McCann and McCann
[2013] FCCA 18
•12 April 2013
FEDERAL CIRCUIT COURT OF AUSTRALIA
| McCANN & McCANN | [2013] FCCA 18 |
| Catchwords: FAMILY LAW – Property – long marriage – substantial assets of Husband prior to marriage – questions of ‘weight’ to assets brought to the marriage by the parties – Husband was ‘traditional’ breadwinner of family and Wife traditional Mother and home-maker – agreed equal contributions during marriage – agreed position of Wife to receive large former marital residence – most of the children reside with Husband – a principal asset relates to long-time business of Husband – application of Wife to re-open evidence. |
| Legislation: Evidence Act1995 (Cth), s.128 Family Law Act 1975 (Cth), ss.75(2), 75(2)(o), 79(2), 79(4) |
| Cases cited: AON Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175 ASIC v Rich (2006) 235 ALR 587 Bing! Software Pty Ltd v Bing Technologies Pty Limited (No.2) [2008] FCA 1761 C v C [1998] FamCA 143 Clives v Clives (2009) 40 Fam LR 273 C & C (2005) FLC ¶93-220 Dakin & Dakin [2012] FamCAFC 120 Gollings v Scott (2008) 37 Fam LR 428 Inspector-General in Bankruptcy v Bradshaw [2006] FCA 22 In the Marriage of Kessey (1994) 18 Fam LR 149 Lee v Professional Services Review Committee No.292 (No.2) [2010] FCA 1490 Londish v Gulf Pacific Pty Ltd (1993) 45 FCR 128 Martin & Crawley [2012] FamCA 1032 TWN v PAQ (2006) 34 Fam LR 190 Norbis v Norbis (1986) 161 CLR 513 Omacini & Omacini (2005) 33 Fam LR 134 Pierce & Pierce (1999) FLC ¶92-844 Russell v Russell (1999) FLC ¶92-877 Smith & Fields [2012] FamCA 510 Smith v NSW Bar Association (1992) 176 CLR 256 Stanford v Stanford (2012) 293 ALR 70; (2012) 87 ALJR 74; (2012) 47 Fam LR 481; [2012] HCA 52 Steinbrenner & Steinbrenner [2008] FamCAFC 193 Stephens & Stephens (& Anor) (Enforcement) (2009) 42 Fam LR 423 Summitt & Summitt & Ors (Re-opening) [2009] FamCA 365 Watson & Ling [2013] Fam CA 57 |
| Applicant: | MR MCCANN |
| Respondent: | MS MCCANN |
| File Number: | CAC 688 of 2011 |
| Judgment of: | Judge Neville |
| Hearing dates: | 22 & 23 March, 22 June, 5 & 19 September 2012 |
| Date of Last Submission: | 1 November 2012 |
| Delivered at: | Canberra |
| Delivered on: | 12 April 2013 |
REPRESENTATION
| Counsel for the Applicant: | Mr G Glover |
| Solicitors for the Applicant: | Farrell Lusher, Wagga Wagga |
| Counsel for the Respondent: | Mr S Gardiner |
| Solicitors for the Respondent: | Walsh & Blair, Wagga Wagga |
THE COURT ORDERS THAT
The Husband pay to the Wife, within sixty (60) days of the date of these orders, the sum of $90,000, such sum to be payable pursuant to Section 77A of the Family Law Act 1975;
The superannuation interests of the parties should be divided equally;
Within thirty (30) days of the date of these orders the Husband will do all acts and things and sign all such documents as may be required to transfer to the Wife at the expense of the wife all his right title and interest in the real property situate and known as Property P more particularly described as Lot (omitted) in Deposited Plan (omitted) (hereinafter referred to as “the real property”);
The Wife indemnify the Husband against all rates, taxes and outgoings of or with respect to the property of whatsoever nature and kind.
Within thirty (30) days of the date of these orders the Wife will do such acts and things and sign all such documents as may required to transfer to the Husband at the expense of the Husband all her right title and interest in the following
(a) Property B1 and Property B2, more particularly described in Lot (omitted) and Lot (omitted).
(b) the business, (omitted) trading as “(omitted)”;
(c) except as otherwise provided for in these orders, the self funded superannuation fund known as “ (omitted) Super Fund”.
The Husband indemnify the Wife against all payments and liabilities pursuant to the mortgage to the (omitted) Bank registered number (omitted) and further mortgage to the (omitted) Bank registered number (omitted) (hereinafter referred to as “the mortgages”), the business overdraft facility with (omitted) Bank, and all rates, taxes and outgoings of or with respect to the real properties located at Property B1 and Property B2.
The Husband as soon as possible do all necessary acts and things and sign all necessary documents to transfer to the Wife at the expense of the wife the Toyota (omitted) currently in the wife’s possession.
The Wife as soon as possible do all necessary acts and things and sign all necessary documents to transfer to the Husband at the expense of the husband all interest in the:
Toyota; and
(motor bike),
currently in the possession of the Husband.
Subject to any payment pursuant to Order 2 of these Orders, each of the Husband and Wife be entitled to their respective account balances in the (omitted) Super Fund (“the fund”) and in relation to the fund:-
(a) within thirty (30) days of the date of making these orders each of the Husband and Wife will do all acts and things and sign all documents and vote in favour of all resolutions to transfer or procure the transfer by the fund of the Wife’s superannuation entitlement (including the income as at 30 June 2011 on or after tax basis) to a retail fund or to another self managed fund as notified by the Wife in writing;
(b) within sixty (60) days of the transfer referred to in order 5(a) the Husband and Wife will do all acts and things and vote in favour of all resolutions to pay to the Wife’s new superannuation fund the additional sum being the balance of the Wife’s entitlement in the fund as at the date of roll out, together with interest thereon (on or after taxes accrued between 1 July 2011 and the date of these orders);
(c) thereafter the Wife will do all acts and things and sign all necessary documents submitted to her by the Husband so that she ceases to be a member of the said fund;
(d) simultaneously with the provisions of paragraph (a) and (c) being effected, the parties shall exercise their power of appointment to appoint a new trustee to the fund and shall agree that the trustee of the fund will no longer be Ms McCann and the Husband will indemnify the Wife against all liabilities attaching to the Fund.
Unless otherwise specified in these Orders and except for the purposes of enforcing the payment of any money due under these or any subsequent Orders:
(a) each party be solely entitled to the exclusion of the other party to all property (including choses in action) in the possession of such party as at this date. All the chattels in the matrimonial home are considered to be in the possession of the Wife;
(b) monies standing to the credit of the parties in any joint bank account is to become the property of the Husband;
(c) each party hereby forgoes any claim they may have to any superannuation benefits belonging to or earned by the other;
(d) all insurance policies to become the sole property of the beneficiary named hereunder;
(e) each party be solely liable for and indemnify the other against any liability encumbering any item or property to which that party is entitled pursuant to these Orders.
IT IS NOTED that publication of this judgment under the pseudonym McCann & McCann is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT CANBERRA |
CAC 688 of 2011
| MR MCCANN |
Applicant
And
| MS MCCANN |
Respondent
REASONS FOR JUDGMENT
Introduction
This proceeding involves parties to a long marriage (of approximately 23 years) that was productive of five children. The eldest child lives independently; three of the other four children live with the Applicant Husband; the youngest child (aged 13) lives with the Respondent Wife.
Both parties are aged 55 years. Some years ago, the Husband suffered a stroke, which has left him with a clearly noticeable restriction of movement on one side of his body. Nevertheless, he is still able to conduct a (omitted) business in (omitted), which he has done for decades, including for approximately 11 years prior to the commencement of the marriage.[1] I do not understand there to be any health concerns in relation to the Wife.
[1] I note that par.13 of the Husband’s trial affidavit, filed 13th March 2012, details all the property owned by the Husband at the commencement of the relationship. Thus, in addition to the (omitted) business to which I have referred, he owned a property at Property T with an estimated value, in 1987, of $77,900 (with a mortgage of $40,000); a unit at Property F, purchased for $62,000. The Husband paid the deposit of $6,200 and otherwise financed the purchase by mortgage; an unencumbered block of land in (omitted), which was used as security for the purchase of the Property F unit. The Husband also claimed that he owned, at the commencement of the marriage, a ‘(omitted) motor vehicle’ with an estimated value of $12,000. Supporting documents of one kind or another are annexed to the Husband’s affidavit, except in relation to the car. The Wife challenged none of these assets or values.
The Wife currently works casually, part-time at an (omitted). In her oral evidence, detailed further below, she confirmed that, in addition to her current work schedule (2½ days one week, and three days in the other week), she would be content if she worked one extra half-day each alternate week.
For reasons noted below, this matter should never have been litigated. The only “winners” from such litigation are the lawyers. This is also to say that the scope of the contest was clearly very narrow, and accepted as such. Indeed, on more than one occasion during the trial, I indicated that it was clear that, in percentage terms, the difference between the parties was only 10%. Not only was there no commercial compromise, (e.g. to ‘split the difference’) but also no amount of “indication” from the Bench as to what the likely result would be moved the parties to end the litigious warfare. They were determined to reduce the assets and/or funds available for distribution and to ensure that the lawyers were and remained (respectfully of course) well fed - again.
The ‘bloody-mindedness’ of one or both parties in the refusal (or inability) to settle the matter, was even more troubling because there were some areas of agreement, which reduced the scope of the contest even more. For example, the parties agreed that there were equal contributions during the marriage. Thus the areas of contest only concerned how to treat the initial contributions of the parties, and the factors detailed in s.75(2) of the Family Law Act1975 (“the Act”). It was also agreed (and had been so agreed for quite some time) that the Wife would retain the former marital residence, one of six bedrooms – three bathrooms, on some acreage, with an agreed value of $875,000. Only she and the youngest son reside there. She intimated in her evidence that her parents may come to live with her, but I leave such things for later consideration.
Procedural and Other Considerations
Before proceeding further, in the light of the recent High Court judgment in Stanford v Stanford, I must determine whether it is appropriate that the Court make an order pursuant to s.79(2) of the Act.[2] Before making such a finding, I note the following.
[2] Stanford v Stanford (2012) 293 ALR 70. See recent comment on this decision by Coleman J in Martin & Crawley [2012] FamCA 1032, and by Murphy J in Watson & Ling [2013] Fam CA 57.
First, at [35], the plurality (French CJ, Hayne, Kiefel and Bell JJ) said:
It will be recalled that s 79(2) provides that "[t]he Court shall not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order". Section 79(4) prescribes matters that must be taken into account in considering what order (if any) should be made under the section. The requirements of the two sub-sections 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.
Secondly, at [42], the plurality also said (emphasis added):
It will be just and equitable to make a property settlement order in such a case because there is not and will not thereafter be the common use of property by the Husband and Wife. No less importantly, the express and implicit assumptions that underpinned the existing property arrangements have been brought to an end by the voluntary severance of the mutuality of the marital relationship. That is, any express or implicit assumption that the parties may have made to the effect that existing arrangements of marital property interests were sufficient or appropriate during the continuance of their marital relationship is brought to an end with the ending of the marital relationship. And the assumption that any adjustment to those interests could be effected consensually as needed or desired is also brought to an end. Hence it will be just and equitable that the Court make a property settlement order. What order, if any, should then be made is determined by applying s 79(4).
The criteria to which the High Court referred have been satisfied here, principally because (among other things) the evidence clearly shows that, since separation, and for the future, there is no intention that there will be common use of the property of the Husband or the Wife. Therefore, in my view, it is appropriate that there be orders to adjust, according to principles that are just and equitable under s.79(2) of the Act, the ‘matrimonial property’ to which I now refer in more detail. I determine the property for distribution, and the bases for it, for the following reasons and according to the following procedural steps, which are taken, in large measure, from the more classical cases noted in the footnotes. Although it is, in my view, proper to view them with a greater degree of caution than might otherwise be the case because of the High Court’s admonition and very specific instruction in Stanford, nonetheless, as something of a vade mecum, respectfully, they continue to serve some residual procedural (and other) utility.[3]
[3] A convenient summary of the so-called “four step” process, now questioned by the High Court in Stanford, is Omacini & Omacini (2005) 33 Fam LR 134 at [46].
The reasons proceed as follows: (a) orders sought; (b) evidence of the parties (and the valuer); (c) application to re-open; (d) assets of the parties; (e) consideration of matters under s.79(4); (f) consideration of matters under s.75(2); (g) conclusion.
A. Orders Sought[4]
[4] The following orders are those as filed with the Court.
Orders sought by Husband
1. That the husband pay to the wife the sum of $47,546.00 (hereinafter referred to as “the payment”) on or before the expiration of thirty (30) days from the date of this order, such sum to be payable pursuant to Section 77A of the Family Law Act 1975.
2. That within thirty (30) days of the date of the order the husband will do all acts and things and sign all such documents as may be required to transfer to the wife at the expense of the wife all his right title and interest in the real property situate and known as Property P more particularly described as Lot (omitted) in Deposited Plan (omitted) (hereinafter referred to as “the real property”).
3. That the wife indemnify the husband against all rates, taxes and outgoings of or with respect to the property of whatsoever nature and kind.
4. That within thirty (30) days of the date of these orders the wife will do such acts and things and sign all such documents as may required to transfer to the husband at the expense of the husband all her right title and interest in the following
(a) Property B1 and Property B2, more particularly described in Lot (omitted) and Lot (omitted).
(b) the business, (omitted), trading as “(omitted)”;
(c) except as otherwise provided for in these orders, the self funded superannuation fund known as “ (omitted) Super Fund”.
5. That the husband indemnify the wife against all payments and liabilities pursuant to the mortgage to the (omitted) Bank registered number (omitted) and further mortgage to the (omitted) Bank registered number (omitted) (hereinafter referred to as “the mortgages”), the business overdraft facility with (omitted) Bank, and all rates taxes and outgoings of or with respect to the real properties located at Property B1 and B2.
6. That the husband as soon as possible do all necessary acts and things and sign all necessary documents to transfer to the wife at the expense of the wife the Toyota (omitted) currently in the wife’s possession.
7. That the wife as soon as possible do all necessary acts and things and sign all necessary documents to transfer to the husband at the expense of the husband all interest in the:
Toyota; and
(motor bike),
currently in the possession of the husband.
8. Each of the husband and wife be entitled to their respective account balances in the (omitted) Super Fund (“the fund”) and in relation to the fund:-
(a) within thirty (30) days of the date of making these orders each of the husband and wife will do all acts and things and sign all documents and vote in favour of all resolutions to transfer or procure the transfer by the fund of the wife’s superannuation entitlement (including the income as at 30 June 2011 on or after tax basis) to a retail fund or to another self managed fund as notified by the wife in writing;
(b) within sixty (60) days of the transfer referred to in order 4(a) the husband and wife will do all acts and things and vote in favour of all resolutions to pay to the wife’s new superannuation fund the additional sum being the balance of the wife’s entitlement in the fund as at the date of roll out, together with interest thereon (on or after taxes accrued between 1 July 2011 and the date of these orders);
(c) thereafter the wife will do al acts and things and sign all necessary documents submitted to her by the husband so that she ceases to be a member of the said fund;
(d) simultaneously with the provisions of paragraph (a) and (c) being effected, the parties shall exercise their power of appointment to appoint a new trustee to the fund and shall agree that the trustee of the fund will no longer be Ms McCann and the husband will indemnify the wife against all liabilities attaching to the Fund.
9. That unless otherwise specified in these Orders and except for the purposes of enforcing the payment of any money due under these or any subsequent Orders:
(a) each party be solely entitled to the exclusion of the other party to all property (including choses in action) in the possession of such party as at this date. All the chattels in the matrimonial home are considered to be in the possession of the wife;
(b) monies standing to the credit of the parties in any joint bank account is to become the property of the husband;
(c) each party hereby forgoes any claim they may have to any superannuation benefits belonging to or earned by the other;
(d) all insurance policies to become the sole property of the beneficiary named hereunder;
(e) each party be solely liable for and indemnify the other against any liability encumbering any item or property to which that party is entitled pursuant to these Orders.
Orders sought by Wife
1. That within 28 days the husband do all such acts and things and sign all such documents as may be required to transfer to the Wife all of his right, title and interest in the real property situate at and known as Property P being the whole of the land more particularly described in certificate of title folio identifier (omitted) including discharging the mortgage registered number (omitted) to the (omitted) Bank with the husband to bear the costs of the discharge.
2. Contemporaneously with Order 1 that the wife do all such acts and things and sign all such documents as may be required to transfer to the husband at the expense of the husband all of her right, title and interest in the real property situate at and known as Property B1 being the whole of the land more particularly described in certificates of title folio identifier and (omitted) and (omitted) provided that the Husband refinances the mortgages registered numbers (omitted) and (omitted) to the (omitted) Bank into his sole name and pay to the Wife such the sum that represents a 55/45 division in favour of the Wife of the parties non-superannuation assets.
3. That within 28 days the Husband do all such acts and things and sign all such documents as may be required to transfer to the Wife at the expense of the Wife all of his right, title and interest in the Toyota (omitted) registration number (omitted).
4. That otherwise the parties are each declared the owner to the exclusion of the other of all right, title and interest in any property in his or her possession, including shares, funds standing to the credit of any bank accounts in their names, business interests, choses in action, motor vehicles, motor bikes and all other personalty in their respective possession or control.
5. Within 28 days the husband and wife do all such acts and things and sign all such documents as may be required to effect and [sic] equal division of their superannuation entitlements.
6. The husband be responsible for an indemnify the wife in respect of all business related liabilities including taxation and any tax levied on the wife arising from the business including rental income received from the business.
7. The husband pay the wife spousal maintenance of $300.00 per week.
8. The husband pay the wife’s costs of an [sic] incidental to the proceedings.
B. The evidence of Mr McCann
The following is a summary of evidence given by Mr McCann over the first two days of the trial initially held in Wagga, commencing on 22 March 2012. I might also note that the evidence of the parties only commenced somewhat late in the first day because there were lengthy discussions with Counsel in relation to disclosure, primarily said to be various documents that had not been provided by the Husband. The second reason was that I indicated, and not for the first time in the course of the proceeding, that I did not understand why the matter had not resolved, given that in percentage terms the parties were not that far apart.
Early in the hearing, I indicated, obviously in a non-binding way on either the parties or the Court, that my reading of the material suggested that a percentage split of 55 per cent to 45 per cent (or thereabouts) in favour of the Husband seemed to be just and equitable in all the circumstances. Nothing came of this initial “indication.”
Turning, then, to the evidence proper, I note the following.
First, as confirmed in his affidavit material, the Husband contended that, for some time, the Wife had taken financial advantage of him, given his superior financial position. Next, in relation to the issue of disclosure of documents, he said he thought that bank statements were sufficient and that no one had asked him to provide cheque books, specifically in relation to the (omitted) business which he has conducted in (omitted) for more than 30 years. He said that if he had been asked for them six months ago, they could have and would have been provided.[5] I accept this evidence.
[5] Transcript, 37-38. Hereafter, such references will simply be to “T” followed by the relevant page number.
There was little or no dispute that the Husband has conducted the business for decades essentially in a manner where he has been the sole decision-maker. Likewise, there was little or no dispute of the way the parties conducted their marital relationship, which could properly be described as a traditional marriage where he was the “breadwinner” throughout the entirety of the relationship, and she had primary responsibility as Mother and homemaker. In such circumstances, and certainly in accordance with his usual business practice not to involve the Wife, the Husband did not consider it necessary to advise the Wife of the renovations/alterations to the business premises which he had, relatively recently, undertaken. He said that the alterations, which were internal to the building in Property B1 were necessary for stock control and storage purposes. Indeed, he confirmed that “something had to be done about storage” not least because it was costing the business not insignificant sums of money for storage “off-site.”[6]
[6] T 41-42. See also the discussion at T 44-45.
In relation to the use of the business overdraft account, the Husband confirmed that he has used it for many years, and precisely because of that fact, and because of the way that he has conducted the business as sole proprietor, he saw no need to inform his Wife of access to this account in the sum of $45,000. He also confirmed that in the purchase of a residence in Property E for his use (and that of the children who live with him), some funds were used from the business.[7]
[7] T 51-52.
Later in his evidence, he again confirmed that he never discussed finances with his Wife during the marriage; she concentrated on her primary responsibilities for the then five small children of the relationship and the management of the household. He said he paid the bills and his Wife looked after the children and the house.[8] There was no challenge to this evidence.
[8] See T 52.
I note here in passing that, contrary to the suggestion and submission by learned Counsel for the Wife, I did not take Mr McCann’s evidence as being confirmation that he sought to control all of the “family finances” with a view specifically to exclude his Wife from them. In my view, on all the evidence, that would be a mis-characterisation of the relationship and the conduct of the business. As I have already indicated, he was the breadwinner; she was the Wife and homemaker. I saw no malevolent or malign intent to exclude the Wife from the finances of the business (which were invariably used for the betterment of the family throughout the life of the marriage). It was his business – from first to last. There was no evidence that the Wife ever sought to involve herself in the business, and certainly not in its finances.
The Husband confirmed that his Wife did have access to a credit card which was linked to the business account. At the same time, his evidence suggested that, certainly in more recent times, that either he did not appreciate fully, or chose not to do so, the detailed or precise needs of his Wife in every respect.[9] The Husband’s lack of attention to the Wife’s financial circumstances has caused her some difficulty. This has ultimately led to orders for spousal maintenance in the Wife’s favour on more than one occasion.
[9] See the discussion at T 53-58.
As earlier observed, the Husband confirmed through his Counsel that the parties are at least agreed that the contributions during the long marriage should be taken to be equal. Therefore, the only issues before the Court relate to ascribing proper weight to the initial contributions that each party brought to the relationship, then, secondly, how to treat the s.75(2) factors.[10]
[10] See T 69 and 79-80.
The Husband also confirmed (and there was no ultimate dispute over the issue) that there is no change to current parenting arrangements (and certainly there is no such application before the Court) so that the four older boys live with the Father, and the youngest child lives with the Mother. This is in circumstances where the Mother resides in the former marital residence with one child, that residence being a six bedroom, three bathroom residence on approximately five acres – as earlier noted.
In answer to questions from Counsel for the Wife, the Husband acknowledged that on one particular document, a business finance agreement letter of variation, he had forged his Wife’s signature. He confirmed that he thought that perhaps he may have forged his Wife on perhaps two occasions in total. He sought to explain that he did this in order to achieve certain business ends, and perhaps also because there were pressures of time involved.[11]
[11] T 71-75.
I should note here that upon this line of questioning being undertaken, Counsel for the Husband sought, and the Court granted, a certificate under s.128 of the Evidence Act in favour of the Husband and the answers that he gave concerning the forging of the Wife’s signature. For my part, and without in any way condoning the Husband’s actions, (a) I do not accept the Wife’s submissions that his conduct showed the Husband to be above the law, and (b) I note that the events surrounding the forged signatures of the Wife took place in approximately 1999. There was no suggestion that it was a common occurrence or common practice by the Husband to forge the Wife’s signature.
Similarly, I do not accept the further submission that the Husband’s conduct was specifically designed to disregard the Wife with respect to the financial affairs of the couple. Learned Counsel for the Wife further submitted in this regard that these matters in relation to forgery and the like, went to the Husband’s credit, and that wherever there was a dispute, factually or otherwise, between the parties, it should lead the Court to determine such matters in favour of the Wife’s account. I come back to such matters later in the reasons.
Further, in relation to the later part of Mr McCann’s cross‑examination, it was again confirmed (including by Counsel for the Wife) that the contest in the case was over the weight to be given to the initial contributions and the s.75(2) factors. Therefore, the dispute, in percentage terms, was in relation to the 10 per cent difference between what each of the parties sought. Again I commented, if not lamented and questioned to both parties, why they were arguing over such a small differential, and whether or not in pragmatic, commercial terms, it would be better simply to split the difference. The further lament made no difference.[12]
[12] T 80-81.
There was also no dispute in relation to one further aspect of the Husband’s evidence. This concerned the fact that the Husband had suffered a stroke in 2009. He said, on the basis of a report attached to his material, that he has a 50 per cent risk of another stroke.[13] However, in the documents before the Court, and confirmed by the Husband, he has not seen any allied health professionals since December 2010. The Husband confirmed that he serves in his store much less now than he used to, that is, post his stroke; formerly he served there all the time.[14]
[13] The Report is from Dr B, a consultant rehabilitation physician at (omitted) Hospital, which is dated 8th March 2011 and is annexure C to the Husband’s affidavit, filed 8th December 2011. See also Dr B’s affidavit, filed 15th March 2012, which attached a copy of the same letter, dated 11th March 2011.
[14] See T 84-86 & 87.
In his affidavit material, the Husband contended that, as a result of his stroke, the wages for the business have gone up. It was put to him, however, that the documents produced confirmed that, in fact, the wages bill of the business has not increased. The Husband plausibly explained this in a twofold way: (a) the business has employed more junior staff, whose wages are necessarily less than more senior staff; and (b) other staff are on leave and have yet to return, but when they do that will result in the general wages bill of the business increasing.[15]
[15] T 88.
The Husband confirmed that he is still able to manage the affairs of the business on a day‑to‑day basis, notwithstanding the legacy of his stroke. He confirmed that (a) he recently went on an overseas trip for approximately one month; (b) he can now drive; and (c) he continues to run the business as a sole trader.[16]
[16] T 90-91.
The Husband’s purchase of Property E was a regular topic of discussion during the trial, particularly in the context of the Husband’s access to funds from the business that he could use, effectively, for whatever purpose he wished. Indeed, he confirmed that he uses the overdraft facility to pay expenses and other commitments as needed. He also confirmed that in relation to the (omitted) Bank home loan account (account number (omitted), that that loan account has been, and continues to be, used for business purposes.
The Wife argues that in relation to this (omitted) Bank home mortgage/loan account, because it is used for business, it should not be regarded or treated as a liability of the marriage.[17]
[17] See T 97-101. As to whether or not moneys used in relation to the Property E property should be treated as an add‑back, see the further discussion at T 107.
The final thing to note here is that, at the end of the Husband’s evidence, with all of the “usual qualifications”, I again gave an indication to the parties about the utility, the practicability, and the wisdom of endeavouring to settle the matter and the possible “range” that might be considered. But, as with each occasion when this was raised, the suggestion again fell on barren ground.
Sequentially, at trial, the next person who gave evidence was the valuer, Mr E. However, I will next consider the evidence given by Ms McCann before returning to matters of valuation.
The Evidence of Ms McCann
Ms McCann gave evidence on the third day of the trial, the matter having gone “part‑heard”. The third day of the trial was held in Canberra and commenced on 22nd June 2012. Ms McCann’s evidence was much briefer than that given by Mr McCann.[18]
[18] The Transcript for the Wife’s evidence did not follow the earlier page numbering. Hereafter, unless otherwise specified, it should be taken that the Wife’s evidence is from the transcript for the date mentioned, and which [re]commences at p.1.
Her evidence opened with the fact that, between the two hearing dates, the Wife had found, but had not otherwise discovered, some further documents, which included two of her tax returns for 1988 and 1989, together with an (omitted) Bank passbook.
Then, after significant discussion as to the accuracy of the figures that were set out in her various affidavits, she finally confirmed that, at the start of the relationship, she had $36,000 (as opposed to an earlier, higher claimed figure) in cash and some cash deposits as well.[19]
[19] In her trial affidavit, sworn 21st March 2012, Ms McCann said (at par.14) that she had savings of approximately $53,000 at the commencement of the marriage.
This might be immediately put in contrast to the ready and clear acknowledgement by the Wife that at the commencement of the marital relationship the Husband had run a successful business, which had operated at that stage for 11 years, before the marriage of the parties.
Concerning the Wife’s intention and regularly stated desire to retain the former marital residence, she said that she needs the large house to look after her parents in the future.[20] As previously noted, the Husband has long-agreed to this course.
[20] T 16-17 & 19.
I pause here simply to observe that her evidence in relation to the former marital residence struck me as somewhat confused; respectfully, it was certainly confusing for the following reasons.
First, she said that her parents would come to live with her; then she said that even when her parents came to live with her, her Father would still purchase a smaller residential property in (omitted). Thirdly, she said that she did not know if she would get any of the proceeds of the sale of her parents’ current property even though she proposes to be looking after them on a full time basis. Fourthly, she said that even looking after her parents on a full time basis, this would not impair her ability to continue her work, which currently is two and a half days one week and three days the next.
Part of the confusion in her evidence, as I understood it, was that although she said at different times that she had discussed the proposal of her parents coming to live with her, it was, in my view, necessarily still a significantly speculative exercise. There was certainly no time-frame for when her parents were likely to move to live with her, nor was there any evidence as to how much money might be realised from the sale of her parent’s property, nor was it explained how or why her parents would live with her, and yet, in some way, they would purchase a separate residence in (omitted).[21]
[21] Generally, see the discussion at T 16, 17, 19, 20 & 42.
There was a second area of some significant cross-examination, and again which, respectfully, I also found not completely helpful or enlightening. This related to Ms McCann’s work situation and what she described as her “dire financial circumstances.”[22] In no way critically do I observe that a very significant part of Ms McCann’s life has been spent – and understandably so - as Wife, Mother and homemaker. Those onerous responsibilities have necessarily meant that her skills in other areas have not been able to be developed, for example, as recounted in her affidavit material, in relation to some modest managerial positions prior to her marriage. She is currently working two and a half days one week and three days the next (as previously noted) in an (omitted) in (omitted).
[22] T 20 & 26.
She confirmed in evidence that she wants to “up-skill” to become an (omitted). She confirmed that it is a four year course. Apart from the fact that it would take approximately four years, she was significantly unclear as to much relevant detail regarding what would be involved in relation to that course, apart from doing some things “online”. She confirmed that she was not really trained for anything in particular.[23]
[23] T 21.
When asked whether or not she knew what income an (omitted) might earn she said “pretty much the same as everybody else….” Respectfully, this was both an unusual, and an unusually unhelpful, answer. For someone who wishes, or intends, to “up-skill”, Ms McCann was significantly uninformed how to go about this. She had seemingly done little to work out particular goals, or the paths and requirements to achieve them. Without being unduly critical of her evidence, she lacked attention to significant detail which the Court should have reasonably expected to have been addressed. It was not so addressed. It did not put her evidence in a very positive or overly helpful light.
When pressed about how much work she might need in order to ensure that she was not in dire financial circumstances, she said she would just need to work regularly three days each week; such work would be sufficient for her.
At one level I found this answer also to be somewhat curious, if not less than helpful: I found myself wondering how only, or simply, one half day a fortnight would resolve her professed “dire” financial difficulties. Obviously, it needs to be put into context, which is that following the resolution of these property matters, Ms McCann will end up with a property (the Property P property) which will be worth, on the valuer’s evidence, $875,000, and she will also have a substantial amount of superannuation standing to her credit. Still, her answer that a half day of work, every other week, will relieve her financial plight was, as I say, “curious.”
More generally, it is somewhat difficult to observe, but necessary to do so, that I found Ms McCann’s evidence to lack the detail, greater clarity and independent support (e.g. in the form of documentary evidence) that came with the Husband’s evidence. While his was not without difficulty, the Wife’s – in comparison – was often ill-considered, lacking in clarity and basic detail. Her evidence was, in many respects, speculative. She was, unfortunately, quite an unresponsive witness, who also struck me as someone who lacked insight. As well, in my view, she is someone who showed (at least during the trial) a lack of (or perhaps an incapacity to take) responsibility to establish or set reasonable and achievable goals, and to take appropriate steps to achieve them.
I might also observe here that I remain somewhat perplexed why – apart for sentimental and other family reasons – Ms McCann would want to retain a six bedroom, three bathroom house for the only child living with her, even if at some time in the future her parents came to live with her. Whether for reasons of the labour of upkeep of the property, and/or the very significant cash that would be realised upon its sale, it struck me that her insistent desire to retain the Property P property was a triumph of sentiment (or whatever else it might be) over common sense.
In the course of her evidence I put to her whether it would not be better to sell the residence and secure a much smaller property, which would still accommodate herself, her son and [maybe] her parents, and which would give her a net figure of perhaps something in the order of a couple of hundred thousand dollars in her pocket. While she seemed to acknowledge that possible scenario she certainly did not embrace it as something she was willing to do because she was so determined to keep the former marital residence in Property P.
The final matters to note relate to two modest aspects.
First, she denied the suggestion by the Husband that her regularly convened (omitted) classes for others realised regular and significant income for her; she said that they were not all that regular, the numbers were quite small, and when she held them, she only charged people approximately $10 per head to attend. Secondly, her Counsel confirmed (after Ms McCann left the witness box) that she had recently sold the Toyota van before the resumed final hearing; this sale (and its proceeds) was not formally put into evidence.[24]
[24] T 47.
Again, I note for the third time, that I indicated to the parties at the conclusion of all the evidence what I thought was a reasonable settlement “range” in order for the parties to consider with a view to resolving the matter so that they could get on with their lives. But as with previous “indications”, the strong “recommendation” [again] fell on completely infertile or unproductive soil.
The Evidence of the Valuer: Mr E
Mr E had prepared a written valuation, dated 16th September 2011. It was attached to an affidavit filed with the Court. It was confirmed in the course of the proceeding that it was, and should be, taken to be formally before the Court as evidence.
In his oral evidence, Mr E noted the following very simply and straightforwardly. First, he said that there had been a decrease in demand for properties of the kind and size as the former marital residence in Property P.
Secondly, he confirmed that this property was in the higher price bracket, and that while inquiries had decreased, that did not necessarily mean that the value of it had similarly decreased. He confirmed that there was, in fact, a significant demand for this kind of property. Ultimately, he put the range of the property in the current market as between $850,000 to $900,000. He said that he would formally put it in the mid‑range, being a figure of $875,000.[25] This figure was accepted by both parties as the value of the Property P property.
[25] T 112-113 (Transcript of 23rd March 2012).
C. Application to Re-open
By an Application in a Case, filed on 30th July 2012, the Respondent Wife to the substantive proceedings sought to re-open the hearing of the matter. It was heard on 5th September 2012. At that time, orders were made that the Application would be determined by written submissions, and a time-table was set for the filing of same. On 16th October 2012, oral reasons were delivered, dismissing the Application. The costs of the Application were reserved. What follows are those reasons, as revised from the transcript.
The basis of the Wife’s Application to re-open was as follows. She said that it has come to light that shortly after the trial concluded the Husband transferred the sum of $50,000 to the parties’ self-managed superannuation fund bank account. The Wife contended that this deposit – or at least its contemplation – must have been within the purview of the Husband at the time of the trial and should have been disclosed in the course of the evidence at trial.
The Application was resisted by the Husband on three grounds: (a) transfer of funds to the superannuation account has been a common occurrence for many years of which the Wife was aware; (b) in fact, in relation to the relevant financial year, he only received [financial] advice after the trial concluded in relation to a deposit of funds to the superannuation account;[26] and (c) in any event, the relative size of the funds in question, compared to the overall size of the asset pool of more than $2 million, and (I infer) compared to the costs associated with re-opening, the justice of the case does not warrant the matter being re-opened.
[26] See the letter from his accountants, Annexure A, to the Husband’s affidavit filed on 4th September 2012.
In accordance with the previously ordered time-table (as previously indicated), both parties filed written submissions in support of their respective contentions.
There was a degree of unanimity between the parties in relation to matters of legal principle relevant to such applications.
Summarily, whether by reference to the High Court decision in Smith v NSW Bar Association, the decision of Murphy J in Summitt & Summitt & Ors (Re-opening), or the Full Court decision in Stephens & Stephens (& Anor) (Enforcement) (relying upon the decision of Austin J in ASIC v Rich), the principles are generally clear.[27]
[27] Smith v NSW Bar Association (1992) 176 CLR 256; Summitt & Summitt & Ors (Re-opening) [2009] FamCA 365; Stephens & Stephens (& Anor) (Enforcement) (2009) 42 Fam LR 423; ASIC v Rich (2006) 235 ALR 587.
In no hyper-critical manner do I observe that no submission seemed to have acknowledged the importance of the signal High Court decision in AON Risk Services Australia Ltd v Australian National University and its relevance to applications of the kind currently before the Court.[28]
[28] AON Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175.
For my part, in addition to the cases to which I have referred, the Federal Court decision of Kenny J in Inspector-General in Bankruptcy v Bradshaw helpfully outlines relevant principle.[29]
[29] [2006] FCA 22. Her Honour’s summary has been followed by Collier J in Bing! Software Pty Ltd v Bing Technologies Pty Limited (No.2) [2008] FCA 1761 and by Katzmann J in Lee v Professional Services Review Committee No.292 (No.2) [2010] FCA 1490 at [20] & [21].
It is sufficient to note the Full Court’s citation in Stephens of Austin J’s summary of considerations applicable to applications of this kind from ASIC v Rich, thus:[30]
·the nature of the proceeding
·whether the occasion for calling further evidence ought reasonably to have been foreseen
·the importance of the issue on which the further evidence is sought to be adduced
·the degree of relevance and probative value of the further evidence
·the prejudice to the other party
·the public interest in the timely conclusion of litigation
·the explanation offered for not having called the evidence
[30] Stephens v Stephens (2010) 42 Fam LR 423 at [273]. In the same place, the Full Court also noted the importance to consider the High Court’s observations in AON Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175.
For completeness, I note the following from the High Court decision in Smith v NSW Bar Association. In that case, Brennan, Dawson, Toohey and Gaudron JJ, said (internal citations omitted):[31]
It is again necessary to distinguish between the considerations which may bear on a decision to re-open and the processes involved in reconsideration once a case has been re-opened. If an application is made to re-open on the basis that new or additional evidence is available, it will be relevant, at that stage, to enquire why the evidence was not called at the hearing. If there was a deliberate decision not to call it, ordinarily that will tell decisively against the application. But assuming that that hurdle is passed, different considerations may apply depending on whether the case is simply one in which the hearing is complete, or one in which reasons for judgment have been delivered. It is difficult to see why, in the former situation, the primary consideration should not be that of embarrassment or prejudice to the other side. In the latter situation the appeal rules relating to fresh evidence may provide a useful guide as to the manner in which the discretion to re-open should be exercised. But those considerations bearing on re-opening are not decisive of the question whether, a matter having been re-opened by reason of error, further evidence can be called.
[31] At CLR pp.266-267.
It might be taken from this decision, as noted by the Full Federal Court in Londish v Gulf Pacific Pty Ltd, that the primary considerations are (a) whether judgment has yet been delivered, and (b) whether the interests of justice require the matter to be re-opened.[32]
[32] Londish v Gulf Pacific Pty Ltd (1993) 45 FCR 128 at pp.138-139.
The parties’ submissions proceed essentially on the basis that there were four, albeit different, considerations in the current application: (a) interests of justice; (b) probative value of the evidence (which is said – by the Wife – that it will likely affect the outcome of the case); (c) inability to discover the evidence beforehand or earlier; and (d) lack of prejudice to the other party.
Briefly stated, in my view, the Application should be dismissed. The question of costs was reserved to be dealt with in the context and at the time of the determination of the substantive application.
On the limited evidence available to the Court there was some inconsistency. For example, the Husband said, on the one hand, that he has been making such a transfer of funds to the superannuation account for many years, and that the Wife has known of such transactions. Yet, on the other hand, according to his sworn evidence, and supported by correspondence, he was so advised this year only after the trial concluded to make such a deposit.
Notwithstanding the submission on behalf of the Wife that there was (or would be) no prejudice to the Husband if the matter was re-opened, having regard to the detail with which the trial was conducted, he contended that to re-open the matter would not be an inexpensive exercise, either in financial terms or in time. He submitted that the parties are entitled to have their case determined as quickly as possible.
In my view, the size of the funds now said to warrant the matter being re-opened, compared to the size of the overall asset pool, does not warrant the application being granted. Moreover, there is no question that, whatever the final determination by the Court, there will be significant assets from which a distribution will be made. Thus there will not be prejudice to the Wife in this regard. However, there is the risk of prejudice to both parties in re-opening because of the costs, the time, and the consequential delay in having the matter determined on a final basis.
Nor am I convinced by the contention that the so-called new evidence will alter the outcome of the case, as alleged by the Wife. It is difficult to see that evidence of a $50,000 transfer to a joint superannuation fund bank account, in a pool of some millions of dollars, is of such moment that the outcome of the trial will be substantially altered. This is so in circumstances where it is agreed that the Wife will have transferred to her the former marital residence, the value of which, on any view, is not too far short of one million dollars.
Further, if the matter was to be re-opened on the basis alleged here, the question might reasonably be asked whether, in relation to the on-going conduct of the Husband’s long-standing business, any and all further transactions should be further scrutinised, and on an on-going basis. The matter needs to be finalised, otherwise it will never end.
I stress too (as earlier noted) the importance of taking into account the High Court’s observations in AON Risk Services v ANU, in relation to Courts being public resources upon which many parties seek to draw. In addition to the adverse time and financial consequences to the parties if the matter were to be re-opened, given the demands on the Court and other litigants who seek to have their matters determined, (a) the Court could not re-list the matter for hearing for many months hence (either in Canberra or Wagga Wagga), and (b) re-listing this matter would cause inevitable further delays for other matters awaiting final hearing dates. While not determinative factors, they are nonetheless matters that warrant some consideration.
For these reasons, the application to re-open must be dismissed. Costs of the Application were reserved and left to be determined in the light of the ultimate resolution of the substantive proceedings. I deal with “costs” later in the reasons.
D. Assets of the Parties
I note the following table of assets and liabilities, which helpfully records the few matters that are in contest. It should be taken that I have sought to treat the superannuation and non-superannuation assets separately, in accordance with the principles set out by the Full Court in Coghlan.[33] Thus:
[33] See C & C (2005) FLC ¶93-220.
JOINT LIST OF ASSETS & LIABILITIES
| Assets | Wife’s value | Husband’s value |
| Property B1 & B2 | Agreed | $1,150,000 |
| Property P | Per evidence | $875,000 |
| (omitted) Company | Agreed | $617,000 |
| Vehicles: · Toyota · Toyota · (motor bike) (now sold) | Agreed | $20,000 |
| Addback: · Payment to wife 9/12/11 · Payment to wife 2/4/12 | Agreed | $35,000 |
| Addback: · Legal payments by Husband | Agreed | $8,954 |
| Addback: · Property E | $76,000 | Not agreed |
| Total Assets | $2,870,604 | $2,794,604 |
| Liabilities | Wife’s value | Husband’s value |
| Overdraft facility secured by mortgage over Property P | $8,470 | $23,470.00 |
| Business loan | Agreed | $239,688.50 |
| Business loan | Agreed | $38,210.78 |
| Tax of Husband | Agreed | $17,869.00 |
| Tax of Wife | $6,273.90 | $6,273.90 |
| Cost of renovations to Property B1 premises | Not known | $75,521.40 |
| Total Liabilities | $310,512.18 | $401,033.58 |
| Total net Non-Superannuation Asset Pool | $2,560,091.90 | $2,393,570.50 |
| Superannuation | Wife’s value | Husband’s value |
| Husband | $558,093.20 | $508,093.20 |
| Wife | $359,698.59 | Agreed |
| Total Superannuation | $917,791.79 | $867,791.79 |
There are four areas of contest in relation to the assets: (i) the Husband’s post-separation payment of $50,000 into his superannuation; (ii) the treatment of the cost of renovations to the business premises in Property B1; (iii) the use by the Husband of the business overdraft to facilitate part-payment of $76,000 towards the purchase of his residence in Property E; and (iv) the use and characterisation of the business overdraft facility secured over the Property P property.
First, but for the Wife’s contention that the post-separation payment of $50,000 to the Husband’s superannuation account (which was the subject of the Wife’s unsuccessful application to re-open), the value of superannuation would also be agreed. I accept the Husband’s evidence and submission that this sum was derived from post-separation earnings, and that the Wife made no relevant contribution to it.
In this regard, I note the comments of the Full Court (Nicholson CJ, Ellis & Kay JJ) in C v C.[34] At [45] – [46], the Court said:
[45] … In a case involving the magnitude of the assets of this case, in our view it is unreasonable to conduct a microscopic examination of each of the parties’ items of post-separation expenditure with a view to determining whether or not it is appropriate that they be brought into account in dividing up the asset pool between them….
[46] Whilst not seeking to place a fetter upon the exercise of discretion of a trial judge in individual cases, it seems to us that the concept of adding monies reasonably disposed of back into the pool ought to be the exception rather than the rule. The parties are entitled to reasonably conduct their affairs post-separation in a manner that is consistent with properly getting on with their lives….
[34] C v C [1998] FamCA 143. See also the more recent Full Court (Finn, Kay & Boland JJ) decision in Gollings v Scott (2008) 37 Fam LR 428 at [68] – [69], which cited C & C with obvious approval.
Respectfully, the comments of the Full Court in C & C and in Gollings v Scott apply to the facts and circumstances of the current matter, particularly where the assets (in total) exceed more than $3 million.
Secondly, the cost of the renovation to the business premises in Property B1, was the subject of some evidence from the Husband. The costs of renovation are specifically within his knowledge. There is no reason to doubt the amount claimed. Moreover, I do not accept the Wife’s [written] submission that the renovations constituted some form of “waste.” Rather, I accept the Husband’s evidence that the renovations constituted much needed storage space for the business. Given that both parties have derived their current financial position by virtue of the long-running (omitted) business, it makes no sense to characterise modest storage facilities for the successful business which has supported and provided assets for the benefit of both parties over the life of their marital relationship (and beyond) as “waste.”
Further, as the Husband’s solicitor made plain in further written submissions (filed 25th July 2012), the second valuation, dated 18th June 2012, dealt specifically with the renovations and concluded that they “improved its [the building] overall condition which has been reflected in the adopted capitalisation rate…. The added value of these works has been offset to a degree by the softening market conditions.” Thus, it may properly be said that the renovations had at least preserved if not protected (to some relevant degree) this capital asset of the marriage. In my view, in no way could the renovations be characterised, as urged by the Wife, to having been undertaken recklessly, negligently or wantonly.
Thirdly, the overdraft facility, secured over the Property P property, should be taken – as it always has – as a facility that has benefitted both parties. It continues to be so used for the benefit of both parties, including the Wife. It is from this overdraft that payments to the Wife for spousal maintenance, pursuant to orders of the Court, have been made from time to time.
Fourthly, the “add-back” claimed by the Wife relates to funds drawn from the business overdraft facility, post-separation, for the purchase of the property in Property E.
The agreed value of the business, and the basis upon which it was valued, takes account of the rise and fall of the overdraft. To add back the figure claimed by the Wife would, in effect, result in a double-counting exercise. Further, the amount claimed does not come within any of the categories accepted by the Full Court as “add-backs”.[35] Further, in my view, the comments earlier noted from the Full Court in C & C and Gollings v Scott apply here. And, it may be asked, not unreasonably, from what other source might the Husband secure funds in order to purchase a residence for himself and the children who live with him? He has, and knows, no other business. I have significant difficulty seeing why a sole trader may not use funds from ‘his business’, particularly for the acquisition of a residence. He would have to borrow funds (and did so) in any event to secure accommodation, while the Wife resides in the six-bedroom residence with one child only; why should he not be entitled to use the overdraft facility in the circumstances here? There is no hardship to the Wife, nor is there any diminution of any relevant asset. The value of the business, and the basis upon which it has occurred, as already observed, has been agreed.
[35] See Omacini (2005) 33 Fam LR 134 at [30].
Accordingly, I accept the assets available for distribution to be as asserted by the Husband.
E. Section 79(4) Considerations
I have earlier noted that the parties agreed that contributions during the marriage should be regarded as equal.
I have also earlier listed the substantial financial contributions brought by the Husband to the marriage, and in particular, his business. At the time of the commencement of the marriage, it had been running for some 11 years or thereabouts.
The Wife’s initial financial contributions (noting the earlier error, corrected in her oral evidence, of the amount of savings being $36,000 rather than the previously claimed amount of $53,000) are set out in her trial affidavit of 21st March 2012. Summarily stated, those contributions, apart from the savings already noted were: a Holden (omitted) car (with no value given); some household effects (with no value given); a bonus and a redundancy from her employment both of which totalled $11,500.
From her savings and other funds, Ms McCann claimed that she provided $40,000 towards various renovations at the Property T property (owned by the Husband), and $11,572 towards the parties’ wedding and honeymoon. Given that the total of these figures exceeds to a significant degree the amount now confirmed by the Wife to be her savings brought into the marriage, these figures must be, but were not, revised down.
I remind myself that in cases such as Pierce, and in Clives v Clives, the Full Court (Warnick, Boland & Cronin JJ) in the latter case, at [44], cautioned that the task to be undertaken at trial “in assessing weight to be attached to initial contributions, and other contributions, is not always an easy one and not discharged by a strict accounting exercise.”[36]
[36] Pierce & Pierce (1998) FLC ¶92-844. Clives v Clives (2009) 40 Fam LR 273. See also similar comments by the Full Court (Bryant CJ, Finn & Boland JJ) in Noetel v Quealey (2006) 34 Fam LR 190 at [79].
In Pierce, at [28], the Full Court (Ellis, Baker & O’Ryan JJ) referred to the point being not one of “erosion” of the earlier contributions but rather the relevant “weight” to be ascribed to them in the light of all the other circumstances and contributions.
In my view, in this case, the initial assets provided by the Husband were significantly superior to those that were contributed by the Wife at the commencement of the relationship. In percentage terms, there should be an adjustment in relation to contributions overall of 8% in favour of the Husband.
I should also note that, having regard to the size of the assets available for distribution, and the evidence of the Wife in relation to her employment (including her current “skills”), and the very significant assets the Wife will secure following the resolution of the current proceeding, in my view, the orders made by the Court will not impact – other than positively – on the Wife’s earning capacity. There is no evidence to suggest that the orders of the Court will impact adversely on the earning capacity of the Husband.
F. Factors under s.75(2) of the Act
I repeat what is set out at the commencement of these reasons, thus: both parties are aged 55 years. Some years ago, the Husband suffered a stroke, which has left him with a clearly noticeable restriction of movement on one side of his body. Nevertheless, he is still able to conduct a (omitted) business in (omitted), which he has done for decades. I do not understand there to be any health concerns in relation to the Wife.
Further, I noted that the eldest child lives independently; three of the other four children live with the Applicant Husband; the youngest child (aged 13) lives with the Respondent Wife.
I also observed that the Wife currently works casually, part-time in an (omitted). In her oral evidence she confirmed that, in addition to her current work schedule (2½ days one week, and three days in the other week), she would be content if she worked one extra half-day each alternate week. The Husband continues to conduct the (omitted) business, as he has done, for the last three decades, or thereabouts.
From the table of assets and liabilities, and on the ‘orders sought’ by each of the parties, it will be clear that, whatever the order of the Court, both will be well provided for. Both will have a residence; both will have significant superannuation; both will have an income stream (admittedly greater on the Husband’s part compared to the Wife). Both have responsibilities, albeit different ones, to the children of the relationship.
In general terms, both parties will have significant financial resources available to them.
Perhaps best by reference to s.75(2)(o), I note two other matters.
First, while I accept the Wife’s evidence in relation to her intention, at some stage, to have her parents live with her, in my view that prospect or course should be considered as ‘aspirational.’ Apart from the Wife’s rather ill-considered comments (i.e. it appeared to be evidence ‘on the run’ without any genuine thought or plan), there was no evidence to support any of the vague assertions of some possible move, some time in the future, of her parents. If the Court was to take it into account in any respect, it would also need to be in the context of the evidence that her parents would likely sell their current abode. There was no evidence that the Wife would secure, and if so what amount, anything from her parents’ estate. Yet that is perhaps likely. However, that too must necessarily be speculative. Accordingly, I do not take anything from this evidence of the Wife and put it to one side.
Secondly, I confess to some difficulty in relation to the Wife’s proposed retention of the large, former marital residence. She is, of course, at liberty to do with it what she will. However, for reasons already given, in my view it would be imprudent to keep it. It will require significant upkeep and it will continue to be a drain on her finances. It could command a very significant price on the market, which would result in a very substantial cash fund becoming available to the Wife. From that fund she could purchase another residence to better suit her needs, and she would still have a very sizeable amount of cash available to her. In such circumstances, in my view, her insistence on keeping the Property P property should not result in requiring the Husband to continue to fund the Wife, either in terms of spousal maintenance or in terms of any additional distribution of the assets of the marriage. She has chosen her course. As with all actions, there are consequences that flow from the particular course determined.
Conclusion: A just & equitable order
In Smith & Fields, Murphy J said, at [27] – [28]:
[27] … The very wide discretion inherent in s 79 requires the Court “… to do justice according to the needs of the individual case, whatever its complications might be.”[37] That necessarily involves an acknowledgement that the circumstances of each marriage are different and that it is to those particular circumstances to which the discretion must be applied.
[28] Shape can be given to that task, in my view, by looking at the nature, form, characteristics and origin of the property comprising the “property of the parties or either of them”. Reference to the above excerpts from the judgments in Mallet will see distinctions drawn by reference to the form and characteristics of the property to be divided. Those matters can bear upon an analysis of the parties’ respective contributions….
[37]Norbis v Norbis (1986) 161 CLR 513 at 520, per Mason, Deane JJ.
Then at [30], his Honour observed:
… what remains is the exercise of discretion – to do what is just and equitable – as between these particular parties, not because one or the other has “special skills” or because there is a “matrimonial partnership”, but because the identification and comparison of contributions and the “general counsel of experience” pulls toward a particular result. Or, as Coleman J recently put it:
Given that the evaluation of contribution based entitlements inevitably moves from qualitative evaluation of contributions to a quantitative reflection of such evaluation, there will inevitably be a “leap” from words to figures. That is the nature of the exercise of discretion, whether it be in the assessment of contributions in the matrimonial cause, assessment of damages in a personal injuries case, or determination of compensation in a land resumption case …[38]
[38] Steinbrenner & Steinbrenner [2008] FamCAFC 193 at [234].
Accepting that the contributions of the parties are agreed as equal during the marriage, three matters warrant a modest adjustment in the Husband’s favour. Those three matters are: (a) the conduct of the Husband’s business for a significant number of years prior to the marriage (11 years or thereabouts) which was brought into the marriage; (b) the Husband’s business was the primary vehicle for the income, and the acquisition of all relevant assets, during the marriage; and (c) the Husband’s successful business was operated by him before, during and after the marriage, as that of a sole trader to which no one else (including the Wife) had access or took responsibility. This was a commercial decision by the Husband, and not one to exclude or to prejudice the Wife. Indeed, but for the Husband’s business there would not be the very significant former marital residence which the Wife will now receive, or the significant superannuation that stands to the credit of both parties.
I will not repeat the earlier comments about the commercial value of the Property P property, and the financially advantageous opportunity it provides – if/once sold – for the Wife to acquire another, more commercially and otherwise viable property, which would also result in her having a very sizeable pool of funds available to her. Once prudently invested, one might opine that her financial worries would be alleviated, and for a very considerable time into the future.
I accept that the Husband has some residual health issues as a legacy of his stroke, but which has not, to date, materially affected the business. I also accept that his income-earning capacity is greater than the Wife. And I note again that the parties have responsibilities to their children as earlier indicated.
The Wife (a) will acquire the Property P property (value $875,000), and (b) has superannuation of $359,698.00.
In my view, and in addition to the agreed transfer of the Property P property to the Wife as detailed in the Husband’s orders, the following orders should be made on the basis that they are, in all the circumstances, just and equitable for the purposes of s.79(2) of the Act. Rather than fix upon a percentage split of the assets, something more immediately tangible seems warranted in the current matter.[39] Thus, the further orders shall be:
(i)the superannuation interests of the parties should be divided equally. This should result in a payment to the Wife from the Husband’s superannuation of $74,197.30.
(ii)the Husband should pay to the Wife, within 60 days of the date of the orders, the sum of $90,000
[39] In this regard, I recall the admonition in Russell v Russell where the Full Court (Ellis, Finn & Mushin JJ) said (emphasis in original): “… it must be remembered … that under s.79(2) of the Act, the Court is required to be satisfied that it is the order to be made which is just and equitable, not just the underlying percentage division of the net value of the parties’ assets.” Russell v Russell (1999) FLC ¶92-877 at p.86,439.
Otherwise, the orders shall be as sought by the Husband.
Finally, in relation to costs, there are two aspects to consider.
First, in relation to the Wife’s unsuccessful Application to re-open, the Husband should have an order for costs in the sum of $6,000. That is to be paid within 60 days of the date of these orders.
Secondly, in relation to the substantive proceeding, in the absence of any submission in writing within seven (7) days of these orders, in all of the circumstances of the case, there will be a self-executing order that each party shall pay their own costs.
I certify that the preceding one hundred and twelve (112) paragraphs are a true copy of the reasons for judgment of Judge Neville
Date: 12 April 2013
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