Mena and Mena & Anor

[2012] FamCA 1046

FAMILY COURT OF AUSTRALIA

MENA & MENA AND ANOR [2012] FamCA 1046

FAMILY LAW – PROPERTY – Matrimonial pool of assets – where the unsecured loans of the husband owing to his mother were excluded from the pool of assets on the basis that they were unlikely to be enforced and unreasonably incurred  – where the Court ordered that the husband be solely responsible for the repayment of any loans existing between himself and his mother  – where the Court made an order requiring the husband’s mother to remove a caveat over the former matrimonial home  – where the husband’s mother had intervened as a party  – where the wife had no prior knowledge of the loans – where the husband’s mother had never sought to enforce the loans prior to the breakdown of the marriage – where the interest payable on the personal loans was unreasonable  and punitive – where the husband had never contributed any money towards the repayment of the loans.

FAMILY LAW – PROPERTY – Adjustment of matrimonial property – where the assets of the parties were divided 45 per cent to the wife and 55 per cent to the husband  – where the husband’s initial contributions outweighed those of the mother – where an adjustment of 15 per cent was made to the wife as the husband had a greater earning capacity and the wife undertook the majority of the care for the parties’ children – where there was a five percent adjustment for the husband for the substantial financial contributions of the paternal family to the acquisition of matrimonial property.

Family Law Act 1975 (Cth) ss 79, 75 and 90AE

In the Marriage of Biltoft (1995) FLC 92-614
In the Marriage of Petersens (1981) FLC 91-095

APPLICANT: Mr Mena

RESPONDENT: Ms Mena

INTERVENOR: Mrs Mena Snr

FILE NUMBER: (P)NCC 2997 of 2010

DATE DELIVERED: 12 November 2012

PLACE DELIVERED: Newcastle

PLACE HEARD: Newcastle

JUDGMENT OF: Justice Cleary

HEARING DATES: 18, 19, 20 June & 30 July 2012

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr P Davies

SOLICITOR FOR THE APPLICANT: MRM Lawyers

COUNSEL FOR THE RESPONDENT: Mr I Duane

SOLICITOR FOR THE RESPONDENT: Boyd Olsen Lawyers

COUNSEL FOR THE INTERVENER: Mr G Levick

SOLICITOR FOR THE INTERVENER: Burgess Lawyers

Orders

1. That Orders 2, 3 4 of the Application in a Case filed 28 March 2011 by the Intervener is dismissed.

2. That the Intervener, Mrs Mena Snr, do all acts and things and sign all documents necessary to withdraw Caveat number … being a Caveat naming her as the Caveator and in respect of the interest of the husband and registered on the title to the property situate and known as R Street, W in the State of New South Wales being the land in Certificate of Title Folio Identifier …63 (“the home”).

3. That on or before 60 days from the date of Orders the wife shall pay to the husband the sum of NINETY-SEVEN THOUSAND NINE HUNDRED AND SIXTY DOLLARS ($97,960).

4. That simultaneously with compliance by the wife with Order 3, the husband shall do all acts and things and sign all documents necessary to and in order of priority:

   4.1pay and discharge the liabilities of the parties in respect of 2 St George Portfolio Loans Numbers …37 and …18;

   4.2transfer the property known as and situate at R Street, W to the wife.

5. On the husband’s compliance with Order (4) the wife shall do all acts and things and sign all documents necessary to transfer to the husband all her right title and interest in each of the H properties.

6. In default of the wife’s compliance with Order 5 herein or any part of that order, the parties shall do all acts and things and sign all documents necessary to sell the W property and the net proceeds of sale after payment out of all reasonable costs of sale, including but not limited to:

   6.1Agent’s commission;

   6.2conveyancying costs;  and

   6.3any mortgage secured on the property at that time

   AND the net balance to be divided:

   6.4as to husband, the sum of $97,960;  and

   6.5to the wife, the balance.

7. That within 7 days of the date of the Orders the wife do all acts and things and execute all such documents as may be necessary to:

   7.1transfer to the husband or as he directs in writing at the husband’s expense, her shareholding in M Pty Limited;  and

   7.2do all acts and things and execute all documents as are necessary and are provided by the husband at his expense to cause to be assigned to him all other rights entitlements claims, actions or demands which the wife may have against the company whether by way of long service leave, unpaid wages, shareholder’s loan accounts or otherwise howsoever arising.

8. That on and contemporaneously with the wife’s compliance with Order 7 the husband pay and indemnify and keep indemnified the wife with respect to any liability of the wife arising out of or attaching to M Pty Limited and the business trading as MM Services including but not exclusively any liability to the Australian Taxation Office as a result of her shareholding in the company, her loan account in the company and any wages or remuneration of her paid or unpaid.

9. That within 7 days of the days hereof the wife shall make available for collection by the husband from the home the jackhammer referred to in the valuation report of Mr F.

10. That forthwith upon the making of these orders and other than as provided herein, the husband transfer to the wife all his right title and interest in any item of personalty of property in the wife’s possession and/or control as at the date of the making of these Orders.

11. That forthwith upon the making of these Orders and other than as provided herein, the wife transfer to the husband all her right title and interest in any item of personalty of property in the husband’s possession and/or control as at the date of the making of these Orders.

12. Pursuant to s 90AE(1) of the Family Law Act 1975 (Cth) the husband be solely legally responsible as between the husband’s mother, Mrs Mena Snr, and the husband for any and all indebtedness to the husband’s mother in relation to any alleged loan advances by the husband’s mother to the husband and not paid.

13. That the husband pay and indemnify and keep indemnified the wife with respect to any liability in his sole name as at the date of orders or attaching to any property transferred to him pursuant to these Orders.

14. That the wife pay and indemnify and keep indemnified the husband with respect to any liability in her sole name as at the date of orders or attaching to any property transferred to her pursuant to these Orders.

15. That each of the parties do all acts and things and execute or sign all documents necessary to give effect to these Orders.

16. That pursuant to s 106A of the Act, in the event that any party fails, neglects or refuses to sign any document required to give effect to these Orders within 7 days of being requested in writing by another party who has an interest in the execution of such document, then upon the filing of an affidavit evidencing such failure, neglect, or refusal, a Registrar of the Newcastle Registry of the Family Court of Australia is appointed to execute such document in lieu of the defaulting party.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Mena & Mena has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT NEWCASTLE

FILE NUMBER: (P)NCC 2997 of 2010

Mr Mena

Applicant

And

Ms Mena

Respondent

And

Mrs Mena Snr

Intervener

REASONS FOR JUDGMENT

Introduction

1. This is a dispute over the division of matrimonial property between husband and wife. Mrs Mena Snr, the mother of the husband intervened in the proceedings. She seeks to enforce re-payment to her of two loans, together with interest, said to have been made by her, to her son, before his marriage.

Short History of the parties

1. The parties met in 1995, married and began living together in February 1998. They separated after 12 years of marriage and are now divorced.  The parties have two children aged nine and seven who live with their mother and spend time with their father by arrangement between the parties.

2. The Applicant Husband, Mr Mena, is aged 39.  He is a self employed tradesman.  He also enjoys music and formed a musical group which has played part-time at hotels, clubs and weddings.

3. The Respondent Wife, Ms Mena, is aged 36.  She is living with the two children in the former family home at Merewether Heights.  She is working as an administrative assistant in a business owned and managed by her father.

4. Both parties are of Greek Australian heritage.  Each of them worked hard during the marriage, the husband as an employee and then self employed as a tradesman.  The wife worked both part-time and full-time in the five years before the birth of their first child.  Thereafter she did book-keeping work for the businesses that the husband worked in or owned.

The intervention by the husband’s mother

1. The husband’s mother asserts two loans to her son made in 1997 to a total of $150,000 plus interest. She seeks to enforce repayment of those loans through these proceedings.

2. The resolution of this aspect is at the heart of the inability of the parties to resolve their dispute.

First Loan-$73,000

1. The husband’s mother had owned a property at C Street, A (“C Street”) since 1991. She had borrowed $50,000 from the National Australia Bank to complete the purchase.[1].

   [1]  Affidavit of the husband filed 14/06/2012, Annexure ‘E’ mortgage

2. On 9 July 1997, the husband’s mother transferred C Street to her son[2].  The consideration was stated to be $134,000.  The husband’s mother asserts she lent her son $73,000 to enable him to buy the property from her, the balance to be borrowed from the bank.  The evidence as to how that figure was chosen is hard to follow.  His mother allegedly told him that she and his father had “worked to reduce the mortgage to $73,000” and would therefore lend him that amount[3].  This is inconsistent with the original mortgage being $50,000.

   [2]  Exhibit ‘2’ entry number 3 (09/07/1997)

   [3] Affidavit of the husband’s mother filed 14 June 2012, para 6

3. After the transfer in August 1997, a mortgage document was prepared and stamped with the mortgagor as the husband and the mortgagee as the husband’s mother.  The total principal sum nominated was $73,000 with interest at the rate of 10 per cent per annum calculated on daily rests[4].  That mortgage was not registered.  It is uncontested that no repayment has been made to date of principal or interest.

   [4]  Affidavit of the husband’s mother filed 14/06/2012, Annexure ‘A’

4. In September 1997, the applicant borrowed $58,000 from Advance Bank[5]. Neither the applicant nor his mother, assert that these funds were actually paid to her.  Again the evidence is unclear.  The husband’s mother also paid stamp duty and legal fees of $6,081.15 in relation to the transfer[6].   

   [5] Affidavit of the husband filed 14/06/2012, Annexure ‘G’ mortgage

   [6] Affidavit of the husband filed 14/06/2012, Annexure ‘L’

5. The husband says that within three to four months of the purchase of C Street he had completed $17,000 worth of renovations to the property and shortly after the parties were married the husband spent a further $75,500 again on renovations to the home. There is no explanation for where the additional funds came from for the expenditure, other than “this was all paid for [by] myself and my family”[7].  Remarkably, the Husband deposes that he only had $57,350 in savings at the time.

   [7] Affidavit of the husband filed 6/06/2012, para 42

6. In November 1997, a caveat was prepared, stamped and lodged on behalf of the husband’s mother with the Registrar General noting her interest in C Street as mortgagee[8].  The husband and his mother had several conversations relating to the transfer of C Street.  Neither of them asserts that the wife was present at any time when the matter was being discussed.

   [8] Affidavit of the husband filed 6/06/2012, Annexure ‘I’

7. The wife denies all knowledge of a loan for C Street.  Her evidence is that between first meeting and marriage her husband told her that the C Street property was his[9].  By 1997 it was.

   [9] Affidavit of the wife filed 30/05/2012, para 28 - 29

8. From 1999 the parties began buying four investment properties, four in total.

9. In 2002 the husband sold C Street back to his mother for $320,000 and borrowed additional funds to buy the property in W, which became the family home. The unregistered mortgage over C Street lost its significance.

10. In their affidavits the husband and his mother refer to conversations from time to time about the husband having to repay the loan when asked to do so.  Again there is no suggestion that the wife was present during these conversations.  The first request for repayment came in a letter from solicitors on 19 February 2010, 15 days after the parties had separated[10].

    [10] Affidavit of the husband filed 6/06/2012, para 36; Affidavit of the husband’s mother filed 14/06/2012, para 25

11. The husband’s mother frankly stated that when she became aware of problems in her son’s marriage she instructed her solicitor to issue the demand.  I reject the evidence of Mrs Mena Snr that the reason why she had her solicitor write requiring immediate repayment was the reference in that letter to her circumstances having changed.  There has been no payment made by the applicant in response to that request up to and including the dates of trial.

12. The husband’s mother asks the Court to make an order that the parties pay $73,000 plus interest of 10 per cent calculated on daily rests over 15 years from the matrimonial asset pool.

Discussion

1. In circumstances where an unsecured liability is vague or uncertain, unlikely to be enforced or unreasonably incurred, the Court may determine not to take it into account (In the Marriage of Biltoft (1995) FLC 92-614 at 82,127). The same decision of the Full Court is authority for the proposition that there is no priority between a creditor and a spouse (In the Marriage of Biltoft (supra) at 82,128 – 82,129).

2. It would be unjust to impose on the wife the repayment of a loan to which she was not a party and of which she was unaware.  She had no opportunity to consider repaying the loan that her husband had arranged with his parents.

3. Further the rate of interest became punitive as it increasingly exceeded the commercial rates over the years from 1997. The wife had no chance to consider refinancing at a lower rate.

4. I consider that the husband’s mother had the intention to benefit and assist her son and also, whilst ever his marriage was successful, his wife and children. It was not her intention to impose a financial penalty on him by allowing the loan to run for 13 years then calling for the total amount where interest greatly exceeds principal.

5. I consider that the husband’s mother did describe the money she provided to her son as a loan. The documents brought into existence reflect that. However, her intention was to protect her son’s position as much as her own. I am satisfied that if the marriage had continued the loan would not have been called on and would never have been repaid (see In the Marriage of Petersens (1981) FLC 91-095 at 76,665- 76,666).

6. I am supported in this view by the fact that the husband’s mother did not commence proceedings in the State Courts to recover the money from her son. She could have done so, although with more difficulty after the C Street property passed out of his possession 10 years ago. The personal obligation between the applicant and his parents is a matter for them. On balance I consider it unlikely that the husband’s mother will require repayment to her of various monies said to have been lent, but she may do so. That possibility requires a modest adjustment pursuant to s 75 of the Family Law Act 1975 (Cth) (“the Act”).

7. Accordingly, I find that neither the loan nor the accumulated interest on the loan should be included as a matrimonial liability.  Of course the provision of the funds gives rise to a significant initial contribution on behalf of the husband.  I will refer to that matter later in these reasons.

Second Loan- $77,000

1. On 10 November 1997, the applicant and his mother entered into a Deed of Loan in the sum of $77,000 which was stamped in that year.  This is said to be a second loan and was expressly stated to be “separate and distinct from monies owed by the borrower to the lender under a mortgage in respect of [C Street, A]”[11].

   [11] Affidavit of the husband’s mother filed on 14/06/2012, Annexure ‘D’

2. The loan was to assist the father to purchase his share of a business from his partner, Mr K.  The loan was in similar terms as indicated in a conversation between the husband and his mother as follows[12]:

   I will have…[to] do another loan agreement with the exact terms and conditions that we did with the house at [C] Street…I will also ask for [the loan] to be paid back in full including interest in the future, as well as the loan for [C] Street.

   Sure mum thanks again and yes I’m happy to do another loan agreement between us, and of course I will pay you back both loans when you ask for it.

   [12] Affidavit of the husband’s mother filed 14/06/2012, para 12

3. Again, no repayments have ever been made in respect of this loan and again, there was no action by the husband’s mother to enforce repayment until 19 February 2010.  On that date, solicitors who acted both for the husband and the husband’s mother wrote requesting immediate repayment of the two amounts, together with interest at 10 per cent per annum[13].  

   [13] Affidavit of the husband’s mother filed 14/06/2012, para 26

4. Mrs Mena Snr and her son concede that the wife was not party to these loan discussions.  The husband made a bland statement, “She knew”.  The sole reference to the state of knowledge of the wife is this:

   From my reading of [the wife’s] affidavit I understand that she may deny that monies are owing to me[14].

   [14]Affidavit of the husband’s mother filed 14/06/2012 par 35

5. The application of the husband is that the sum of $655,149, being the combined loans of $150,000 plus accumulated interest, should be regarded as a joint liability of the parties. 

6. The application of the wife is that the Application in a Case filed by the intervener, Mrs Mena Snr, should be dismissed.

Discussion

1. I do not accept that a lump sum of $77,000 was lent in order to enable the applicant to acquire an interest in the business in 1997.  The reference by the husband’s mother to being willing to lend “up to $150,000” suggests that there was a generalised figure chosen for this loan to balance the advance for the purchase of the home at C Street.

2. I do accept that the husband’s mother from time to time advanced sums of money to her son to assist him with the purchase of tools.  On one occasion a “brick of cash” of $ 20,000 or $25,000 was handed over by Mrs Mena Snr to her son.  It is hard to reconcile this injection of cash into the business given that the husband subsequently received no payment for his share of the business when he left.

3. A Court exercising jurisdiction under s 79 of the Act will usually distribute between the parties the net value of their assets, after deduction of all debts. In my view this second debt is also an exception to that general principle.

4. The Court can deal with the property of parties undiminished by debts because a debt does not diminish property until it is paid, or execution is levied on the property.  

5. For the same reasons as for the first loan, I consider the Court should make a division of the assets without taking into account the two debts as matrimonial liabilities.

6. The significance as a contribution on behalf of the husband is somewhat less than the provision of funds for a residence because there is insufficient evidence to identify exactly how much cash was provided and to which assets it could be attributed.

Approach to the division of property

1. The Court has a general power to alter the interests of parties to a marriage in their property and may make such order as it considers appropriate altering the interests of the parties in identified property.  There is an established process for analysis, that is:

   (1)to identify the assets and liabilities and accordingly, a net asset pool;

   (2)to identify the contributions made by each of the parties, directly and indirectly, financially and to the welfare of the family;

   (3)to consider the factors set out in s 75(2) in making the adjustment; and

   (4)to consider whether the outcome is just and equitable in the particular circumstances of the case.

2. The net asset pool was asserted to be as follows in the final Single Balance Sheet:[15]

   [15]Exhibit 6

Ownership			Description	W value	H value
Assets:
1		J	R Street, W	775,000	775,000
2		J	Unit 1 D Street, H	340,000	340,000
3		J	Unit 2 D Street, H	353,000	353,000
4		J	Unit 3 D Street, H	324,000	324,000
5		H	M Pty Ltd trading as MM Services plant and equipment	38,616	38,616
6		J	Household contents at R Street, W	7,215	7,215
7		J	Contents at R Street: jackhammer	300	300
8		H	Contents at D Street, H	9,910	9,910
9		H	St George Bank account number …46	32,690	32,690
10		W	Newcastle Permanent account number …25	139	139
11		H	Honda motor vehicle	7,500		7,500
Total	$1,888,370		$1,888,370
Addbacks:
12	H		Jetski	7000			3,860
13	H		Monies withdrawn by husband from St George accounts following separation	50,645			40,735
14	H		Interest on portfolio loan	11,235.59			11,235.59
15	H		Tax refund attributable to cohabitation	1,385			1,385
Total	$70,265.59
Liabilities:
16	J		St George Portfolio Loan …37 @ 31/05/3012	394,169.00			394,169.71
17	J		St George Portfolio Loan …18 @  est	54,520.00			54,520.00
18	H		Two loans from husband’s mother to husband	0.00			655,149
19	J		CGT on sale Unit 1 D Street) H  )
20	J		CGT on sale Unit 2 D Street ) H  )	NIL			94,000
21	J		CGT on sale Unit 3 D Street  ) H  )
22	J		CGT on sale R Street, W	NIL			8,000.00
Superannuation[16]:
Member			Name of Fund
23	H		X Superannuation	28,967.26
24	W		Y Superannuation	10,852			10,852
25	W		X Superannuation	4,512			4,512
TOTAL	$ 15,364			$ 44,331.26

[16]  Parties agreed that superannuation should be included in the general asset pool

Notes to the asset pool

1. Item 12:  I prefer the husband’s value of the jetski ($3,860), which takes into account a diminution in value proportionate to the costs of the recent repairs to the jetski[17].

   [17] Exhibit 6

2. Item 13:  I note that when the matter came before me the parties had reached agreement as to the value of the monies the husband had withdrawn from St George Accounts following separation. That agreed amount is $54,520.

3. Item 16:  I note that there is a discrepancy between the parties of 71 cents. That amount is insignificant and thus I have rounded the husband’s figure down so as to equal that of the wife’s.

4. Item 18:  The loans from the Intervener together with interest have been excluded as liabilities

5. Items 19 – 21:  The figures for capital gains tax in items 19 to 21 of the Balance Sheet have been excluded from consideration.

6. Neither party seeks an order for the sale of the properties at D Street, H, other than as a default if the husband does not reduce the mortgage on the family home.  The wife seeks to transfer the interest she has in the D Street units to the husband.  In those circumstances there is no certainty that the properties will be sold.  The husband’s evidence was that in the event that he sold the properties he would do so in the most tax effective way.  Accordingly, it would likely be a number of financial years before any sale eventuated.  It would be an injustice to allow a fixed sum for capital gains tax when the sale price of the properties is unknown, the relevant income of the husband is also unknown and there is a real possibility that the units will not be sold at all.

7. Item 22:  The figure for capital gains tax at item 22 of the Balance Sheet has also been excluded from consideration.

8. In the event that the wife sells the matrimonial home in W, there is complete uncertainty as to the sale price and the wife’s income.  It is her present intention to remain living in the home with the children as her primary residence. Thus there is no certainty that a sale will occur.

Revised Balance Sheet

1. Accordingly I find the net asset pool to be as follows:

Ownership			Description	W  value	H  value
Assets:
1		J	R Street, W	775,000		775,000
2		J	Unit 1 D Street, H	340, 000		340, 000
3		J	Unit 2 D Street, H	353, 000		353, 000
4		J	Unit 3 D Street, H	324, 000		324, 000
5		H	M Pty Ltd trading as MM Services plant and equipment	38,616		38,616
6		J	Household contents at R Street, W	7,215		7,215
7		J	Contents at R Street, jackhammer	300		300
8		H	Contents at D Street, H	9,910		9,910
9		H	St George Bank account number …46	32,690		32,690
10		W	Newcastle Permanent account number …25	139		139
11		H	Honda motor vehicle	7,500		7,500
Total	$1,888,370		$1,888,370
Addbacks:
12	H		Jetski	7,000		3,860
13	H		Monies w/drawn by husband from St George accounts following separation	54,520		54,520
14	H		Interest on portfolio loan[18]	11,236		11,236
15	H		Tax refund attributable to cohabitation	1,385		1,385
Total	$71,001
Liabilities:
16	J		St George Portfolio Loan …37 @ 31/05/3012	394,169		394,169
17	J		St George Portfolio Loan …18 @  est	54,520		54,520
Total	$ 448,689		$ 448, 689
Superannuation[19]:
Member			Name of Fund
23	H		X Superannuation	28,967.26
24	W		Y Superannuation	10,852.00		10,852
25	W		Y Superannuation	4,512.00		4,512
Total	$ 44,331.26
Assets	1,888,370
Addbacks	71,001
Superannuation	44,331
Less Liabilities	448,680
Total	$1,555,022

[18] The amount of $11,235.59, as appears in the parties balance sheet has been rounded up to the nearest dollar

[19]  Parties agreed that superannuation should be included in the general asset pool

2.  Contributions: Financial and to the welfare of the       family

Initial contributions

1. When the parties were married in February 1998, the husband had the following assets:

   (a)      House at C Street  $134,000

   (b)      Mortgage on C Street  -$ 58,000

   (c)      Money in bank   $ 57,350

   (d)      3 year old Toyota motor vehicle

   (e)      Full set automotive tools

   (f)       Jetski purchased in 1997 for $13,000.

2. There was no record of the husband’s savings between June 1997 and February 1998.  The possibility exists that the savings were part of business income and/or advances by the husband’s mother. The husband conceded that the relevant account was his business trading account, out of which he paid tax and other business related expenses.  It is likely that funds in the bank are reflective of the husband’s position in his business rather than true savings. 

3. The husband was working fulltime in his own business and was probably generating a reasonable income.

4. The wife had the following assets:

   (a)Shares in Commonwealth Bank (sold during marriage for $5,000).

   (b)Holden motor vehicle (sold during marriage for $5,500).

   (c)Modest superannuation.

   (d)Yamaha organ which had an insurance payout of $15,000 towards the end of the marriage.

   (e)Household goods.

5. The wife had a Higher Education Contribution Scheme (HECS) debt of $3,200 and a debt in respect of her car of about $2,500.

6. On balance, it is clear that the initial position of the husband was a much stronger one financially.  I give significant weight to the contribution by the husband or on his behalf, of a house with equity of about $76,000.  This property was the parties’ family home until July 2002, a little over the first four years of the marriage.

7. To the extent that there was a repayable loan to the husband’s mother, I consider that the applicant was confident that it would not be called on by his parents whilst he needed their ongoing support.  

Contributions during the relationship

1. During the period from 1998 to 2010 both parties worked exceedingly hard. The wife taking on the greater share of the care of the children and also working both independently and in the business’s run by the husband.  The husband worked long hours and initiated the purchase of the three properties in D Street, H, which are part of the asset pool.

2. The husband’s mother assisted the parties by putting her son in a position of owning his own home and having an interest in a business.  She gave cash sums to her son during the course of the marriage.  On balance I consider that both parties benefited from that money.  The initial contribution by the husband outweighed that of the wife, although contribution during the marriage was equal.

Post separation

1. The parties’ mortgage met many of their joint expenses.  The husband paid very little by way of child support so that the financial burden of the children as well as their day to day care fell mostly on the wife.

2. Over the course of the relationship, the husband had a significant initial contribution providing the platform the for the parties capacity to go on borrowing and adding to assets.  By the date of separation, with the parties’ equal contributions over 12 years, I consider that difference created by initial contribution had reduced to 70/30 in favour of the husband, and by the date of hearing to 65/35 in favour of the husband.

3.  Adjustments pursuant to Family Law Act

1. I take into account the following matters:

1. Age and Health

1. The parties are aged 39 and 36 respectively and are both in good health.

1. Income

1. The wife has an income of $690 per week gross as an administrative assistant.

2. The husband declared an income of $1,372 as at 5 June 2012.  He has a capacity to earn a greater income than the wife based on his past earning capacity.  The wife does not wish to work full time whilst the party’s children are still young in order to meet their needs for care and supervision.

3. The majority of the day to day care of the children falls on the wife.

   Both parties have a responsibility to support the children however to date the child support paid by the husband has been in the order of $67 per week in total.  That fact is reflected in the assessment of post separation contributions.

4. The current rate of child support is a low one in contrast with the husband’s capacity to earn income.

5. This was a marriage of 12 years to the date of separation.  The wife gave up full-time employment with the birth of the parties’ first child and she has not further developed her skills or been in a position to obtain employment consistent with her university education.  Both parties wish to continue their role as parents and the mother is committed to working around the hours and obligations of the children, still both in primary school.

6. I consider there should be an adjustment of 15 per cent in favour of the wife on account of her lower capacity to earn income and her commitment to part time work for many years due to the age of the children.

(iii)  Standard of Living

1. The parties are now divorced and it is reasonable for each of them and their children to have the reasonable standard of living that they achieved during the course of their marriage.

2. The wife will receive the benefit of continuing to live in the family home if she can meet reduced mortgage payments. If not she will no doubt purchase alternate accommodation and will continue in part-time employment.

3. The husband can continue in his present accommodation

(iv)  Other considerations

1. The husband has been put in a position by his mother’s generosity to make many financially successful moves to acquire further assets together with his wife.  

2. I have excluded the loans from the asset pool and found that it is likely that the applicant will not be required to repay the loans in full or at all.  However, there may well be some kind of accounting between mother and son for the generous financial assistance which the husband has been given credit for in these proceedings, and there should be a modest adjustment of five per cent in his favour to allow for that contingency.

3. Accordingly the ultimate percentage division is 55 per cent to the husband 45 per cent to the wife.

4.  Is the outcome just and equitable?

1. The outcome of these proceedings will be that the parties retain or acquire the following assets.

2. The husband:

Item 2	Unit 1 D St, H	340,000.00
Item 3	Unit 2 D St, H	353,000.00
Item 4	Unit 3 D St, H	324,000.00
Item 5	M Pty Ltd t/as MM Services Plant & Equipment	38,616.00
Item 7	Contents at R Street: jackhammer	300
Item 8	Contents at D St, H	9,910
Item 9	St George Account no. …46	32,690
Item 11	Honda motor vehicle	7,500
Item 12	Jetski	3,860
Item 13	Monies withdrawn by husband from St George accounts	54,520
Item 14	Interest on Portfolio Loan	11,236[20]
Item 15	Tax refund attributable to cohabitation	1,385
Item 23	X Superannuation	28,967
Payment from Wife Total net assets	97,960       $1,303,944
Less St George Portfolio loans Net total to Husband	448,689         $ 855,255

[20] The amount of $11,235.59, as appears in the parties balance sheet has been rounded up to the nearest dollar

1. The wife:

Item 1	R Street, W	775,000
Item 6	Household contents at R Street, W	7,215
Item 10	Newcastle Permanent Acc No. …25	139
Item 24	Y Superannuation	10,852
Item 25	X Superannuation	4,512
Total net assets Less payment to Husband Net total to Wife	$ 797,718              97,960          $699,758

1. Accordingly, the wife will retain:

   (a)the property at W;

   (b)the contents of the W property;

   (c)a nominal bank account; and

   (d)her interests in superannuation of $15,364

   She will have the obligation to raise funds to pay to the husband.

2. The husband will retain:

   (a)the three units in D Street, H;

   (b)the chattels of M Pty Ltd;

   (c)the contents of his property in the unit he lives in at D Street;

   (d)a jackhammer presently at R Street;

   (e)a St George account;

   (f)the Honda motor vehicle;

   (g)the proceeds of sale of the jet ski;

   (h)the balance of monies withdrawn from the St George account following separation;

   (i)interest on the portfolio loan;

   (j)a tax refund;  and

   (k)his superannuation.

   He will have the obligation to refinance or discharge the two St George Portfolio Loans.

3. The husband has the capacity to rebuild assets at a greater rate than the wife. He is presently accommodated in one of the D Street units and could continue to be so.  He has the capacity to borrow against the units rather than sell them.  

4. I consider that the outcome is a just and equitable one in the circumstances of the case and make orders accordingly.

I certify that the preceding eighty one (81) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cleary delivered on 12 December 2012.

Associate: 

Date:  12 December 2012