Mayhew & Fairweather
[2021] FamCA 614
•20 August 2021
FAMILY COURT OF AUSTRALIA
Mayhew & Fairweather [2021] FamCA 614
File number(s): SYC 13 of 2017 Judgment of: WILSON J Date of judgment: 20 August 2021 Catchwords: FAMILY LAW – ALTERATION OF PROPERTY INTERESTS – lengthy marriage – inheritance received by wife – superannuation pension to husband – one adult child – orders made dividing assets as to 60% to the wife. Legislation: Family Law Act 1975 (Cth) ss 75(2), 79 Cases cited: Bacall & Zagar [2020] FamCA 350
Chang v Su (2002) 170 FLR 244
Dickons v Dickons (2012) 50 Fam LR 244
Fitzgerald-Stevens & Leslighter [2015] FCWA 25
Frederick v Frederick (2019) 60 Fam LR 1
Hayton v Bendle (2010) 43 Fam LR 602
Hepworth v Hepworth (1963) 110 CLR 309
In the Marriage of Aleksovski (1996) 20 Fam LR 894
In the Marriage of Black & Kellner (1992) 12 Fam LR 343
In the Marriage of Crawford (1979) 5 Fam LR 106
In the Marriage of Kannis (2002) 30 Fam LR 83
In the Marriage of Lee Steere (1985) 10 Fam LR 431
In the Marriage of Money (1994) 17 Fam LR 814
In the Marriage of Pierce (1998) 24 Fam LR 377
In the Marriage of Weir (1992) 16 Fam LR 154
In the Marriage of White (1982) 8 Fam LR 512
Jabour v Jabour (2019) 59 Fam LR 475
Semperton v Semperton (2012) 47 Fam LR 626
Singerson & Joans [2014] FamCAFC 238
Stanford v Stanford (2012) 247 CLR 108
Wallis & Manning [2017] FamCAFC 14
Wirth v Wirth (1956) 98 CLR 228
Zagar & Bacall (2020) 61 Fam LR 601
Number of paragraphs: 147 Date of last submission: 29 June 2021 Date of hearing: 21-23 June 2021 Place: Melbourne Counsel for the Applicant: Mr P. Batey Solicitor for the Applicant: Broun Abrahams Burreket Counsel for the Respondent: Mr R. Lethbridge SC Solicitor for the Respondent: De Saxe O’Neill Family Lawyers ORDERS
SYC 13 of 2017 BETWEEN: MS FAIRWEATHER
Applicant
AND: MR MAYHEW
Respondent
ORDER MADE BY:
WILSON J
DATE OF ORDER:
20 AUGUST 2021
THE COURT ORDERS THAT:
1.The court split the net asset and superannuation pool of the parties into two pools comprising –
(a)pool 1, all the assets, liabilities and superannuation of the parties other than the property situate B Street Suburb C in the State of NSW (“The Suburb C Property”) and the liabilities comprising –
(i)the CBA Mortgage secured over the Suburb C property;
(ii)the CGT incurred on the sale of the Suburb C property; and
(iii)the selling costs of the Suburb C property; and
(b)pool 2, the Suburb C property and the associated liabilities comprising –
(i)the CBA Mortgage secured over the Suburb C property;
(ii)the CGT incurred on the sale of the Suburb C property;
(iii)the selling costs of the Suburb C property.
2.In respect of pool 1 –
(a)within 42 days of the date of making of this order the husband must do all acts and things and pay all moneys necessary to discharge the registered first mortgage number …09 to the Commonwealth Bank of Australia secured over the title to the property situate at and known as 1 and 2 D Street, Suburb F being the whole of the land comprised in certificate of title folio identifier …;
(b)within three months from the date of making of these orders the wife must vacate the property 2 D Street, Suburb F; and
(c)within 42 days of the date of making of this order the husband must –
(i)do all acts and things and pay any monies necessary to discharge the mortgage to Westpac Banking Corporation secured over the property G Street, Suburb H; and
(ii)do all acts and things and sign all documents necessary to transfer to the wife the whole of his right, title and interest in the property situate at and known as G Street, Suburb H (“the Suburb H property”) being the whole of the land comprised in certificate of title folio identifier …;
(d)pending the transfer of the Suburb H property to the wife pursuant to order 2(c)(ii) above the husband must pay as and when they all due the outgoings in relation to the Suburb H property including the following –
(i)land tax;
(ii)council rates;
(iii)water and sewerage rates; and
(iv)periodical maintenance and repairs necessary to keep the Suburb H property in a state of good repair, fair wear and tear excepted;
(e)the husband must do all acts and things and sign all documents necessary to cause the rental income from the Suburb H Property to be paid to the wife as and from the date of transfer of the Suburb H property to her;
(f)within 28 days of the date of making of these orders the husband must do all acts and things and sign all documents necessary to –
(i)transfer to the wife all of his right, title and interest in his shareholding in K Limited;
(ii)assign to the wife his right, title and interest in any issued share capital together with any loan account in K Limited; and
(iii)resign any offices held in K Limited;
(g)the wife must indemnify the husband and keep him indemnified from and against all claims, actions, suits, demands or liabilities arising out of, or in connection with, the husband having been a director and shareholder of K Limited and in respect of any amounts owing by him to K Limited as may be reflected in the loan accounts of that entity;
(h)pursuant to s 90XT(1)(b) of the Family Law Act 1975 (Cth) whenever the Trustee of the J Super Fund (“the Super Fund”) makes a splittable payment out of the interest held by the husband in the Super Fund the wife shall be entitled to be paid 100% of the splittable payment and that there shall be a corresponding reduction in the entitlement of the person to whom the splittable payment would have been made, but for these orders;
(i)order 2(h) have effect from the operative time and the operative time for these orders is the fourth business day from the date of service of the orders on the Trustee;
(j)orders 2(h) and 2(i) above bind the Trustee of the Super Fund;
(k)upon compliance with order 2(h) above, the husband and the wife must do all acts and things and sign all documents necessary for the husband to resign as a member of the Super Fund and to resign as a Trustee of the Super Fund;
(l)within four weeks of the date of the making of the orders, the husband must do all acts and things and serve on L Company, Accountant, with an authority to release all records relating to the J Super Fund to the wife;
(m)within 28 days of the date of making of this order –
(i)the husband and the wife must do all acts and things and sign all documents necessary to distribute to the wife the monies standing to the credit of the bank account in the joint names of the parties with V Bank New Zealand, account number …00 (“the joint bank account”) and thereafter close the joint bank account; and
(ii)pending the closure of the joint bank account pursuant to order 2(m)(i) above, the husband and the wife are restrained from operating on that account, save for the purposes of giving effect to order 2(m)(i) above;
(n)in accordance with s 90XT(1)(a) of the Family Law Act 1975 whenever a splittable payment becomes payable in respect of the superannuation interest of the husband in his Mayhew Private Super Fund with M Company, Fund No. ….87 Membership No. …, the wife shall be entitled to be paid an amount calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001 using a base amount of $800,000 and there will be a corresponding reduction in the entitlement of the person to whom the splittable payment would have been made but for these orders;
(o)order 2(n) above binds the Trustee of M Company and these orders take effect from the operative time being the fourth business day after the date of service of these orders on the Trustee;
(p)within 30 days of the date of settlement of the sale of the Suburb C property the husband pay to the wife a cash adjustment as is required to provide the wife with 60% of the assets of the parties having regard to the other assets to be retained by the wife including the proceeds of sale of the Suburb C property provided for in order 3(e) below;
(q)except as specifically provided for in these orders, the wife is declared the sole owner of and the husband has no interest in –
(i)K Pty Ltd;
(ii)the wife’s share portfolio;
(iii)the wife’s motor vehicle;
(iv)the wife’s bank accounts;
(v)the wife’s superannuation; and
(vi)all other assets of whatsoever nature and kind in the wife’s possession, ownership and/or control as at the date of these orders;
(r)except as specifically provided for in these orders to the contrary, the husband is declared and the wife has no interest in –
(i)the property 1 and 2 D Street, Suburb F;
(ii)the husband’s bank accounts;
(iii)the husband’s motor vehicles;
(iv)the husband’s superannuation;
(v)the husband’s share portfolio; and
(vi)all other assets of whatsoever nature and kind in the husband’s possession, ownership and/or control as at the date of these orders;
(s)except as specifically provided for by any order to the contrary, each of the husband and the wife releases the other from all debts owing from one to the other; and
(t)except as specifically provided for by any order to the contrary –
(i)the wife indemnifies the husband from, and in respect of, all actions, claims, suits and demands as may be made against the husband in relation to all liabilities in the name of the wife; and
(ii)the husband indemnifies the wife from, and in respect of, all actions, claims, suits and demands as may be made against the wife in relation to all liabilities in the name of the husband.
3.In respect of pool 2 –
(a)within 28 days of the making of these orders the wife must do all things and sign all documents to cause the Suburb C property to be offered for sale by private treaty at a sale price not less than $1,870,000;
(b)for the purpose of order 3(a) herein, the wife must select a selling agent in the local area and the agent so selected shall be the selling agent for the purpose of these orders;
(c)in the event the Suburb C property is not subject to an exchange of contacts within six weeks of first being listed for sale in accordance with order 3(a) herein, the wife is to do all things and sign all documents to cause the Suburb C property to be submitted for sale by public auction with a reserve to be advised by the selling agent;
(d)in the event the Suburb C property is not subject to an exchange of contracts pursuant to the auction provided in order 3(c) herein, then the Suburb C property is to be resubmitted to successive auctions no more than 4 weeks apart at a reserve 5% less than the preceding reserve until sold; and
(e)upon settlement of the sale of the Suburb C property, the wife must do all acts and things and sign all documents necessary to cause the proceeds of sale to be applied and distributed in the following manner and priority –
(i)in payment of agent’s commission, advertising expenses and legal costs of the conveyancing;
(ii)in payment of the amount required to discharge the mortgage to the Commonwealth Bank of Australia secured on the title of the Suburb C property; and
(iii)the balance to be paid to the wife;
(f)upon settlement of the sale of the Suburb C property in accordance with Orders 3(a), 3(c) or 3(d) herein, the wife must cause her tax return in the financial year of the sale, to be prepared and submitted to the ATO for the purpose of calculating the Capital Gains Tax incurred on sale of the Suburb C property, and within seven days of the wife providing to the husband –
(i)the ATO assessment of CGT attributable to the sale of the Suburb C property; and
(ii)a statement of the selling costs incurred in the sale of the Suburb C property;
the husband shall pay to the wife 60% of the total CGT and selling costs as defined in orders 3(e)(ii) and 3(e)(iii) herein; and
(g)in the event that the receipt by the wife of the proceeds of sale of the Suburb C property cause her to receive in excess of 60% of the assets pursuant to order 2(q) above then the wife must pay to the husband the sum received in excess of 60% of the asset pool.
4.In the event that either party refuses or neglects to execute any deed or instrument necessary to give effect to these orders, a registrar of the court be appointed pursuant to s 106A of the Family Law Act 1975 (Cth) to execute such deed or instrument in the name of the defaulting party and to do all acts and things necessary to give validity and operation to the deed or instrument.
5.Pursuant to s 117(2) of the Act, in respect of any action taken pursuant to order 2(t) above, the defaulting party will pay the other party’s costs of, and incidental to, that action as agreed, and failing agreement as assessed.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to 17.02 Family Law Rules 2004 (Cth).
IT IS NOTED that publication of this judgment by this Court under the pseudonym Mayhew & Fairweather has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
WILSON J:
INTRODUCTION
After nearly two and a half decades together, the applicant commenced this proceeding under s 79 of the Family Law Act for the alteration of property interests.
The applicant sought orders to the effect that she receives 60% of the asset pool, said to have been estimated at in excess of $15m.
Conversely, the respondent sought orders that he receives a division of assets in his favour as to 55%. The respondent contended deficiencies in the applicant’s disclosure were apparent invoking certain observations from Bacall & Zagar.[1]
[1] [2020] FamCA 350.
SYNOPSIS
For the reasons that follow, in my judgment –
(a)the making of an order under s 79 of the Family Law Act is just and equitable in the circumstances of this case; and
(b)an alteration of property interests as to 60% in favour of the applicant is just and equitable.
SHORT NARRATION OF RELEVANT BACKGROUND
The applicant is a 63 year old company director with a master’s degree from N University.
The respondent is a 71 year old health professional with a master’s degree from N University.
The parties commenced cohabitation in 1990, married in 1992, then separated,[2] leading to a divorce order being made in 2017.
[2] The applicant gave evidence that the final separation occurred on 15 October 2016 whereas the respondent gave evidence that the parties separated under one roof in February 2014.
The property at 1 D Street, Suburb F, a dual occupancy, is the place of residence of each party, the applicant upstairs and the respondent downstairs.
The parties have one child of their marriage, born in 1998, nearing 23 years of age.
When they commenced cohabitation, the applicant was in full time employment with P Company as a health consultant and the respondent was in full time employment with P Company as a health professional.
THE PARTIES’ BALANCE SHEET
Item Owner Description Wife's Value Husband's Value Assets 1 H 2 D Street, Suburb F $6,000,000 $6,000,000 2 H G Street, Suburb H $1,870,000 $1,870,000 3 W B Street, Suburb C $1,870,000 $1,870,000 4 J K Limited $278,947 $278,947 5 W Land at Q Farm, R Town, New Zealand $70,000 $70,000 6 W motor vehicle 1 $4,000 $4,000 7 H motor vehicle 2 $3,500 $3,500 8 H motor vehicle 3 $15,000 $15,000 9 W CBA …42 $43,283 $43,283 10 W CBA …13 $2,805 $2,805 11 W T Bank Account …74 $81,875 $81,875 12 W T Bank Account …00 $462 $462 13 W T Bank Account …20 $549 $549 14 J V Bank …00 $13 $13 15 W V Bank …01 $3,109 $3,109 16 W Share Portfolio $529,272 $529,272 17 H Share Portfolio $77,240 $77,240 18 H CBA Account #...38 $2,074 $2,074 19 H W Bank $19,651 $19,651 20 W Loan Account K Limited $1,091,720 $1,091,720 21 J Loan Account K Limited $152,494 $152,494 22 W Household contents $4,000 $4,000 22 H Household contents $4,000 $4,000 23 H S Trust Account $52,800 $52,800 $12,176,794 $12,176,794 Liabilities 24 J Mortgage CBA over 2 D Street, Suburb F $165,575 $165,575 25 W Mortgage CBA over B Street, Suburb C $186,206 $186,206 26 W Estimated Capital Gains Tax on sale of Suburb C $257,000 NK 27 W Estimated selling costs re Suburb C $50,000 NK $658,781 $351,781 Superannuation 29 W J Super Fund $495,725 $495,725 30 H J Super Fund $891,305 $891,305 31 W X Super $9,846 $9,846 32 W V Bank Portfolio $17,167 $17,167 33 H M Company $1,072,687 $1,072,687 34 H Y Super Fund $1,353,642 $1,353,642 $3,840,372 $3,840,372 Net Assets (including Superannuation) $15,358,385 $15,665,385 PRINCIPLES OF PROPERTY ALTERATION UNDER THE FAMILY LAW ACT
Before embarking on an analysis of the parties’ history in the acquisition and sale of property, it is necessary to record the legal principles that govern a proceeding commenced under s 79 of the Family Law Act.
Under s 79(2) of the Family Law Act, the court (me, in this instance) must not make an order under s 79 unless satisfied that in all the circumstances, the making of an order under s 79 is just and equitable.
Section 79(4) of the Family Law Act prescribes matters that must be taken into account in considering what order (if any) should be made under the section.[3]
[3] Stanford v Stanford (2012) 247 CLR 108 (at [35]).
The requirements of s 79(2) and s 79(4) are not to be conflated.
In every case in which a property settlement order under s 79 is sought, it is necessary to satisfy the court that, in all the circumstances, it is just and equitable to make the order.[4]
[4] Ibid.
The expression “just and equitable” qualitatively describes a conclusion reached after examination of a range of potentially competing considerations and cannot be exhaustively defined.[5]
[5] Mallet v Mallet (1984) 156 CLR 605, 608 and Stanford v Stanford (2012) 247 CLR 108, 120 (at [36]).
Three fundamental propositions must not be obscured in relation to the exercise of the power conferred by s 79.[6]
[6] Stanford v Stanford (2012) 247 CLR 108, 120 (at [36]).
First, it is necessary to begin consideration of whether it is just and equitable to make a property settlement order by identifying, according to ordinary common law and equitable principles, the existing legal and equitable interests of the parties in the property.[7] The question posed by s 79(2) is thus whether, having regard to those existing interests, the court is satisfied that it is just and equitable to make a property settlement order.[8]
[7] Ibid (at [37]).
[8] Ibid.
Second, although s 79 confers a broad power on a court exercising jurisdiction under the Act to make a property settlement order, it is not a power that is to be exercised according to an unguided judicial discretion and instead is a power which rests upon the law.[9]
[9] Wirth v Wirth (1956) 98 CLR 228, 231, R v Watson; ex parte Armstrong (1976) 136 CLR 248, 257 and Stanford v Stanford (2012) 247 CLR 108, 120 (at [38]).
Whether it is just and equitable to make the order is not to be answered by assuming that the parties’ rights to or interests in marital property are or should be different from those that then exist as the question presented by s 79 is whether those rights and interests should be altered.[10]
[10] Stanford v Stanford (2012) 247 CLR 108, 121 (at [39]).
Community of ownership arising from marriage has no place in the common law.[11]
[11] Hepworth v Hepworth (1963) 110 CLR 309, 317 and Stanford v Stanford (2012) 247 CLR 108, 121 (at [39]).
Third, whether making a property settlement order is just and equitable is not to be answered by beginning from the assumption that one or other party has the right to have the property of the parties divided between them or has the right to an interest in marital property fixed by reference to the various matters set out in s 79(4). To that end, a conclusion that making an order is “just and equitable” only because of and by reference to various matters in s 79(4), without a separate consideration of s 79(2), is to conflate the statutory requirements and ignore the principles laid down in the Family Law Act.[12]
[12] Stanford v Stanford (2012) 247 CLR 108, 121 (at [40]).
Those three fundamental propositions require a court to have a principled reason for interfering with the existing legal and equitable interests of the parties to the marriage.[13]
[13] Stanford v Stanford op cit (at [41]).
The just and equitable requirement is readily satisfied when, as a result of a choice made by one or both parties, the husband and wife are no longer living in a marital relationship because in such a case, there is not and will not thereafter be the common use of property by the husband and wife.[14]
[14] Stanford v Stanford op cit (at [42]).
Also brought to an end by the voluntary severance of the mutuality of the marital relationship are –
(a)the express and implicit assumptions that underpinned the existing property arrangements;
(b)any express or implicit assumptions that the parties may have made to the effect that existing arrangements of marital property interests were sufficient or appropriate during the continuance of their marital relationships is brought to an end with the ending of the marital relationship; and
(c)the assumption that any adjustments to those interests could be effected consensually as needed or desired.[15]
[15] Ibid.
Conversely an involuntary separation does not show that it is just and equitable to make a property settlement order and a court is not permitted to disregard the rights and interests of parties in their respective property so as to make whatever order may seem to it to be fair and just.[16]
[16] Wirth v Wirth (1956) 98 CLR 228, 231, Hepworth v Hepworth (1963) 110 CLR 309, 317 and Stanford v Stanford (2012) 247 CLR 108, 122 (at [43]).
Section 79(4) identifies seven matters that a court must take into account in considering the order to be made under s 79.
Paragraphs (a), (b) and (c) each refer to various forms of contributions made by parties to the marriage.
Paragraph (d) refers to the effect of any order on either party’s earning capacity.
Paragraph (e) requires consideration of the matters to be taken into account in relation to spousal maintenance “so far as they are relevant”.
Paragraphs (f) and (g) refer to orders already made under the Family Law Act and child support.
No real dispute existed about the parties’ property. The balance sheet recorded above was a joint document on which both counsel relied. The debate in the case emerged in relation to the quantification of initial contributions, inheritances and s 75(2) factors.
THE PARTIES’ PROPERTY
The respondent’s property at cohabitation
The respondent owned the land and improvements at G Street, Suburb H, he having acquired it in or about 1976. The respondent stated[17] that the property was valued at $200,000 as at the date of cohabitation. While various statements have been made[18] about lay persons purporting to give unqualified evidence about valuation issues, in this case no contradictory evidence was adduced about the value of G Street, Suburb H as at the date of cohabitation and the applicant did not challenge that valuation. Further, the respondent recorded that the value of $200,000 had been determined by Mr Z, an agreed expert. The amount of $200,000 for G Street, Suburb H was recorded in paragraph 10(b) of the applicant’s 16 April 2021 affidavit.
[17] Paragraph 7(a) of his affidavit made 14 May 2021.
[18] For example Frederick v Frederick (2019) 60 Fam LR 1.
In those circumstances it is appropriate to proceed on the basis that as at the date of cohabitation, the Suburb H property had a value of $200,000.
The respondent also gave evidence of a property at 1 D Street, Suburb F. He said he purchased that property in or about 1981 for $200,000. He said[19] that as at the date of cohabitation the property at 1 D Street, Suburb F was valued at $940,000, an amount with which the applicant agreed.[20] The respondent stated that Mr Z had ascribed that value to the property at 1 D Street, Suburb F.
[19] Paragraph 7(b) of his affidavit of 14 May 2021.
[20] Paragraph 10(a) of her affidavit made 16 April 2021.
The respondent stated[21] that he owned a share portfolio as at the date of cohabitation. He did not attribute a dollar value to that share portfolio. The applicant did not mention the respondent’s share portfolio as at the date of cohabitation. The respondent was cross-examined about his share portfolio. However, that questioning was directed to events subsequent to the parties’ commencement of their cohabitation. In the passages below I have addressed matters relating to the respondent’s share portfolio.
[21] Paragraph 7(c) of his 14 May 2021 affidavit.
The respondent stated[22] that he owned household furniture as at the date of cohabitation. He did not ascribe a figure to that. The applicant said nothing about the details of that household furniture as at the date of cohabitation. In light of there being no evidence of details and value on point, I have disregarded household furniture for the purpose of ascertaining the parties’ property as at the date of cohabitation.
[22] Paragraph 7(d) of his 14 May 2021 affidavit.
The respondent stated[23] he owned a motor vehicle as at the date of cohabitation. No details of make, model, year or value were given. The applicant did not mention a motor vehicle owned by the respondent as at the date of the commencement of their cohabitation. As with the respondent’s evidence about his owning household furniture, in respect of his evidence of owning a motor vehicle as at the date of cohabitation, in the absence of details of the type already recorded, I am unable to make any finding about any such motor vehicle, as alleged.
[23] Paragraph 7(e) of his 14 May 2021 affidavit.
So far as the respondent’s liabilities were concerned as at the date of cohabitation, he said[24] he owed the following sums to mortgagees –
(a)over the Suburb H property – $25,000; and
(b)over the Suburb F property – $130,000.
[24] Paragraph 8 of his 14 May 2021 affidavit.
The applicant stated in her affidavit[25] that the sum owed by the respondent to his mortgagees as at the date of commencement corresponded with the sums stated by the respondent save that she said he owed $10,000 more than he stated in relation to the Suburb F property.
[25] Paragraph 10 of her 16 April 2021 affidavit.
Expressed arithmetically, at the commencement of cohabitation the respondent’s property was as follows –
assets
·G Street, Suburb H $200,000
·1 D Street, Suburb F $940,000 $1,140,000
liabilities
·G Street, Suburb H $25,000
·1 D Street, Suburb F $130,000 $155,000
net assets $985,000
The applicant said[26] the respondent’s net asset position as at the commencement of cohabitation was $975,000. On their respective assessments they were essentially agreed, his version being $985,000 and hers being $975,000. That was in 1990. However, she stated that by reason of a valuation of mortgage dated 1 February 1991, the debt of $140,000 had reduced by $10,000 making it $130,000.
[26] Paragraph 10 of her 16 April 2021 affidavit.
The applicant’s property at cohabitation
The applicant stated[27] that as at the date of cohabitation her net asset position was $97,500.
[27] Paragraph 9 of her 16 April 2021 affidavit.
She gave as her property –
(a)a farm in New Zealand to which she ascribed the amount of $20,000;
(b)AA Street, Suburb BB that she said carried a value of $130,000;
(c)savings of $17,000 in various bank accounts; and
(d)superannuation of $5,500.
She attributed a total of her assets to be $172,500.
The respondent referred to[28] the applicant’s Suburb BB property to which he attributed the amount of $130,000. He also mentioned[29] the applicant’s land in New Zealand although he did not purport to attribute a value to it. The respondent did not address the applicant’s cash-at-bank or her superannuation.
[28] Paragraph 9(a) of his 14 May 2021 affidavit.
[29] Paragraph 9(b) of his 14 May 2021 affidavit.
In those circumstances, there being no contradictory evidence on point from the respondent I accept the applicant’s evidence about her assets.
So far as the applicant’s liabilities were concerned as at the commencement of cohabitation, she mentioned an amount owing under a mortgage over the Suburb BB property that she said stood at $75,000. The respondent acknowledged[30] that the applicant owed money to a mortgagee yet he did not say how much the applicant owed. It seemed to me, therefore, that on the balance of probabilities, there being no contradictory evidence on point, that the applicant’s version is correct in that she owed $75,000 to her mortgagee as at the date of cohabitation.
[30] Paragraph 10(a) of his 14 May 2021 affidavit.
Expressed arithmetically, the applicant’s property position as at the date of cohabitation was as follows –
assets
·New Zealand land $20,000
·AA Street, Suburb BB $130,000
·cash-at-bank $17,000
·superannuation $5,500 $172,500
liabilities
·debt to mortgagee $75,000 $75,000
net assets $97,500
From the foregoing, the respective net financial position of the parties was as follows –
·applicant – $97,500
·respondent – $985,000
After undertaking certain renovations to it, the parties married at the Suburb F property on 3 May 1992 and thereafter moved into it.
Both parties gave evidence about renovations to the Suburb H property. The applicant said she –
(a)cleaned, painted and assisted tradesmen;
(b)chose tiles, toilets and fittings for the bathrooms;
(c)obtained quotes for a new oven;
(d)assisted in the design of the bathrooms and kitchen;
(e)liaised with the builder; and
(f)decluttered the property then arranged for four students to move in generating weekly rental of $200.
The respondent gave evidence[31] about renovations to the Suburb H property. He said that in 1990 he –
(a)designed the renovations and chose the contractor;
(b)provided his own labour mostly by clearing the site and cleaning; and
(c)chose the tiles and fittings.
[31] Paragraph 14 of his 14 May 2021 affidavit.
In cross-examination,[32] Mr Lethbridge SC obtained from the applicant the admission that the renovations undertaken by the parties to the properties at Suburb H and Suburb F were undertaken as a team. To my mind, that seemed to accord with the versions given by each party in relation to who did what work in the nature of renovations.
[32] T32 L35.
The applicant’s employment history
The applicant left P Company in 1994 and took up employment as a health consultant with CC Company until 1995. From 1995 until 1997 she worked full time as a senior health consultant with DD Business then on a part time basis until June 2005. Between mid-2005 and late 2007 the applicant worked in with EE Company. Between 2008 and 2010 she was a health advisor at FF Services. Between 2011 and 2013 she worked casually as a health professional while farming in New Zealand.
The applicant provided assistance to the respondent in the respondent’s career over various dates and in various capacities.
The respondent’s employment history
Narrating the respondent’s complete work history was problematic as he did not detail his career with particular precision. He worked with P Company when he and the applicant met and in 1990 commenced cohabitation. He left P Company in early 1993 after which he worked for six months with GG Organisation. Between 1995 and 1998 the respondent was a health professional at HH Services.
Between 1998 and 2007 the respondent served in a New South Wales State organisation.
COMPLAINTS ABOUT DEFECTIVE DISCLOSURE
Both parties contended the disclosure given by the other was defective with the consequence that each submitted that the ascertainment of the true asset position was problematic.
On behalf of the applicant Mr Batey of counsel submitted that the respondent’s disclosure deficiencies fell into several categories, namely management fees, the contents and value of the respondent’s share portfolio and the private superannuation fund. Both Mr Batey and Mr Lethbridge SC relied on my observations in Bacall & Zagar[33] about the consequences of defective disclosure.
[33] The result in the property division was upset on appeal [(2020) 61 Fam LR 601] but the statement of principle concerning disclosure remains good law.
In focussing on the absence of satisfactory disclosure concerning the respondent’s share portfolio, Mr Batey contended that only upon the respondent being pressed in cross-examination for details of his share portfolio did the respondent produce two schedules (one on 21 June 2021, the other the next day) the details on which were different. Those schedules were not source documents. Mr Batey highlighted how the respondent’s persistent failure to diligently provide disclosure undermined every stage of the judicial process.[34]
[34] He relied on In the Marriage of Black & Kellner (1992) 12 Fam LR 343, In the Marriage of Weir (1992) 16 Fam LR 154, In the Marriage of Kannis (2002) 30 Fam LR 83 as well as Chang v Su (2002) 170 FLR 244.
Mr Batey submitted that by reason of that significant dereliction to diligently disclose documents, I should not disadvantage the applicant. Mr Batey also contended that the authorities[35] show where the court is satisfied that the whole truth has not come out by reason of defective disclosure, it may be appropriate for the court to err on the side of generosity to the party who otherwise might be seen to be disadvantaged by the lack of appropriate candour in making disclosure.
[35] Those were drawn together in Bacall & Zagar (at [342] and following).
Perfectly appropriately, Mr Lethbridge SC conceded that the respondent was unable to avoid a finding that he made no reference to personally owned shares in his financial statement made in 2018. Mr Lethbridge also conceded that the respondent’s share portfolio was undervalued for the purposes of the trial. However, Mr Lethbridge submitted that notwithstanding those concessions –
(a)the respondent did not intentionally mislead by reason of his defective evidence concerning his share portfolio;
(b)the discrepancy in the value of his share portfolio was de minimis;
(c)certain of the respondent’s shares formed the seed capital for the parties’ private superannuation fund; and
(d)the applicant regarded the parties as partners so it may readily be deduced that she had some knowledge of the respondent’s financial position.
Even if I were to accept those contentions, the legal consequences as outlined in Kannis and in Weir remain because the intention of the party whose non-disclosure is in issue becomes largely irrelevant. In those cases the court spoke of it being beside the point whether the non-disclosure is wilful or accidental or is the result of misfeasance, malfeasance or nonfeasance, as the duty to disclose is absolute.
Being bound by those authorities, I must apply their divining principle. Having regard to the concessions made about the respondent’s non-disclosure in circumstances where the respondent’s duty to disclose is absolute, an inevitable finding follows that the respondent failed in his disclosure duty. I cannot therefore be satisfied that the respondent’s version of the property in issue in this case is accurate. Put differently, in the face of the respondent’s concession that his disclosure has been defective, I am fortified in the conclusion that it is appropriate to err on the side of generosity in favour of the applicant.
THE RESPONDENT’S INHERITANCE
In 2007 the respondent’s mother died making provision in her will for the respondent. The respondent deposed[36] to receiving shares and cash of $225,000 together with a quarter interest in a unit at B Street, Suburb C, valued for probate purposes at $750,000[37] making the respondent’s quarter share $187,500. The applicant contended that the Suburb C unit was valued by JJ Company as at 5 July 2007 for probate purposes at $650,000.[38] The difference in the value of the unit, $100,000, was not the subject of cross-examination of the respondent. However, Mr Lethbridge obtained the admissions from the applicant that she purchased the interests of the other three quarter interest holders in the unit, thereby enabling the applicant to secure 100% ownership in the Suburb C unit for the price of $650,000, the respondent having transferred the one quarter interest devised to him.[39]
[36] Paragraph 27 of his 14 May 2021 affidavit.
[37] This was according to the respondent.
[38] Paragraph 26 of the applicant’s 16 April 2021 affidavit.
[39] T13.
In order to fund the applicant’s acquisition of the three quarter interest in the Suburb C unit, the applicant applied the proceeds of sale of her Suburb BB property and obtained mortgage funding. That was in 2010 or thereabouts.
THE APPLICANT’S INHERITANCE
The applicant’s parents owned farming land in KK City, New Zealand called “Q Estate”.
In January 2020 the parties and their son relocated to New Zealand and lived rent free in accommodation at Q Estate.
In 2012 and 2013 the applicant received property, as inheritances, from the estate of her late father.[40] The applicant narrated the property received by her together with her version of the value of that property. The property was –
(a)cash of NZD $123,244;
(b)shares valued at NZD $333,088;
(c)breeding cows valued at NZD $60,000;
(d)LL Town beach house valued at NZD $144,000; and
(e)Q Farm valued at NZD $1,185,000.
[40] Paragraph 35 of her affidavit made 16 April 2021.
She said the total of those items of property was NZD $1,845,332 or AUD $1,537,531, when applying the exchange rate in operation as at 20 May 2013.[41] The date 20 May 2013 was selected because the applicant relied on the information in financial statements for the period to 20 May 2013 prepared by Mr MM, exhibited to the applicant’s affidavit.
[41] Ibid.
The applicant also deposed to an earlier gift to her by members of her family of farm equipment she said was valued at $10,000. She did not substantiate the valuation of $10,000.
K PTY LTD
Both parties gave largely consistent evidence about the establishment of a corporate entity in 2010 through which each conducted farming activities. Most of the information given by each was consistent.[42] Each held 50% of the issued shares in the capital of the company. The applicant stated that she transferred the Q Farming property to the company when she inherited it.[43]
[42] Save that the applicant identified the company as K Pty Ltd whereas the respondent identified the company as K Ltd. No company search was exhibited.
[43] Paragraph 36 of her 16 April 2021 affidavit.
As to the running of the farm, their evidence diverged. The respondent stated that “we ran the farm together through this entity until 2014”.[44] The respondent stated that after 2014 the applicant made it very difficult for him to have access to any financial information about the farm as well as physical access to it. In paragraph 41 of his affidavit the respondent gave evidence of the renovations that had been undertaken at the Q Estate property in respect of which the respondent said he was the builder’s labourer. The cost of the renovation works, according to the respondent, was paid from funds in the V Bank account into which he said he had deposited his superannuation. The respondent also said[45] that the renovation works were paid in part from his income and in part from one or more drawdowns under the mortgage facility. The respondent did not exhibit any bank documentation to substantiate the contention that he applied his superannuation income from Australia to New Zealand into a V Bank account. Conversely, the applicant stated[46] that the renovation costs of works at Q Estate was $180,000 approximately which the applicant said she paid from her inheritance and rental income. She was not challenged on that statement when she was cross-examined.
[44] Paragraph 37 and 40 of his 14 May 2021 affidavit.
[45] Paragraph 35 of his affidavit made 14 May 2021.
[46] Paragraph 34 of her 16 April 2021 affidavit.
THE APPLICANT’S CONTENTIONS ON HER FINANCIAL CONTRIBUTIONS
On behalf of the applicant, Mr Batey of counsel submitted that the applicant applied the inheritances she received in a manner that illustrated her superior financial contributions. He supported that contention by submitting that the applicant –
(a)procured the derivation of rental income from letting the farm for two years in April 2016 for NZD $45,000 per annum;
(b)procured the derivation of other income from letting the farmhouse for NZD $300 per week over the period December 2017 to July 2020;
(c)sold the LL Town beach house for NZD $140,000 in April 2016; and
(d)funded renovations to Q Farm of NZD $180,000.
Mr Batey also submitted that the applicant provided financial contributions in arranging for the parties to live rent-free at the Q Farm property between January 2010 to 2015 (when the respondent returned to Sydney) and 2016 (when the applicant returned to Sydney).
RENOVATIONS TO THE SUBURB F PROPERTY
It was said that the applicant contributed “at least $20,000 in renovations to the Suburb F property”.[47] In paragraph 22 of her affidavit made 16 April 2021, the applicant supported that figure by deposing to the renovation costs of the Suburb F property being about $450,000, the majority of which renovation costs were funded by mortgage finance in respect of which the parties were joint borrowers. The balance was funded by the applicant when she paid $4,500 to an architect, $9,500 for cabinetry and $6,000 to a builder. No documentation was adduced to support those assertions. The respondent did not adduce any evidence to contradict the applicant’s evidence about the Suburb F renovations. None of those amounts were the subject of challenge during the cross-examination of the applicant. Despite those amounts being largely approximations, no challenge was made to them and they represent the best evidence on point so I accept the applicant’s evidence in relation to them.
[47] Paragraph 5 of the applicant’s undated case outline.
J SUPER FUND
By deed dated June 2009, the J Super Fund was established. The applicant stated[48] that the respondent transferred into the superannuation fund the shares left to him by his mother then valued at $306,071.78. She also said that she transferred into that fund the sum of $62,030.35 that she rolled over from PP Super Fund. In paragraph 29 of his affidavit, the respondent gave evidence in largely consistent terms, save for $71.78 difference in amount in the value of the shares and no value stated by the respondent in relation to the sum rolled over from PP Super Fund. On that basis I accept the applicant’s unchallenged evidence on that issue.
[48] Paragraph 27 of her affidavit made 16 April 2021.
The agreed joint balance sheet, in items 29 and 30, addressed different amounts in the parties’ private superannuation fund. No evidence about the J Super Fund was given by the parties beyond that mentioned. Having regard to the fact that the balance sheet was agreed, and by that I mean the description of the assets and liabilities as well as the amounts stated, then the fact of there being little evidence about the source of amounts in the parties’ private superannuation fund is of little moment. Applying similar reasoning, the same may be said of the respondent’s pension as to its appearance on the agreed balance sheet and the amount there recorded. The applicant gave evidence of the respondent’s pension,[49] as did the respondent.[50]
[49] Paragraph 29 of the applicant’s affidavit made 16 April 2021.
[50] Paragraph 57 of the respondent’s affidavit made 14 May 2021.
DISPUTED DATE OF SEPARATION
The applicant gave 15 October 2016 as the date of final separation.[51]
[51] Paragraph 6(d) of her affidavit of 16 April 2021.
The respondent gave 3 February 2014 as the date of separation.
On the applicant’s version of the evidence, the parties first cohabited in 1990, married in mid-1992 then finally separated in late 2016, 26 years or thereabouts in total.
On the respondent’s version of the evidence the parties first cohabited in 1990, they married in 1992 then separated in 2014, 24 years or thereabouts in total.
On either version,[52] both counsel described the relationship as lengthy.
[52] Part 7 paragraph 2 of Mr Batey’s case outline and T5 L9-10 of Mr Lethbridge SC’s opening.
POST-SEPARATION
It was common ground that the Suburb F property came to be the parties’ places of residence subsequent to their separation. Works were undertaken to it. The applicant relied on expenditures made by her to the upstairs living area of that property. She also relied on her payment of expenditures for the parties’ son in respect of his clothing, bedding and heating.[53] She said[54] she has continued to meet veterinary expenses as well as costs of food and care in relation to the family dog. No details of sums actually paid in relation to post-separation expenses were put in evidence by the applicant. That said, the respondent did not challenge the fact of the applicant having made those payments.
[53] Paragraph 52 of her 16 April 2021 affidavit.
[54] Paragraph 55 of her 16 April 2021 affidavit.
So far as the respondent’s post-separation financial contributions were concerned, the respondent gave evidence that he has met all sums due to the mortgagee of the Suburb F property since separation.[55] He said he paid school and college fees for the son after separation being –
(a)school fees of $28,166; and
(b)college fees of $63,138.[56]
[55] Paragraphs 57 and 59 of the respondent’s affidavit made 14 May 2021.
[56] Paragraph 62 of the respondent’s affidavit made 14 May 2021.
He said he paid repairs and renovation expenses associated with the Suburb H property, being $74,811 over the period 2019 and 2020.
He also said that in early 2019 works to Suburb H were arranged[57] but were not completed until 2020. He said that in order to re-let the property, internal and external works were undertaken at a cost paid by him of $78,182. The respondent did not produce documentary verification of those sums he said he paid, even though the amounts were dollar-specific.
[57] Paragraph 67 of the respondent’s 14 May 2021 affidavit.
ASSESSING CONTRIBUTIONS
Not only am I required to determine the parties’ respective initial contributions, but I am required to take into account the miscellany of contributions made by each party over the course of the marriage and subsequent to separation.[58]
[58] In the Marriage of Pierce (1998) 24 Fam LR 377, Dickons v Dickons (2012) 50 Fam LR 244, Singerson & Joans [2014] FamCAFC 238, Wallis & Manning [2017] FamCAFC 14 and Jabour v Jabour (2019) 59 Fam LR 475, to name but a few authorities on point.
The parties’ initial contributions have already been addressed. As has been mentioned already,[59] the initial contributions of the respondent substantially exceeded those of the applicant, his being $985,000 and hers being $97,500 that is to say hers was less than one tenth of his.
[59] Paragraph 51 above.
Relevantly paraphrased, under s 79(4)(a) I am required to take into account the financial contributions made directly or indirectly by or on behalf of each party to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them.
On behalf of the respondent, Mr Lethbridge SC submitted that the matter that fell for determination in this case were primarily fivefold. They were –
(a)the value and weight to be attached to the property introduced into the relationship at its commencement by the husband;
(b)the value and weight to be attached to the interest in property introduced into the relationship at its commencement by the wife;
(c)the value and weight to be attached to the husband's inheritance received from his mother's estate;
(d)the value and weight to be attached to the wife's inheritance received from her father's estate; and
(e)the manner in which the court should treat the husband’s contributory superannuation fund and the consequences of that manner of treatment.
On behalf of the applicant, Mr Batey submitted that the applicant’s direct and indirect financial contributions were made up of real property, sums paid by her, inheritances and certain gifts. Mr Batey submitted that those categories of contributions amounted to a very considerable sum. The use to which the relevant contribution is put is relevant although not determinative, as was held in In the Marriage of Money.[60]
[60] (1994) 17 Fam LR 814.
In addition, Mr Batey submitted that rental income was generated from letting the Q Farm and the farmhouse. He contended that the proceeds of sale from the LL Town property funded renovations to other properties.
It has been repeatedly held[61] that one party’s original contribution should not be carried forward as a mathematical proportion because ultimately, at trial, that party’s original contribution is one of a number of factors to be determined. Those authorities have also held that the longer the marriage the more likely it is that later factors of significance will emerge. In the end, the court’s task is to weigh the original contribution with all other subsequent factors, whether equal or not, to ascertain whether or not, in the circumstances of the case to hand, those subsequent factors reduce the significance of the original contributions.
[61] In the Marriage of Crawford (1979) 5 Fam LR 106, In the Marriage of White (1982) 8 Fam LR 512, In the Marriage of Lee Steere (1985) 10 Fam LR 431, In the Marriage of Money (1994) 17 Fam LR 814, In the Marriage of Aleksovski (1996) 20 Fam LR 894 and In the Marriage of Pierce (1998) 24 Fam LR 377.
Applying the ratio decidendi of those authorities to the facts of this case, while the respondent made significantly greater initial financial contributions than did the applicant, over the duration of the long marriage between the two the importance of that disparity in initial financial contributions diminished.
As the authorities mentioned above reveal, the task that is set of me involves weighing subsequent factors to ascertain whether those subsequent factors reduce the significance of the disparity in the initial contributions. To that I now turn.
The applicant received a large inheritance. It involved –
(a)cash of NZD $123,244;
(b)shares valued at NZD $333,088;
(c)cattle valued at NZD $60,000;
(d)a beach house valued at NZD $144,000; and
(e)a farm valued at $1,185,000.
The total of those amounts was NZD $1,845,332.
It must not be overlooked that the applicant’s proprietorship of the farm was transferred to the company K Investments Pty Ltd in which the applicant and respondent were equal shareholders. Pursuant to that transfer the applicant divested herself of sole proprietorship of the farm in favour of the corporate entity that has been owned as to half by each the applicant and the respondent. There was no suggestion in the evidence that the applicant orchestrated the transfer of title in the farm to the company (owned as to half by the respondent) in any manner other than voluntarily, fortifying my view of the evidence that to her way of thinking she and the respondent operated as a team. The farm generated rental income for a period of NZD $45,000 per annum and, separately, the farmhouse generated other rental income of $300 per week from December 2017 to July 2020. It must also be borne in mind that the applicant dedicated an amount in or around $180,000 from her inheritance towards renovations of the farm property. The applicant gave evidence of a gift of $10,000 in farm equipment. In addition, the parties lived rent-free at the farm from January 2010 until their return to Sydney in 2015 and 2016.
The applicant sold her Suburb BB property in 2009 and by the application of the proceeds of that sale plus mortgage funding, she acquired the three-quarter interest previously held by the respondent’s siblings in the unit at B Street, Suburb C. The respondent transferred his quarter interest given to him pursuant to a bequest from his mother resulting in the applicant owning the whole of the fee simple estate in that parcel of land.
In terms of post-separation contributions, the applicant gave evidence that she paid for her son’s clothing, bedding, heating as well as the costs of certain works undertaken to the upstairs area of the Suburb F property. She did not give detailed evidence of the quantification of those payments. She said she paid veterinary expenses for the family dog.
Turning now to an assessment and weighing of the respondent’s direct and indirect financial contributions subsequent to his initial contributions, the respondent gave evidence of his 1997 acquisition of a NN City unit for $160,000 and its later sale. He said it sold in 2006 for $350,000 and the profit was applied in extinguishing the mortgage over the Suburb H property and to meeting his unsuccessful 2003 election campaign.
The sum of $225,000 received as an inheritance in 2007 upon the death of the respondent’s mother has been canvassed.
Mr Lethbridge SC placed heavy reliance on the fact that the parcels of real estate introduced by the respondent substantially increased in value. The values of all items of property were agreed so no dispute exists in that regard.
TREATMENT OF EACH PARTY’S INHERITANCE
Consistent with the holding in Jabour v Jabour[62] in this case I am required to weigh and assess the contributions of all kinds and from all sources made by each party throughout the period of their cohabitation and then translate such an assessment into a percentage of the overall property of the parties. A reasonable value must somehow be given to all the elements that go to making up the entirety of the marriage relationship.[63] Contributions must be assessed holistically and by analysing the nature, form, characteristics and origin of the property currently comprising that to which s 79 applies and in turn analysing the nature, form and extent of contributions of all types contemplated by s 79.[64]
[62] (2019) 59 Fam LR 475.
[63] In the Marriage of Aleksovski (1996) 20 Fam LR 894.
[64] Dickons v Dickons (2012) 50 Fam LR 244 (at [20]).
Mr Batey placed weight on the fact that the applicant’s inheritance was larger than was the respondent’s. Conversely, Mr Lethbridge contended that the value of the parcels of real estate that the respondent brought to the relationship by way of initial contribution has seriously increased in value and account for a very large sum in the assessment of the value of the property of the parties as at the date of trial. Expressed arithmetically, Mr Lethbridge submitted that the combined value of the Suburb F property and the Suburb H property along with the one quarter interest in the Suburb C unit amounts presently to almost $8,000,000 being 65% of the parties’ assets excluding superannuation. Mr Lethbridge compared that to the applicant’s inherited amount having a converted value of AUD $1,537,531.
In his written submissions at paragraph 15 Mr Batey contended that the respondent’s inheritance was cash of $225,000 plus the quarter share in the Suburb C property, having an approximate value of $163,000, making $388,000. When added to the value of the respondent’s direct ascertainable lump sum contributions from property at the commencement of the relationship together with inheritances the sum was $1,363,000.
Mr Batey compared that situation with that of the applicant. He submitted that in 2012 and 2013 the applicant received inheritances of shares, cash, real property at LL Town, and a farm that had a combined value of AUD $1,537,531. When added to her initial contribution, that amounted to AUD $1,635,031. The difference between that amount and the amount of the respondent placed the applicant at an advantage of $272,031.
Mr Lethbridge’s contention that the parcels of land the respondent introduced to the relationship should be accorded dominating significance having regard to the current value of those properties needs to be viewed with caution. Naturally, I recognise the current value of those two parcels of land. However, concurrently I must also recognise the myriad of other contributions over the duration of the marriage. To focus too single-mindedly on the current value of those two parcels of land introduced by the respondent diverts attention away from the task that must be undertaken, namely, assessing the totality of the contributions prescribed by s 79(4) and examining the matters prescribed by s 75(2).
NON FINANCIAL CONTRIBUTIONS
For the purposes of s 79(4)(b) of the Family Law Act, both parties provided non-financial contributions. It is necessary to record them as disclosed in both parties’ affidavit material.
The applicant’s non-financial contributions may be stated in précis form. They included –
(a)helping the respondent in his career;[65]
(b)planning renovations to the Suburb F property and overseeing works over a period of 12 months during 1995 or thereabouts;
(c)supervising renovation works to the Suburb BB property in 2009;
(d)supervising renovations to the Suburb C property;
(e)farming the Q Estate property;
(f)supervising renovations to the Q Farm house in 2010 and later in 2014;
(g)managing the rental of the Suburb H property;
(h)raising their child in New Zealand and when the respondent was working in Australia;
(i)fulfilling the role of primary carer for the parties’ son from the date of his birth, the extensive details the applicant recorded in paragraph 48 of her affidavit; and
(j)fulfilling the role of primary homemaker, as recorded in paragraph 50 of her affidavit.
[65] Details were extensive and were set out in paragraph 21 in her affidavit sworn 16 April 2021.
As to those Mr Batey submitted that those contributions tilt in favour of the applicant.
Mr Lethbridge SC contended that the respondent’s contributions of the respondent were extensive. In précis form, taken from the respondent’s trial affidavit those included –
(a)contributing his income over the whole of the marriage when in employment;
(b)assisting in the renovations of the Suburb H property in 1990;
(c)assisting in the renovations of the Suburb F property in 1995;
(d)being a hands-on carer for the couple’s son even during the respondent’s years as an elected official;
(e)assisting in the renovations of the Suburb BB property;
(f)assisting in the renovations of the Suburb C property;
(g)helping in the management of the farm in New Zealand; and
(h)assisting in the renovations of the Q Farmhouse.
The respondent gave evidence that he assisted in the care of his son as his work permitted.[66]
[66] Paragraph 53 of his affidavit made 14 May 2021.
So far as post-separation non-financial contributions were concerned, the respondent contended that he has shared in the care of the parties’ dog and he assisted in the fitting out of the apartment occupied by his son and him.
Case law that binds me requires me to consider all contributions and to weigh all matters said to represent direct and indirect financial contributions as well as direct and indirect non-financial contributions. Each party argued that the overall contributions of that party exceeded the overall contributions of the other.
RESPONDENT’S PENSION
Both parties made detailed submissions on the manner in which the respondent’s pension should be treated. The agreed amount for the respondent’s pension was recorded in the agreed balance sheet at item 34 as $1,353,642. Both parties addressed the significance of the respondent’s pension on the basis that it was an item to be reckoned in the operation of s 75(2) of the Family Law Act.
For the purposes of s 75(2) considerations, several preliminary matters may be expressed. They include –
(a)the modest discrepancy in the parties’ age, the respondent being 71 years of age and the applicant 63; and
(b)each is in good health.
So far as the earning capacity of each was concerned, the parties were opposed. The respondent argued that the applicant, being younger, enjoyed a “greater length of income earning capacity”.[67] Conversely, the applicant argued that the slight age disparity “prima facie hints at the wife having a greater earning capacity over a period prior to retirement”.[68]
[67] Paragraph 30 of the respondent’s point of submission dated 22 June 2021.
[68] Paragraph 20 of the applicant’s submissions dated 23 June 2021.
The applicant works two to three days a week as a health professional for which she derives $610 gross per week. In addition the applicant derived dividend income, rent and interest of $1401 and a car allowance, per week.[69] According to her proposed orders, she will be selling the Suburb C unit with the consequence that her rental income stream will cease and upon her vacating the Suburb F property she will need to rent other accommodation or purchase a home. The proposed orders also reflect the transfer to her of the Suburb H property. If she does not elect to occupy that premises, the net income of $597 per week will continue. If she chooses to occupy it, then that income stream ceases.
[69] Ibid.
Mr Batey submitted that the respondent, working two days a week, derived (before tax and after deduction of 25% commission) $1,745 per week, plus, $1,626 per week by reason of his pension. Mr Batey said that based on historical performance,[70] the weekly amount paid pursuant to that pension is increasing each year.
[70] Ibid (at [21]).
Mr Batey submitted that I should be slow to embrace the respondent’s evidence about his wish to retire. It was put on behalf of the applicant –
(a)the parties’ son earns $1,000 per week and no longer justifies parental support;
(b)the respondent’s pension and investment income surpasses his disclosed expenditure of $2,525 per week;[71]
(c)the respondent has no need to work;
(d)the respondent put forward no meaningful evidence of a retirement plan; and
(e)in all the circumstances the respondent has an ongoing capacity to work.
[71] Tab 8 of the applicant’s tender bundle.
Mr Batey submitted that pursuant to s 75(2)(a), (b), (k) and (o), a 2.5% adjustment in favour of the applicant was warranted.
Mr Lethbridge SC relied on the decision in Semperton v Semperton[72] as well as the decision of a single judge of the Family Court of Western Australia in Fitzgerald-Stevens & Leslighter.[73] He said those cases stood for the proposition that a court dealing with a entitlement such as a Defence Forces Retirement and Death benefit –
(a)should have regard to the fact that such a benefit has a different character when it comes to the adjustment required under s 75(2); and
(b)the different character of the benefit in that case required attention when constructing the pools but also at each other point in the process, most especially at the s 75(2) stage and when assessing the justice and the equity of the outcome.
[72] (2012) 47 Fam LR 626.
[73] [2015] FCWA 25.
In this case Mr Lethbridge contended that a risk existed of double counting if on the one hand I were to factor the respondent’s pension in the assets in the balance sheet yet on the other hand additionally treated the pension as a discrete matter to be addressed under s 75(2). The consequence that such an issue threw up, although in the context of a defence forces retirement and death benefit, was specifically addressed in Semperton v Semperton. The following is a distillation of the holdings of the plurality[74] –
(a)applying Hayton v Bendle,[75] it is important to not double count a pension entitlement that is already included in the pool of assets;
(b)also applying Hayton v Bendle, nevertheless, such a pension assumes some relevance in the s 75(2) adjustment;
(c)a judicial pension was involved in Hayton v Bendle having “far greater magnitude” than the benefit under consideration in Semperton;[76] and
(d)tax payable on the defence force retirement and death benefit was not explored at trial in that case yet it was an important issue.
[74] Thackray & Ryan JJ, although May J agreed in the result adding reasons in different issues.
[75] (2010) 43 Fam LR 602.
[76] Semperton, op cit (at [151]).
In this case, the respondent’s pension entitlements are not taxable.[77] He said it was an income stream only and was not capital available to the respondent. The observations of the plurality in Semperton on the issue of tax on the retirement and death benefit tax distinguish this case from Semperton. While I accept that in this case the pension is not capital in nature, guaranteed income streams have been treated as being of considerable value, those decisions being canvassed between paragraphs 171 and 184 of the reasons of the plurality in Semperton.
[77] Mr Lethbridge SC’s final address 23 June 2021 – T79 L3.
Mr Lethbridge SC also relied on a first instance decision of the Family Court of Western Australia. To my mind the observations in that case represent little more than a fact specific illustration of principles canvassed by a full court in Semperton. The ratio decidendi of Semperton binds me. The single judge’s decision does not.
It seems to me that based on the reasons in Semperton, I should take into account –
(a)the respondent’s income stream from his pension;
(b)that it is not taxable;
(c)that the pension is not capital; and
(d)that compared to 2018, the weekly sum payable has increased.
The pension in this case is of a different character to the judicial pension in Hayton v Bendle yet in both a regular income stream was under consideration. Even in Hayton v Bendle where a judicial pension was involved, the court held that s 75(2) assumed some relevance in the adjustment.
HOW MANY POOLS – ONE OR TWO?
Mr Batey submitted that two pools were involved in this case. In the first were all assets, liabilities and superannuation of the parties but not the Suburb C unit. In the second was the Suburb C unit and associated liabilities, which included the mortgage debt and a capital gains tax liability. Conversely, Mr Lethbridge submitted as follows –
While it is conceded that it is possible separately to consider particular assets adopting a more than one pool approach. This is not a case where that course can safely be undertaken. The parties have throughout the proceedings approached the matter on the basis of a one-pool approach. Further, this is the case with real property introduced into the relationship both by way of contribution by the Husband and the Wife at its outset and subsequently through inheritances on each party’s side which again mitigates against any separate pool consideration. This is a case where the application / use of the inherited and introduced properties is a significant contribution to be considered holistically with all other contributions as has already been submitted.[78]
[78] Paragraph 22 of the respondent’s submissions.
In support of the two pool approach Mr Batey contended that the sale price was yet unknown. He submitted as follows –
Finally, to accommodate an agreed position of a sale of the Suburb C property with the resultant net sale proceeds being unknown for the purpose of calculating the selling commission and the CGT, the wife submits that a “two-pool” approach be taken with the Suburb C property, the secured mortgage, selling expenses and CGT in one pool (“Pool 2) , and the remainder of the parties assets in the other pool; (“Pool 1”) that would allow for adjustment from the net sale proceeds to accommodate the parties overall entitlements as found by the Court.[79]
[79] Paragraph 27 of the applicant’s submissions.
CONCLUSIONS ON INITIAL CONTRIBUTIONS
The discrepancy between the parties’ respective initial contributions has already been addressed. It was very much weighted in favour of the respondent.
SUBSEQUENT DIRECT AND INDIRECT FINANCIAL CONTRIBUTIONS
In the passages above I have recorded the parties’ direct and indirect financial contributions. The law requires that a holistic approach be adopted to the myriad of different contributions provided by each party. In this case, the marriage was lengthy and, irrespective of the debate about the precise date of separation, it was in the order of a quarter of a century. Upon separation the parties ceased to enjoy the common use of property. The express and implied assumptions that underpinned the property arrangements then in existence came to an end.[80] Hence, upon the parties separating the just and equitable requirement of s 79 is readily satisfied when as a result of a choice made between the parties (or one or other of them) the husband and wife no longer live in a marital relationship.
[80] Stanford v Stanford (2012) 247 CLR 108, 121 (at [41] – [42]).
When together living in a marital relationship, over somewhere between 24 and 26 years, the parties contributed their earnings to the acquisition, conservation or improvement of property of the parties. Each was in gainful employment for most of the marriage. Each paid various mortgage debts in reduction of them as well as funding renovation works associated with the improvement of several properties brought by each to the marriage. The court is not engaged in a cent-perfect mathematical calculation. I agree with Mr Lethbridge’s opening[81] when he submitted that the parties’ contributions other than in respect of inheritances, should be seen as essentially equal.
[81] T5 L9 – 21 June 2021.
The inheritances each party received were different. The respondent received $387,500 ($225,000 plus $162,500 in the quarter interest of the Suburb C unit) compared with the applicant’s receipt of AUD $1,537,531.
In my view the applicant’s contribution by way of inheritance was substantially greater than was the respondent’s.
So far as post-separation contributions were concerned, each expended sums, although the amounts involved were not the subject of precise evidence so no meaningful conclusions can be expressed.
Turning to direct and indirect non-financial contributions, each party made them over the life of the marriage. Each relied on the fact that each provided time, skill and expertise in renovation activities, and each said he or she had provided care for their son. The applicant relied heavily on the fact that she provided time-consuming and extensive office, administrative and service-related assistance to the respondent when he served as an elected official.
Mr Batey also relied on the respondent’s defective disclosure as grounding the applicant’s entitlement to an enhanced assessment of her contributions.
Expressed in aggregate, Mr Batey submitted that an appropriate percentage alteration of property interests was 57.5% in the applicant’s favour. He said that such a percentage reflected appropriate recognition of the greater inheritance, the greater indirect financial contribution and the substantial non-financial contribution in the provision of care to the couple’s son. To that Mr Batey submitted that an additional 2.5% should be added under s 75(2) to reflect the greater income stream the respondent will receive by reason of his pension. In total, that equated to a division in the applicant’s favour of 60%.
Mr Lethbridge SC submitted that the appropriate percentage division is 55% in favour of the respondent with up to 2% additionally ordered pursuant to s 75(2).
CONCLUSION
In my view the position advanced on behalf of the applicant is correct. The inheritance she received had the effect of substantially altering the nature, form and extent of contributions that to that point in time were largely equal, aside from the initial contributions. The contributions ceased to be equal when the inheritances were taken into account and in my view, the applicant’s inheritance had the effect of tilting the scales in her favour in the percentage urged by Mr Batey. This is supported by the respondent’s defective disclosure. In my view an adjustment in the applicant’s favour of 57.5% is just and equitable. To that must be added an amount to reflect the fact that the parties’ earning capacity hereafter is disparate with the respondent’s being significantly more assured by reason of his pension. That warranted an additional 2.5% making 60% in the wife’s favour. No double counting was involved in that approach.
The two pool method proposed by Mr Batey was appropriate having regard to the uncertainty of the capital gains tax that was likely to emerge.
In those circumstances, I make orders in terms of the two pools.
THE PROPOSED ORDERS
The orders proposed by the applicant in her amended orders were, to my mind, just and equitable. They were as are reflected in the early pages of these reasons. I make those orders.
I certify that the preceding one hundred and forty-seven (147) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Wilson. Associate:
Dated: 20 August 2021
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