MASOUM & CHETCUTI
[2019] FamCA 51
•8 February 2019
FAMILY COURT OF AUSTRALIA
| MASOUM & CHETCUTI | [2019] FamCA 51 |
| FAMILY LAW – PROPERTY ADJUSTMENT – Where 15 year marriage with children – Where both parties seek disparate orders as to adjustment – Where wife lived in the matrimonial home with the children after separation – Where wife has ongoing care of the children – Where consideration of contributions – Where consideration of applicable principles – Where orders for property adjustment made. |
| Family Law Act 1975 (Cth) ss 75, 79 |
| Bevan & Bevan [2014] FamCAFC 19 Chancellor & McCoy [2016] FamCAFC 256 Chapman & Chapman [2014] FamCAFC 91 Dickons & Dickons [2012] FamCAFC 154 Pandelis & Pandelis [2018] FamCAFC 66 Russell & Russell (1999) FLC 92-877 Scott & Danton [2014] FamCAFC 203 Stanford v Stanford [2012] HCA 52 Teal & Teal [2010] FamCAFC 120 |
| APPLICANT: | Mr Masoum |
| RESPONDENT: | Ms Chetcuti |
| FILE NUMBER: | PAC | 5982 | of | 2016 |
| DATE DELIVERED: | 8 February 2019 |
| PLACE DELIVERED: | Parramatta |
| PLACE HEARD: | Parramatta |
| JUDGMENT OF: | Foster J |
| HEARING DATE: | 24 to 26 September 2018 and by way of written submissions last received on 9 November 2018 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Batey |
| SOLICITOR FOR THE APPLICANT: | Armstrong Legal |
| COUNSEL FOR THE RESPONDENT: | Mr Hodgson |
| SOLICITOR FOR THE RESPONDENT: | O'Sullivan Legal |
Orders
That the husband and wife do all acts and things necessary and sign all necessary documents to forthwith sell the property at B Street, Suburb C being the land contained in Lots … Section … of Deposited Plan … for the best price reasonably obtainable by public auction with the reserve price at auction to be agreed between the parties in writing or in default of agreement to be fixed by the selling agent, or such other method of sale to which they agree, and that upon settlement of the sale the proceeds of sale be paid as follows:
(a)in discharge of Westpac Banking Corporation loans being BSB … Account number #89 and BSB … Account number #97;
(b)in payment of agents commission and auction expenses;
(c)in payment of legal costs of and incidental to the sale;
(d)in payment of any contract adjustments as to local council water rates and other levies;
(e)in payment of the balance then remaining as to 57.5 per cent to the wife less payment to the husband of one half of single expert Real Estate Valuation fees and Chapter 15 Single Expert Family Report fees paid by him with the husband to provide a copy of receipts for payments made by him to the wife not less than seven days prior to settlement of the sale of the said property;
(f)in payment of the balance remaining to the husband.
That the husband and wife do all necessary things and sign all necessary documents to forthwith sell the property at D Street, Suburb E being the land comprised in Folio identifier … for the best price reasonably obtainable by public auction with the reserve price at auction to be agreed between the parties and in default of agreement to be fixed by the selling agent, or such other method of sale to which they agree, and that upon settlement of the sale the proceeds of sale be paid as follows:
(a)in payment of agents commission and auction expenses;
(b)in payment of legal costs of and incidental to the sale;
(c)in payment of any contract adjustments as to local council water rates and other levies;
(d)in payment of the balance then remaining as to 57.5 per cent to the wife;
(e)in payment of the balance remaining to the husband.
Liberty to apply as to implementation or enforcement in respect to the orders for sale made above.
That the wife shall be entitled to sole use and occupation of the Suburb E property pending sale and shall pay as they fall due and payable outgoings in respect of the said property and mortgage payments during any period of her occupation with any arrears of such payments as at the date of settlement of the sale to be adjusted from her proportion of the proceeds of sale.
That should the wife elect to vacate the Suburb E property pending sale she shall give to the husband not less than 14 days’ notice of her intention to vacate and that thereafter and upon the wife vacating the property the husband shall have sole use and occupation of the said property pending sale and in the event that he elects to occupy the property he shall pay as they fall due and payable outgoings in respect of the said property and mortgage payments during any period of his occupation provided always that in the event that the husband elects not to occupy the property pending sale the husband and wife shall pay equally pending sale outgoings in respect of the said property and mortgage payments as they fall due and payable with any arrears arising from the parties’ obligations under this order to be adjusted between them from their respective proportion of the proceeds of sale.
That within 14 days from the date of these orders the husband and wife do all things necessary and sign all necessary documents to sell and close the joint Westpac Offset Account BSB … account number #67, the joint Westpac accounts held by the parties in trust for the children and the K Ltd shares held by the parties on behalf of the child X with the proceeds of such accounts and shares sale to be paid to the wife or as she may otherwise direct in writing.
That a base amount of $78,117.00 is allocated to the Wife out of the Husband’s interest in the Masoum Superannuation Fund (“the fund”):
(a)That in accordance with section 90MT(1)(a) of the Family Law Act 1975:
(i)The Wife is entitled to be paid the amount calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001 using the base amount referred to in order 7 above; and
(ii)The Husband’s entitlement (and the entitlement of such other person to whom splittable payments may be made) to payments out of the Husband’s interest in the Fund is correspondingly reduced.
(b)That the husband and wife cause the trustee of the fund Masoum Investments Pty Ltd (the trustee) to do all acts and things and sign all such documents as may be necessary to:
(i)Calculate in accordance with the requirements of the Family Law Act 1975 and the Family Law (Superannuation) Regulations 2001 the entitlement of the Wife created by these orders; and
(ii)Pay the entitlement whenever the trustee makes a splittable payment out of the Husband’s interest in the Fund.
That Order 7 have effect from the operative time and the operative time is four business days from the date of these orders.
That within 28 days from the date of these orders the husband and wife do all things necessary and sign all necessary documents to authorise and direct the trustee to cause the wife’s member entitlements in the fund to be rolled over to a complying superannuation fund nominated by the wife.
That within seven days from the date that the wife’s member entitlement in the fund is rolled over as provided, the wife shall do all things necessary and sign all necessary documents to transfer to the husband all her right title and interest and resign from all offices held by her in Masoum Investments Pty Ltd and Masoum Nominees Pty Ltd and that thereafter the husband shall indemnify the wife from all or any liability arising from such companies.
Note: The form of the order is subject to the entry of the order in the Court’s records.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Masoum & Chetcuti has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).
| FAMILY COURT OF AUSTRALIA AT PARRAMATTA |
FILE NUMBER: PAC 5982 of 2016
| Mr Masoum |
Applicant
And
| Ms Chetcuti |
Respondent
REASONS FOR JUDGMENT
The question for determination is that of property adjustment as between the applicant husband and respondent wife.
By way of background, comprehensive interim parenting orders were made by consent on 25 September 2018 that provided for the children, Y aged nine and X aged 15 to live with the mother. The child X may spend time with the father in accordance with her wishes and, otherwise, the father and Y are to engage in family therapy as to their relationship and after a period the child Y to commence spending time with the father initially supervised but by the end of 12 months to progress to alternate weekends.
On 13 April 2018 the husband filed a Further Amended Initiating Application seeking orders as to property adjustment, in summary, as follows:
a)That the husband transfer to the wife his interest in the real estate property at D Street, Suburb E and simultaneously with such transfer the husband discharge the mortgage secured against the said property.
b)That the wife transfer to the husband her interest in the real estate property at B Street, Suburb C.
c)That the wife pay to the husband by way of further adjustment the sum of $100,000.00.
d)That there be a splitting order in favour of the wife out of the husband’s interest in the Masoum Superannuation Fund in the sum of $158,979.00.
e)That thereafter the wife transfer to the husband her interest in and resign as director of Masoum Investments Pty Ltd and Masoum Nominees Pty Ltd.
Otherwise, the husband sought various orders as to enforcement by way of sale of the Suburb E property in default of the wife complying with orders.
At trial the husband relied upon his financial statement filed 13 April 2018, his affidavit filed 8 June 2018 and the affidavit of his sister, Ms F Masoum filed 20 September 2018.
At trial the husband sought orders for property adjustment that, in summary, provided:
a)That the Suburb C property be sold and that the net proceeds of sale after discharge of the mortgages secured over the matrimonial home at Suburb E be paid as to 55 per cent to the wife less reimbursement to the husband for single expert valuation fees and the chapter 15 Single Expert family report fees to the husband and the balance thereafter to be paid to the husband.
b)That subsequent to obtaining a final occupation certificate in respect of the Suburb E property the said property be sold and after selling costs and reimbursement to the husband of costs expended by him in obtaining a final occupation certificate the balance then remaining be paid as to 55 per cent to the wife and the balance to the husband.
c)That within 28 days the husband advise the wife in writing of works to be carried out to the Suburb E property and the cost of such works in order to obtain a final occupation certificate and his election to carry out such works and in the event of such election the husband to undertake such works to obtain the occupation certificate within a further four months at no greater cost than that advised to the wife and that the husband provide to the wife no later than seven days from receipt:
i)all notices from the relevant Council issuing the final occupation certificate;
ii)a comprehensive list of works required by the Council for the issue of a final occupation certificate;
iii)quotations, invoices and statements for the works required to obtain the final occupation certificate, copies of all receipts evidencing payment for the works and for which the husband seeks reimbursement.
d)That the wife forthwith do all things including providing the husband with house keys and sign all necessary documents requested by the husband to facilitate the works and the obtaining of a final occupation certificate from the relevant Council.
e)That upon the wife vacating the Suburb E property mortgage payments and outgoings be met from the rental income from the Suburb C property until the sale of that property and in the event of any shortfall the husband and wife shall contribute equally to such mortgage payments and outgoings and that both parties be restrained pending sale of both properties from accessing rental income from the Suburb C property otherwise.
f)That in the event that either party has failed or neglected to pay their share of mortgage payments and outgoings in accordance with the previous order then any shortfall shall be deducted from their respective entitlement to the net proceeds of sale and reimbursed to the other party.
g)That the parties retain their respective interests in the Masoum Superannuation Fund and that the wife within 28 days roll-over her entitlement in the said fund to a complying superannuation fund of her choice and concurrently with such roll-over transfer her interest in and resign as officeholder in Masoum Investments Pty Ltd (Trustee of the Superannuation Fund) and Masoum Nominees Pty Ltd.
h)That within 28 days the husband and wife do all things necessary and sign all documents so as to either sell or close joint Westpac account BSB … account number #67, joint K Ltd shares held on behalf of the child X and joint Westpac accounts held in trust for the children with the proceeds from such sale or bank accounts to be paid to the wife.
i)Liberty to apply as to enforcement or implementation of the orders.
The respondent wife, for her part, relied upon her Response filed 23 February 2017 in which she sought orders as to property adjustment, in summary, as follows:
a)That the husband transfer to her his interest in the property at Suburb E free of encumbrance.
b)That the husband by way of further adjustment pay to the wife the sum of $300,000.00.
c)That with the husband complying with the previous orders the wife transfer to the husband her interest in the property at Suburb C.
d)That the wife rollout from the Masoum Superannuation Fund her entitlement to a complying superannuation fund nominated by her.
At trial the wife relied upon her financial statement filed 15 June 2018 and her affidavit filed 21 June 2018.
At trial the wife proposed different orders as to property adjustment as comprised in Exhibit “I”. In summary, those orders proposed:
a)A sale of both properties with the net proceeds of sale to be applied in payment of selling costs, discharge of mortgages, agents commission and capital gains tax as to 65 per cent to the wife and 35 per cent to the husband.
b)That the husband indemnify the wife from all or any liability in respect of capital gains tax arising from the sale of the Suburb C property.
c)That the husband and wife retain their present superannuation entitlements in the self-managed super fund and do all necessary things to rollout their superannuation entitlements in that fund to a complying superannuation fund that they shall each nominate and thereafter do all necessary things to lodge final audited tax returns for the fund.
d)That the husband do all things necessary to transfer to the wife his interest in the joint Westpac Rocket account, the joint K Ltd shares held on behalf of the child X and Westpac saver accounts held on trust for each of the children.
The issue of property adjustment proceeded to trial on 26 September 2018. Subsequent to the conclusion of evidence, directions were made for the filing and service of minutes of proposed final orders together with final submissions by both parties with judgment thereafter to be reserved to chambers.
Following receipt of submissions, judgment was reserved on 4 December 2018.
Context
The wife was at trial aged 47 and the husband 48.
The parties married in 2000 at which time they commenced cohabitation. The parties separated on a final basis on 5 December 2015.
The children referred to above are the only children of the parties’ relationship. The children will live substantially with the wife.
At cohabitation
At the time of marriage the parties had the following assets:
a)Wife:
i)some savings at bank;
ii)her company G Pty Ltd that had certain funds on term deposit;
iii)accumulating superannuation;
iv)some jewellery.
b)Husband:
i)a motor vehicle;
ii)some H Ltd public company shares later sold in 2013 for $5,131.00;
iii)accumulating superannuation;
iv)a company Masoum Pty Ltd incorporated in 1997 through which the husband contracted his work;
v)the Masoum Family Trust that had an accrued capital loss of about $70,000.00 as a consequence of a poor share investment.
Save for the matters set out in [19] below, there is no evidence as to the value or otherwise of the parties’ assets at the commencement of cohabitation.
Subsequent to marriage the wife continued in employment, and from about May 2000 to until May 2006 on a contract basis with J Ltd. From May 2006 until separation and thereafter until November 2017 the wife was the primary homemaker and carer for the parties’ children. The wife obtained some contract work from November 2017 until May 2018 but has not obtained employment thereafter.
The husband worked on a contract basis throughout the marriage.
Aspects of the parties’ financial history
In August 1999 the parties opened a joint account. The wife asserts that they paid into this account gifts received by them and about $22,000.00 each. The husband asserts that he contributed some $44,000.00 to the account by the time of marriage. In his oral evidence the husband conceded that his contributions to the account were made from his income and that both he and the wife paid funds into the account. He asserted that the wife paid into the account funds equal to or less than he did. Regrettably, there was no objective evidence supporting either party’s contentions as to contributions to this account. This account remained the parties’ joint account.
At about the time of marriage the husband invested funds from the parties’ bank account of about $30,000.00 in a business enterprise that subsequently failed. This investment was lost.
The parties initially lived in rented premises until 2001 at which time they jointly purchased the property at Suburb C for the sum of $280,000.00. In addition to the deposit paid, the parties obtained a loan from Westpac bank for about $224,000.00 to finance the balance of the purchase. After the purchase the parties deposited their respective incomes to the joint account that was operated as a “mortgage offset” account.
Subsequent to the purchase of the Suburb C property, the parties remained living in rented premises while renovations were undertaken to the property over a period of about two months. The cost of renovations were paid from the joint income with the wife’s father and uncle assisting substantially with the renovations and the management of tradesmen.
In about mid 2003, expecting the birth of the parties’ first child, the wife ceased employment and “dissolved” her company with funds of about $64,000.00 from the company paid to the parties’ mortgage offset account.
The parties were able to discharge the mortgage on the Suburb C property by 2005/2006.
In 2007 the parties purchased jointly the property at Suburb E for the sum of $405,000.00. A significant deposit was paid from the parties’ savings and a mortgage advance of about $300,000.00 was obtained from the Westpac bank to fund the balance of the purchase price.
The parties demolished the old home on the Suburb E property and with a construction advance from Westpac of about $250,000.00 constructed a new home. The parties remain living in the Suburb C property during the construction period for the new home. The parties moved into the new home in October 2008 and then rented the Suburb C property.
At the time of trial the Suburb C property was rented for $420.00 per week.
The wife received about $25,000.00 from her parents at the time of the birth of the eldest child by way of gift to the child. These funds were deposited by the wife to her Westpac E Saver account and she has subsequently used those funds to pay part of her legal fees. Otherwise, the wife had an ANZ E*TRADE bank account through which she purchased public company shares for the child using funds gifted by her parents when the child was born. The wife sold the shares in early 2018 for $9,500.00 to pay part of her legal fees.
Subsequent to the wife ceasing employment she asserts that the husband controlled the family finances.
During the parties’ cohabitation the wife was the primary carer for the children of the marriage with the husband engaged in full-time contract work. The husband worked long hours thus leaving most of the domestic tasks for the children to the wife. Otherwise, the wife asserts that the husband had limited engagement with the children and undertook very little of the daily household and domestic tasks, if any, and all. The wife asserts that her mother provided significant assistance within the household and with the children. Regrettably, the maternal grandmother was not called to give evidence.
The husband asserts that he was more involved with the children than asserted by the wife.
Notwithstanding the conclusion is that like many similar households the wife was primarily engaged as homemaker and primary caregiver for the children and the husband in the role as primary income earner and subject to his obligations in that regard had some engagement with the children and within the house.
The wife asserts that there was conflict in her relationship with her husband with him being abusive towards her on a regular basis. The husband denies such behaviour. In 2009 she asserts that the husband assaulted her by grabbing her around the neck with his two hands and squeezing hard. The husband denies this incident. In 2014 the wife asserts that the husband grabbed her arms with his hands, shaking her and squeezing her arms to the extent that she screamed from the pain and begged him to let go. As a consequence of his behaviour, she suffered bruising on her arms. The husband concedes that this was the only physical altercation between himself and the wife.
Otherwise, the wife asserts that the husband was belittling towards the child X. The husband denies this conduct but his denial belies the fact that at present there is little or no relationship between the husband and the child X.
The wife did not speak to anyone about the husband’s violence and was “always scared that the husband would hurt her or the children because she did not understand the reason for his aggression and anger”.
It is readily apparent that the husband’s conduct may have made the wife’s role within the household and with the children more arduous than would otherwise have been the case.
The husband for his part makes various allegations in relation to the wife’s strange and bizarre behaviour during cohabitation.
Such circumstances must, of course, be balanced against the many and varied aspects of the parties’ contributions overall.
The parties’ relationship deteriorated such that the parties separated initially in late May 2015. There were various dealings in the latter part of 2015 by the parties in terms of funds either withdrawn from or redeposited back into the mortgage or funds withdrawn from the parties’ joint account and used for various purposes or otherwise redeposited. By reason of the parties’ agreement as to what comprises the asset pool for division as referred to below, it is unnecessary to descend into the minutiae of the parties’ evidence in regard to this issue.
The parties separated on a final basis in early December 2015 following concerns about the husband’s behaviour including strange smells and his health.
In mid-September 2016 the husband sought to transfer the self-managed super fund term deposit of $255,000.00 to the superannuation fund’s day-to-day transaction account. The wife made arrangements for the parties’ joint signatures to be on the superannuation fund accounts thus stopping the transfer from the term deposit to the day-to-day account.
Until March 2017 the wife did not receive child support from the husband but he continued to meet mortgage payments on the matrimonial home by depositing his income to the parties’ joint account from which the wife paid mortgage payments. In October 2016 the husband ceased paying his salary into the parties’ joint account and the wife was no longer able to use his credit card.
In November 2016 the husband ceased making contributions to the mortgage payments from his salary.
In November 2016 the wife transferred $18,400.00 from the parties’ joint account to her personal account and $9,700.00 of the children’s funds to her personal account. With these funds she has been meeting mortgage payments on the home, school fees and living expenses. Notwithstanding she has, since separation, reduced the balance outstanding on the mortgage from her own income by about $28,000.00.
The wife commenced to receive child support from the husband in March 2017 with child support of the time of trial being in the sum of $2,868.00 per month. The wife continues to meet mortgage payments from her child support and funds retained by her subsequent to separation.
The wife’s circumstances
The wife is in reasonable health.
In February 2016 she commenced a Bachelor degree. Ultimately she shall be qualified in a profession. She expects to finish her degree course in mid to late 2020 and thereafter seek employment in that profession.
In August 2018 the wife obtained full-time employment and an annual salary of $76,650.00 plus superannuation: Exh “J”. Such employment is subject to a probationary period of six months.
As a consequence of the wife obtaining employment, it is common ground that her child support payments will reduce somewhat.
Rental income from the parties’ Suburb C property has continued to be paid into the parties’ joint account from which the wife tends to the payment of outgoings. She estimates that net of property expenses rent averages about $1,000.00 per month.
The wife and children remain in occupation of the former matrimonial home at Suburb E. The child X is now in year ten at high school and the child Y in year five at primary school. Both children are progressing well at school.
The wife asserts that the Suburb E property is subject to an interim occupation certificate only as a consequence of building works undertaken. Notwithstanding she has made no enquiries as to what is required to obtain a final compliance certificate. She now seeks to have the property sold and it is contended on her behalf that the property can be sold as is with the interim occupation certificate being properly disclosed in the contract for sale. But it is further contended that the orders proposed by the husband requiring him to be engaged in works on the property and the obtaining of a final occupation certificate are fraught with difficulty and may well result in a further application being made to the Court where there is no evidence that the obtaining of a final occupation certificate would increase the value of the property. Indeed, the single expert has valued the property at $1.4 million with full knowledge that there is no final occupation certificate.
The husband’s circumstances
The husband resides at his late father’s home in Sydney.
He is in good health.
The husband continues to work. He no longer contracts through his company but is employed by L Ltd on a contract basis. His current gross income per annum is about $160,000.00 per annum. Since separation in December 2015 he has had a very limited relationship with the children, they refuse to spend time with him. His future time with the child X will be subject to her wishes and his ongoing relationship with the child Y will depend upon the outcome of family therapy provided for in order as referred to above.
The husband has incurred significant personal loan liabilities of about $78,400.00 to meet his legal fees and has, otherwise, met his legal fees from income.
The husband’s father passed away in 2018 and he asserts that he is not entitled to any benefit from his late father’s estate with the estate he asserts passing entirely to his sister. He contended that he does not propose to contest the estate. He continues to reside in his late father’s home that is now owned by his sister.
Property adjustment
The approach to the determination of an application under s 79 of the Family Law Act 1975 (Cth) (“the Act”) is set out in Stanford v Stanford [2012] HCA 52 and further considered by the Full Court in Bevan & Bevan [2014] FamCAFC 19, Chapman & Chapman [2014] FamCAFC 91 and Scott & Danton [2014] FamCAFC 203.
The Court must identify the existing legal and equitable interests of the parties in the property, the liabilities and financial resources of the parties at the time of the hearing and then whether it is just and equitable to make a property settlement order.
Such a consideration should not be guided by an assumption that the parties’ rights to or interests in property are or should be different from those that then exist. The question is whether those rights and interests should be altered.
There is no presumption that one or other party has the right to have the property of the parties divided between them or a right to an interest in marital property that is fixed by reference to the various matters in s 79(4).
The Court in the application of s 79(2) of the Act needs to conclude that it would be unjust or unfair to leave the parties’ property rights intact.
In Chancellor & McCoy [2016] FamCAFC 256 the Full Court said:
42.In adopting the approach she did, her Honour proceeded in accordance with what the Full Court said in both Bevan and Chapman, namely that it is open to a trial judge to take into account the matters stated in s 79(4) (or s 90SM) of the Family Law Act 1975 (Cth) (“the Act”) when determining whether it is “just and equitable” to adjust existing property interests. However, consistent with Stanford, her Honour also recognised that it was not open to her to decide that issue merely by reference to those matters.
In many cases this requirement in s 79(2) is readily satisfied where the parties are no longer in a marital or de facto relationship and, thus, for example, the common ownership or use of property by husband and wife will no longer be possible or the express or implicit assumptions that underpinned existing property arrangements such as the accumulation of assets or financial resources by one for the benefit of both have been brought to an end with the relationship.
In particular, such a circumstance arises where both parties seek property adjustment orders but are unable to agree as to same. Here both parties seek orders for adjustment of property.
It would be unjust or unfair to leave property rights intact where there is common ownership and discrete assets are sought by each. Such is the case in this matter and the parties both agree that their common ownership of property is to be brought to an end so as to reflect their respective contentions as to entitlement.
It is appropriate that property adjustment orders be made.
Section 79(4) requires a consideration of the contributions made by the parties as defined in s 79(4)(a) to (c). The Court must then consider s 79(4)(d) to (g), in particular, the subjective considerations as to the parties by having regard to the provisions of s 75(2) in so far as they are relevant: (s 79(4)(e)).
The Court can then consider the “justice and equity” of the actual orders to be made: Russell & Russell (1999) FLC 92-877; Teal & Teal [2010] FamCAFC 120, in the context of the Court’s obligation to make “appropriate orders” as provided for in s 79(1) of the Act.
The existing asset pool for consideration
In circumstances where the parties separated some years ago the working balance sheet that comprised Exhibit “E” in the proceedings included various bank accounts, shares, motor vehicles and other items of personalty accumulated by the parties’ post separation and mostly attributable to the individual contributions.
In submissions it was agreed by both parties that the asset pool for consideration as to adjustment should exclude many of these post separation acquired assets, minimal as they are, and liabilities incurred unrelated to the “matrimonial” assets.
Accordingly, the asset pool for consideration by agreement comprises the following:
Joint Suburb C property $ 1,050,000.00
Joint Suburb E home $ 1,400,000.00 $ 2,450,000.00
Wife Masoum Superannuation $ 119,658.00
Wife M Pty Ltd $ 3,613.00
Husband Masoum Superannuation $ 203,743.00
Husband N Superannuation $ 6,242.00
Husband O Superannuation $ 6,861.00 $ 340,117.00
Total $ 2,790,117.00
Liabilities:
Joint Westpac Rocket H/Loan (#89) $ 231,995.00
Joint Westpac Rocket H/Loan (#97) $ 150,402.00 $ 382,397.00
Net: $ 2,407,720.00
Contributions
The husband’s counsel asserted at trial that contributions of both parties to the date of separation should be considered as equal. Counsel for the wife contended that contributions to separation should favour the wife as to 50 to 55 per cent.
In Dickons & Dickons [2012] FamCAFC 154 the Full Court said at [24] and following:
There can be little doubt that the classification of contributions by reference to terms such as “initial contributions”, “contributions during the relationship”, and “post-separation contributions”, can be helpful as a convenient means of giving coherent expression to the evidence in a s 79 case and to giving coherence to the nature, form and extent of the parties’ respective contributions. However, the task of assessing contributions is holistic and but part of a yet further holistic determination of what orders, if any, represent justice and equity in the particular circumstances of this particular relationship. So much is clear from the terms of s 79 itself and, in particular, s 79(2). The essential task is to assess the nature, form and extent of the contributions of all types made by each of the parties within the context of an analysis of their particular relationship.
Doing so is also consistent with the demands of authority that the ultimate assessment of contributions should be made without “...giving over-zealous attention to the ascertainment of the parties’ contributions...” (Norbis v Norbis [1986] HCA 17; (1986) 161 CLR 513 at 524) and the well-established recognition in the authorities (acknowledged specifically by her Honour in this case) that the process required of the Court by s 79 is the exercise of a wide discretion, not the performance of a mathematical or accounting exercise.
The necessarily imprecise “wide discretion” inherent in what is required by the section is made no more precise or coherent by attributing percentage figures to arbitrary time frames or categorisations of contributions within the relationship. Indeed, we consider that doing so is contrary to the holistic analysis required by the section and, in the usual course of events, should be avoided.
In Pandelis & Pandelis [2018] FamCAFC 66 the Full Court reiterated:
24.We think it important to record that in Zyk and Zyk [1995] FamCA 135; (1995) FLC 92-644, the Full Court said it is somewhat artificial to purport to assign a percentage to a particular category of contributions....
The discussion above reveals that the parties are at odds as to some aspects of their respective contributions and use or otherwise of various funds during the relationship. However, notwithstanding it is the position of the husband that contributions to the date of separation should be regarded as equal whilst the wife asserts that contributions should favour her marginally to that date.
This is a relationship of some 15 years to the date of final separation that produced two children. To a great extent the parties adopted classical roles within the household with the wife working for a period during the relationship and then after children undertaking the task of primary home maker and caregiver for the children with the husband the primary income earner to the extent that the parties have been able to accrue not insignificant assets.
In all of the circumstances, the contribution of the parties to the date of separation shall be regarded as equal. Subsequent to separation the wife has remained in the primary matrimonial home for some three years to trial and from income and otherwise has managed to attend to a reduction in the outstanding mortgage obligation. Her contribution to the property in terms of the reduction in the mortgage balance can be seen as balancing her ongoing occupation to the husband’s exclusion.
But, otherwise, she has undertaken the primary parenting duties in relation to the children of the marriage until trial with regrettably little or no assistance input from the husband. It is contended on behalf of the husband that the wife has had the primary care of the children post separation but otherwise has had occupation of the home since final separation and notwithstanding her contributions to the mortgage has been in receipt of rental income from the Suburb C property. The husband contends that contributions to the date of trial should favour the wife as to 52.5 per cent and to the husband 47.5 per cent. Reflecting similar considerations it is contended on behalf of the wife that contributions to the date of trial should favour the wife as to 55 per cent and to the husband 45 per cent. Such an adjustment created disparity between the parties of about $240,000.00. An adjustment of such a quantum is not called for in the circumstances of this matter.
Overall it is considered that the parties’ contributions to date of trial should favour the wife by a small margin of 52.5 per cent to 47.5 per cent. The disparity thus created representing five per cent of the asset pool or about $120,000.00.
Section 75(2) factors
Both parties are still in their 40s and in good health.
The income property and financial resources of the parties are discussed above. There is no reason why both the husband and wife are unable to continue their current employment which sees a significant disparity between the income derived by the husband and that of the wife.
The wife will have the ongoing primary care of the two children of the marriage, the eldest now aged 15 and the youngest now aged nine. By reason of interim parenting orders made, it appears that any ongoing assistance in relation to the eldest child from the husband may be problematic and that ongoing he will have subject to family therapy a not significant engagement with the child into the foreseeable future. This leaves the onus of primary child care and all of the things that that entails on the wife. This is a significant consideration.
Both parties have commitments from the income to support themselves and, of course, the children of the relationship.
Both parties have superannuation entitlements as identified above and by reason of their age there are many years until such time as they have access to those superannuation benefits. It is to be reasonably expected that both parties will continue to accrue superannuation in accordance with their respective salary levels in future years.
The wife has been out of the workforce any full-time meaningful capacity for some time and is to be inferred that her income capacity at present is somewhat limited by that circumstance. However, she has now obtained full-time employment in addition to which she is seeking tertiary retraining so as to perhaps obtain employment in the future.
The husband has had since early 2017 a significant child support obligation. That will reduce somewhat by reason of the wife more recently obtaining full-time salaried employment. There is no reason to suggest that the husband will not continue to meet his child support obligations into the future.
Otherwise, there is no other relevant consideration.
The husband contends that by reason of income disparity and future child care to some extent offset by the husband’s child support obligations that there should be an adjustment reflecting s 75(2) factors of not more than five per cent in favour of the wife. Such an adjustment would again reflect a disparity of 10 per cent between the parties or about $240,000.00.
For her part, the wife contends to the parties’ contribution based entitlements of 10 per cent in favour of the wife. Such an adjustment creates a disparity of 20 per cent between the parties that being in monetary terms about $480,000.00.
In the circumstances of this matter considering the relevant factors above, an adjustment of a further five per cent in favour of the wife over and above her contribution based entitlement is called for.
Having regard to the matters discussed above clearly the above factors favour the wife.
Overall and the Orders to be made
As a consequence of the discussion above the parties’ overall entitlements in the asset pool as agreed between them for division is as to 57.5 per cent in favour of the wife and 42.5 per cent in favour of the husband. Overall, this represents disparity of about 15 per cent of the pool as between them. It is considered such a result in all the circumstances is just and equitable.
Otherwise, whilst the issue of the sale of the former matrimonial home at Suburb E only arose late in the matter and, indeed, at trial the orders proposed by the husband seem to unnecessarily prolong the engagement between the husband and wife in relation to the property and in what are to some extent uncertain circumstances as to the final occupation certificate. Both parties made no interlocutory application seeking to remedy the issue notwithstanding separation almost three years before trial.
The property has been valued by the single expert for the purposes of the trial with full knowledge of the absence of a final occupation certificate. There is no cogent argument from either party as to why the property cannot be sold in its present state and condition with an appropriate contract for sale. Nor is there any cogent argument that is persuasive as to the property being able to realise any increase in value as a consequence of the obtaining of the occupation certificate.
In such circumstances, there will simply be an order for sale of both properties as is with net proceeds of sale to be divided in accordance with the parties’ respective overall entitlements. Both parties will accrue some capital gains tax liability as a consequence of the sale of the Suburb C property and such liability will be assessed at their respective marginal tax rates and payable by each of them. There is no evidence as to the respective likely additional income tax obligations as a consequence of estimated capital gains tax liability. Assuming that the property at Suburb C is sold in the current financial year, they will receive an assessment of any additional tax payable when they each file their separate taxation returns after 30 June 2019. If not, any capital gains tax will fall into their taxation return for the year ended 30 June 2020 and be payable by each of them thereafter.
It is the wife’s evidence late in the trial that she is seeking alternative accommodation, it appears, as a consequence of her obtaining full-time employment. In the event that subsequent to orders she vacates the matrimonial home at Suburb E it would be appropriate that the husband be able to occupy that property pending sale subject to him paying outgoings and meeting mortgage payments in regard thereto. Such orders will be made accordingly.
Otherwise, there is no evidence as to the value of the parties’ respective self-managed superannuation fund entitlements as at the date of separation and no evidence as to contributions if any made by either of the parties’ post separation to the fund. There is, otherwise, no evidence as to the circumstances in which the parties’ other accumulation superannuation benefits have accrued.
By reason of the Court’s findings as to the parties’ entitlements and the overall pool, there remains a disparity in their superannuation that requires an adjustment. The husband has superannuation entitlements totalling $216,846.00. The wife has accrued superannuation entitlements of $117,450.00. Their total superannuation entitlements are $340,117.00. The sum of $195,567.00 is 57.5 per cent of that sum. Accordingly, there will be a splitting order in favour of the wife from the husband’s entitlement in the Masoum Superannuation Fund in the amount of $78,117.00 so as to appropriately adjust the parties’ superannuation entitlements. Following that superannuation split the wife will be required to roll out her entitlement into an approved superannuation fund of her choice and resign her interest and any offices held by her in the superannuation trustee company and the other corporate entity in respect of which she has a shareholding.
Orders will be made accordingly.
I certify that the preceding one hundred (100) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Foster delivered on 8 February 2019.
Associate:
Date: 8 February 2019
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