Meiloakitau and Taumoepeau

FAMILY COURT OF AUSTRALIA

MEILOAKITAU & TAUMOEPEAU

[2008] FamCA 476

FAMILY LAW - PROPERTY SETTLEMENT – Pool of assets - Valuation of a former business – Contributions - Adjustments

Family Law Act 1975 (Cth) Sections 75 & 79

In the Marriage of Omacini (2005) 33 Fam LR 134
In the Marriage of Hickey (2003) 30 Fam LR 355
In the Marriage of Lenehan (1987) 11 Fam LR 615
In the Marriage of Norbis (1986) 10 Fam LR 819; FLC 91-712
In the Marriage of Zyk (1995) 19 Fam LR 797
In the Marriage of Coghlan (2004) 33 Fam LR 414
Mallett v Mallett (1984) 9 Fam LR 449
In the Marriage of Ferraro (1992) 16 Fam LR 1
In the Marriage of Shewring (1987) 12 Fam LR 139
In the Marriage of Kennon (1997) 22 Fam LR 1
In the Marriage of Townsend (1994) 18 Fam LR 505; (1995) FLC 92-569

APPLICANT:

Ms Meiloakitau

RESPONDENT:

Mr Taumoepeau

FILE NUMBER:

SYF

4358

2004

DATE DELIVERED:

27 June 2008

PLACE DELIVERED:

Sydney

JUDGMENT OF:

Judicial Registrar Loughnan

PLACE HEARD: Sydney

HEARING DATE:

10, 11 & 12 June 2008

REPRESENTATION

COUNSEL FOR THE APPLICANT WIFE:	Mr T. Hodgson
SOLICITOR FOR THE APPLICANT:	Thomson Bentley & Partners

COUNSEL FOR THE RESPONDENT HUSBAND	Ms R. Druitt
SOLICITOR FOR THE RESPONDENT	John Spence & Associates

Orders

Within 2 months from the date of these orders the husband shall do all necessary acts and sign all necessary documents to transfer to the wife all his right title and interest in the property known as G, in the State of New South Wales, being the whole of the land contained in Certificate of Title Folio Identifier … .

Forthwith upon that transfer, the wife shall sign all documents and do all things necessary to discharge the mortgage to St George Bank Limited secured on the G property.

From the date that the G property is transferred to the wife, she shall be solely liable for all rates and taxes in relation to the property.

In the event that the wife fails to comply with order 2, the parties shall forthwith do all necessary acts and sign all necessary documents to cause the G property to be sold by public auction and to cause the net proceeds of sale, after any adjustments on sale, payment of the costs of sale, including agent’s commission, auction fees, and legal costs to be disbursed to the wife.

Forthwith upon payment by the wife to him of $39,906.66 the husband shall do all necessary acts and sign all necessary documents to transfer to the wife all his right title and interest in the property known as S, in the State of New South Wales being the whole of the land contained in Certificate of Title Folio Identifier … .

From the date that the S property is transferred to the wife, she shall be solely liable for all rates and taxes in relation to the property.

In the event that the wife does not tender $39,906.66 to the husband within two months of the date of these orders, or such further time as the parties may agree upon in writing, the parties shall forthwith do all necessary acts and sign all necessary documents to cause the S property to be sold by public auction and to cause the net proceeds of sale, after any adjustments on sale, payment of the costs of sale, including agent’s commission, auction fees, and legal costs to be disbursed as to 70.5% to the wife and the balance to the husband.

Otherwise, the husband is declared the sole owner, both at law and in equity of the Toyota Prada motor vehicle, the freight container, his superannuation and all other assets in his possession or control.
Otherwise, the wife is declared the sole owner both at law and in equity of all assets in her possession or control.

That in the event that the husband refuses or neglects for more than fourteen (14) days to comply with any provisions of these orders, the Registrar of the Family Court of Australia, Sydney is hereby appointed pursuant to Section 106B to execute all deeds and documents in the name of the husband and to do all acts and things necessary to give validity and operation to the said orders.

IT IS NOTED that publication of this judgment under the pseudonym Meiloakitau & Taumoepeau is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYF 4358 of 2004

Ms Meiloakitau

Applicant

And

Mr Taumoepeau

Respondent

REASONS FOR JUDGMENT

After a marriage involving cohabitation of about 20 years the parties cannot agree on a settlement of their property. Parenting proceedings remain outstanding but are not being actively prosecuted by either party.

Applications

The wife seeks orders in terms of a Minute emailed to my chambers late on the final day of the hearing, as follows:

…..
4.That the Husband do all necessary acts and sign all necessary documents to transfer to the Wife all his right title and interest in the property known as [G] being the whole of the land contained in Certificate of Title Folio Identifier […] subject to the mortgage to St George Bank Limited within twenty-eight (28) days of the date hereof.
5.That the Husband do all necessary acts and sign all necessary documents to transfer to the Wife all his right title and interest in the property known as [S] being the whole of the land contained in Certificate of Title Folio Identifier […] within twenty-eight (28) days of the date hereof.
6.From the date that the property at [G] is transferred to the Wife, the Wife shall be solely liable for all rates and taxes and shall finance the mortgage to St George Bank into her sole name.
7.That within twenty-eight (28) days of the date hereof, the Husband shall pay to the Wife the sum of $37,363.00.
8.That the Husband be declared the sole owner, both at law and in equity of the Toyota Prada motor vehicle, the freight container, the art business called [P] and the [art] stock.
9.That as between the parties, the Wife be declared to be the legal and beneficial owner of and solely entitled to the use and benefit of bank accounts, furniture and chattels and other assets in her possession or under her control.
10.That as between the parties, the Husband be declared to be the legal and beneficial owner of and solely entitled to the use and benefit of superannuation entitlements, bank accounts, furniture and chattels and other assets in his possession or under his control.
11.That in the event that the Husband refuses or neglects for more than fourteen (14) days to comply with any provisions of these orders, the Registrar of the Family Court of Australia, Sydney is hereby appointed pursuant to Section 106B to execute all deeds and documents in the name of the Husband and to do all acts and things necessary to give validity and operation to the said orders.
12.That the Husband pay the Wife’s costs of and incidental to these proceedings.

The husband seeks orders in terms of his amended Response filed 12 October 2007 whereby the G property should be transferred to him, the S property to the wife and he should pay her a further $80,000 (or $78,000) within 28 days.

Affidavits

The wife relied on the following documents:
1.        Affidavit of Wife sworn 9 January 2007.
2.        Affidavit of Wife sworn 3 July 2007.
3.Affidavit of Wife sworn 27 March 2008 (incorrectly dated 27 March 2007).
4.        Financial Statement of Wife sworn 27 May 2008.
           Family Report of Ms M dated 29 June 2005.
           Family Report of Ms T dated 21 March 2007.
The husband relied on the following documents:

Document Sworn Filed

1 Amended Response to an Application for Final Orders 10.10.2007 12.10.2007

2 Response to an Application for Final Orders 24.01.2005 24.01.2005

3 Affidavit of Husband 10.10.2007 12.10.2007

4 Affidavit of Husband 09.10.2007 10.10.2007

5 Affidavit of Ms K 10.10.2007 12.10.2007

6 Financial Statement 5 .6.08 11.6.2007

Ms K was unavailable for cross-examination due to a sick infant and as a result, the husband withdrew his reliance on her affidavit.

Issues for determination

The issues for determination are:

The value to be placed on the parties’ financial services business;
Whether the parties contributions were equal or favoured the wife;
The extent of the adjustment to the wife pursuant to the non-contribution elements of section 79(4);
In the framing of orders, whether the wife or the husband should have the first opportunity to retain the former matrimonial home at G

Short History

The wife and husband were born in Tonga and as at the date of hearing they were 51 and 46 years of age respectively. They were married in November 1982 and separated on 9 November 2002. The parties were divorced pursuant to a Decree Nisi of Dissolution of Marriage pronounced on 9 July 2004.

Children

There are nine children of the marriage:
Awho is 25 years of age;
Bwho is 24 years of age;
Cwho is 23 years of age;
Dwho is 20 years of age;
Ewho is 19 years of age;
Fwho is 18 years of age;
Hwho was born in December 1996 and as at the date of the hearing he is 11 years of age;
Iwho was born in August 1998 and as at the date of the hearing she is 9 years of age; and
Jwho was born in September 2000 and as at the date of the hearing is 7 years of age.

Background facts

The parties migrated to Australia, separately, during 1981.
They commenced co-habitation upon their marriage in November 1982.
Neither of them had any significant assets. They lived in rented accommodation, first in the W area and later in the N area until 1995.
A was born in November 1982.
In 1982 the parties bought the property S on the Central Coast. They paid $25,000 some or all of which was borrowed from the St George Bank. The loan was discharged in 1995. The property remains unimproved and unencumbered.
The wife worked full-time as a Process Worker until 1983 and then she worked as a Receptionist / Secretary until April 1988 when D was 4 months old. During that period she had maternity leave of two or three months for the births of A, B and C.
The wife says the husband was unemployed from 1982 to 1983. I think the husband’s case is that he had some paid employment from time to time but was restricted because of his lack of residence status in Australia.
In early 1984 the parties purchased a truck in order to subcontract with a company known as X. The wife attended to all the paperwork for the business. The husband obtained a truck license in 1984 and continued in that employment for 7 – 9 years.
B was born in November 1983.
C was born in March 1985.
D was born in October 1987.
Apart from various family businesses, after April 1988 the wife did not have paid employment outside the home.
E was born in July 1988.
F was born in April 1990.
In October 1991 the wife registered a company known as “[Z Pty Limited]” with 30 shares being issued. The original directors were herself (10 shares), her father (10 shares) and her brother U (10 shares). The original secretary was her other brother V.
From 1991 to 1995 the parties occupied rented accommodation in W.
In June 1993 the wife established a financial services business which she ran from home, while caring for the children. The business was operated through Z Pty Limited and later became the main enterprise of that company. It involved the transactions from Australia to Tonga and from Tonga to Australia. The business involved clients depositing moneys in one of a number of personal accounts of the husband and/or wife. The wife says that on a weekly basis those deposits would then be transferred, often by bank cheque, to a Commonwealth Bank account from which the moneys, minus any fees, would be transferred to Tonga or from Tonga to Australia. The transfers, made in sums of tens of thousands of dollars, representing the deposits made by many clients, occurred on a monthly basis. Once funds were transferred from Australia to Tonga, the business would pay the money out at the direction of the client, whether in cash, by instalments or by a drawing on the fund. The moneys could be paid out immediately or could remain in the Tongan accounts of the business, for some months. The business made an income by charging fees to effect the transfers. The wife says that a commission of 2% was charged. That income was applied towards the payment of household bills and saving moneys for a deposit for the ultimate purchase of the property at G.
In 1994 the parties sold the truck and the proceeds of sale were used to purchase shares in Y Pty Limited, a company which leased hospitality premises called “[T]” in inner Sydney.
In early 1995 the parties purchased further shares from Dr O and his wife in Y Pty Limited. They ran the hospitality business together. The wife worked Fridays and Saturdays and also prepared food, received money from patrons and worked behind the bar.
In 1995 the parties bought the property G for $250,000. They borrowed $125,000 from the St George Bank. The balance came from savings and profits from the businesses.
In 1995 the loan to the St George Bank in relation to the S property was discharged.
H was born in December 1996.
In September 1996 an Apprehended Violence Order was made against the husband in the Local Court.
In late 1997 the parties sold the hospitality business for approximately $100,000.
In about 1997 the husband became involved in the financial services business.
I was born in August 1998.
In 1999 the husband, in conjunction with relatives, established a plantation in Tonga. The husband says that produce takes 6 years to grow and that there has never been a crop harvested by or for him from the plantation. The wife says that the husband had plant stock and a warehouse in Tonga to store plant stock before it was airfreighted to Australia. The husband agrees he imported plant stock but denies the existence of a warehouse in Tonga. He says that he paid for the plant stock to be delivered in Australia and he had none in his possession at separation.
In July 2000 the parties purchased a Toyota Landcruiser Prada motor vehicle for $47,090.
J was born in September 2000.
In 2000 the wife established a retail shop in Tonga known as “[DF]”. The wife’s evidence about this is unclear. At one point she refers to profits from the business and elsewhere she says that the business made no profit. The shop was destroyed in late 2006, during civil unrest in Tonga. Bank accounts for the retail business were also used for the financial services business.
On 28 February 2001 the husband and the parties’ daughter, A were appointed directors of the company “Z Pty Limited”.
The parties separated on 9 November 2002. The wife contends that after this time the husband commenced gambling on poker machines.
The wife says that on 30 November 2002 the husband threatened the wife saying “I will kill you if you leave me.” The wife says that as a consequence, she travelled to New Zealand taking books of the financial services business with her together with cards and the PIN (n)umbers for the bank accounts. While the wife was in New Zealand, the wife says the husband telephoned her requesting bank account pin numbers so he could transfer money from the accounts into his name and he promised her that, “he will give her what she wants”. The wife gave the husband the pin numbers to the bank accounts. Thereafter the husband withdrew money from the business accounts and deposited monies in the accounts in his sole name.
Between 27 November 2002 and December 2002 the husband withdrew moneys totalling $178,571 from the Westpac Account in the wife’s name. The wife does not know if any or all of that money was used for anything other than the financial services business. It is the husband’s case that most if not all of those moneys were clients’ moneys associated with the financial services business. It is his evidence that he does not have possession of the records of the financial services business to demonstrate that fact and assumes that the wife has or had the relevant records.
Between 16 December 2002 and 3 January 2003 the husband withdrew a total amount of $49,000 being monies collected from clients of the financial services business, including the company’s commissions by internet banking.
The wife returned to Australia on 20 December 2002. Despite her initial evidence to the contrary, the wife assisted in dealing with clients and making records for the financial services business from time to time.
In December 2002 the husband’s mother, at the request of the husband, transferred approximately $35,000.00 from “[DF]” business into the husband’s Westpac Account.
On 20 November 2003 the husband paid an amount of $20,527.00 to a company known as “[Q] Pty Limited” trading as “[MT]”. This amount was withdrawn from commissions retained in the accounts of “Z Pty Limited”. The money was used to purchase stock for sale in Tonga.
Between January 2003 and February 2004 the wife withdrew some $27,000 from the Westpac Account. She applied those funds to travelling to New Zealand, purchasing a motor vehicle, the payment of living expenses and establishing another hospitality business in Tonga. That business was not successful and was closed in early 2004.
On 7 July 2003, on the advice of her accountant, the shares in the names of her father and brother in the company “Z Pty Limited” were transferred to the wife.
On 10 November 2003 the husband withdrew a bank cheque from the Commonwealth Bank in the amount of $18,000 in favour Ms R, a woman with whom he was having an intimate relationship at that time. He also withdrew a bank cheque from the Westpac Banking Corporation in the amount of $177,000 in the name of Ms R. It is his evidence that she needed the money to demonstrate her possession of assets in connection with an immigration application. The moneys were repaid to the husband shortly thereafter.
On 9 December 2003 the husband withdrew a bank cheque from the Commonwealth Bank in the amount of $20,000 in favour of the parties’ son, C. Much later those moneys were applied to legal costs incurred by C.
On 12 December 2003 the husband withdrew a bank cheque from the Commonwealth Bank in the amount of $23,000 in favour of the parties’ son, D. Much later some of those moneys were repaid.
It is the husband’s evidence that in each case the advances to the sons were to assist them to buy property and in each case the moneys were not used for that purpose.
On 26 December 2003 an Apprehended Violence Order was made against the husband.
On 5 January 2004 the husband obtained a bank cheque from the Commonwealth Bank in the amount of $42,000 drawn in his favour.
On 13 January 2004 the parties’ children, B and C were appointed directors of “Z Pty Limited”.
On 9 July 2004 a Decree Nisi of Dissolution of Marriage was pronounced.
In August 2004 the husband was convicted of common assault and placed on a good behaviour bond for two (2) years in the Local Court.
In 2005 the husband lent his cousin FS an amount of $45,000 from the funds of “Z Pty Limited”. The wife is unaware whether those moneys have been repaid to the husband or the company.
In April 2005 the wife married Mr Meiloakitau. She sponsored him for Australian residence.
In early 2006 the husband ceased residing at the former matrimonial home at G. He has lived for at least part of each week with his then partner Ms MF, in her rented accommodation.
In June 2006 the wife made application to the Colonial Limited to release her superannuation funds upon the grounds of hardship and received an amount of $7,000, which she has used to pay living expenses for herself and the children.
In October 2006 the husband filed a voluntary de-registration of the company “Z Pty Limited”, with the Australian Securities & Investment Commission.
Although the husband deposed to fruit picking at about that time, in cross-examination the husband conceded that he was unemployed from sometime prior to October 2006 until August 2007.

At a later point, D and C commenced a financial services business under the business name of “PM”. The wife asserts that the business is operated by the husband and that it is a continuation of the parties’ business.
In June 2007 the husband married Ms MF. They have one child who was about 12 months of age at the time of the hearing.
On 1 August 2007 a cost order was made against the husband in these proceedings in the amount of $7,667.09.
In October 2007 the wife separated from Mr Meiloakitau. They remained living under one roof until the week before the hearing, with Mr Meiloakitau living downstairs at the AB property.
On 24 October 2007 an order was made by consent that the amount of $7,667.09 awarded by way of costs to the Wife, be paid from the husband’s entitlement to property settlement.
In late 2007 the Child Support being paid by the husband for the three (3) younger children increased from $21.67 per month to $26.00 per month.
In 2008 the Child Support being paid by the husband increased from $26.00 per month to $28.00 per month. The wife says that is the only financial support for the children provided by the husband. The husband says that he gives the children money when he sees them.
D and his wife live at the G property. E lives at the G property and works at a warehouse. F lives at the G property and works in eastern Sydney.
The wife visits the G property at least once a week.
The three youngest children live with the wife in rented premises at AB. In 2008 they moved to AW School. H is in Year 6, I is in Year 4 and J is in Year 2.
Since February 2008 the husband has spent little time with any of the youngest three the children.
The other adult children live independently.

Credit and Submissions

The evidence of the witnesses

The only witnesses called for cross-examination were the parties. The husband initially relied on an affidavit of his niece, Ms K. She used to live at the G property but since she swore her affidavit, she moved in with the wife. She was unavailable for cross-examination due to a sick infant and as a result, the husband withdrew reliance on her affidavit.
The wife gave her evidence with the assistance of a Tongan interpreter. She conceded that she is undertaking business studies in English and that she completed a secretarial course in Tonga, in Tongan and in English. Her affidavits were not read over to her in Tongan. She responded to some questions in English and by her reaction, showed that she understood questions prior to them being translated for her. The wife says that she has been confused in previous legal proceedings and felt that she needed an interpreter. On several occasions the wife contradicted herself. For example:
·    She said that she had not bought bank cheques for the purposes of the financial services business. When shown a receipt in her name for a bank cheque from the husband’s St George Account immediately thereafter, she said that bank cheques were the usual method of transferring money from the St George or Commonwealth banks to Westpac before telegraphic transfer to Tonga.
·    She said that Ms K and her husband pay ¾ of the outgoings on the Auburn property and soon after corrected that to ¼.
·    She denied that there was an agreement for the husband to see the children at their football until she was shown a letter sent by her solicitor, on her instructions, agreeing to the husband taking the children to football
·    At paragraph 67 of her affidavit it is her evidence that in about 2000 she started a retail shop in Tonga; that she leased a shop front; arranged for her cousin to run the shop; and the business made no profit. In paragraph 74 she says words to the effect that in December 2000 she had the equivalent of $35,000 in the Westpac Bank in Tonga being the gross profits of the retail business. I sought to discover how this new business might have generated $35,000 in profit, before tax, in such a short time. When I asked her about that she said that the business was not initially run out of leased premises.
The wife would have it that she initiated the financial services business and yet could not or would not demonstrate a familiarity with key concepts going to the running of such a business:
· She was asked whether she would start up a new financial services business with Tonga and replied to the effect that she would not because the exchange rate is unfavourable. She was asked several times and in several ways – ‘What would be a favourable rate sufficient to attract you to again run such a business?’ She could not give an answer. She finally said words to the effect that her son D told her that the exchange rate is not good.
· She was asked about her calculations going to her evidence about the net asset position of the company at separation. Her evidence relies on moneys standing to the credit of the parties and the business as at 9 November 2002 with a deduction for clients’ moneys held at that time. The latter figure taken from the first page of annexure K to her affidavit seems to relate to deposits made by clients in the week of 9 November 2002 and the wife could not explain how that figure could represent the total balance of clients’ funds held by the parties. It is her evidence that the telegraphic transfers were made monthly, not weekly. Putting aside the fact that the parties agreed prior to the first date of the hearing about the net value of the business for the purposes of the hearing, the wife’s evidence is confusing.
Despite the best efforts of an interpreter, there are often misunderstandings and miscommunication in evidence given through an interpreter. Perhaps because of that effect, many of the wife’s answers were unresponsive or unintelligible. In the result the wife was a poor witness. That is not to say that she did tried to mislead the court but her evidence is unreliable.
The husband too is a poor witness. He was careless in completing his Financial Statements. For example his superannuation figures were what he recalled of his entitlement from 2003. Why he would think that was a proper disclosure of his circumstances for the purposes of his 2007 or 2008 Statements, is beyond me.
There was the following passage in the husband’s cross-examination:
Mr Hodgson:           is it the fact also that there was a giftware or a gift company that you and your wife ran, a giftware company, an [art] company?
Husband:                 no, we never operated it before.
Mr Hodgson:           wasn’t it the situation that during the marriage you and your wife lent money to clients who gave you South Pacific Island [art] as security for the money.
Husband:we never ran a business like that together with my wife.
JR:  46
Mr Hodgson:           that’s, yes I am referring him to 65 of her affidavit
JR:  well 46 of his
Mr Hodgson:           of his affidavit, yes.
Mr Hodgson:           well sir, in paragraph 46 of your affidavit, thank you JR, you said that in 2006 the applicant and I commenced the business for the sale of Tongan [art]. Now that date can’t be right can it – I would purchase [art] from local […] market.
Husband:                 yes, the date is wrong
Mr Hodgson:           it was 96 was it
Husband:                 47
Mr Hodgson:           in 46
Husband:                 in 46
Husband:                 yes
Mr Hodgson:           what date was it, 96
Husband:                 96, er 2006
Mr Hodgson:           it wasn’t 2006. I thought you said the date was wrong. You are not suggesting you and the wife were running a business in 2006 together - gone off and married another man.
Husband:                 I know.
Mr Hodgson:           you were running a business in 2006.
Husband:I got confused because you were swearing earlier on false evidence
Mr Hodgson:             I referred to 46, you took me to 47. What’s the date in 46 please. What year did you and she commence the business for sale of [art] which you said just a moment ago in oral evidence “oh there was never any business”.
Ms Druitt:I object your honour. The question was put that it was held in art while there were loans of money outstanding. It’s quite a different business for the sale of
Mr Hodgson:             He gave other evidence
JR:No you can’t have that. The question was along the lines of [art] and we got
Ms Druitt:No your Honour he said I never operated a giftware business.
Mr Hodgson:             [art] I thought
Ms Druitt:because my friend used the words “giftware”
Mr Hodgson:             I corrected myself
Ms Druitt:ah, you didn’t
JR:sir, do you say now that you ran [an art] business
Husband:yes
JR:Did you say a few minutes ago that you did not run [an art] business
Husband:a gift, a gift
Mr Hodgson:             I changed it from gift
Husband:that is why I say now because we say gift business
JR:right
Husbandso I never ran a gift business, a giftwarehouse business
JR:OK. When do you think you ran this [art] business. Was it in 2006.
Husband:Yes, a little operation. People come and ask for money
JR:You and your separated wife?
Husband:yes
Mr Hodgson:             Years after you and your wife separated you ran this business
Husband:yes
Mr Hodgson:             yes
Husband:I would not call it a business
Mr Hodgson:           well you have called it a business in your affidavit. Do you want to retract that now?
Husband:but this is a legal
Mr Hodgson:             pardon?
Husband:but this a legal money for my own purchase, for my own benefit
Mr Hodgson:           quickly sir, because I am running out of time. Can you tell me this, what year do you say you and the wife commenced this business?
Husband:2006(?)
Husband:Not me and my wife that is a correction
Mr Hodgson:          You have got in your affidavit the applicant, that is the wife, and I commenced the business. I mean that is what you have said on your oath.
Husband:Yes but that is wrong, that’s only mine
JR:Only
Husband:it’s only mine
JR:only you. Okay
Mr Hodgson:             Okay. So you commenced the business for the sale of the [art]
Husband:yes
….
At first he seemed to concede that the date in his affidavit was wrong and then after confirming a number of times what he had deposed, that he and his ex-wife commenced the business, he finally asserted that the reference to his ex-wife was incorrect. Giving the husband every allowance for English being his second language, and the benefit of the doubt in relation to years and ‘giftware’ vs ‘[art]’, his evidence in cross-examination is that the first sentence of paragraph 46 of his affidavit, is wrong.
At paragraph 47 of his affidavit the husband says:
47.In 1998 I obtained a license to import [plant stock] from Tonga for sale amongst the Tongan Community. The business ceased operating in 2005.
In cross-examination the husband said that the plant stock business ceased in early 2001. He later said words to the effect that he never imported plant stock after separation (9 November 2002). Paragraph 47 was put to him and the effect of his answer was that the “business” he referred to in that paragraph was the financial services business. If that is what he intended then paragraph 47 is, at least, confusing. The only subject matter in that paragraph is plant stock importing. The logical inference is that the thing that ceased operating in 2005 was the plant stock importing business. Even if, as he now says, the thrust of his written evidence was intended to be - the plant stock importing was undertaken under the umbrella of the financial services business which itself ceased operating in 2005 - that conflicts with an earlier statement in the same affidavit:
38. The company was deregistered and ceased to trade in February 2006.

The husband relied for corroboration of his version of the living arrangements of the youngest three children since separation, on contemporaneous notes in diaries. The first thing to say is that the diary entries did not always corroborate his evidence. For example in cross-examination he said that his last weekend with the younger children was about a month ago. His 2008 diary puts the most recent weekend at 29 & 30 March 2008. Next, although it was not apparent from his affidavit or his initial evidence, it is the husband’s practice to use several diaries each year. It was revealed in cross-examination that records about the children are not confined to only one diary each year. He does not have all of the diaries. Finally, although he said that the entries in the diaries are made contemporaneously, he conceded that there were entries in the diaries for days when he was outside Australia and says that he does not take the diaries overseas with him. The net effect is that the husband’s diaries do not provide reliable corroboration of his oral testimony.
Casting further doubt on the husband’s reliability as a witness is the improbability of various contentions in his case. There is the fact that the husband would have it that the financial services business of the parties’ sons, D and C:
·    which is similar to and started after the close of the parties’ business;
·    which uses bank accounts in Australia and Tonga that were used for the parties’ business and which continue to be in the husband’s name;
·    which has or has had clients who had previously used the parties’ financial services business;
·    which operates, rent-free, from the former matrimonial home, which is attended by the husband on a daily basis and for which, despite usually sleeping elsewhere, he alone pays the outgoings; and
·    in respect of which the husband gives the sons advice from time to time;
is unrelated to the parties’ business.
In summary, the parties are not reliable witnesses. Much of that unreliability may arise because English is not their first language. As I will come to later, credit would normally have a significant impact on a case where the background facts are unusual and informal. I cannot rely on the credit of either party.

Submissions

The written submissions on behalf of the wife are as follows:

G. FINANCIAL CIRCUMSTANCES OF PARTIES:

Property:

Item Ownership Value (H) Value (W)

[Property at G]  Joint          $370,000.00     $370,000.00
[Property at S]  Joint          $135,000.00     $135,000.00
[Z] Pty Ltd  Joint          $136,530.00     $136,530.00
Westpac Bank  Wife  $2.00
Household contents            Wife  $4,000.00
Household contents –         Wife  $10,000.00
[G] property
Storage container                Joint              $1,000.00         $1,000.00
Toyota Prada motor
vehicle  Husband            $13,000.00       $13,000.00
Superannuation -
Colonial 1^st State           Husband            $23,990.00       $23,990.00

Add Backs

Monies allegedly drawn by Husband from business from 27.01.2002 to 05.01.2004 –
$295,843.00

Monies allegedly drawn by Wife from business accounts
Paid legal fees of Husband –
$3,400.00

Liabilities

MortgageJoint $95,000.00 $95,000.00
[School fees]
for [F]Joint $4,820.00 $4,820.00
*The amount of $7,767.09 ordered by way of costs by Judicial Registrar Loughnan is to be paid to the Wife from the Husband’s entitlement to property settlement, pursuant to orders made by consent on 24 October 2007.

CONTRIBUTION ASSESSMENT

The Wife contends that contributions should be assessed in proportions as to 65% to her and 35% to the Husband, depending upon the quantum of the asset pool and the extent to which assets are added back or held to have been disposed of by the Husband.

SECTION 75 (2) FACTORS ASSESSMENT

The Wife contends that an adjustment of 15% to 20% should be made in her favour to reflect relevant Section 75(2) factors depending upon the quantum of the asset pool and the extent to which assets are added back or held to have been disposed of by the Husband.

I. SECTION 79 CONSIDERATIONS

1The Wife made a contribution to the welfare of the family as she was primarily responsible for caring for the nine (9) children of the marriage during cohabitation and for performing household tasks and domestic duties.
2.The Wife’s contribution to the welfare of the family was made more onerous as a consequence of domestic violence perpetrated upon her by the Husband.
3.The Wife has been primarily responsible for the care of the children of the marriage under the age of eighteen (18) years since the separation of the parties.
4.The Wife was engaged in employment at various times during cohabitation and used the income which she derived for the benefit of the household in meeting outgoings and household expenditure.
5.The Wife worked in the family [financial services] business from 1991 to 1995 business, which was conducted from the parties’ home.
6.The Wife worked in the parties’ [hospitality business] known as “[T].”
7.The Wife was involved through her physical endeavours in the [initial business] and the [plant stock] importing business of the parties.
8.The Wife was involved in running the business the “[DF]” in Tonga and used income derived for the support of herself and the children. The Husband has also retained approximately $35,000.00 from this business which was transferred to an account in his sole name by his mother.
9.The Wife cashed in her superannuation entitlement of $7,000.00 upon the basis of hardship and used these monies for the financial support of herself and the children.
10.The Wife has been primarily responsible for the financial support of the children in her care since the time of separation, as the Husband pays minimal child support.

J. SECTION 75(2) FACTORS

1. The Wife has the responsibility for the care of the three children of the marriage under the age of eighteen (18) years which shall continue for a further 10 ½ year in the case of the youngest child. It also appears that the Husband will have little future involvement with the children.
2.The Husband has not made a full and frank disclosure of his financial affairs.
3.The Husband has embarked on a course of wastage of assets of the parties by divesting himself of monies by transferring the same to third parties and by his gambling activities.
4.The Husband has withdrawn significant amounts from the parties’ business accounts, retained such monies for his own purposes and not accounted for the same.
5.The Husband has retained the [plant] stock and not accounted for the same
6.The Husband has a superior income earning capacity to that of the Wife.
7.The Wife does not have the capacity for gainful employment as a consequence of her responsibility to care for the children of the marriage.
8.The duration of the marriage has had an adverse effect upon the Wife’s earning capacity.
9.The Husband has had the benefit of occupying or determining who shall occupy the former matrimonial home since separation to the exclusion of the Wife.

In oral submissions on behalf of the wife, it was argued that the wife is a more reliable witness than the husband. The pool is said to be a net $560,530 with $23,990 in superannuation. It is submitted that an agreement was reached before Rose J on 13 March 2008 as to the treatment of the financial services business and it would be unfair to the wife to permit the husband to resile from that agreement during the hearing. The wife abandons her contention that $295,843 should be read back in to the list of assets as a preliminary distribution to the husband. It would be unfair to leave the husband with his superannuation on the basis that on her evidence the wife had resort to her superannuation of $7,000 for her living expenses. The contributions are said to be 55% or 60% by the wife because she did more, particularly as parent, since separation. Then it is submitted that there should be an adjustment to the wife under section 75(2) of 10-15% largely because the younger children live with her and the husband’s greater earning capacity. If I am satisfied that the husband failed to properly disclose his financial circumstances or committed waste, it is submitted that the cases such as – Black and Kelner; Weir and Weir and Kowaliw would permit a greater allowance.

In any event the submission is that the wife can argue for 75% and the orders she seeks, involving her taking the G and S properties and $37,363 are therefore just and equitable.
The written submissions on behalf of the husband were to the following effect. The contributions were equal to the date of separation and thereafter the husband has cared for the children without financial support from the wife and has continued to meet the outgoings on the home. As to section 75(2), the parties are of comparable age and earning capacity and both have remarried. The children spend more time with the wife than the husband but that situation is fluid. The husband has responsibility for another child. The husband has minor superannuation and the wife used hers in 2006. The net effect should be a 5% adjustment to the wife. As to a just and equitable outcome, it is his case that the orders he seeks leave the wife with 84% of the assets – S and $80,000. Although, it is submitted, it is not warranted on the current valuations, that is what he seeks in his Amended Response.
In oral submissions, learned counsel for the husband put that the husband was a more reliable witness than the wife. The husband seeks to revisit the agreement about the financial services business. It is submitted that to value the business at the balance of the bank accounts used in the business, at separation, is unfair. In cross-examination the wife was not able to make sense of the arithmetic that went to establish that figure. It is submitted that the business should be deemed to have no value. It is submitted that this is a two pools case with the husband’s superannuation treated separately and in effect, that it be left with him.
Thus the husband contends that the pool is a net $426,000. Without explanation that is based on a figure for the G mortgage of $93,000 rather than $95,000, being the agreed figure. The submission for the husband is that the contributions were equal to the date of separation and despite various factors favouring the husband after separation, should be seen as equal overall. Matters favouring the husband include the fact that the children were with him for much of the time since separation. The wife’s case about the children being with her in 2003 and 2004 cannot be right given, for example, that she was outside Australia for 100 days in 2004. Other matters not explained by the wife are the fate of her businesses in Tonga, the retail and second hospitality businesses, particularly since she says her travel was for business.
Thus the contributions to the non-superannuation pool were equal. As to section 75(2) it is submitted that the most the wife could argue for would be a 5% to her. It is said that the parties are of similar age, the wife has some formal qualifications and the husband does not. The wife is currently engaged in studies. They each have the care of children under 18 years – the care of the parties three youngest being in a state of flux; the husband has a child to his current wife. The wife is obliged to make first call for her own support on her second husband and the evidence suggests that there is still a relationship between them. The wash up is that the husband says there should be no adjustment. It is his case that the wife should have the S property and a payment of $78,000.

The approach in proceedings under section 79

The case law reveals that there is a permissible approach to the determination of an application brought pursuant to the provisions of s 79. That approach involves four inter-related steps. First, I am to make findings as to the identity and value of the property, liabilities and financial resources of the parties at the date of the hearing. Second, I should identify and assess the contributions of the parties within the meaning of s 79(4)(a), (b) and (c) and determine the contribution based entitlements of the parties expressed as a percentage of the net value of the property of the parties. Third, I should identify and assess the relevant matters referred to in s 79(4)(d), (e), (f) and (g), (the other factors) including, because of s 79(4)(e), the matters referred to in s 75(2) so far as they are relevant and determine the adjustment (if any) that should be made to the contribution based entitlements of the parties established at step two. Fourth, I should consider the effect of those findings and determination and resolve what order is just and equitable in all the circumstances of the case. [1]
[1] This summary of the effect of the authorities is paraphrased from the comments of the Full Court in In the Marriage of Hickey (2003) 30 Fam LR 355 at 370
There is no mention of steps in section 79 but it is convenient to approach the exercise of discretion in a structured way. As I say, the Full Court has supported such an approach.

The property of the parties at the date of the hearing

The Court is required to make a finding as to the property of the parties. That involves identifying assets and liabilities and financial resources and their values.
There are circumstances whereby assets are included in the list for division although they no longer exist. In the Marriage of Omacini (2005) 33 Fam LR 134 the Full Court noted:
[30]    To date, three clear categories of cases have emerged where the court has determined that it is appropriate to notionally add back to the pool of assets, that is, assets that no longer exist. They are:
(a)      Where the parties have expended money on legal fees. In In the Marriage of DJM and JLM (1998) 23 Fam LR 396; (1998) FLC 92-816; [1998] FamCA 97 the Full Court said at [11.6]:
[11.6] For reasons set out in Farnell, s 117 provides that each party to proceedings under the Family Law Act shall bear their own costs unless the Court otherwise orders. Failing to add back monies expended by parties on costs frequently has the effect of defeating the policy of s 117 by permitting the pool of available assets for distribution between the parties to be diminished by any monies that either of the parties have managed to spend on their costs up to the date of trial. We are of the view that the normal approach ought be to add costs already paid back into the pool. Whilst there may be cases where that approach is inappropriate, the reasons why it is not taken ought normally be spelt out.
(b)      Where there has been a premature distribution of matrimonial assets. In In the Marriage of Townsend (1994) 18 Fam LR 505; (1995) FLC 92-569 Nicholson CJ as he then was with whom Fogarty and Jordan JJ agreed, said at Fam LR 509; FLC 81,654:
In my view, what occurred in this case, as I said during the course of argument was, in fact, a premature distribution of a proportion of the matrimonial assets. What the husband did was to distribute to himself an asset in which the wife had a legitimate interest. In such circumstances I consider that it would be unjust in the extreme to simply treat such conduct by the husband as a matter to which regard should be had under section 75(2). It seems to me that the husband has had the benefit of that money. Had he retained, for example, the taxi licence instead of selling it, that would have been brought into account as an item of property which would have been dealt with in the same way as the remaining items of property in this case. Accordingly, I am of the view that the correct way in which to deal with the husband’s receipt of those moneys is to bring them into the pool of assets on a notional basis and make a distribution accordingly.
(c)      In the circumstances outlined by Baker J in In the Marriage of Kowaliw (1981) 7 Fam LN N13; (1981) FLC 91-092 at FLC 76,644:
As a statement of general principle, I am firmly of the view that financial losses incurred by parties or either of them in the course of a marriage whether such losses result from a joint or several liability, should be shared by them (although not necessarily equally) except in the following circumstances:
(a)      where one of the parties has embarked upon a course of conduct designed to reduce or minimise the effective value or worth of matrimonial assets, or
(b)      where one of the parties has acted recklessly, negligently or wantonly with matrimonial assets, the overall effect of which has reduced or minimised their value.
Conduct of the kind referred to in para (a) and (b) above having economic consequences is clearly in my view relevant under s 75(2)(o) to applications for settlement of property instituted under the provisions of s 79.

Value of the Financial Services Business

The matter of contention is the value attributed to the financial services business operated by Z Pty Ltd. The assets and their values were agreed on 13 March 2008 before Rose J. The agreement put the value at $136,530 and as the husband had the main carriage of the business at that time, it had the effect of putting that value in the hands of the husband.
There was no attempt to resile from that agreement or agitate any issue about the pool of assets prior to the start of the hearing. The genesis of the agreed figure is revealed in paragraphs 53 & 54 of the wife’s affidavit. It was the balance of the company’s bank accounts at around the time of separation - $173,739, minus $37,209, which was said to be the amount owing to clients at that same time. The latter figure comes from a copy of a ledger or cash book showing that during the week of 4 November 2002, that was the total of moneys paid in by clients. What is missing is any reason for finding that the totality of the money owing to clients, held by the company at the date of separation is represented by what had been paid in over the preceding week. It is the evidence of the wife that the transfers were made monthly. The business did not operate a trust account system whereby clients’ money was kept separately from the fees or profits of the business or the private funds of the parties. I infer that from the fact that the same accounts were drawn on for family purposes, before and after separation. For example, after separation the husband lent a friend $203,000, $3,000 to another person and a total of $43,000 to D and C. None of those transactions were undertaken for the purposes of the business.
Normally one could simply leave the person who had carriage of the business at a particular point with the onus of producing evidence about the business at that time. If that onus could not be discharged, the Court would make every inference against that person. We are denied that approach here because the wife removed at least some of the relevant records. We know that because she produced, in answer to a Notice to Produce, records of the husband and records of the business from that time. She asserts that she has some of the telegraphic transfer records but not those from the critical time. The husband says that he does not have all of those records. That means it is not possible to see how much of the moneys in the relevant accounts was in fact transferred to Tonga.
The important thing is to identify the truth about issues but in a case where:
·    there is no independent evidence of the value of the business at that time;
·    the parties are not reliable witnesses;
·    the business practices were very irregular;
·    it is not possible to visit one of the parties with the onus of establishing the value; and
·    the records that would allow even a rudimentary assessment by the Court are not available
there is no option but to hold the parties to their agreement, as an admission against interest.
For the purposes of these proceedings the value of the business is $136,530.
For completeness I should note that despite the wife’s contention that the business continues to be operated by the husband to this day under the auspices of the company established by C and D, neither of them was called to give evidence and no orders were sought against them or the company. That may be a matter of filial concern or it may be that their evidence would not assist the wife.

Other assets

There is evidence of other assets but it is not conclusive. The wife asserts that after separation the husband had plant stocks and of Tongan art. Each of the parties says that they travelled extensively after separation for the purposes of business and yet no businesses are declared. As to the plant stock, the wife cannot support her contention that plant stocks exist in the possession of the husband, let alone the value of those stocks. As to the art, the husband denies the wife’s assertion. He points out that the container that the wife says was used to store the art is refrigerated and he says it was used for food stuffs. In the hearing, neither of the parties pursued the question of the other having existing and valuable business interests in Australia, New Zealand or Tonga. In the circumstances I cannot make findings about the existence of other assets.

Paid legal costs

In accordance with the counsel in In the Marriage of Omacini I would normally read back into the list of assets a figure for paid legal fees where the pool would be greater but for the payment. Here the wife has not paid her lawyers but the husband has paid $11,600.10[2]. He has not identified the source of those funds. He has no relevant savings and no relevant debts, despite relying on his current wife and the parties’ adult sons, for financial support from time to time. I cannot be confident in those circumstances, that the pool would be greater but for the payment. There is the further complication that the parties have earlier agreed to read back the value of the business into the pool. There is a risk of double counting assets if the costs were paid from that source. Although there is a dispute about it, on the husband’s case he neither has the business nor the funds that were in the business account in 2002. I will not include the paid fees in the pool.

[2] Letter of 6 June 2008 from husband’s lawyer to him - Exhibit 18

I find that the assets are:

Assets Value

G property $370,000

S property $135,000

Z Pty Ltd (H) $136,530

Storage container (H) $1,000

Toyota Prado motor vehicle (H) $13,000

Superannuation - Colonial First State (H) $23,990

Total $679,520.00

Liabilities:

The parties agree that the relevant liability is:

Liabilities Amount

Mortgage on the former matrimonial home

$95,000

$95,000.00

Net assets

The husband’s superannuation has a value of $23,990. The net non-superannuation assets have a value of $560,530 ($655,530 - $95,000).

Financial Resources

The husband’s financial arrangements are not well explained. One might expect a level of informality between him and his current wife but he pays expenses for his adult sons and they provide funds to him from time to time and no records are kept. Otherwise, there is no evidence that either of the parties has any financial resources.

Contributions

The obligations placed on the Court by s 79 call for an assessment of the respective contributions of the parties. The manner of assessing contributions has been the subject of previous decisions. The contributions of a parent and homemaker are to be assessed, not in any merely token way, but in terms of their true worth to the building up of the assets[3]. There are said to be risks in taking an overly technical approach to the assessment of the respective contributions of the parties in that the Court can become involved in questions of the quality of contributions which go far beyond the real world expectations of parties[4].
[3] Mallett v Mallett (1984) 9 Fam LR 449; In the Marriage of Ferraro (1992) 16 Fam LR 1
[4] In the Marriage of Shewring (1987) l2 Fam LR 139
As to whether the Court should apply the considerations in section 79(4) to the assets globally or asset by asset, the authorities have it the latter approach is preferred, in appropriate circumstances either approach is permissible and sometimes the asset by asset approach is best. See In the Marriage of Lenehan (1987) 11 Fam LR 615; In the Marriage of Norbis (1986) 10 Fam LR 819; FLC 91-712; In the Marriage of Zyk (1995) 19 Fam LR 797.
In the Marriage of Coghlan (2004) 33 Fam LR 414 the Full Court allowed that superannuation may be included in the list of property drawn up as “the first step” in the determination of proceedings under s 79, whether or not a splitting order is sought in those proceedings. The Full Court suggests that that:
… approach could be adopted where the parties agree that it should be adopted, or where the court is satisfied that the superannuation interest is indeed property within the meaning of the definition of property contained in s 4(1), or if the interest is not within that definition, but is of relatively small value in the context of the value of the other assets in the case, or there are features about the interest which leads the court to conclude that this would be an appropriate approach.
Here there was no agreement. The case argued on behalf of the husband was that superannuation should be addressed separately. I am obliged to apply the section 79(4) considerations to separate pools of superannuation and non-superannuation assets.
Otherwise, this was a long marriage and the assets were not segregated by the parties. Subject to the separate treatment of superannuation, I will deal with the assets globally.

Contributions to the non-superannuation assets

Section 79(4)(a) Contributions

Financial contributions, both direct and indirect were made by each of the parties. The husband was unemployed for between 6 and 12 months at the start of the marriage. He was employed as a Labourer and then for 7 – 9 years he worked as a Truck Driver.
Although the husband deposed to fruit picking at about that time, in cross-examination the husband conceded that he was unemployed from sometime prior to October 2006 until August 2007.
The wife worked full-time as a Process Worker until 1983 and then she worked as a Receptionist / Secretary until April 1988 when D was 4 months old. During that period she had maternity leave of two or three months for the births of A, B and C. After April 1988 the wife did not have paid employment other than through the parties’ businesses.
In early 1984 the parties purchased a truck in order to subcontract with a company known as X. The husband drove the truck and the wife attended to all the paperwork for the business.
In October 1991 the wife registered a company known as “X Pty Limited”. Thirty shares were issued. The original directors were herself (10 shares), her father (10 shares) and her brother U (10 shares). The original secretary was her other brother, V. It is the unchallenged evidence of the husband that the wife’s relatives took no active role in the company and were officers because neither the husband nor the wife were permanent residents.
In June 1993 the wife established the financial services business which she ran from home.
In 1994 the parties sold the truck and the proceeds of sale were used to purchase shares in Y Pty Limited, a company which leased a hospitality venue, “[T]”, in inner Sydney.
In early 1995 the parties purchased further shares in Y Pty Limited from Dr O and his wife. The parties ran the hospitality business together. The wife worked Fridays and Saturdays and also prepared food, received money from patrons and worked behind the bar. In late 1997 the parties sold the hospitality business for approximately $100,000.
The wife says that in about 1997 the husband became involved in her financial services business.
In 1999 the husband, in conjunction with relatives, established a plantation in Tonga. Plant stock was imported and sold in Australia.
In 2000 the wife established a retail shop in Tonga known as “DF”. The wife’s evidence about any profit from this business is contradictory. She says that the shop was destroyed in late 2006, during civil unrest in Tonga.
It is likely that the businesses of Z Pty Ltd were initiated by the wife but were generally joint enterprises later in the marriage. There are many paradoxes in the proceedings. One if them is that the wife seeks to minimise her involvement in (contribution to) the financial services business after separation and the husband seeks to argue that she had a regular involvement. Ultimately the wife conceded that, contrary to the thrust of her case, she did have an involvement in the business after separation.

(k) the duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration;

No maintenance is sought. It is not possible to make sensible findings about these issues.

(l) the need to protect a party who wishes to continue that party's role as a parent;

Neither of the parties seeks to make this case. The wife says she intends to return to the paid workforce. The youngest children are 11, 9 & 7 years of age and therefore the aspects of the parenting role that call for close supervision continue to apply. The parties have been successful in obtaining family assistance for supervision from time to time and that may be what the wife intends, if she returns to work immediately.

(m) if either party is cohabiting with another person — the financial circumstances relating to the cohabitation;

I have set out that evidence above.

(n) the terms of any order made or proposed to be made under section 79 in relation to the property of the parties;

(na) any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage; and

The husband pays the minimum rate of child support despite his income warranting a greater contribution. On the other hand he says he pays school fees. The children attend a public school and it is not clear what fees are due. I take it that the matter of the husband’s income has been raised with the Child Support Registrar and a proper assessment will soon issue. In any event that is a matter that the parties can attend to.

(o) any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account;

The financial arrangements between the husband and the older children, particularly D and C, are apparently flexible and informal. Whatever else they are, they are unexplained.

(p) the terms of any financial agreement that is binding on the parties.

There was no binding agreement made between the parties.

Section 79(4)(f)

There is a relevant order. On 24 October 2007 an order was made by consent whereby the wife is to receive an amount of $7,767.09 from the husband’s entitlement to property settlement by way of costs. Rather than being dealt with here, the order should result in a dollar adjustment on the final distribution.

Section 79(4)(g)

I have referred to the child support position.

Conclusion

The relevant matters arising from the remaining elements of s 79, which include the s 75(2) factors referred to above are:
Ø At 51 years of age, the wife is 5 years older than the husband and therefore he has the potential of more years in the paid workforce than she;
Ø The husband has remarried and his wife is in paid employment;
Ø The husband has another young child to support;
Ø The husband is in well paid employment and the wife is not;
Ø The wife has the day to day care of the only children of the marriage who are under 18 years of age. They are 11, 9 & 7 years of age and see little of their father.

For the wife it is argued that there should be an adjustment in her favour by reference to these matters. The husband argues for no adjustment or at the most for a 5% adjustment.
Most of the matters referred to above favour an adjustment to the wife. It is accepted that one of the most valuable ‘assets’ of many marriages is the capacity of secure, well paid employment. Here the husband is in a stronger financial position than the wife and he will have the potential of more years in the paid workforce than her. As against that, with the assistance of his current wife, the husband has a new child to support.
In my view there should be a 10% adjustment.

Contributions to the superannuation assets

Section 79(4)(a) Contributions

The parties both had superannuation interests. The wife says applied in June 2006 for access to her superannuation on hardship grounds, resulting in a payment of $7,000. The husband has an interest in the sum of $23,990. He is 46 years of age.
It is likely that the husband’s direct financial contribution to superannuation was greater than that of the wife. The wife’s efforts are likely to have made it easier for the husband to make contributions.

Section 79(4)(b) contributions

There is no evidence of non-financial contributions to superannuation.

Section 79(4)(c) contributions

I have made findings about the parent and homemaker contributions. Those contributions are not made to the acquisition etc of an asset. The above findings apply with equal force to superannuation.

Conclusion on contribution

The wife’s case was argued on a one pool basis. Therefore I take it that she would say that her contributions were 65% compared to 35% by the husband, As I understand it the husband’s case is that he should retain his superannuation because the wife has already accessed her superannuation and because he made the only direct contribution to his superannuation.
The wife received $7,000 from her superannuation in 2006 and used the moneys for household bills and the expenses of the children since that date. There is an argument that the wife took the benefit of her superannuation and along the lines of in In the Marriage of Townsend (1994) 18 Fam LR 505; (1995) FLC 92-569 that should be seen as a preliminary distribution of assets to her. That is not the approach the parties agreed on before Rose J on 13 March 2008. Further, the general approach of identifying assets and their value at the date of hearing reflects an acceptance that moneys applied to normal living expenses are not read back into the list of assets as if they still existed. That is what the wife says was the fate of her superannuation.
True it is that the direct contributions to the husband’s superannuation were made by him. However, the wife made indirect contributions to that superannuation. She also made greater parent and homemaker contributions.
Albeit that their contributions to superannuation were made in different ways, the parties should be seen to have contributed equally to superannuation.

The other matters in Section 79

Once contributions have been assessed, the other factors in section 79(4) need to be considered.
I refer to the findings made above in relation to the other factors but note that section 75(2)(f) cannot be double counted for this purpose.
There would seem no basis for making a different adjustment to superannuation for these factors than was made for the non-superannuation assets. There should be a 10% adjustment to the wife.

Just and Equitable

As to Superannuation - neither of the parties seeks a splitting order. Therefore the findings in relation to superannuation will need to be reflected in an adjustment of non-superannuation assets. The problem with superannuation is that it may not be readily available to the husband for many years. For that reason it should not be a matter of making a dollar for dollar adjustment. In my view it would be just and equitable within the context of s 79 if an allowance was made to the wife out of the husband’s non-superannuation assets based on one half of the value of his current superannuation interest. That is less than she is entitled to but allows for the fact that there are usually limits on when superannuation can be accessed and penalties if access is granted early, whether on hardship grounds or on some other basis.
I will provide for an adjustment to the wife from the non-superannuation assets of $11,995.
As to the Non- Superannuation assets – The division of non-superannuation assets that would be appropriate based on the matters discussed above would be 62.5% to the wife plus $11,995 by way of adjustment for superannuation. Further, the wife is also to receive $7,767.09 by way of the costs ordered on 24 October 2007. The husband would receive the balance.
The net non-superannuation assets have a value of $560,530. The wife should receive $370,093.34 ($350,331.25 + $11,995 + $7,767.09), leaving the husband with $190,436.66. The husband has or has had the benefit of :

Assets Value

Z Pty Ltd (H) $136,530

Storage container (H) $1,000

Toyota Prado motor vehicle (H) $13,000

Total $150,530.00

In order to bring him to $190,436.66 the husband should receive a further $39,906.66. He also retains his superannuation interests and owes the balance of his legal fees.
The wife has possession of none of the agreed assets. Her entitlement is $370,093.34.

The G property

Each of the parties seeks that the wife retain the S property but it transpires that each of them wants to retain the G house. Although she said something else in her affidavit of May 2008, it is the wife’s proposal to live in the G property with all 6 children (the three currently living there and the three youngest). She will pay the outgoings by finding a job as a Secretary. The husband wants to retain the property. He generally sleeps at his wife’s house but says that he visits the G property every day. With significant overtime being worked in his job as a Truck Driver and him generally sleeping elsewhere, it is hard to imagine him having much time at G.
Neither of the parties currently lives in the property. There is no evidence from the adult family members in the G property - D, E or F or any indications of their wishes.
On the values agreed between the parties, the G property has a net value of $275,000 ($370,000 - $95,000). It would be better to preserve the property rather than ordering a sale and division of proceedings. A sale may be necessary but provided she is able to refinance the mortgage, it would be practicable and sensible to allow the wife the opportunity of retaining the property. It seems unlikely that the husband would be able to buy the wife out.
If the wife wants to retain the S property she will need to pay out the remainder of the husband’s entitlement. If that is not possible the S property must be sold and the balance of the parties’ entitlements could then be met out of the proceeds of sale of that property. In order that the parties both share in an profit or loss on the sale, the proceeds should be divided in the approximate proportions 39,906.66 : 95,093.34 which I will round out to 29.5% to the husband and 70.5% to the wife.
That would leave the wife with:

Assets Value

G Property $370,000

Mortgage on the former matrimonial home -$95,000

S Property $135,000

Payment to the husband -$39,906.66

$370,093.34

She has no superannuation and will owe moneys to her lawyers.
In the event that the wife is not able to refinance the G mortgage the property will need to be sold and the net proceeds, after sale costs and the discharge of the mortgage, will be paid to the wife.

Conclusion under Section 79

In my view the outcome I have identified would be just and equitable.

I certify that the preceding two hundred and nine (209) paragraphs are a true copy of the reasons for judgment of Judicial Registrar Ian Loughnan.

Associate:

Date: 27 June 2008

[2008] FamCA 476

27 June 2008

Key Legal Topics

Areas of Law

Family Law

Property Law

Civil Procedure

Legal Concepts

Remedies

Jurisdiction

Costs

Procedural Fairness

Injunction

Document	Sworn	Filed
1	Amended Response to an Application for Final Orders	10.10.2007	12.10.2007
2	Response to an Application for Final Orders	24.01.2005	24.01.2005
3	Affidavit of Husband	10.10.2007	12.10.2007
4	Affidavit of Husband	09.10.2007	10.10.2007
5	Affidavit of Ms K	10.10.2007	12.10.2007
6	Financial Statement	5 .6.08	11.6.2007

Assets	Value
G property	$370,000
S property	$135,000
Z Pty Ltd (H)	$136,530
Storage container (H)	$1,000
Toyota Prado motor vehicle (H)	$13,000
Superannuation - Colonial First State (H)	$23,990
Total	$679,520.00

Liabilities	Amount
Mortgage on the former matrimonial home	$95,000
$95,000.00