name, and the Court will need to adjudicate in relation to this.
The evidence
The Husband relied on the following documents:
·Amended Initiating Application filed 1 April 2015;
·Application in a Case, filed 1 July 2015;
·Financial Statement, filed 1 April 2015;
·Affidavit of Mr Marshman, affirmed 31 March 2015;
·Affidavit of Mr Marshman, sworn/affirmed 4 June 2015;
·Affidavit of Mr Marshman, sworn/affirmed 1 July 2015;
·Affidavit of Mr M, sworn/affirmed 20 March 2015; and
·Affidavit of Mr B, sworn/affirmed 24 March 2015.
The Wife relied on the following documents:
·Second Amended Response filed 2 April 2015;
·Response to an Application in a Case, filed 17 July 2015;
·Updated Financial Statement, filed 2 April 2015;
·Affidavit of Ms Marshman, sworn 2 April 2015; and
·Affidavit of Ms Marshman, sworn 14 July 2015.
The applicable law
This is an application under s.79 of the Act which relevantly provides:
Alteration of property interests
(1) In property settlement proceedings, the court may make such order as it considers appropriate:
(a) in the case of proceedings with respect to the property of the parties to the marriage or either of them--altering the interests of the parties to the marriage in the property; or
(b) in the case of proceedings with respect to the vested bankruptcy property in relation to a bankrupt party to the marriage--altering the interests of the bankruptcy trustee in the vested bankruptcy property;
including:
(c) an order for a settlement of property in substitution for any interest in the property; and
(d) an order requiring:
(i) either or both of the parties to the marriage; or
(ii) the relevant bankruptcy trustee (if any);
to make, for the benefit of either or both of the parties to the marriage or a child of the marriage, such settlement or transfer of property as the court determines.
(2) The court shall not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.
(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 to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(b) the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(c) the contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage and any children of the marriage, including any contribution made in the capacity of homemaker or parent; and
(d) the effect of any proposed order upon the earning capacity of either party to the marriage; and
(e) the matters referred to in subsection 75(2) so far as they are relevant; and
(f) any other order made under this Act affecting a party to the marriage or a child of the marriage; and
(g) any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage.
Section 79(4) incorporates the provisions contained in s.75(2) of the Act, which states:
(2) The matters to be so taken into account are:
(a) the age and state of health of each of the parties; and
(b) the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment; and
(c) whether either party has the care or control of a child of the marriage who has not attained the age of 18 years; and
(d) commitments of each of the parties that are necessary to enable the party to support:
(i) himself or herself; and
(ii) a child or another person that the party has a duty to maintain; and
(e) the responsibilities of either party to support any other person; and
(f) subject to subsection (3), the eligibility of either party for a pension, allowance or benefit under:
(i) any law of the Commonwealth, of a State or Territory or of another country; or
(ii) any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia;
and the rate of any such pension, allowance or benefit being paid to either party; and
(g) where the parties have separated or divorced, a standard of living that in all the circumstances is reasonable; and
(h) the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income; and
(ha) the effect of any proposed order on the ability of a creditor of a party to recover the creditor's debt, so far as that effect is relevant; and
(j) the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party; and
(k) the duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration; and
(l) the need to protect a party who wishes to continue that party's role as a parent; and
(m) if either party is cohabiting with another person--the financial circumstances relating to the cohabitation; and
(n) the terms of any order made or proposed to be made under section 79 in relation to:
(i) the property of the parties; or
(ii) vested bankruptcy property in relation to a bankrupt party; and
(naa) the terms of any order or declaration made, or proposed to be made, under Part VIIIAB in relation to:
(i) a party to the marriage; or
(ii) a person who is a party to a de facto relationship with a party to the marriage; or
(iii) the property of a person covered by subparagraph (i) and of a person covered by subparagraph (ii), or of either of them; or
(iv) vested bankruptcy property in relation to a person covered by subparagraph (i) or (ii); and
(na) any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage; and
(o) any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account; and
(p) the terms of any financial agreement that is binding on the parties to the marriage; and
(q) the terms of any Part VIIIAB financial agreement that is binding on a party to the marriage.
In Bevan & Bevan [2013] FamCAFC 116, the Full Court of the Family Court of Australia considered the High Court’s decision in Stanford & Stanford [2012] HCA 52, which provided guidance on how s.79 was to be interpreted and implemented. Bevan endorsed the continuing application of the four-step approach articulated by the Full Court in Hickey & Hickey & Attorney General for the Commonwealth of Australia [2003] FamCA395, but on the basis that it is a shorthand distillation of the words of s.79, as opposed to being a statutory edict. The four steps articulated in Hickey at paragraph 39 are:
a)Identify and value the property, liabilities and financial resources of the parties; and
b)Identify and assess the contributions of the parties and express them as a percentage of the net value of the property; and
c)Identify and assess the other facts relevant under s.79(4)(d)-(g) including s.75(2) and determine the adjustment (if any) to be made to the contribution entitlements at step two; and
d)Consider the effect of the above and resolve what order is just and equitable in all the circumstances.
The decisions in Stanford and Bevan also emphasise the importance of making findings that any order is just and equitable for the purposes of s.79(2), independent of the s.79(4) process. In most cases, such as the present one, it makes no difference to the outcome of the alteration of property interests exercise. Even if the just and equitable consideration were treated as a threshold issue in this case the parties have, by their actions (separation, and re-ordering of their financial lives since then), and claims (divergent claims about their property under s.79 of the Act), indicated that they themselves consider it just and equitable that some order be made under s.79 adjusting their property interests as presently held. It is clearly just and equitable in this case to make an order.
Both decisions also emphasise the importance of identifying, according to ordinary common law and equitable principles, the existing legal and equitable interests of the parties in the property. This is not inconsistent with step one in Hickey. A problem that commonly arises, and indeed does arise in this case, relates to property that once existed but no longer does. It is no longer appropriate to notionally “add-back” this property. This disposed of property may still be significant, however, and needs to be considered as part of the history of the marriage, as well as a s.75(2)(o) consideration. As the Full Court said in Bevan, such disposals must be dealt with carefully. In practical terms this means carefully assessing the evidence about the disposal, attempting to quantify it if this is at all possible, and then assessing its weight whilst neither placing too much, or too little, weight on it. Maintaining jurisprudential rigour, transparency and accountability may well be challenging in the era post the demise of the traditional add-back.
A significant issue in this matter was the alleged non-disclosure of the Husband. Attempting to deal with non-disclosure often puts the other spouse to considerable difficulty with regards to investigating their financial affairs. The Full Court in Weir (1993) FLC 92-338 at 79,593–4 made the following statement regarding the duty to disclose and the Court’s powers where non-disclosure has been found:
This Court has pointed out in a line of cases leading up to the recent decision of the Full Court in Black & Kellner (1992) FLC 92-287, that it is the duty of a party involved in property proceedings in this jurisdiction to make a full disclosure of their financial affairs. See also Giunti & Giunti (1986) FLC 91-759, and Mezzacappa & Mezzacappa (1987) 11 Fam LR 957; (1987) FLC 91-853. It is clear enough from his Honour's findings in the present case that the husband had not done so and had in fact pocketed the proceeds of a substantial number of cash sales. It is obvious that in most cases of this nature it is difficult enough for the other party to establish that fact let alone establish the quantum of what has been taken.
It seems to us that once it has been established that there has been a deliberate non-disclosure, which follows from his Honour's findings in this case, then the Court should not be unduly cautious about making findings in favour of the innocent party. To do otherwise might be thought to provide a charter for fraud in proceedings of this nature…
We appreciate that this is something of a broad brush approach, but, as we have said, where there is clear evidence of non-disclosure as there was here, the Court should not be unduly cautious about making findings in favour of the other party. It has been said by one commentator (O'Ryan and Broadfoot, 5th National Family Law Conference Handbook, p 249) the failure to disclose undermines the whole process of adjudication of proceedings for a settlement of property in that the court is unable to identify the property of the parties, to properly assess contribution, or to properly assess s 75(2) factors.
Another issue in this case is how, precisely, I should weigh and assess the initial contribution made by the parties. In this regard, I need to consider the decision of the Full Court in Pierce v Pierce (1998) FLC 92-844. A useful decision of the Full Court examines its earlier decision in Pierce v Pierce together with a later case. In Williams & Williams [2007] FamCA 313, the Full Court states as follows at paragraphs 26, 27, 28, 29 and 32:
26. We think there is force in the proposition that a reference to the value of an item as at the date of the commencement of cohabitation without reference to its value to the parties at the time it was realised or its value to the parties at the time of trial, if still intact, may not give adequate recognition to the importance of its contribution to the pool of assets ultimately available for distribution between the parties Thus where the pool of assets available for distribution between the parties consists of say an investment portfolio or a block of land or a painting that has risen significantly in value as a result of market forces, it is appropriate to give recognition to its value at the time of hearing of the time it was realised rather than simply pay attention to its initial value at the time of commencement of cohabitation. But in doing so it is equally as important to give recognition to the myriad of other contributions that each of the parties has made during the course of their relationship.
27. In Pierce v Pierce when speaking of the relevance to be paid to initial contributions the Full Court (Ellis, Baker and O’Ryan JJ) referred to Fogarty J in Money v Money (1994) FLC 92-485 at 81,054; (1994) 17 Fam LR 814 at 816:
…respective contributions of the parties over a long period of marriage “offset” the significance which might otherwise be attached to a greater initial contribution by one party…ultimately, when it comes to the trial such a contribution is one of a number of factors to be considered. The longer the marriage the more likely it is that there will be latter factors of significance and in the ultimate the exercise is to weigh the original contribution with all other, later, factors and those later factors, whether equal or not, may in the circumstances of the individual case reduce the significance of the original contribution.
28. The Full Court (Ellis, Baker and O’Ryan JJ) then said at [28]:
In our opinion it is … a question of what weight is to be attached, in all the circumstances, to the initial contributions. It is necessary to weigh the initial contributions by a party with all other relevant contributions of both the husband and the wife. In considering the weight to be attached to the initial contribution, in this case of the husband, regard must be had to the use made by the parties of that contribution.
29. Pierce v Pierce was a case in which the husband brought in $200,000 cash into the relationship. He applied that money towards the purchase of a matrimonial home. He was employed throughout the marriage and supported the wife who, whilst in some paid employment primarily attended to domestic tasks and taking care of the children. The Full Court assessed the parties’ respective contributions to a pool of $320,000 as 70 per cent in favour of the husband and 30 per cent in favour of the wife at the end of a 10 year relationship.
…
32. In Hunt v Zuryn (2005) FLC 93-226; (2005) 34 Fam LR 169 the Full Court (Kay, May and Boland JJ) allowed an appeal in a property case where a pool of assets of $1.12million had been assessed for contribution purposes as 75 per cent in favour of the husband and 25 per cent in favour of the wife. The Court in allowing the appeal indicated that an assessment of 75:25 fell outside the realms of an acceptable range saying at 79,730; 170:
Such an assessment ought adequately recognise that much of the parties’ wealth can be attributed to the capital growth in the assets introduced by the husband at the commencement of the marriage but at the same time bringing into consideration a myriad of other contributions each made in the course of their relationship.
Accordingly, I must not only identify the contributions of each party, but also assess the weight to be attributed to these contributions having regard to many factors including what has occurred afterwards.
Credit issues
It is necessary in this case to make observations about, and findings in relation to, the credibility of the Husband and the Wife.
The Husband’s evidence about his financial affairs is unsatisfactory. It is, regrettably, so unsatisfactory that it casts a shadow of unreliability over all of his evidence. Unless the Husband’s evidence about financial matters is corroborated by independent documentation, the Wife’s evidence is to be preferred. The reasons for this finding includes the following:
a)The Husband was frequently unresponsive in cross-examination. The degrees of his unresponsiveness seemed to grow in direct proportion to his growing awareness about the inherent difficulty and implausibility of the evidence that he was himself giving.
b)At times, however, he showed a remarkable lucidity in relation to how others might view the evidence that he was giving. For example, when it was demonstrated to him that his disclosure of various assets in his Financial Statements seemed to coincide with the production of documents to the Court pursuant to subpoena, he was able to acknowledge, in relation to the deficiencies “it appears that way”. When confronted with the amazing dissonance in his evidence about an alleged purchase of furniture from Ms M, in relation to the date of payment (August 2013) as contrasted to the date of receipt of payment (November 2013), he acknowledged: “There appears no explanation”. When confronted with a long list of examples of omissions in financial disclosure in his Financial Statements, he acknowledged “it might look that way”.
c)In the early stages of his evidence, the Court would have been prepared to describe his evidence about disclosure as demonstrating a somewhat cavalier attitude. After all, he described himself as a “(occupation omitted)”, the inference being that his real expertise was in his trade, and not in the nuances of financial disclosure. That might have explained the “triple dipping” of his compensation claim of $25,000, asserted to be a contribution that he made to the (omitted) purchase and savings. Moreover, it might have explained significant memory lapses in terms of contribution towards the purchase and sale of properties, and perhaps even $1,000 weekly discrepancies in his income, in some Financial Statements. The point was reached, however, where the sheer weight and consistency of his cavalier approach to disclosure led the Court to reclassify his conduct as blatant non-disclosure. The Court finds that he failed to disclose the true nature and value of his employment package in some of his evidence. He has failed to disclose the true nature of his relationship with Ms M (who he described as his bookkeeper – a relationship the Court does not accept) particularly his financial relationship with her. There was no adequate explanation given for why Ms M could not have given evidence to corroborate the Husband’s assertions. The Court finds that it is highly likely that he had access to at least some of her bank accounts, and she probably had access to some of his bank accounts. The furniture transaction was probably a sham. It is clear from the evidence that she was very much involved in the preparation of the Husband’s evidence in this case.
It should be noted that the matters set out above are not presented as an exhaustive basis for making findings about the Husband’s credibility. Indeed, more examples will probably emerge from these reasons for judgment.
Compared to the Husband’s evidence, the Wife’s evidence was far more cogent and plausible. She seemed to have a better grip of the financial matters about which she was cross-examined. She made appropriate concessions, for example, about the receipt of the Husband’s compensation payments, and about his contribution both as breadwinner and as homemaker and parent. She accepted the mistakes that she made about matters like bank account numbers in her Affidavit. There was the odd occasion when the Wife, in cross-examination, was flippant and unreasonable (for example, about the Husband having to meet all the outgoings and liabilities on the boat, because it was his boat, even though it clearly appeared on the balance sheet; about the Husband potentially bearing all the liability for the residuals on the car leases) but the Court is prepared to put this down to frustration, as compared to the Husband who came across as quite calculating at times. The Court finds that it is possible that the Wife in fact knew somewhat more about the Husband’s finances that she let on, but this does not detract in any way from reality that the onus of disclosure to the Court was always on the Husband, insofar as it related to his financial affairs. Whilst the Court generally prefers the Wife’s evidence over that of the Husband, this is not a universal truth. For example, the Wife appears to have a good earning capacity, indeed it is probably an earning capacity that has not been realised to its maximum.
The balance sheet
During written submissions, Counsel for both parties agreed that the balance sheet reproduced below represented the respective contentions of each party:
| Ownership | Description | Wife / de facto partner’s value | Husband / de facto partner’s value | |
| ASSETS | ||||
| REAL ESTATE | ||||
| 1. | J | Property D, | $900,000 | Agreed $900,000 |
| 2. | J | Property M | $510,000 | Agreed $510,000 |
| 3. | J | Property B | $535,000 | Agreed $535,000 |
| 4. | J | Property P | $580,000 | Agreed $580,000 |
| 5. | H | Property C1 | $230,000 | Agreed $230,000 |
| 6. | H | Property C2 | $230,000 | Agreed $230,000 |
| 7. | J | Property V | $280,000 | Agreed $280,000 |
| VEHICLES AND VESSELS | ||||
| 8. | H | Subaru (omitted) | $28,230 | Agreed $28,230 |
| 9. | H | Boat (omitted) | $190,000 | $170,000 |
| 10. | H | Mazda 3 (driven by X) | Agreed to be excluded$15,060 | Agreed $15,060 |
| 11. | H | Mitsubishi Lancer (driven by Y) | Agreed to be excluded $11,750 | Agreed $11,750 |
| 12. | W | Hyundai i30 | $20,500 | Agreed $20,500 |
| 13. | H | (omitted) motor bike | $3,100 | Agreed $3,100 |
| 14. | H | Jet ski and trailer (1/2 share owned with (omitted)) | $1,000 | Agreed $1,000 |
| BANK ACCOUNTS | ||||
| 15. | W | Bank account with (omitted) Bank (omitted) | $824 | Agreed $824 |
| 16. | H | (omitted) Bank Account (omitted) same as 25(c) | Not Disclosed | Does not exist |
| 17. | H | (omitted) Bank Account (omitted) | Not Disclosed | NIL |
| 18. | H | (omitted) Bank Account (omitted) | Not Disclosed | Does not exist |
| 19. | H | (omitted) Bank Account in name of (omitted) | Not Disclosed | Not Relevant |
| 20. | H | (omitted) Bank account (omitted) | Closed | Agreed Closed |
| 21. | W | (omitted) Bank account (omitted) | $355 | Agreed $355 |
| 22. | H | (omitted) Bank account (omitted) | $7.48 | Agreed $7.48 |
| 23. | W | (omitted) account (omitted) | $17 | Agreed $17 |
| 24. | J | (omitted) Bank Account (omitted) closed | $0 | Agreed $0 |
| 25. | W | (omitted) Bank Account (omitted)/ (Rental account) | $1,800 | $12,816 As 15/4/15 |
| 26. | J | (omitted) Credit Union a/c | $7 | Agreed $7 |
| 27. | H | (omitted) Bank (omitted) account | $ believed to be closed | Agreed Closed |
| 28. | H | (omitted) Bank car repayments debited (omitted) | $25,510 | $ 5,278 |
| 29. A | W | (omitted) account Y funds received by Wife | $440.30 | $440.30 |
| 29B | H | (omitted) account Y funds received by Husband | $440.30 | $440.30 |
| 30. | H | (omitted) account | Not disclosed | NIL |
| 31. | H | | | NIL |
| 32. | H | | | Does not exist |
| FURNITURE | ||||
| 33. | H | Husband’s furniture | NK | $65,000 |
| 34. | W | Wife’s furniture | $6,600 | Agreed $6,600 |
| SHARES | ||||
| 35. | H | (omitted) o/seas stock and savings plan | See Property disposed | Sold |
| 36. | W | (omitted) share portfolio | $2,827 | Agreed $2,827 |
| 37. | J | (omitted) shares (1152 at $29.02) | $33,408 | Agreed $33,408 |
| 38. | J | (omitted) shares | $478 | Agreed $478 |
| 39. | H | (omitted) and Employee Incentive | $21,075 | Nil $21,000 (sold) |
| 40. | H | (omitted) Employee Shares | See Financial resources | Agreed (sold) Nil |
| 41. | H | (omitted) shares | See Property disposed | (sold) |
| 42. | | | | |
| 43. | J | (omitted) shares | $700 | Agreed $700 |
| 44. | J | (omitted) shares | $378 | Agreed $228 |
| 45. | W | (omitted) shares | $1,187 | Agreed $1,187 |
| 46. | W | (omitted) Shareholdings | $0 | Agreed $0 |
| MISCELLANEOUS | ||||
| 47. | W | Wife’s jewellery | $ 0 | $ 2,500 |
| Total | $3,630,694.0 8 | $3,647,753.0 8 |
| PROPERTY DISPOSED & OTHER ITEMS | ||||
| 48. | H | Cash taken by Husband | $ 2,000 | $NIL |
| 49. | W | Funds retained by Wife from (omitted) | $ 0 | $7,920 |
| 50. | W | Fund retained by Wife (omitted) account (omitted) at separation | $0 – wife applied funds to joint liabilities until account reduced to current balance of $17 | $30,782 |
| 51. | W | Sale proceeds caravan – prior to separation | $0 | $17,000 |
| 52. | W | $10,000 paid from joint funds to Helen Volk Trust Account | $10,000 | Agreed $10,000 |
| 53. | H | Funds paid to H on sale (omitted) shares | $10,000 | NIL was in boat a/c |
| 54. | W | Additional funds paid by Wife to top up loans account not matched by Husband | -$4,000 | NK |
| 55. | H | Proceeds of sale (omitted) 66 shares | $22,761 + $6.89 | NIL (furniture) |
| 56. | H | (omitted) Shares sold by H | $27,343 | NIL (furniture) |
| 57. | H | (omitted) Shares sold by H | $8,594 | NIL (furniture) |
| 58. | H | Mazda Residual to be paid by X | $agreed to be excluded (payout figure $-9536.58) | NR |
| 59. | Lancer Residual to be paid by Y | $agreed to be excluded (payout figure $-7724.32) | NR | |
| 60. | W | (omitted) shares (sold by H prior to separation) | $0 | $9,622 |
| Total | $76,704.89 | $75,324.00 |
| LIABILITIES | ||||
| 61. | J | Property B (omitted) | $223,133 | Agreed $223,133 |
| 62. | J | Property V – (omitted) | $248,963 | Agreed $248,963 |
| 63. | J | Property C1 – (omitted) | $269,963 | Agreed $269,963 |
| 64. | J | Property C2 – (omitted) | $268,503 | Agreed $268,503 |
| 65. | J | Property M – (omitted) | $402,190 | Agreed $402,190 |
| 66. | J | Property P – (omitted) | $252,578 | Agreed $252,578 |
| 67. | H | (omitted) credit card (omitted) | $0 | Agreed Closed |
| 68. | J | Boat loan – (omitted) | $135,943 | Agreed $135,943 |
| 69. | H | Diners Card account no: (omitted) | $0 | Agreed $0 |
| 70. | H | Lease Husband’s Subaru | $3,835 | Agreed $3,835 |
| 71. | H | Lease Mazda 3 (X’s car) | $16,259 | Agreed $16,259 |
| 72. | H | Lease Lancer (Y’s car) | $13,793 | Agreed $13,792 |
| 73. | H | (omitted) – Lancer overuse charge - incurred by H sending vehicle to WA – Wife bore cost to transport vehicle back to NSW | $ 0 | $1,844 |
| 74. | W | (omitted) loan | $28,724 | Agreed $28,724 |
| 75. | W | (omitted) Bank Visa (omitted) | $2,234 | Agreed $2,234 |
| 76. | W | (omitted) - visa | $532 | Agreed $532 |
| 77. | H | (omitted) Bank Mastercard | $19,840 | Agreed $19,840 |
| 78. | H | Capital Gains Tax Shares | $1,785 | $1,785 |
| 79. | H | Capital Gains Tax Properties | $161,378 | E$161,378 |
| 80. | W | Capital Gains Tax Properties | E$17,328 | E$17,328 |
| 81. | J | Sale Costs properties | E$51,000 | E$85,000 |
| 82. | J | Legal Fees on sale | E$9,000 | E$9,000 |
| 83. | H | 2014 tax payable | $0 no evidence produced and potentially duplicates items 78 and 79 | $18,913.30 |
| Total | $2,126,981.00 | 2,194,409.30 |
| SUPERANNUATION | |||||
| Member | Name of Fund | Type of Interest | Wife / de facto partner’s value | Husband / de facto partner’s value | |
| 84. | W | (omitted) Super | Accumulation | $29,977 | Agreed $29,977 |
| 85. | W | (omitted) Super | Deferred benefit | $106,790.26 | $106,790.02 Agreed |
| 86. | W | (omitted) Super | $27,100 | Agreed $27,100 | |
| 87. | H | (omitted) Super TO BE VALUED | Defined benefit | $674,849 | $524,176 (as at separation) $674,849 (April 2015) |
| 88. | W | (omitted) | Accumulation | $0 | $0 |
| Total | $838,716.26 | $ 688,043.02 Or $838,716.02 |
| FINANCIAL RESOURCES | ||||
| Ownership | Description | Wife / de facto partner’s value | Husband / de facto partner’s value | |
| 89. | H | (omitted) Employee Share Plan | $ 3,152 | $ NIL |
| 90. | H | Company matching shares – unvested | $ 36,500 | $see Item 39 NIL |
| 91. | H & W | Taxation reimbursement available to Husband 2014 | $ 15,000 – 25,000 | $ NIL |
| 92. | W | Anticipated tax return by Wife | $309 | Agreed $309 |
| 93. | H | Restricted Stock Units – not disclosed (200 - $16726 USD, 548 $31,751 USD, 856 - $60,135 USD, @$1.26 | E$136,851.12 | NIL (not vested) |
| 94. | H | Salary Continuance Income Protection Insurance | $156,000 per annum as at 2013 | NIL (H not in (omitted) Super Fund – not available) |
| 95. | H | (omitted) tax protection claim 2014 – not disclosed or claim made | E$25,000 | NIL |
| Total | $372,812.12 – $382,812.12 | $309.00 |
The first item in respect of which an adjudication is required is item 9, the catamaran registered in the Husband’s name. He says it has a value of $170,000 and the Wife says the value is $190,000. The Court finds that it is valued at $170,000, having regard to the Expert Report prepared by Mr B, filed 1 April 2015. Mr B was cross-examined, but there was no reason to reconsider his expert evidence after his cross-examination. The original survey of the boat does not form an adequate basis for a finding in the Wife’s favour about a higher value. Item 9 will read $170,000.
Whilst items 10 and 11 appear on the balance sheet, the parties have agreed that, as these vehicles are used by their respective children, items 10 and 11 should be excluded from the balance sheet. They have also agreed, as a necessary corollary to the above, that the liabilities at items 58 and 59 should also be excluded. The Court agrees with each of these contentions. Items 10, 11, 58 and 59 should appear as blank on the balance sheet.
It is hard to understand the basis on which items 16-19 inclusive should appear on the balance sheet. Obviously the Wife contends that these are assets owned or controlled by the Husband, but not disclosed. The Husband contends that items 16 and 18 simply do not exist, that the evidence about item 17 is that it has a nil balance, and that the account at item 19 appears to be a reference to an account in the name of Ms M. Even though the Court has doubts about the Husband’s credibility in relation to financial matters, it does not follow that every assertion made by the Wife needs to somehow be represented in the balance sheet. It is simply not clear to the Court what the Wife was asking the Court to do by having these items appear on the balance sheet. Her contention about non-disclosure is unaffected by not including these items in the balance sheet. It is one thing for the Court to find that the Husband probably had access to accounts in Ms M’s name, as she probably had access to accounts in his name, but that does not result in the inclusion of any account in Ms M’s name on the balance sheet, at least not on the evidence available to the court. Item 16-19 inclusive should, therefore, be blank.
Item 25 appears to be the (omitted) Bank account that was used by the parties to collect rentals. It is unclear to the Court how the Wife’s contention of a balance of $1,800 is established. It does appear that the balance as at 15 April 2015, just the day before the hearing commenced, was $12,816. It is no doubt a fluctuating account but, for present purposes, and doing the best the Court can, it will appear at item 25 as $12,816.
Item 28 is described as (omitted) Bank car repayments. Having reviewed the evidence, the Court is not able to understand the assertion by the Wife in item 28 that a sum of $25,510 should be included. The Wife’s explanation for this in her submissions in reply takes the matter no further.
Items 30-32 are unclear. The reference back to item 17 suggests that the accounts in question probably came up in cross-examination. It is possible that items 30-32 form part of the Wife’s general case about non-disclosure, but that in itself does not justify putting items on a balance sheet. Items 30-32 should be blank, and issues of non-disclosure can be dealt with in another fashion.
Item 33 is contentious. The Husband asserts in his Affidavit that in or about August 2013, he arranged with Ms M to purchase her household of “premium furniture” for $65,000, and that he paid her that amount in two instalments. He says the source of the funds was a tax refund received by him on 23 August 2013 in the sum of $25,844, and then, presumably the balance from the sale of his employee incentive (omitted) shares. The Husband was extensively cross-examined about this. He provided no satisfactory explanation as to why, if he had in fact purchased $65,000 worth of premium furniture, it did not appear in his Financial Statement of 27 February 2014 shortly after the transaction. He could not explain why the receipt for the $65,000 was provided several months after the money was paid. He tried to say that he had finished paying it in November, but his own evidence suggested there were two cheques which were drawn in August 2013. The Wife’s case is that the entire transaction is a sham, and that, in substance, what the Husband did was to pay $65,000 to Ms M in consideration for furniture that he does not possess and which may well not be worth the $65,000 he paid. The Court finds that item 33 should read “$65,000”, but it would be mischaracterising the evidence to say that it represents the Husband’s furniture. A more accurate description is “payment made by Husband allegedly for furniture”. The Husband agrees that it should be on the balance sheet, but this raises consequential issues about the source of funds used, which will be dealt with below.
At item 39 of the balance sheet, the Wife contends for the inclusion, presumably as a form of add-back of $21,075, being the Husband's (omitted) company shares that he used to pay legal costs, and “other everyday expenses” (paragraph 79, Husband’s affidavit of 31 March 2015). It is common ground the shares have been sold. The Husband contends that it should not be included in the balance sheet as, he will contend, the Wife has used assets to pay her legal fees. The difficulty with the Husband’s contention is that his own evidence at paragraph 79 talks of an intention to do something, which includes an intention to use monies for legal expenses, but also “other everyday expenses”. The onus was on him to provide disclosure about this. The onus was on him to establish how much of the funds supposedly went to pay legal fees, and how much of it went on his personal expenses. The mere fact that assets were sold to meet personal expenses is not a justification for not including assets on the balance sheet which otherwise should have been there, particularly in circumstances where the Husband is working full time and well-remunerated. Item 39 will read $21,075.
Item 40 refers to unvested (omitted) shares, and should thus be treated as a financial resource. Item 40 should therefore read nil. Item 41 represents shares sold and will be dealt with elsewhere. It too should read nil.
Item 47 is, apparently, the Husband’s contention as to the value of the Wife’s jewellery. There is no basis in the evidence for this. The Wife makes no admission against interest in relation to this item. Item 47 should read nil.
Items 48 to 60, with the exclusion of items 58 and 59, are very contentious. In short, the Wife asserts that these items should be added back on the basis, in effect, that the Husband’s dissipation of these funds, and in some cases the Wife’s retention of these funds, represent a premature distribution of matrimonial assets. Her submission is made in the broader context of a case where she complained, in the loudest and clearest terms, of the Husband’s non-disclosure of relevant financial information, and of the tremendous cost and effort that she has had to undertake in order to establish some semblance of the financial circumstances of the parties. By contrast, the Husband contends these are not assets, and that there is no basis whatsoever for their inclusion in the balance sheet. His argument is that the financial lives of both the Husband and the Wife continued after separation. Each of them has spent funds on legal fees, living expenses, and the maintenance of various assets which are represented in the balance sheet.
It is best to deal with each item on a line basis.
There is no evidence to support the contention about the $2,000 in item 48. This item should read nil.
Item 49 refers to funds that the Wife retained when the joint (omitted) investment pertaining to the children’s education was cashed in. She agreed in cross-examination that the money, i.e. $7,920 was received before the date of separation. She says that it went into one of the (omitted)-linked accounts which was used to fund their joint living expenses and to pay liabilities. The Court accepts the Wife’s evidence that the funds were in fact received before the date of separation, and were in fact deposited into a joint account. There is no basis for the add-back contended for at item 49. This item should read nil.
Item 50 is an add-back contended for on behalf of the Husband. He says that $30,782 was retained by the Wife in an (omitted) account at the time of separation. The Wife does not cavil with this, but submits that as she was responsible for managing the parties’ finances, as complicated as they were, in the post-separation period, the money was simply used for that purpose. There can be no question that the evidence indicates that in the post-separation period the Wife bore the brunt of the responsibility for managing the investment properties and ensuring that there was sufficient funds to meet the liabilities in respect of those properties. The Husband could hardly contend that he bore the brunt of this, given that he was working (employer omitted) for about half of the year. The Wife’s contention is, more likely than not, correct. Item 50 should read nil.
Item 51 represents sale proceeds of a caravan, sold prior to separation. The Wife agreed that she sold the caravan. She was challenged as to whether it was sold at market value, and how the funds were applied. She says that the sale proceeds were deposited into the (omitted) account, which was used to manage the joint finances. Her account is plausible. The Husband could not prove to the contrary. Item 51 should read nil.
Item 52 is an agreed add-back, being funds that the Wife used from joint accounts to pay for her legal fees.
Item 53 is an add-back contended on behalf of the Wife, being funds paid to the Husband when the (omitted) shares were sold. It is hard to understand why she contends for an add-back. She deals with this issue at paragraph 108 of her Affidavit. It seems that, in effect, the Husband and the Wife shared the sale proceeds of the (omitted) shares, and applied them for their own purposes. No case for add-back is made out. Item 53 should read nil.
The basis of the contended add-back at 54 is not understood. Why it is expressed as a negative is unclear. As this contended item is not adequately particularised, item 54 will read nil.
Items 55-57 are add-backs contended by the Wife, but resisted by the Husband. The dispute does not appear to be about whether the Husband in fact sold the shares in question – he concedes this. He says, however, that this was the source of the funds paid to Ms M, and represented at item 33 of the balance sheet. The Court is satisfied that the Wife has established that the transaction in relation to the furniture was a sham, and that $65,000 should in fact be added back, as indeed the Court has done so (see ruling on item 33 of the balance sheet). But the Husband’s evidence about the application of the sale proceeds of these shares, for the stated purpose of “buying” premium furniture from Ms M, could not be challenged. The wife cannot have it both ways, i.e. to add back the $65,000 paid, and the sale proceeds of the asset used to fund the payment. Items 55-57 should read nil.
Item 60 should also read nil, as the Court was not directed to, and otherwise could not find the evidence to support the Husband’s contention.
Likewise, item 73 will read nil. The Court was not referred to any evidence, nor could it find any on its own efforts, to justify this contended add-back.
Items 78-83 reflect a fundamental difference of approach as between the parties. The Orders proposed by the Wife in her Second Amended Response filed 2 April 2015 seem to contemplate that, other than her retaining the former matrimonial home at Property D and the property at Property V, Queensland, the Husband would retain all remaining properties. The Orders proposed by the Husband are those in his Amended Initiating Application filed 1 April 2015. He wishes to retain the Property D property and the catamaran, and he is happy for the Wife to retain Property V in Queensland, but proposes that all other assets be sold, and all liabilities be discharged, before a division of the net sale proceeds. The balance sheet items create the impression that there is agreement between the parties about what the tax, sale costs and legal fees will be on the sales of properties, but that is highly unlikely having regard to the reality of fluctuating values and uncertainties about when and how properties might be realised. The Court is certainly not prepared to impose on the Husband alone the responsibility for selling properties in their property portfolio, many of which are jointly owned. The taxation implications alone of these transactions are potentially quite complex. A far safer method of dealing with these potential liabilities is to note them as liabilities, the values of which will crystallise in due course, and to make provision for them in the Orders. For balance sheet purposes, however, items 78-82 should read nil.
Item 83 falls into a different category to the preceding items. It is the Husband’s income tax. The evidence in support of this is not clear. His Financial Statement sworn 31 March 2015 does not refer to an income tax liability. Item 83 should read nil. Even if there were a tax liability, it is unclear why it would automatically come onto the balance sheet, having regard to the date of separation.
The only issue in relation to superannuation is reflected at item 87. The Wife contends that the Husband's (omitted) Super ought to be included in the balance sheet at $674,849, based on a current market value. The Husband contends it should be $524,176, as at the date of separation. The Court acknowledges that the orthodox approach would be to have the asset at its current market value, but it is difficult to argue against the Husband’s submission that the Wife could not be deemed to have made a contribution to the increase in value of the superannuation post-separation. The Wife does not make an argument for post-separation contribution. None of the evidence before the Court would lead to such an argument being sustained. To leave the value of the superannuation in the balance sheet at its current value creates the need for the Court to undertake a process of assessing contribution which involves unnecessary arithmetic gymnastics. There is no discernible prejudice to the Wife, therefore, in having item 87 read $524,176, which is the value of the Husband's (omitted) Super at the date of separation.
At items 89-95, under the heading Financial Resources, the Wife seeks to attribute a value to items which are, by definition, financial resources and thus not necessarily easily valued.
Item 89 will not be allowed, as it duplicates item 39 of the balance sheet.
If item 90 is indeed unvested, no value can be attributed to it because the conditions precedent to vesting have not been satisfied.
The Court could find no evidence to support the contention that item 91 is payable to the Husband at some future time.
Item 93 was certainly a contentious item in cross-examination. The Court formed the very strong impression that the Husband found it very convenient not to disclose this resource which may, in the fullness of time, have a considerable value to him. It is highly artificial, and indeed quite improper, to seek to attribute a value to it. That is not to say that the restricted stock units are not a financial resource available to the Husband, indeed a potentially valuable one. It is just that it cannot be valued in the glib fashion asserted by the Wife.
Item 94 is salary continuance income protection insurance. It is hard to understand how this would be construed as a financial resource. To somehow attribute the value to it in such tangible terms stretches the concept of “financial resource”.
Item 95, the (omitted) tax protection claim, is hotly contested by the Husband. He says no such claim exists. The evidence that he gave in cross-examination, however, is that the (omitted) tax protection payment was an entitlement to claim back tax paid overseas, or at least to minimise the impact of tax having been paid overseas, so that the payer is not disadvantaged by reason of an obligation to pay tax overseas. The Husband agreed that he is eligible to make the claim. He agreed that he had done so in the past. There was no evidence about when he last claimed the payment. Clearly, this (omitted) claim is a resource available to him, but to somehow quantify it at $25,000 in the absence of specific evidence advances the matter nowhere.
It follows from the above that whilst the Court recognises that the Husband does have available to him the various financial resources referred to at items 89-95, it is not possible to somehow ascribe the suggested values to them.
The Court proposes to disregard any balance sheet item having a value of less than $500. Retaining these items makes the balance sheet more complex, and thus the s.79 exercise more problematic. There is no discernible prejudice to either the Husband or the Wife in doing so, given the size of the asset pool. Accordingly, any asset having a value less than $500 will be treated in the line as being blank.
Having regard to the Court’s findings about the balance sheet, the situation will be as follows:
| Ownership | Description | Court’s value | |
| ASSETS | |||
| REAL ESTATE | |||
| 1. | J | Property D | $900,000 |
| 2. | J | Property M | $510,000 |
| 3. | J | Property B | $535,000 |
| 4. | J | Property P | $580,000 |
| 5. | H | Property C1 | $230,000 |
| 6. | H | Property C2 | $230,000 |
| 7. | J | Property V | $280,000 |
| Total (real estate) | $3,265,000 | ||
| VEHICLES AND VESSELS | |||
| 8. | H | Subaru (omitted) | $28,230 |
| 9. | H | Boat catamaran (omitted) | $170,000 |
| 12. | W | Hyundai i30 | $20,500 |
| 13. | H | (omitted) motor bike | $3,100 |
| 14. | H | Jet ski and trailer (1/2 share owned with (omitted)) | $1,000 |
| Total (vehicles and vessels) | $222,830 | ||
| BANK ACCOUNTS | |||
| 15. | W | Bank account with (omitted) Bank (omitted) | $824 |
| 25. | W | (omitted) Bank Account (omitted) – loans acc)(Rental account) | $12,816 |
| Total (bank accounts) | $13,640 | ||
| FURNITURE | |||
| 33. | H | Payment made by Husband allegedly for furniture | $65,000 |
| 34. | W | Wife’s furniture | $6,600 |
| Total (furniture) | $71,600 | ||
| SHARES | |||
| 36. | W | (omitted) share portfolio | $2,827 |
| 37. | J | (omitted) shares (1152 at $29.02) | $33,408 |
| 39. | H | (omitted) and Employee Incentive | $21,075 |
| 43. | J | (omitted) shares | $700 |
| 45. | W | (omitted) shares | $1,187 |
| Total (shares) | $59,197 | ||
| Total assets | $3,632,267 |
| PROPERTY DISPOSED & OTHER ITEMS | |||
| 52. | W | $10,000 paid from joint funds to Helen Volk Trust Account | $10,000 |
| Total add-backs | $10,000 | ||
| LIABILITIES | |||
| 61. | J | Property B – (omitted) | $223,133 |
| 62. | J | Property V – (omitted) | $248,963 |
| 63. | J | Property C1 (omitted) | $269,963 |
| 64. | J | Property C2 – (omitted) | $268,503 |
| 65. | J | Property M – (omitted) | $402,190 |
| 66. | J | Property P – (omitted) | $252,578 |
| 68. | J | Boat loan – (omitted) | $135,943 |
| 70. | H | Lease Husband’s Subaru | $3,835 |
| 71. | H | Lease Mazda 3 (X’s car) | $16,259 |
| 72. | H | Lease Lancer (Y’s car) | $13,793 |
| 74. | W | (omitted) loan | $28,724 |
| 75. | W | (omitted) Bank Visa (omitted) | $2,234 |
| 76. | W | (omitted) - visa | $532 |
| 77. | H | (omitted) Bank Mastercard | $19,840 |
| Total liabilities | ($1,886,490) |
| SUPERANNUATION | ||||
| Member | Name of Fund | Type of Interest | Court’s value | |
| 84. | W | (omitted) Super | Accumulation | $29,977 |
| 85. | W | (omitted) Super | Deferred benefit | $106,790.26 |
| 86. | W | (omitted) Super | $27,100 | |
| 87. | H | (omitted) Super | Defined benefit | $524,176 |
| Total superannuation | $688,043.26 |
| TOTAL NET ASSETS (including superannuation) | $2,443,820.26 |
Assessment of contribution
Each of the Husband and the Wife assert that they made the greater contribution. She says hers should be assessed at 60 per cent, he says it should be 52.5 per cent in his favour.
At cohabitation they each had an interest in property. She had a property at (omitted), sold two years later, for $120,000. It was subject to a mortgage, but even on the Wife’s evidence this was paid out using the sale proceeds of the Husband’s interest in a property that he had at (omitted). It may well be the case that the Wife was slightly ahead on contribution, but this is hardly the basis for asserting that, somehow, 25 years later this means that she should be assessed as having made the greater contribution.
They both worked diligently and very hard throughout the relationship. It cannot be doubted that the Husband earned more, particularly having regard to the nature of his work. The Wife does not dispute that his income was greater than hers. To the extent that his case is presented, either implicitly or explicitly, that his greater earnings throughout the relationship must necessitate an assessment of contribution which is in his favour, the Court does not accept this. The very nature of the Husband’s work meant that the Wife carried the greater burden in terms of non-financial contribution. Indeed, when one looks at the contribution made by each of them, direct and indirect, financial and non-financial, in the absence of some external factor, it is very difficult to see why contributions should not be assessed as being equal. The fact that the Husband’s brother, who is a (occupation omitted), assisted the parties to renovate the former matrimonial home in 1996 takes the matter no further.
In 1993, the Husband received compensation in respect of an injury he suffered in an accident. In 2006, the Wife received an inheritance from the estate of her late grandfather. The Husband’s parents provided some money towards the purchase of the former matrimonial home. During the course of a long relationship, therefore, each received windfalls which was applied for their joint benefit. Again, it is hard to discern from the evidence how anything that either the Husband or the Wife did, or brought into the relationship, could somehow result in an assessment of contribution after the end of a long relationship that is quantitatively greater than the other’s contribution.
Even when one focuses on the post-separation period, it is hard to see how what one did is deserving of a greater recognition, than the other. The Court accepts that in the post-separation period the Wife was, for all practical purposes, primarily responsible for managing their investments and property portfolio. Shortly after separation the Husband appears to have ceased making contributions into the account which was designed to meet the shortfall between all of the expenses pertaining to the property portfolio and the income. To the extent that the Wife had to somehow manage the shortfall, she is not being left with the burden of any debt accrued, as all the relevant debt is reflected in the balance sheet. The Wife’s post-separation management of assets benefited her, as much as the Husband. She did this at a time when she was in sole occupation of the former matrimonial home, a benefit to her.
To the extent that the Husband seeks some advantage in the assessment of contribution exercise by reference to servicing the loan for the catamaran, and meeting its mooring and other costs, he was merely preserving the assets in the same way as the Wife was. Any argument in this regard about whether his contribution was directed to a depreciating asset, whilst hers was directed towards an appreciating asset, is a sterile one. They were both preserving matrimonial assets, which are reflected in the balance sheet. If the value of the investment properties had gone down, would the Wife’s contribution be any the less? Of course not, barring any action on her part to cause the depreciation.
With the greatest of respect to both parties, and those representing them, the Court simply cannot discern from the evidence how it is that any contribution that either of them made before, during, and after their relationship would somehow result in an assessment of inequality. This conclusion is not based on the application of any presumption or quasi-presumption, it is based on a detailed review of the evidence, and assessing different types of contribution as ultimately having the same weight. Much energy, and no doubt cost, appears to have been exerted on this issue.
Assessment of s.75(2) considerations
The Wife contends for a 10 per cent adjustment in her favour, the Husband says it should be no more than 2.5 per cent in his case outline, but no adjustment in his closing submissions.
The Wife will be 54 in (omitted), and the Husband turned 53 in (omitted). They are both in employment.
There is a substantial disparity in their earning capacity. Whilst the Court accepts that the Wife probably earns about $88,000 per annum as a (omitted), and indeed is prepared to accept that she may not even be working to capacity, the problem is that even after hearing all of the Husband’s evidence, the Court is still not clear on precisely what he earns, and the potential value to him of all of his employment-related benefits. Getting this information from the Husband was, for the Wife and those representing her, a significant achievement in dentistry. The findings adverse to the Husband’s credit have already been noted. What is known about the Husband’s earning capacity is that it is significantly greater than that of the Wife, but the precise extent of this is not possible to measure.
To the extent that the Husband sought to create a cloud of uncertainty around his earning capacity because of ill-health issues and his age, the Court does not accept his evidence. He is a plainly unreliable witness about matters pertaining to any aspect of his finances. If he had medical conditions affecting his earning capacity, there were appropriate means of bringing this before the Court. If there was a cloud about his employment, based upon economic or other conditions, that evidence should have been adduced in proper form, rather than making loose assertions that are easy to make, but difficult to refute. With great respect to the Husband and those representing him, to assert that at any point the respective earning capacities of the Husband and the Wife are equal is absurd, on the evidence before the Court.
The Wife does not cohabit with any other person. By contrast, the nature of the Husband’s relationship with Ms M is far from clear. There is strong evidence before the Court of intermingling of funds. She was the recipient of at least $65,000 in what is clearly a sham transaction about furniture. The evidence suggests that she has access to his accounts, and he has access to hers. The evidence suggests she was actively involved in the proceedings in preparing his case. The onus was, at all times, on the Husband to disclose the true nature and extent of the relationship with Ms M, particularly the financial aspects of this. The assertion of the existence of this relationship was something known to the Husband well before the final hearing date. For whatever reason, he chose not to lead evidence from Ms M.
The Wife also relies as a s.75(2) consideration in her favour, the fact of the Husband’s non-disclosure. The contention must be that even though the Court has made findings about the balance sheet, and has recognised that he has available to him various financial resources that she does not, but of unspecified value, there must be something else that he has not disclosed. The Wife relies on well-known authorities such and Black & Kellner (1992) FLC 92-287, Oriolo & Oriolo (1985) FLC 91-653 and Weir & Weir (1993) FLC 92-338. The Court is well entitled to adopt a robust approach in cases like this one. As previously indicated, the Husband’s evidence about matters pertaining to finance is plainly unreliable. He cannot rely on ignorance. He was represented by very experienced family lawyers. In the post-separation period, the evidence indicates that he received retention bonuses that were not disclosed, that shares were sold, but there is no certainty that he has made proper disclosure and, in any event, he even failed to disclose the income he was earning. The assertion by him, or on his behalf, that the Wife had access to all of this information, and plainly knew is irrelevant. The duty of disclosure was on him.
The state of the evidence leads the Court to conclude that it is possible that there are other assets and financial resources available to the Husband that he has not disclosed in these proceedings. It is impossible to quantify this. That is why it is appropriate to treat it as a s.75(2) adjustment, under s.75(2)(o).
The Wife proposed an adjustment in her favour of 10 per cent. The Court assesses all of the relevant s.75(2) considerations referred to in these reasons as warranting a 10 per cent adjustment in her favour.
A Just and Equitable Order?
If contribution is assessed at 50:50 and s.75(2) considerations in favour of the wife as to 10 per cent, this means that the adjustment between the parties should be 60:40 in favour of the Wife.
As noted earlier in these reasons, the approach that each seeks in dividing their property is fundamentally different. There is some common ground, for example in that both agreed that the Wife should retain the property at Property V. Both agreed that the Husband should retain the catamaran.
They both wish to retain the former matrimonial home at Property D. Obviously, they cannot both keep it. The Wife is presently in occupation and there seems to be no cogent reason why she should be forced out, especially in circumstances where the Husband spends so much time working overseas. The former matrimonial home should be retained by her.
The Husband’s superannuation entitlement is significantly greater than that of the Wife. She seeks a superannuation split in her favour with a base amount of $339,362.80. The precise calculation of this is not clear. In his Amended Initiating Application, the Husband proposed that there be a superannuation split in order to equalise their respective superannuation entitlements, with the adjustment to come out of his (omitted) Superannuation Fund. Thus, he too contemplates an adjustment out of his superannuation.
The Court is concerned that neither of the sets of Orders proposed by the parties adequately reflects the Court’s intention, as reflected in these reasons for judgment. Now that the Court has determined that the split should be 60:40 in Wife’s favour, and that she should retain the former matrimonial home, it is a safer course of action to direct the parties to submit an agreed Minute of Order to give effect to these reasons for judgment. Each party is to retain what they otherwise have in their individual names, save for matters explicitly dealt with in these reasons. Unless they agree, joint assets should be liquidated. There needs to be an orderly sale of the investment property portfolio, with Orders that make provision for all expenses of sale, including capital gains tax. There is to be a superannuation split in the Wife’s favour out of the Husband's (omitted) Super, the effect of which is to give her 60 per cent of the combined super entitlements of the Husband as valued in these reasons, and the Wife, based on the balance sheet, but of course, taking into account her own superannuation entitlement. The Court’s findings, reflected in the balance sheet, must form the basis of the order proposed by the parties. If the parties cannot agree on a form of order within 21 days, they are each to thereafter submit, within seven days, a Minute of the Order that they contend reflects these reasons for judgment.
I certify that the preceding seventy-eight (78) paragraphs are a true copy of the reasons for judgment of Judge Altobelli
Associate:
Date: 20 November 2015
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