Mistle & Mistle
[2010] FamCA 29
•22 January 2010
FAMILY COURT OF AUSTRALIA
| MISTLE & MISTLE | [2010] FamCA 29 |
| FAMILY LAW – PROPERTY – parties have suffered major medical conditions during the marriage – where parties have received significant financial gifts from their parents – initial contributions – post separation inheritance – source of funds to discharge mortgages - post separation support of adult children who are not self supporting – wife’s future earning capacity – s 75(2) factors – very substantial adjustment in favour of the wife FAMILY LAW – EVIDENCE – SECTION 136 of the Evidence Act - the information which is provided to single experts appointed by parties pursuant to the Rules of Court - Rule 15.54(2) - Rule 15.54(3) - wife provided a history to each of the medical experts retain by the parties jointly for the purpose of obtaining a report - history provided by the wife to each doctor was not authorised by the husband - each party clearly expected that the wife would subject herself to physical examination |
| Family Law Act 1975 (Cth) Evidence Act 1995 (Cth) Family Law Rules 2004 |
| Ferraro and Ferraro (1993) FLC 92-335 Hickey and Hickey (2003) FLC 93-143 McLay and McLay (1996) FLC 92-667 |
| APPLICANT: | Ms Mistle |
| RESPONDENT: | Mr Mistle |
| FILE NUMBER: | SYC | 4112 | of | 2007 |
| DATE DELIVERED: | 22 January 2010 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | Le Poer Trench J |
| HEARING DATE: | 10 & 11 August, 28 October 2009 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Jackson |
| SOLICITOR FOR THE APPLICANT: | Shepherds the Family Lawyers |
| COUNSEL FOR THE RESPONDENT: | Mr Simpson SC |
| SOLICITOR FOR THE RESPONDENT: | N/A |
Orders
On or before the close of business on Friday 5 March 2010 the wife is to pay the husband the sum of $27,230.
In exchange for the payment required in Order 1 hereof the husband is to deliver to the wife a signed transfer of his interest in the property known as B property being the whole of the land more particularly described in Certificate of Title Folio Identifier … (“the matrimonial home”). The transfer is subject to the mortgage registered on or secured against the property and the wife is to indemnify the husband against any payment required of him by the mortgage.
Within 14 days of the date hereof the wife will sign all documents and do all things necessary to transfer to the husband her right title and interest in Mistle Pty Limited and T Pty Limited and resign from all positions held by her in the said companies.
The husband is to indemnify the wife and keep her indemnified against any proceedings, suits, or claims of whatsoever nature in relation to or arising out of the wife’s shareholding or positions in Mistle Pty Limited and T Pty Limited.
Each party be declared the sole and beneficial owner of any other property presently in their possession or control.
For the purpose of this Order “the Fund” means the Mistle Superannuation Fund.
(i)Within 30 days of the date of the making of these Orders the wife will do all acts and things and sign all documents and vote in favour of all resolutions to transfer her superannuation entitlements in the Fund as at the date hereof to another fund as notified by the wife in writing;
(ii)Thereafter the wife shall do all acts and things and sign all necessary documents submitted to her by the husband so that she ceases to be a member of the said fund;
Each party is to be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these orders.
The husband has leave to apply to the court for an order for sale of assets of the wife in the event that she does not pay to him the sum of $27,230 as provided for in Order 1 hereof.
Each party has liberty to apply to seek further orders necessary to implement the orders made herein.
All outstanding applications are otherwise dismissed.
IT IS NOTED that publication of this judgment under the pseudonym Mistle & Mistle is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)
| FAMILY COURT OF AUSTRALIA AT SYDNEY |
FILE NUMBER: SYC 4112 of 2007
| MS MISTLE |
Applicant
And
| MR MISTLE |
Respondent
REASONS FOR JUDGMENT
Introduction
The parties in this case are both professional practitioners. Both have suffered significant medical conditions during their 22 or 23 year marriage. Both have received significant financial assistance from their parents during the marriage. The husband has, since the separation, received an inheritance from his mother which now has a value of about $9.5 million. The assets acquired by the parties during the marriage have a total value of about $4.2 million and that total includes superannuation which is valued at $684,000.
The wife is currently working only 20 hours per week and says she cannot work any more hours because of her medical condition.
The children, now all adults, are undertaking tertiary education and the parties have not agreed how they will each contribute to the support of the children until they are self supporting. The children now live with the wife.
At the commencement of the trial I was provided with the following information.
(a)The chronology in exhibit X1 was prepared prior to the affidavits relied upon by the parties in the hearing. The parties agreed that the disputes on the chronology give way to the affidavits in identifying issues of fact.
(b)The husband did not oppose the wife being permitted to rely upon a minute of order filed by her in the court and marked as exhibit W1 (in lieu of her Response to Final Orders).
(c)The wife did not press any portion of the affidavit material objected to by the husband in his written list of objections. Those objections were provided to my Associate by email on 4 August 2009.
(d)The husband did not press part of paragraph 10(a) and any of paragraph 64 of his affidavit. I note other objections were taken by the wife to the husband’s affidavit which were ruled upon by me.
In the preparation of this matter it was clear to me that inspection of documents would satisfy many of the areas of concern which the wife, in particular, had about the husband’s financial circumstances during the marriage and since. There were clear issues between the parties as to the amounts received by each from their parents during the marriage and since. Those issues could have been substantially resolved by the production of documents.
It was clear to me at one time during the course of the cross-examination of the husband by the wife’s counsel that inspection of documents provided by the husband had not taken place. To that extent it was a great disappointment to the court.
By the time the hearing commenced the parties had a very clear idea of what the balance sheet would contain at the conclusion of the hearing. The issues were very limited. It was not a hard case, in my view, for the parties to resolve.
I also noted the agreement of the parties on 11 August 2009 that the parties’ superannuation was to be treated as an asset in the sense that it was to be included in the pool of parties assets and liabilities. (i.e. there is to be one pool rather than two pools to be considered). Clearly this does not negate the requirement to consider the contributions made by the parties to the superannuation funds.
On the last day of the trial I made the following orders:
IT IS ORDERED THAT
1.The parties are to email to my Associate a further agreed balance sheet by 12 August 2009 at 9.30am.
2.By the close of business 12 August 2009 the husband is to tender any further documents he wishes to rely upon.
3.The husband is to prepare an agreed schedule of his income during the marriage and since. Once the schedule has been signed it is to be provided by email to my Associate. The Court notes this schedule is anticipated to be available by 12 August 2009.
4.The husband is to provide written submissions within fourteen (14) days hereof.
5.The wife is to provide any reply within seven (7) days thereafter.
6.The written submissions are to also address s 136.
Note: two further issues-
1.In relation to the 11 items on page 9 of the husband’s affidavit, is there any evidence he received those funds?
2.In relation to items 1, 2, 3 and 4 in paragraph 29 of the husband’s affidavit, is there any documentary evidence the husband received those funds?
I noted on 11 August 2009 that apart from the issues noted in the orders made that day, there was no issue as to the total of funds alleged to be received by the husband from his mother.
On 21 August 2009 I caused to be sent to the wife’s counsel, Mr Jackson, (cc to the husband’s solicitor) an email which referred the “further issues” identified on 11 August 2009 (as above recited) requesting confirmation that the notation was correct in identifying the item numbers and page references. The issue had been identified by the wife’s counsel on 11 August 2009. I received a reply on 25 August 2009. As a result I caused each counsel to be notified by email that the further issues identified on 11 August 2009 should read as follows:
“1.In relation to the 11 items on page 9 of the husband’s affidavit, is there any (corroborative) evidence he received those funds?
2.In relation to items 1, 2, 3,and 4 in paragraph 29 of the husband’s affidavit, is there any documentary evidence the husband received those funds?”
Each of the parties provided their written submissions on 28 August 2009.
On 1 October 2009 the husband sent an email to my Associate. That raised issues as to the orders sought by the husband. I caused copies of that email to be sent to the husband’s solicitor and to the wife’s solicitor. I directed that further submissions could be made in relation to further matters the husband wished to make submissions upon. I received a request from the husband’s solicitor to extend the time for such submissions to 23 October 2009 as the husband’s counsel was away. I granted that application.
Subsequently the husband was no longer represented by solicitors and acted for himself. He sought a re-listing which occurred on 28 October 2009. Having heard the husband’s application to re-open the case I made the following orders:
IT IS ORDERED THAT
1.I grant leave to the husband to re-open the case for the purpose of tendering a letter from Legal Force Specialist Debt Collectors dated 9 October 2009 in relation to outstanding rates in relation to the [B] property and that for that purpose that document be marked Exhibit H9 in the hearing.
2.The husband’s application otherwise be dismissed.
3.The husband pay the wife’s costs of these proceedings in the sum of $1,000. Payment is to be made within fourteen (14) days hereof to the solicitor for the wife.
The Orders Sought by Each Party
The wife moved on a “Minute of Order” which she tendered without objection during the trial (Exhibit W1). It was as follows:
ORDERS SOUGHT BY WIFE
1.The Husband shall forthwith after the making of these Orders do all such acts and things and sign all such documents as may be required to transfer to the Wife all of his right title and interest in the real property situated at and known as [B property] being the whole of the land more particularly described in Certificate of Title Folio Identifier […] (“the Real Property.
2.That the Husband pay $744,501 to the Wife.
3.That in default of payment pursuant to Order 2 above, the Husband and Wife shall forthwith do all acts and things and sign all necessary documents to effect a sale of the Real Property known as and situated at [H] in the State of New South Wales (“[H] Real Property”) and by way of consequential arrangement:
(a)The listing price for the [H] Real Property shall be as agreed between the parties and if there is no agreement then the listing price shall be as advised by a Valuer nominated by the President of the Real Estate Institute of New South Wales.
(b)The Husband and the Wife shall make all such arrangements and do all such acts and sign all such documents and pay all moneys equally, necessary to procure a sale by public auction of the [H] Real Property upon the following terms:
(i)The Auctioneer shall be as agreed upon between the parties and if there is no agreement then the Auctioneer shall be as nominated by the President of the Real Estate Institute of New South Wales.
(ii)The auction shall take place within three (3) months after the deadline date for sale by private treaty.
(iii)The reserve price shall, unless agreed upon by the parties, be as proposed by the Auctioneer.
(iv)The Husband and the Wife shall each pay and be responsible for payment of one half of auction expenses payable before the [H] Real Property is auctioned.
(v)In the event that the [H] Real Property is not sold by auction or by private negotiation within fourteen (14) days after the said auction, then the Husband and the Wife shall do all such acts and sign all necessary documents and shall pay all moneys equally necessary to procure a second auction within a further five (5) weeks of that date otherwise upon the same terms and conditions as applied to the first auction.
4.On completion of the sale pursuant to Order 3 above, the proceeds of the sale shall be applied as follows:
(a)To pay all costs, commissions and expenses of the sale and to pay any Council and Water Rates and maintenance levies outstanding in respect of the Real Property.
(b)To discharge the mortgage and any other encumbrances affecting the Real Property.
(c)The balance then remaining to be divided in the proportions of:
(i)70% thereof to the Husband.
(ii)30% thereof to the Wife, plus interest on such amount calculated pursuant to the Family Court Rules.
5.That the Husband shall indemnify the Wife in respect of any liability she may have arising from or in relation to [T] Pty Limited including but not limited to [T] Pty Limited as trustee for the [Mistle] Family Trust, or arising from [Mistle] Pty Limited.
6.
(a)That the Wife shall be entitled within 21 days of the making of this Order to roll out all of her interest and entitlements in the [Mistle] Superannuation Fund.
(b)That the Husband shall indemnify the Wife in respect of any liabilities arising from the [Mistle] Superannuation Fund.
(c)The Husband warrants that the wife’s membership in the [Mistle] Superannuation Fund has a value of not less than $52,400.
7. That unless otherwise specified in these Orders:
(a)Each party shall be solely entitled to the exclusion of the other to all other property and chattels of whatsoever nature and kind in the possession of such party at the date of the making of these Orders and that for this purpose bank accounts are deemed to be in the possession of the person whose name appears on the Bank’s record thereof, insurance policies are deemed to be in the possession of the party named as the life insured, superannuation entitlements are deemed to be in the possession of the person who is named as the worker whose age or working future provides the conditions for payment out of such entitlements and the chattels in the [B] Real Property are deemed to be in the possession of the Wife.
(b)Each party shall be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these Orders.
The husband moved on a “Minute of Order” which he tendered without objection during the trial and marked as Exhibit H3. It was as follows:
1.That within six weeks of the date of court Order the husband sign all documents and do all things necessary to transfer to the wife the property known as [B property] and that simultaneously with the transfer the wife pay to the husband a sum representing an adjustment between the parties whereby the wife has the benefit of 60% of the property of the parties including superannuation after allowance is made in respect of the property to be retained by each party;
2.Simultaneously with the transfer, as provided, in Order 1 the parties sign all documents and the wife pay all monies to discharge the mortgages registered against the property [at B];
3.If the wife fails to make the payment as provided in Order 1 then the parties will forthwith sign all documents and do all things necessary to sell the property known as [B property] by auction no later than three (3) months from the date of court Orders as follows:-
(a)With an agent as agreed between the parties and failing agreement within 14 days as appointed by the President for the time being of the Real Estate Institute of New South Wales. The parties will share the cost of such appointment;
(b)That the parties instruct a solicitor as agreed between the parties and failing agreement within 14 days as appointed by the President for the time being of the Law Society of New South Wales;
(c)The auctioneer shall be as agreed between the parties and failing agreement as appointed by the selling agent of the property;
(d)The reserve price of the property at auction shall be as agreed between the parties and failing agreement as nominated by the auctioneer;
(e)The wife shall cooperate in every way with the agent including (without limiting the generality of the foregoing):-
(i)Making the key available to the agent;
(ii)Allowing inspection of the property at all reasonable times requested by the agent;
(iii)Doing or saying nothing to him to hinder or prevent the sale be effected;
(iv)Ensuring the property, including the grounds, are in a neat and clean condition at the time of inspection by the agent or respective purchasers;
(f)The proceeds of sale shall be as follows:-
(i)In payment of all mortgages registered against the said property;
(ii)In payment of agent’s fees and legal fees if any;
(iii)In payment to the wife of a sum representing an adjustment to her of 60% of the property of the parties including superannuation after allowance is made in respect of the property to be retained by each party and the balance to the husband.
4.Within 14 days the wife will sign all documents and do all things necessary to transfer to the husband her right title and interest in [Mistle] Pty Limited and [T] Pty Limited as resign from all positions held by her in the said companies;
5.That the husband will indemnify the wife and keep her indemnified against any proceedings, suits, or claims of whatsoever nature in relation to or arising out of the wife’s shareholding or positions in [Mistle] Pty Limited and [T] Pty Limited.
6.Each party be declared the sole and beneficial owner of any other property presently in their possession or control;
7.For the purpose of this Order “the Fund” means the [Mistle] Superannuation Fund.
(i)Within 30 days of the date of the making of these Orders the wife will do all acts and things and sign all documents and vote in favour of all resolutions to transfer her superannuation entitlements in the Fund as at 30 June 2009 to a retain fund or to another self-managed fund as notified by the wife in writing;
(ii)Thereafter the wife shall do all acts and things and sign all necessary documents submitted to her by the husband so that she ceases to be a member of the said fund;
(iii)In the alternative to paragraph 7 the wife do all acts and things necessary to facilitate a splitting order whereunder the whole of her superannuation entitlements in the fund are transferred to the husband and there be an adjustment of the property of the parties consistent with Order 1 hereof to reflect the husband's receipt of that interest.
The Issues
The issues of fact to be determined were identified by the parties and myself during the trial. They are as follows:
a)The value of each parties initial contributions;
b)The source of funds used by the wife to discharge the mortgages on her W property after the marriage;
c)The post separation contributions made by each party to the support of the children;
d)The quantum of the gifts made to each of the parties by each of their mothers during the marriage and since;
In relation to this issue I note the husband does not contest the wife’s evidence as to the quantum of the gifts she says she received from her mother.
In relation to the husbands’ evidence as to the gifts he asserts he obtained from his mother the wife questions the gifts listed as items 1,2,5 & 6 set out in paragraph 29 of his affidavit and at page nine of his affidavit there are 11 items listed. The wife raises an issue as to the evidence provided by the husband to establish that he received those funds.
e)The wife’s ability to earn income in the future;
f)The financial resources of the wife arising from the assets of her mother or the operation of a trust.
Additional Issues identified by the wife on 11 August 2009 and subsequently confirmed by email on 25 August 2009:
g)In relation to the 11 items on page 9 of the husband’s affidavit, is there any (corroborative) evidence he received those funds?
h)In relation to items 1, 2, 3, and 4 in paragraph 29 of the husband’s affidavit, is there any documentary evidence the husband received those funds?”
Background Facts
I make the following findings of fact which arise from either exhibit X1, the balance of the exhibits, the affidavit evidence, or the oral evidence. To the extent that I have accepted a particular fact asserted by one party over a different version asserted by the other it is because I have concluded that version is more reliable. As to my findings on credit please see later in these reasons.
In exhibit X1 there are issues of fact in relation to many of the entries. During the course of the hearing and in the submissions many of the fact issues were not canvassed or addressed. This was, in my view, a proper approach as a determination of many issues would not have impacted upon the final determinations one way or the other to any appreciable degree. I will make specific findings in relation to the area’s which the parties identified as important in the running of the hearing.
The husband was born in 1947 and is 62 years of age.
The wife was born in 1954 and is 55 years of age.
The parties were married in 1983 and separated in July 2006.
There are three children of the marriage: S born in 1985; T born in 1987 and D born in 1989. Although adults, the children live with the wife in the former matrimonial home at B.
Prior to the marriage, both parties had qualified and were working as medical practitioners. The husband practised as a specialist from about 1981 and the wife practised as a general practitioner having worked in a Hospital.
At the time of the marriage, each of the parties had substantial assets and I will refer to this later as I determine the assets of the parties at the date of marriage. The parties had no cohabitation prior to their marriage in December 1983.
In broad terms, the husband owned a property in Victoria; a property at F; a motor vehicle; furnishings in professional rooms and savings. The wife owned a property at W; a motor vehicle; some shares and savings.
Following the marriage, the wife took up work as a general practitioner in Sydney.
At the time of the marriage the wife’s property at W was subject to two mortgages: one in the sum of $26,000 and the other in the sum of $47,000. In 1984 the wife discharged the mortgage for $26,232. In 1985 the wife discharged the mortgage for $47,066. There is an issue between the parties as to whether the husband contributed approximately $30,000 towards the discharge of those mortgages.
In August 1985 the husband sold his Victorian property for $215,000. The mortgage was discharged and the husband received about $125,000.
In 1985 the husband purchased a property in G for $124,000 (“the G property”). In the same year, the husband purchased another property at A for $260,000. Both those purchases were secured by way of advance of $250,000 collectively.
In 1985 the husband bought a property in Sydney for $134,999 and borrowed $220,000 secured against his F property.
In April 1986 the parties caused the company T Pty Limited to be incorporated. The parties are the shareholders and directors of the company. In that same year, the company purchased a property at L for $440,000.
In 1987 the wife purchased commercial premises from which to conduct her medical practice. The property is at O. The property cost $145,000.
In December 1987 the parties purchased in the wife’s name a property at V for $392,000. The funds were borrowed from the National Australia Bank.
In mid-1988 the husband purchased a property in regional NSW for $590,000.
In November 1989 the parties purchased the former matrimonial home at
B for $880,000. The whole of the purchase price was borrowed. At the same time as the B property was purchased the parties sold a number of their respective properties and applied those proceeds to reduce the mortgage on the B property or towards the purchase of same. The husband sold his F property for $340,000 and the G property for $310,000. The wife sold her W property for $388,000.
In December 1989 T Pty Limited purchased a property in Newcastle for $389,000. In 1990, the husband sold two of the A properties.
Towards the end of 1990 T Pty Limited sold the L property for $460,000. In 1991, T Pty Limited refinanced the Newcastle property.
In December 1991 the wife’s property at V was sold for $480,000.
In October 1991 the husband was admitted to Hospital for six days and then to the Northside Clinic for one week. His ability to work as a medical practitioner was inhibited and for a period of 18 months the wife took on an additional job working on Saturdays at P Hospital.
In 1992 T Pty Limited sold the Newcastle property for $420,000.
From 1992 to 2008 the wife’s mother worked in her surgery as a secretary/ receptionist. The wife says she was not paid.
In June 1994 the company Mistle Pty Limited was incorporated (This company is named Mistle Pty Limited in the final balance sheet which I consider more reliable than exhibit X1). The husband and wife were and remain the sole shareholders and directors in the company. The company administered the husband’s practice and employed the husband. In that same year, the Mistle Superannuation Fund was established with T Pty Limited as the trustee. In addition, the Mistle Family Trust (this entity is described as Mistle Family Trust in the final balance sheet which I consider as more reliable than exhibit X1) was created and again, T Pty Limited was the trustee.
In mid-1994 T Pty Limited purchased the husband’s surgery at Suite J for $84,280.
Exhibit X1 sites as an agreed fact that in February 1996 the company X & Y Mistle Pty Limited was incorporated. I consider this to be an error or not relevant to the final determination.
From about 1997 the husband obtained an owner-builder permit to carry out renovations to the B property. One and a half stories were added to the property. The cost of the addition was about $340,000.
On 6 June 1998 the husband was hospitalised for 23 days.
In June 1999 the wife received an inheritance of $10,000.
In October 1999 T Pty Limited purchased a property at U, for $27,250. In the same year the company purchased a property at K for $37,500.
In April 2001, T Pty Limited purchased an Island property for $24,000.
The husband sold his Sydney property in either 1992 or 1997; the parties disagree about that date. Likewise, the husband sold his regional property in either 1990 or 2002.
In about September 2002 the wife was diagnosed with cancer and was treated with chemotherapy. The wife did not work for approximately four months.
In about October 2003 the husband was again hospitalised for four days.
In March 2004 the husband purchased a second Island property for $75,000 (prefer Husband’s version). In April 2004 the husband purchased a third Island property for $115,000.
In June 2006 the husband was again admitted to a psychiatric private hospital.
In July 2006 the parties separated when the husband left the former matrimonial home. The husband claims, however, that the parties were separated under the one roof from about January 2005. No specific evidence was addressed to this issue and so I accept the separation took place on about 21 July 2006.
In November 2006 the husband sold the third Island property for $90,000.
In July 2007 the first Island property owned by T Pty Limited was sold for $145,000.
In August 2007 the husband’s mother died. The husband was the sole beneficiary and the property inherited by the husband now has a value in excess of $9.5 million.
The parties are at issue as to the contributions made by each of them towards the support of the children post-separation.
Credit
The Wife
The wife provided the following submission on credit.
Credibility
1.The different versions impact upon the credibility of the Husband, whereupon if there is any factual dispute between the parties, the Court should accept the version presented by the Wife.
2.To a more limited extended, the Court should not give any weight to some of the alleged payments being made on behalf of the Husband in relation to the impact made on the parties’ matrimonial property arising from the purported payments referred to by the Husband at sub-paragraphs 29 (1), (2), (3) and (4) of the Husband’s affidavit sworn 4th June 2009.
3.Reference has already been made to the $40,000 purported paid to Medfin, (dated 15 August 2006), which is apparently referred to at subparagraph (v) of paragraph 29 of the Husband’s affidavit sworn 4th June 2009. The Husband testified under cross-examination that this referred to the Medfin expenditure. However, a Medfin expenditure is now being relied upon as an existing liability, (see the ‘Schedule of Property’ of Parties’, (which was emailed to his Honour’s Associate on 12 August 2009)).
4.The Husband has failed to explain whether or not there are in fact two different Medfin liabilities. The Husband’s belated affidavit which was sought to be relied upon after the close of his case sworn 12 August 2009, annexure “E”, (referable to the Medfin expenditure), does not appear to relate to any document which does not suggest that the Husband has either an interest nor a debt with Medfin. The statement of account annexed as annexure “E” makes no mention of the Husband.
5.There is also no evidence that verifies the specific payment of $2,233.76 in relation to the Husband’s claim of insurance to the property located at [B].
6.Therefore, the Wife accepts the payments of all but $42,233.76, in relation to the payments that were made originally from the Husband’s mother during a period of 8 days during the calendar month of August 2006, and which are set out at the top of page 9 of the Husband’s affidavit sworn 4th June 2009.
7.Ultimately, it is the Wife’s position that the contributions made by the parties’ respective mothers were roughly equal.
Conclusion on credit of the wife
The wife was not a good witness. She had a tendency to either not answer the particular question asked of her or alternatively to excurse into areas which did not address the question. I spoke to her about this aspect of her presentation on at least two occasions. Frequently she said she did not know the answer to questions which it ought to be reasonably assumed she would have known the answer given her obvious intellectual level and general experience in life and the work place. The wife left me with the clear impression that she was very bitter about the marriage and her current circumstances. I was left with a concern that her memory may have been clouded by her emotional response to circumstances which arose during the course of the marriage and since.
I had a concern about the wife seriously considering the questions she was asked. An example of this arose during cross-examination on the issue of the single experts report provided by Professor LN, a consultant haematologist. There had been an issue between the parties about the content of Professor LN’s report on the basis that he professed to give an opinion outside of his specialty. An application was made by the husband under s 136 of the Evidence Act 1995 (Cth) to strike out part of the report.
In the questioning of the wife she was asked about the letter of instruction sent to Professor LN by the parties solicitors. She was asked whether she read that letter. She said she had read the letter. Shortly thereafter she denied that she had read the letter. When I asked her why she had earlier told me she read the letter of instruction she said she was “stressed and overwhelmed”.
Having considered the totality of her evidence and her presentation in the witness box I concluded that she was not as reliable a witness as the husband. Unless I specifically state that I have preferred her version of the evidence in relation to a controversial fact it is to be understood that I have accepted the evidence of the husband.
The Husband
The husband presented as a straight forward and unemotional witness. He readily conceded matters which were put to him. There was nothing about his evidence both written and oral which gave me cause for concern about his recollection or that his memory might be distorted by emotional fallout from the breakdown of his marriage. I prefer the evidence of the husband to that of the wife where there is conflict unless I have specifically determined to the contrary in relation to particular facts.
The Balance Sheet
The parties tendered during the trial a draft balance sheet which was marked as Exhibit X2 and later as X3. On the last day of the trial (11 August 2009) I made directions for the filing of written submissions and also for the parties to jointly provide an agreed updated balance sheet. I here set out that balance sheet:
SCHEDULE OF PROPERTY OF PARTIES:
PROPERTY:
Husband Wife Total 1 [B property] $1,625,000 $1,625,000 $3,250,000 2 Household contents $15,000 $20,000 $35,000 3 [O Suites] $0 $355,000 $355,000 4 70 acres land [E].[1] $180,000 $0 $180,000 5 Wife’s Medical Practice $0 $0 $0 6 Husband’s Medical Practice $0 $0 $0 7 [remaining Island property] $130,000 $0 $130,000 8 Wife’s CBA A/c No. […] 2071.[2] $0
$9,500
$9,500
9 Wife’s ANZ Account No. […]0885.2 $0
$7,000
$7,000
10 Husband’s NAB A/c […] 3978.[3] $3,800
$0
$3,800
11 Husband’s ANZ Bank A/c […] 4228.[4] $47
$0
$47
12 Husband’s NAB a/c 2140
Overdraft a/c Refer item 28.
$0
$0
$0
13 Mitsubishi Nimbus $0 $2,500 $2,500 14 Mitsubishi 1992 Lancer $2,000 $0 $2,000 15 [BHP shares].[5] $0 $65,407 $65,407 16 [BlueScope Steel shares].5 $0 $1,115 $1,115 17 [IAG Shares] ea.5 $0 $1,134 $1,134 18 Shares in [T] Pty. Ltd. $2 $1 $3 19 Shares in [Mistle] Pty. Ltd.[6] $1 $1 $2 20a [Mistle] Family Trust.[7] $0 $0 $0 20b Drawing from Super Fund 08/09 $50,000 $0 $50,000 TOTAL PROPERTY
$2,005,850
$2,086,658
$4,092,508
[1] Purchased 9 June 2009.
[2] At separation.
[3] At separation in name of T Pty. Limited but used by Husband since about 2002/2003 as his own account.
[4] At separation.
[5] As at Financial Review dated 05.08.2009.
[6] Not trading. Last Accounts prepared for financial year 2003 with a deficiency of $7,987.
[7] Trust has a deficiency of $182,197 represented by assets of $8,092.41 and liabilities of $190,289 due to Husband and Mistle Pty. Limited.
LIABILITIES:
Husband Wife Total 21 Mortgage secured over [B property] $212,800
$212,800
$425,600
22 NAB mortgage (secured over [Island property and H property])[8] $198,802
$0
$198,802
23 Husband’s NAB Mastercard $0 $0 $0 24 Annual Leave owing to [GY] (Secretary of Husband) $14,917
$0
$14,917
25 Long Service Leave owing to [GY] (Secretary to Husband) $11,900
$0
$11,900
26 Arrears of Council Rates on [B property]. $4,114
$4,114
$8,228
27 Medfin $40,000 $0 $40,000 28 NAB overdraft a/c 2140 $32,000 $0 $32,000 TOTAL LIABILITIES
$514,533
$216,914
$731,447
[8] Applied to discharge previous mortgage originally with ALLCO and part purchase price E property at Item 4. See Note A to Husband’s Financial Statement
SUPERANNUATION:
Husband Wife Total 29 [Mistle] Superannuation Fund $650,319 $58,161 $708,480 TOTAL SUPERANNUATION
$650,319
$58,161
$708,480
Husband Wife Total NET PROPERTY OF PARTIES INCLUDING SUPERANNUATION
$2,141,636
$1,927,905
$4,069,541
ESTATE PROPERTY:
Husband Wife Total 30 […] $2,500,000 $0 $2,500,000 31 […] $2,600,000 $0 $2,600,000 32 […] $510,000 $0 $510,000 33 […] $430,000 $0 $430,000 34 […] $575,000 $0 $575,000 35 […] $875,000 $0 $875,000 36 […] $365,000 $0 $365,000 37 […] $700,000 $0 $700,000 38 […] $625,000 $0 $625,000 39 NAB A/c No. […]1555.[9] $226,500 $0 $226,500 40 [Husband’s] Property A/c No. […]9007.9 $186 $0 $186 41 [IAG shares].5 $4,159 $0 $4,159 TOTAL ESTATE PROPERTY $9,410,845 $0 $9,410,845 [9] These accounts were opened after the Husband’s mother’s death and the sole deposits to them are from the properties inherited.
ESTATE LIABILITIES:
Husband Wife Total 38 NAB mortgage $480,000 $0 $480,000 TOTAL ESTATE LIABILITIES $480,000 $0 $480,000
Husband Wife Total NET PROPERTY OF ESTATE $8,930,845 $0 $8,930,845
Conclusions on the Balance Sheet
I have removed items from the balance sheet which have been stated to have a nil value. I have shown those removed at the bottom of the balance sheet. I have also congregated the parties interests under each heading so, for example, all of the parties assets are conveniently sorted into “Joint”, “H” or “W”.
At the conclusion of the hearing I was unaware of any issue existing in relation to the balance sheet other than the issue of whether the husband’s inherited property should be included in the balance sheet with the balance of the parties assets or alternatively (as proposed by the husband) recorded in a separate table and taken into account under s 75(2) of the Family Law Act 1975 (Cth) (“the Act”). The wife in her written submissions raised some further issues relating to the balance sheet which were subsequently answered by the husband in his submissions in reply.
The wife in her written submissions made the following submission in relation to the balance sheet.
Stage 1: Assessment as to the net property of the parties
1.Reference is made to the ‘Schedule of Property’ of Parties’, (which was emailed to his Honour’s Associate on 12 August 2009).
2.The Wife accepts all of the figures referred to in the ‘Schedule of Property’.
3.However, the following submissions are to be made in relation to the Court’s treatment of the following stated liabilities:
(i)The $14,917 attributed to the Husband as representing annual leave owed to [GY] (Secretary to the Husband) (item 24 Schedule of Property’ of Parties’ dated 12th August 2009).
(ii)The $11,900 attributed to the Husband as representing annual leave owed to [GY] (Secretary to the Husband) (item 25).
(iii)The Medfin liability being $40,000 attributed to the Husband (item 27).
The [GY] liabilities
4.Arising from the ‘Schedule of Property of Parties’ dated 12th August 2009, there are liabilities claimed by the Husband in relation to $14,917, (employee annual leave), and $11,900, (employee long service leave), allegedly owed to [GY], apparently a secretary for the Husband.
5.These are not liabilities that were raised in the list of assets and liabilities as per Exhibit 2, as tendered before the Court on 5th June 2009 (Exhibit X2). They both effectively emerged for the first time arising from the Husband’s financial statement sworn 7th August 2009. In the absence of an explanation, the Court is bound to making a finding that these debts arose sometime between 5th June 2009, and 7th August, 2009. Consequently, the Wife argues that they should be treated as representing a post-separation liabilities, and that it should be excluded from the net asset pool.
6.In Af Petersens and Af Petersens (1981) FLC 91-095, Nigh J at 76,669 stated:
“Normally the Court will distribute amongst the parties the net value of their assets after deduction of all debts. But this is not invariably the case: the Court will not normally take account of debts incurred after separation and on some occasions has ignored debts, although incurred during the marriage for which it felt one of the parties should bear exclusive responsibility: Antmann v Antmann (1980) FLC 90-908. Needless to say, a debt due does not diminish the property of the parties until it is paid or execution is levied. Nor, as has been pointed out earlier, is there anything in the decision of the High Court in Ascot Investments Pty Ltd v Harper & Harper to suggest that this Court cannot make an order dividing the assets of the parties because such a division might hamper a third party in his or her chances of the recovery of a debt.”
7.This position was also endorsed by the Full Court in Biltoft and Biltoft (1995) FLC 92-614 at 82,124.
The Medfin liability
8.This Medfin liability is identified as item 27 in ‘Schedule of Property of Parties’ dated 12th August, 2009.
9.Nevertheless, there is no document that verifies when this debt arose. Nor is there any reference in the Husband’s financial statement sworn 7th August 2009 in relation to this particular liability. It represents a liability that has emerged for the first time in relation to the presentation of the Schedule of Property of Parties’ dated 12th August, 2009. The original balance sheet Exhibit 2 (as tendered on 5th June 2009) also makes no reference to this particular liability. Nor is the debt referred to in the Husband’s Senior Counsel’s Case Outline Document, (Aide memoire “H”).
10.It is submitted that the Medfin liability should considered in one of either two ways.
11.First, consistent with the submissions outline above in paragraphs 5 and 6, by virtue of the late presentation, the Court should make a finding that it represents a liability that only very recently arose, and that consequently, it should be excluded from the net asset pool, and therefore be, if it exists, a financial responsibility visited upon by the Husband only.
12.Alternatively, it is noted that the Husband gave evidence under cross-examination that part of the expenditure of the $150,600 that was allegedly received from his mother from 8 to 16 August 2006 (see paragraph 29, top of page 9 of the Husband’s affidavit), reflected the payment of $40,000 to Medfin.
13.It is either the case, that it should be excluded from the net asset pool in accordance with the submissions provided above; or it should be found to be a debt which was never paid by the Husband, contrary to the evidence he gave under cross-examination. The latter argument will be developed later in these written submissions.
14.Therefore, if the submissions are accepted that items 24 and 25, (being annual leave and long service leave owing to [GY]), as well as item 27 (Medfin); should be excluded from the net asset pool, the net asset pool, including the agreed [Mistle] Superannuation Fund, but not including the Husband’s inheritance, would therefore amount to $4,136,358; or $13,067,203, if the Husband’s inheritance from his late mother is to be included.
The inclusion of the Husband’s inheritance as being part of the overall asset pool
15.The Wife argues that the asset pool should include the entirety of the Husband’s net property of his mother’s estate, which has an agreed net figure of $8,930,845.
16.The basis of this position is founded primarily upon the position that was taken by the majority of the Full Court of the Family Court in Farmer and Bramler (2000) FLC 93-060, (“Farmer”), as confirmed by a differently constituted Full Court in Figgins and Figgins (2002) FLC 93-122,(“Figgins”).
17.The principle held by the majority of the Full Court in Farmer’s case was that, the jurisdiction confirmed by s.79(1) to alter the interest of spouses in property extends without limitation to all property which either spouse is entitled “whether in possession or reversion” (s.4), per: Finn J at paragraph 56. The only limitation is that the order must be just and equitable, (per Finn J, also at paragraph 56). As her Honour also stated in her majority judgment at paragraph 57:
“...If it was to be determined that a majority of the community considered that one spouse should, as a general rule, have no entitlement to share in property either by good fortune or good management acquired after separation by the other spouse, then the Act would need to be amended to make this clear. As the Act currently stands, the jurisdiction conferred by s.79(1) to alter the interest of spouses in property extends without limitation to all properties which either spouse is entitled (whether in possession or reversion (s.4)).”
18.Kay J, also in the majority judgment in Farmer’s case, held that the Court’s task is to evaluate all of the contributions from the time of the commencement of the parties’ relationship until the time of hearing and give such weight to such contributions, as the Court thinks is appropriate in the circumstances. He also held there was nothing in the legislation that required s.79 (4)(a), (b) and (c) contributions to be measured only in terms of what either party contributed to the assets of which they presently possess.
19.As Kay J stated at paragraph 77 in Farmer, the concept of an ex-spouse sharing in the changes of fortune of their former betrothed is not entirely alien or repugnant to the law.
20.Reference was made at the opening of the August 2009 trial by the Husband’s Senior Counsel, to an earlier Full Court decision in Bonnici and Bonnici (1992) FLC 92-272 (‘Bonnici’). Bonnici’s case is not referred to in Farmer, and is only briefly mentioned at paragraph 60 in Figgin’s case.
21.Although the principles held in Bonnici’s case have not strictly been overturned, it is submitted that arising from the decisions of Farmer and Figgins, it is now more compellable now, in exercising the stage 1 assessment, to include all assets acquired throughout the course of the marriage, and during the post-separation period, rather than excluding them.
22.Regardless of what position the Court ultimately takes, the result will remain that the Wife will receive by way of net assets pursuant to s. 79, exactly the same amount, or in other words, the exactly same result.
The husband’s submissions in reply on the matters raised by the wife in her submission in relation to the balance sheet are as follows:
Assessment as to the net property of the parties:
1.The Wife submits that
(a)two items (Items 24 and 25 in the Balance Sheet) which are identified in the Husband’s updating Statement of Financial Circumstances[10] as being accrued entitlements owed to his secretary; and
[10] Filed in Court.
(b)a Medfin liability;
should be excluded from the liabilities included in the 12 August 2009 Schedule of Property.
[GY] Liabilities.
2.The submission in respect of Items 24 and 25 (the [GY] liabilities) is put on the basis that either …
(a)they were not included in the Schedule of Assets and Liabilities prepared in advance of the trial (EX.2) and in those circumstances the Court is “bound” to find they arose at a date subsequent to EX.2 such that they are post separation liabilities; or
(b)should be disregarded consistent with Af Petersens case.[11]
[11] (1981) FLC 91-905 at 76,669.
3.It is apparent from the description of the liabilities (annual and long service leave) that they are accrued liabilities incurred over a period of time and did not spring into existence subsequent to the creation of EX.2 or post separation.
4.The updated Statement of Financial Circumstances of the Husband which contained those liabilities constituted the evidence before the Court at trial. It was never put to the Husband that, contrary to their description, the [GY] liabilities were liabilities which only arose after preparation of EX.2.
5.Absent it having been put to the Husband that his evidence should be treated in the way the Wife now submits thereby denying him an opportunity to deal with any discrepancy between EX.2 and the 12 August 2009 Schedule of Property, the submission should be rejected .[12]
[12] Seymour v. A.B.C. (1990) 19NSWLR 219 at 236B.
6.In relation to this submission founded on Af Petersens’ case, that authority has, with respect, nothing to do with the present case. Af Petersens is wholly concerned with cases where there is a liability but it is found that it will not have to be repaid or that it is highly improbable its repayment will be demanded.
Medfin Liability.
7.The submission in relation to Item 27 (Medfin) fails to recall that your Honour’s direction was to include in the Balance Sheet, to the extent possible, liabilities at separation.
8.The Medfin liability was such a liability and it is not suggested it is otherwise. This liability was repaid from the cheques drawn by the Husband’s mother on 15 August 2006 (one month post separation). That was at all times the Husband’s affidavit evidence.[13]
[13] Husband’s affidavit sworn 4 June 2009, para.29 at page 9 (the reference to August 2006 being corrected in oral evidence to 2007).
9.There being no issue regarding the repayment, it is unnecessary to deal with the balance of the Wife’s Submissions regarding this item.
Inclusion of the Husband’s inheritance as being part of the overall asset pool:
10.The Wife submits that the “asset pool should include the entirety of the Husband’s net property of his mother’s estate” and calls in aide the decisions in Farmer and Bramley and Figgins.
11.It was not and is not submitted that the property inherited by the Husband is not property of the parties or either of them. What is submitted is that the treatment of the inherited property should be undertaken consistent with the observations of the Full Court in Bonnici’s case.
12.The authorities referred to by the Wife are concerned with factual situations significantly different to the present case and say nothing to the contrary of Bonnici.[14]
[14] (1991) 15 FamLR 138.
13.The decision of the Full Court in Bonnici identifies the way in which an inheritance of the kind received by the Husband at the time he did is most appropriately treated having regard to
i)the lateness in the marriage of its receipt;
ii)the absence of contribution by the non inheriting party; and
iii)the risk of error if the inherited property is not separately identified.
14.It will be recalled the Full Court said at 143 …
“A property does not fall into a protected category merely because it is an inheritance. On the other hand, if there are ample funds from which an appropriate property settlement can be made and a just result arrived at, then the fact of a recently acquired inheritance would normally be treated as an entitlement of the party in question.
The other party cannot be regarded as contributing significantly to an inheritance received very late in the relationship and certainly not after it has terminated, except in very unusual circumstances. …..
In a case such as this, we think that the global approach, taken by his Honour, presents considerable difficulties. If the matter had been approached upon an asset by asset basis, we think that the task of his Honour and this court would have been a simpler one. To approach the matter globally as his Honour did, in circumstances where the wife had clearly made no contribution to a major asset, must of necessity have involved a greater weighting of her contribution than that of equality to the assets to which she did contribute. There would, nevertheless, have been nothing wrong with his Honour having approached the matter globally if he had explained how he did so.”
Conclusion on the disputes re the Balance Sheet.
(a) GY liability.
The wife’s case is that the liabilities claimed by the husband were added to the balance sheet following the filing of the husband’s Financial Statement filed 10 August 2009. The wife complains that there is no detail provided of how the liability was created and the time frame in which it was created.
There was no cross-examination on the item. There was no identification by the wife that there was any issue about the liability. There seems to me to be a high level of unfairness in the wife conducting her case in this manner.
Nonetheless there is no evidence to establish the time frame in which the liability arose. It seems to me that the husband should have included in the balance sheet that part of the liability which relates to the pre-separation accrual of the debt. The balance should be taken into account when I come to consider the relevant s 75(2) matters.
In the circumstances, I conclude that the safest pathway is to remove the two liabilities for annual leave and long service leave for GY (a total liability of $26,817) and take the liability into account under s 75(2).
(b) The Medfin liability of $40,000
The husband concedes that the debt to Medfin was repaid by payment from his mother on about 15 August 2006. In those circumstances the amount should not remain in the balance sheet, however, the contribution made through the repayment post separation of $40,000 needs to be taken into account as a contribution by the husband.
The prejudice which otherwise might flow to the husband of not having this issue identified at the trial is overcome by the concession made by the husband in his submission.
(c) Inclusion of the husband’s property as being part of the overall asset pool.
I accept that should the case so require the court could order that part of the property received by the husband by way of inheritance be paid to the wife. I do not need to include all of the husband’s property in one pool of assets to be able to determine if such an order were necessary.
The Act requires that I make an order which is just and equitable. I consider the best way to ensure that will happen having regard to the particular facts of this case, is to have the husband’s inherited property in a separate pool.
Each case must be approached having regard to the requirements of the Act and its’ particular facts. In this case there was a long marriage during which the parties accumulated substantial assets. Both parties were fortunate to come from wealthy backgrounds as a result of which each received substantial gifts from their families during the marriage. After the separation the husband inherited a large amount of property. The wife will probably receive a substantial inheritance at some time in the not too distant future albeit significantly smaller than the inheritance received by the husband.
The wife has made no contribution to the assets inherited by the husband. She claims no direct interest in any of the property inherited by the husband.
In all of the circumstances I consider the best way to give rise to a just and equitable result in this case is to isolate the inherited property in a separate pool to the property generated by the parties during the marriage.
Conclusions on the Balance Sheet
| PROPERTY | |||
| Item | Description | Owned | Value |
| 1. | B property | Joint | $3,250,000 |
| 2. | Household contents | H | $15,000 |
| 3. | 70 acres land at E | H | $180,000 |
| 4. | Remaining island property | H | $130,000 |
| 5. | Husband’s NAB A/c … 3978. | H | $3,800 |
| 6. | Husband’s ANZ Bank A/c … 4228. | H | $47 |
| 7. | Mitsubishi 1992 Lancer | H | $2,000 |
| 8. | Shares in T Pty. Ltd. | H | $2 |
| 9. | Shares in Mistle Pty. Ltd. | H | $1 |
| 10. | Drawing from Super Fund 08/09 | H | $50,000 |
| 11. | Household contents | W | $20,000 |
| 12. | O Suites | W | $355,000 |
| 13. | Wife’s CBA A/c No. … 2071. | W | $9,500 |
| 14. | Wife’s ANZ Account No. …0885 | W | $7,000 |
| 15. | Mitsubishi Nimbus | W | $2,500 |
| 16. | BHP shares. | W | $65,407 |
| 17. | BlueScope Steel shares | W | $1,115 |
| 18. | IAG shares | W | $1,134 |
| Shares in T Pty. Ltd. | W | $1 | |
| 19. | Shares in Mistle Pty. Ltd. | W | $1 |
| TOTAL PROPERTY | $4,092,508 | ||
| LIABILITIES | |||
| Item | Description | Owned | Value |
| 20. | Mortgage secured over B property | Joint | $425,600 |
| 21. | Arrears of Council Rates on B property. | Joint | $6,600 |
| 22. | NAB mortgage (secured over Island and H property) | H | $198,802 |
| 23. | Annual Leave owing to GY (Secretary of Husband) | H | Removed |
| 24. | Long Service Leave owing to GY (Secretary to Husband) | H | Removed |
| 25. | Medfin | H | Removed |
| 26. | NAB overdraft a/c 2140 | H | $32,000 |
| TOTAL LIABILITIES | $663,002 | ||
| SUPERANNUATION | |||
| Item | Description | Owned | Value |
| 27. | Mistle Superannuation Fund | H | $650,319 |
| 28. | Mistle Superannuation Fund | W | $58,161 |
| TOTAL SUPERANNUATION | $708,480 | ||
| Owned | Value | |
| NET PROPERTY OF PARTIES INCLUDING SUPERANNUATION | $4,137,986 | |
| ESTATE PROPERTY | |||
| Item | Description | Owned | Value |
| 29. | … | H | $2,500,000 |
| 30. | … | H | $2,600,000 |
| 31. | … | H | $510,000 |
| 32. | … | H | $430,000 |
| 33. | … | H | $575,000 |
| 34. | … | H | $875,000 |
| 35. | … | H | $365,000 |
| 36. | … | H | $700,000 |
| 37. | … | H | $625,000 |
| 38. | NAB A/c No. …1555. | H | $226,500 |
| 39. | Husband’s Property A/c No. …9007. | H | $186 |
| 40. | IAG shares | H | $4,159 |
| TOTAL ESTATE PROPERTY | $9,410,845 | ||
| ESTATE LIABILITIES | |||
| Item | Description | Owned | Value |
| 41. | NAB mortgage | H | $480,000 |
| TOTAL ESTATE LIABILITIES | $480,000 | ||
| Owned | Value | ||
| NET PROPERTY OF ESTATE | H | $8,930,845 | |
| ASSETS REMOVED FROM THE BALANCE SHEET | ||
| Description | Owned | Value |
| Mistle Family Trust. | Joint | $0 |
| Husband’s Practice | H | $0 |
| Husband’s NAB a/c 2140 Overdraft a/c Refer item 28. | H | $0 |
| Wife’s Practice | W | $0 |
| LIABILITIES REMOVED FROM THE BALANCE SHEET | ||
| Description | Owned | Value |
| Husband’s NAB Mastercard | Joint | $0 |
Determination of the Issues
The value of each parties initial contributions.
The husband in his written submission identified the issues and made submissions in relation to those issues which he wished to address. The wife’s submissions took a different form and it is not easy to specifically identify the portions of her submission which addresses each of the identified issues. I shall do the best I can to identify in her submissions where she has addressed the identified issues.
The husband provided the following submission in relation to this issue:
Value of each parties’ initial contribution and the source of funds used by the Wife to discharge the mortgages on her [W] property subsequent to marriage:
1.Omitting personalty, the property owned by the parties at the date of their marriage was as follows …
Husband:[15]
[15] Evidence appears at paragraphs 5 to 11 and 17 and 20 of Husband’s affidavit sworn 4 June 2009.
a)Property at [F] purchased for $46,000 in 1977 which was no longer subject to any liability pursuant to the mortgage registered on the title. As at the date of marriage the property was tenanted.
This property was sold in 1989 for $340,000 by which time it was encumbered but those encumbrances secured other advances obtained for the purpose of later acquisitions of property;
b)Equity of $73,580 in units at [Victoria] (disregarding the paid stamp duty in respect of the acquisition of those units);
c)Peugeot 504 motor vehicle purchased second hand for $7,500;
d)Furnishings of professional rooms acquired at a cost of $6,000 in the year preceding marriage;
e)Savings of approx. $74,000.
Wife:[16]
[16] Evidence appears at paragraph 8 of Wife’s affidavit filed 5 June 2009.
a)Property at [W] purchased for $145,000 in 1981 subject to mortgages with a combined balance of $73,000;
b)Savings of $11,000;
c)Toyota Celica motor vehicle;
d)Shares $3,000.
2.A factual issue exists in relation to the source of the funds from which the mortgages secured over the Wife’s [W] property were subsequently discharged. This is relevant to the weight to be given to the parties initial contributions for reasons which appear below.
3.The Wife says the mortgages were discharged from her savings at marriage together with the further savings made by her to the dates of the discharges of the two mortgages.
4.The Husband says the discharges were effected from the savings the Wife had at marriage but additionally with the assistance of advances made from the Wife’s mother and the application by the Husband of $30,000 from the savings held by him at the time of marriage.[17]
[17] This is as deposed to by the Husband at para. 15 of his affidavit sworn 4 June 2009.
5.The smaller of the two mortgages secured over the Wife’s property ($26,000) was discharged approximately nine months after the parties’ marriage (September 1984) and the larger mortgage ($47,000) eight months later (May 1985).[18]
[18] Wife 5 June 2009, paras. 10 and 11.
6.Apart from the savings the Wife had at the date of the marriage it is improbable she was able to make further savings from her employment sufficient to provide the additional monies over and above her $11,000 in savings to discharge the mortgages.
7.The Wife’s oral evidence when cross-examined was to the effect that she had received some earnings in an amount greater than the amount she received in the position she held at […] Hospital at the time of the marriage because she was engaged in [a specialist field] for a period of six months.
8.The Wife was, however, unable to say what her level of earnings were in relation to that period or what her earnings were over the whole of the period from marriage to the discharge of the second and larger mortgage in May 1985.
9.Relevant to this issue is that the Wife annexed to her affidavit extracts from her bank book to evidence her savings at the date of the marriage and to evidence payment out to discharge the $26,000 mortgage[19] but elected not to annexe the pages in between. These would have disclosed whether monies were accumulated by regular savings or as a result of some third party deposit.
[19] Annexures Ca at page 17, Ea at page 21 and F at page 22 of the Wife’s affidavit filed 5 June 2009.
10.The Wife further declined the three requests that were made of her to provide that information and to obtain from the Commissioner of Taxation her Tax Returns.[20]
[20] EX. H2.
11.The Wife’s explanation for this was that she was being inundated with documents and was under huge stress. The requests were, however, straightforward and no more difficult of being attended to than aspects of her case which assisted her and which were attended to. A Jones v. Dunkel inference arises in those circumstances in relation to the bank book pages and Tax Returns.
12.It is submitted that the Wife had no reliable recollection of the source of the monies and this submission is …
(a)supported by her oral evidence to the effect that after the marriage her finances was taken over by her Husband; and
(b)her concession when it was put that there may have been other sources of monies other than her earnings that she was not sure; and
(c)it was never put to the Husband his version was mistaken.
13.Following from the above, the findings should be that the Husband applied $30,000 of his savings towards the discharge and the balance was provided by the Wife’s mother.
14.Proceeding on the basis of that finding and given that there is no evidence of the values of the property at the date of marriage, the assessment of the weight to be given to the parties’ respective contributions at marriage is best made by having regard to their other property and to the amounts realised on the sale of each of their residential properties.
15.These sales were close in time and effected for the same purpose, i.e., the acquisition of the matrimonial home. The properties were also both held in the same residential market with no improvements carried out to either.
16.So approaching the matter and disregarding the parties’ motor vehicles and personalty their contributions can then be assessed with the Wife being given credit for so much of her mortgage debt as was not discharged by the Husband (paid by an advance from her mother).
Husband Wife House $340,000 $358,000 ($388,000 - $30,000[21]) Savings $74,000 $11,000 Shares $0 $3,000 Other Property $73,580 $0 Furnishings, Professional Rooms $6,000 $0 $493,580 $372,000 [21] Husband’s reduction of mortgage at marriage.
The wife’s submissions appear to deal with the issue of “initial contributions between paragraphs 23 and 26. Those paragraphs are as follows:
Details as to the Wife’s contributions
23.The impact of the Wife’s initial contributions must be seen in light of the fact that in September 1984 she paid and discharged one of the two loans secured against the pre-marital [W] property for the amount of $26,000 from savings including her pre-marital savings. (Paragraph 10 of the Wife’s shorter affidavit sworn 3rd June 2009).
24.In May 1985 she paid and discharged a second loan secured against the [W] property for the amount of $47,000, again acquired from savings. (Paragraph 11 of the Wife’s shorter affidavit sworn 3rd June 2009).
25.Although the extent of the Husband’s initial contributions was marginally greater than that of the Wife’s, it is difficult to ascertain how the Husband’s financial position as of 1983 promoted any significant financial benefits for the parties in the years thereafter. As the Full Court of the Family Court stated in Pierce and Pierce (1999) FLC ¶92-844, at 85-881:
“In our opinion it is not so much a matter of erosion of contribution but a question of what weight is to be attached, in all the circumstances, to the initial contribution. It is necessary to weigh the initial contributions by a party with all other relevant contributions of both the husband and the wife. In considering the weight to be attached to the initial contribution, in this case of the husband, regard must be had to the use made by the parties of that contribution.” (My emphasis in relation to the underlined, bold words).
26.Herein, it is noteworthy that the Husband’s financial position as of May 1985, (being just 17 months into the marriage), was such that he was required to seek the financial assistance of his mother-in-law, for the amount of $50,000, (paragraph 15 of the Husband’s affidavit sworn 4th June 2009).
CONCLUSION ON THE ISSUE.
I find the husband’s contributions at the date of cohabitation (same date as marriage) to be as follows:
·A property at F. The property was financially unencumbered. It had been acquired in 1977 for $46,000. The mortgage was paid off in 1980;
·A property in Victoria which was subject to a mortgage of $70,000. The property had been purchased in 1983 for $143,580. This property was sold in 1985 for $215,000;
·A motor vehicle worth approximately $7,000;
·Furnishings in Sydney, Rooms, $5,000;
·Savings of $74,000.
I find the wife’s contributions at the date of cohabitation (same date as marriage) to be as follows:
·A property at W purchased for $145,000 in 1981 and subject to financial encumbrance of about $73,000 at about the date of marriage;
·Savings of $11,000;
·A Toyota Celica motor vehicle;
·BHP shares valued at about $3,000;
·Jewellery.
The wife in her submission referred to the discharge of the mortgage on her W property in the year after marriage. She frames this as an additional contribution. I do not accept that it should be seen as an additional contribution. Firstly there is an issue of fact as to how the funds were sourced to pay off the mortgage. The wife was cross-examined about the assertion that she had contributed substantially to the payout of the mortgages. Her answers made it clear she could not have contributed to the discharge of the mortgage as she alleges. In relation to that issue I accept the husband’s evidence in preference to that of the wife.
In any event the argument is somewhat futile. I have taken into account on behalf of each of the parties the contributions they each made at the date of marriage. I propose to take into account the income earned by each during the marriage. I propose to take into account inheritances received by each where they were applied for family expenses or used to acquire assets. I propose to take into account gifts from each parties’ families where expenditure on the acquisition of assets or the payment of family expenses can be established or reasonably assumed to be the case.
The source of funds used by the wife to discharge the mortgages on her W property after the marriage
I have dealt with this issue in the above paragraphs.
The post separation contributions made by each party to the support of the children
In her case outline document which has been marked as an aid memoire in the hearing the wife said:
Dot point of post separation contributions
The wife asserts that she has made the following contributions from the date of separation to the date of trial:
·Following separation on 21 July 2006, the wife paid all household expenses including expenses of the children (other than internet, house insurance, private health cover and contribution by the husband of $1,800 to the home mortgage). See paragraph 54 of wife’s Affidavit.
·Some of the wife’s mother’s gifts were made post-separation and apply to meeting household expenses and/or expenses of the children. See wife’s longer Affidavit filed in court on 5/6/09, and paragraphs 54, 56 of the wife’s shorter Affidavit.
·The children have continued to live with the wife following separation, whilst studying at either secondary or tertiary level. The wife has provided financial contributions making care and support for the children. See paragraphs 54, 56, 63 of the wife’s shorter Affidavit filed 5/6/09.
The husband in his submission identified the issue as:
Post Separation Contributions made by each party to the support of the children:
Unfortunately what then follows under that heading does not address the issue.
Conclusion on this Issue.
The husband sets out in paragraph 67 of his affidavit the money paid by him as a post separation contribution. The contributions are extensive. There is no suggestion that the husband has a liability to the Child Support Agency in relation to D who was the only child under 18 at the time of the separation. D was just 17 when the parties separated.
The wife’s evidence is not specific in setting out what was expended by her in the support of the children post separation. She was questioned about her claimed Amex expense of $1000 per week. She said there were additional cards for each of the children. She was asked whether the $1000 per week was an average over the last three months. She said no it was the average post separation. She admitted that between April 2009 and August 2009 her average monthly Amex account was $2,250. The wife explained that each of the children has a supplementary card on her Amex account however S had not been using the card. She had been paying cash for purchases. The wife agreed that D was incurring about $300 to $400 per month on the card.
The wife agreed that the husband has probably paid two thirds of the payments falling due on the mortgage on the B property since separation.
The wife said that at the date of separation each of the children had several thousand dollars in ANZ bank accounts.
Whilst being cross-examined on the way she conducts her medical practice the wife told me that she has not engaged a receptionist since her mother ceased assisting her in that role. However, she did say her children assist her as “my receptionist”.
The wife was asked about the expense contained in her tax return of $8,000 for “staff amenities”. She confirmed that since her mother ceased assisting her she has had no staff. She did not think it was money paid to the children for their assistance.
In re-examination the wife told me that in about March 2009 she received $13,000 as a back payment for unpaid Family Allowance.
I conclude this issue by determining that each of the parties has significantly supported the children (whether adult or otherwise) since the separation. The wife’s mother has made contributions to the children. It is difficult to categorise those contributions as they may well fall into the description of “gifts from a grandparent to a child of the marriage”. Such as gift would not normally be seen as a contribution made by or on behalf of a party. That situation is usually contrasted with a circumstance where necessary expenses associated with the support of children are met by a grandparent as the parents cannot afford to meet such expense. In this case the wife has not established to my satisfaction that she could not meet the expenses associated with the necessary living and educational expenses from her own income and resources. In the absence of specific evidence I could not be satisfied that motor vehicles for each of the children (as apparently supplied by the wife’s mother) were necessary items for their support as opposed to being a generous gift from a grandparent.
The husband’s contribution to meeting the mortgage on the property must be seen as a contribution to the family as a whole as all the children have mainly continued to reside in the property post separation.
The wife has not provided details of the income of the children or any of them. Her Financial Statement is silent on that matter. I do know that the children (or some of them) have the capacity to contribute to their own support.
The quantum of the gifts made to each of the parties by each of their mothers during the marriage and since
In relation to this issue I note the husband does not contest the wife’s evidence as to the quantum of the gifts she says she received from her mother.
In relation to the husbands’ evidence as to the gifts he asserts he obtained from his mother the wife questions the gifts listed as items 1, 2, 5 & 6 set out in paragraph 29 of his affidavit and at page nine of his affidavit there are 11 items listed. The wife raises an issue as to the evidence provided by the husband to establish that he received those funds.
This last issue was refined on 11 August 2009 and on 25 August 2009 to be:
In relation to the 11 items on page 9 of the husband’s affidavit, is there any (corroborative) evidence he received those funds?
In relation to items 1, 2, 3, and 4 in paragraph 29 of the husband’s affidavit, is there any documentary evidence the husband received those funds?
The husband provided the following submission on this issue:
Is there evidence to establish the Husband received the funds referred to at paras. 29.1 to 29.4 of his affidavit and the post separations payments Nos. 1 to 11.
29.The Wife puts in issue the payments made and referred to in the Husband’s affidavit and that of his mother being the payments …
i)1991 of $3,000;
ii)1997 of $40,000;
iii)13 August 1998 of $250,000 (as to which the cheque butt identifies the cheque as in favour of the parties’ mortgage)[22]; and
[22] Affidavit F Mistle filed 23 April 2009, Annexure “A”.
iv)13 August 1998 of $90,000.
and the payments 1 to 11 appearing at page 9.
The Wife does not, however, deny these payments and limits herself to a non-admission.
30.The cross-examination of the Husband was essentially limited to the fact that the Husband’s bank accounts did not record receipt of the post separation payments identified as Nos. 1 to 11 at page 9 and there were no records evidencing receipt of the four payments made between 1991 and 1998 identified in paragraphs 29.1 to 29.4.
31.There is no evidence to the contrary of the Husband’s mother and himself in relation to these.
32.The Husband’s mother deposed to having an independent recollection of the payments of $3,000 and $40,000[23] although not having the cheque butts and statements at the time of her affidavit.
33.The bank statements tendered pursuant to the leave granted at the conclusion of the trial record debits of $250,000 and $90,000 in 1998 consistent with the cheque butts. (I note I cannot find these documents)
34.The payments were also consistent with the undisputed history of advances by the Husband’s mother made to or for his benefit and no plausible reason why the Husband’s evidence might not be accepted was put to him in cross-examination.
35.As to the post separation payments, the absence of a record of deposit to the Husband’s account is because the evidence of his mother as appears in paragraph 2 of her affidavit was that on some of the occasions that she provided money to him it was by cheque payable to a third party and provided to the Husband. Reference to page four of the affidavit of the Husband’s mother discloses that the 11 payments in question and recorded at page 9 were payments to third parties.
36.The Husband further produced in reply and annexed to his affidavit sworn 12 August 2009 documents confirmatory of his receipt of the benefit of nine of these post separation payments.
37.The position is therefore that all the evidence is that the payments were made and the Husband received the benefit of them.
[23] Affidavit F Mistle filed 23 April 2009, para. 3.
The wife’s submission on this issue is as follows:
The parties’ respective mothers’ contributions
37.The unchallenged evidence from the Wife is that her mother to date has assisted her with a total amount of $420,318, which was applied for the benefit of the parties and the children, (see the Wife’s longer affidavit sworn 3rd June 2009).
38.The Husband’s position is to argue that his mother’s contributions prior to her death amounted to a total of $612,000.
39.During the course of the trial the Husband, however, was subject to some challenges in relation to a portion of the monies which he alleges was received from his mother. There is a document marked in the hand of by Mr Shepherd, the Wife’s solicitor, and written in February 2009, which indicates that as of February 2009, the Wife was still not satisfied that the Husband had presented all necessary documents to confirm and verify that he had been the beneficiary of the monies he states he had received from his mother during the years of the marriage, and during the period of post separation. (See Exhibit “X”)
40.In respect to sub-paragraphs 29 (1), (2), (3) and (4), of his affidavit sworn 4th June 2009, the Husband was subject to cross-examination about payments made allegedly by his mother for the amounts totalling, according to the affidavit evidence, $383,000.
a.In respect to 29 (1) and (2), being 1991 and 1997 alleged payments, there is no evidence whatsoever to verify a payment totalling $43,000. For example, there are no cheque butts or bank statements that would confirm such amounts.
42.In respect of the payments referred to in subparagraphs (3) and (4) at paragraph 29, being both payments allegedly made by the Husband’s mother on 13 August 1998 for the total amount of $340,000, the primary issue is the credibility of the Husband’s various positions taken.
43.The Husband presented no evidence as to where this money went to in relation to any bank accounts.
44.Then, in the absence of any verified documentation, he then presents three different versions as to what became of the money.
45.The first version is referred to in his affidavit where he suggests that the money went towards the payment of a mortgage. Herein the Husband says at paragraph 31 of his 4th June 2009 affidavit:
“In August 1998 my mother gave me two sums of money being $250,000 and $90,000. I used this to reduce the mortgage over the property in which we lived in at [B]. This reduced the mortgage from approximately $740,000 to $30,000.”
46.The Husband then presented a different version under cross-examination. Herein he testified initially said the vast majority went to the mortgage plus loan for surgery equipment. He then said that $90,000 went to a "debt of mine" and $250,000 to ANZ. This, of course, is different to paragraph 31 of his Affidavit. The Husband then said that his Affidavit was wrong and confirmed that the $250,000 went the mortgage and $90,000 to a "debt of mine”.
47.The third and different version appears in a letter from the Husband’s solicitor, which is annexed as Exhibit X4 in these proceedings.
48.In light of the absence of any documentation germane to such payments benefitting the husband, as well as these three different versions, it is submitted that little weight can be given the extent of this alleged payments representing contributions that should be attributable to the Husband.
Conclusion on this issue.
At issue are items 1, 2, 3, and 4 in paragraph 29 of the husband’s affidavit together with the 11 items on page 9 of the husband’s affidavit. The items in paragraph 29 which are disputed are:
1.1991 $3,000
2.1997 $40,000
3.13/08/1998 $250,000
4.13/08/1998 $90,000.
In relation to the 11 items on page 9 of the husband’s affidavit those items are:
Physical Separation 19 July 2006 to 25 August 2007
1.
08/08/06
6,926.00
2.
15/08/06
48,957.39
3.
15/08/06
9,717.95
4.
15/08/06
17,444.18
5.
15/08/06
40,000.00
6.
15/08/06
2,233.76
7.
15/08/06
2,434.00
8.
15/08/06
12,000.00
9.
15/08/06
4,375.00
10.
15/08/06
2,400.00
11.
16/08/06 Total
4,000.00
150,488.28
The affidavit of the husband’s mother sworn 21 June 2007 was relied upon by the husband. It was not objected to by the wife. Mrs Mistle had died between the signing of the affidavit and the hearing in the court. The court has a discretion to consider the evidence of deceased persons and give it such weight as is considered appropriate. One of the matters to be considered in weighing the evidence is the lack of availability to test the evidence. The detail of the evidence is also important. The extent of the controversy which the affidavit addresses also needs to be considered.
In this case I can see no reason why I should not give the content of Mrs Mistle’s affidavit significant weight. Most of her evidence is corroborated with copies of her bank records which she has annexed to the affidavit.
Paragraph 3 of that affidavit attests to the provision to the husband of $3,000 in 1988 and $40,000 in early 1997 to be used for extensions to his home. The deponent could not produce bank statements or cheque butts to confirm those payments.
The husband in his affidavit at paragraph 29 set out that he had received $3,000 in 1991 and $40,000 in 1997. He said the money was used to reduce debt, meet family expenses and day to day living expenses.
In cross-examination the husband was asked about items 3 and 4 on his list in paragraph 29 as they appear on page 7 of the affidavit. Those items were for the sums of $250,000 and $90,000. He was asked what the money was put towards. He replied “The majority went to meet mortgage. I think I put $90,000 to debts of mine and I gave $250,000 to the ANZ”. The husband further said his Affidavit was incorrect where it stated in paragraph 31 that both amounts were used to reduce the mortgage. He said the $250,000 went to the mortgage and the $90,000 went to his working account and was used to pay other debt.
The first annexure to the affidavit of Mrs F Mistle is a photocopy of a cheque butt dated “13.8.98”. The payee is the husband ANZ Double Bay. The amount is $250,000. There appears no issue that the copy cheque butt was from the records of Mrs Mistle and related to a cheque account once operated by her.
The second annexure to Mrs Mistle’s affidavit is a copy of a cheque butt consecutive in number to the cheque butt for $250,000. It is also dated “13.8.98” and the payee is the husband. The amount is $90,000.
In the written submissions provided by the wife on 28 August 2009 a submission is made clearly relying upon the identified contributions in the Case Summary Document. Argument is advanced to support the weighing of the contributions by each party and to support the contended assessment to be made by the court.
I find the contributions of the wife during the cohabitation to be as follows:
(a)The income earned by the wife during the marriage. Exhibit W3 shows the wife’s taxable income between 1 July 1999 and 30 June 2006 was a total of $367,379. That represents an average of $52,482 per year across a seven year period. I accept that from September 2002 the wife was unable to work for four months. The wife does not give evidence about the income she earned in other years. The wife says that at the time of the marriage she was working at P Hospital. The husband asked her to give up that work in order to start a family. She gave up that work and thereafter commenced work as a general practitioner at O. As each of the children were born the wife took only a few weeks off work. I accept that the wife has worked as a medical practitioner during the course of the marriage and that her income has been applied to family purposes.
(b)The wife contributed as a home maker and parent. The parties child S was born in 1985 just 2 years after the marriage. R was born in 1987 and D was born in 1989. In the husband’s affidavit he concedes that the wife was the primary carer for the children and to facilitate this she mainly worked from 9 am to 3 pm. The wife says she employed a nanny to care for the children and she worked from 10 a.m. to 3.30 pm. I accept her evidence on that matter. The wife’s mother assisted in household chores, cooking and caring for the children. The extent of that assistance is not detailed. The wife’s submissions acknowledge that that assistance from the wife’s mother cannot constitute a contribution as detailed in s 79(4)(c). In cross-examination the husband told me that during the marriage he had worked a 6 to 10 hour day and additionally visited hospital. Wednesday was his hospital day. He worked 5 days a week and on Saturday mornings. The husband denied that the wife was almost entirely responsible for the daily care of the children. He agreed it was not often that he bathed the children. He agreed it was not often that he assisted with homework. He said that from 2002 he had driven the children to school. He denied that he only attended presentations if the children were receiving a reward. The husband denied his tidying the children was not a daily event. He denied that he had never mowed the lawns and asserted that he trimmed the hedges 6 or 7 times per year. He asserted that in addition to doing his own washing from 2002 he also regularly put washing in the dryer and also removed washing from the clothes line. I conclude that the vast majority of the home maker and parent tasks which were undertaken by the parties were performed by the wife. There were times when the husband was hospitalised and not available to assist with the home or the care of the children at all.
(c)On 24 June 2009, the wife received an inheritance of $10,000.
(d)In 1992 the wife’s mother worked as her secretary and receptionist in her O practice on an unpaid basis. The wife claims a contribution in this regard. The weight which can be given to such contribution is limited given that the work hours the wife’s mother was present are not disclosed. The amount of money saved is not in evidence. Whether it is possible for the wife to operate without a secretary or receptionist is not in evidence. Nonetheless I accept that this contribution would be of some benefit to the wife.
(e)The wife says that in 2002 and again in 2006 her mother assisted in the care of the children. The submission on behalf of the wife is framed in terms of that assistance “allowed the wife to work”. The suggestion in the submission is that without her mother’s assistance she would not have been able to work. Unfortunately the wife’s evidence does not make such assertion. In any event this is a contribution which falls within section 79(4)(c) and as such the jurisprudence prevents the court taking into account such matters as contributions except in certain restricted circumstances.
Post separation
The wife relies on contributions identified in the Case Summary Document filed on her behalf.
13th July 2009 Order 2.d
Dot point of post separation contributions
The wife asserts that she has made the following contributions from the date of separation to the date of trial:
·Following separation on 21 July 2006, the wife paid all household expenses including expenses of the children (other than internet, house insurance, private health cover and contribution by the husband of $1,800 to the home mortgage). See paragraph 54 of wife’s Affidavit.
·Some of the wife’s mother’s gifts were made post-separation and apply to meeting household expenses and/or expenses of the children. See wife’s longer Affidavit filed in court on 5/6/09, and paragraphs 54, 56 of the wife’s shorter Affidavit.
·The children have continued to live with the wife following separation, whilst studying at either secondary or tertiary level. The wife has provided financial contributions making care and support for the children. See paragraphs 54, 56, 63 of the wife’s shorter Affidavit filed 5/6/09.
I find that the wife made the following contributions post separation.
(a)The wife met all of the household expenses and support of the children not covered by the husband. The husband contributed by paying the internet, house insurance, private health cover and contribution of $1,800 to the home mortgage. The husband’s payment on the mortgage represented about 60 to 66 per cent of the parties’ liability on the mortgage. The wife contributed the balance of the mortgage liability.
(b)The wife received $207,489 from her mother post separation. Most of the entries in exhibit W4 for this period attribute the use of the funds as for household expenses and living expenses. In cross-examination the wife agreed that some of this money was used to meet legal fees with Mr Connolly. His fees had been paid in the sum of $49,240.
(c)The wife has worked since the separation and earned the income disclosed by her to the court in her affidavit and exhibits.
(d)At the time of separation the children were aged 21, 19 and 17. They have predominantly lived in the family home following the separation. The wife has contributed to their care both physically and financially. The wife says in paragraph 63 of her affidavit that none of the children have employment. They do however work in the wife’s practice as her receptionist. In 2007 D commenced to study at University. The husband paid his fees for that year in the sum of $10,040 and the wife’s mother paid $5,090. I accept that the wife would have had difficulty paying those fees from her own resources and therefore I accept that the payment was a contribution which should be taken into account. However the wife has already included that payment as item 82 in exhibit W4 and it should not therefore be counted twice.
Contributions of the Husband
During the marriage
I find that the husband received gifts of $498,500 from his mother during the course of the marriage. I accept that money was applied to matrimonial purposes.
The husband in his Case Outline document identified the contributions upon which he relied. Those contributions are as follows:
Contributions to Separation:
a)The Husband made the predominant financial contribution during the course of the marriage.[27]
b)The Husband was unable to work during three periods (1991, 1998 and 2003) prior to separation when he had short hospitalisations.
c)The diminution in the Husband’s earnings as a consequence of those hospitalisations was not significant in comparison to his earnings in other years.4
d)The Wife also worked from the time of the marriage (18 December 1983) until prior to the birth of the parties’ first child, [S] ([…] August 1985), and ceased to practice for periods prior to and after the birth of the subsequent children [R] ([…] July 1987) and [D] ([…] July 1989). Thereafter from a date which is not identified in the evidence she carried on a general medical practice working about five hours a day including house calls.[28]
e)The Wife undertook additional work for about 18 months commencing in or about 1991 following the Husband’s hospitalisation working over that period one day a week on a long shift at [P] Hospital.
f)The Wife also suffered ill health in September 2002 and was unable to work for 4 months.[29]
g)Financial contributions were also made on behalf of the parties during the period from marriage to separation. The contributions on behalf of the Husband over that period were $498,500[30] and behalf of the Wife $212,514.65[31] ($285,985 difference)
Contributions other than Financial Contributions:
a)The Husband undertook the management of the parties’ finances both investment and household.[32]
b)Additionally the Husband acted as owner/builder in respect of extensive renovations to the matrimonial home at [B] extending over a period of approx. nine months.[33]
[27] Husband’s affidavit para. 26 sworn 4 June 2009 and Wife’s affidavit para. 60 filed 5 June 2009.
[28] History given to Dr. AT.
[29] Wife’s affidavit para. 48 filed 5 June 2009.
[30] Husband’s affidavit para. 29 sworn 4 June 2009.
[31] Calculated by reference to the schedules of the Wife filed pursuant to direction made 3 October 2008.
[32] Husband’s affidavit paras. 42 and 46 to 50 sworn 4 June 2009
[33] Husband’s affidavit para. 46 sworn 4 June 2009
Contribution to the Welfare of the Family:
The Husband acknowledges the Wife made the preponderant contribution as homemaker and parent. The Husband also made a contribution both to the welfare of the family[34] and as parent[35].
[34] Husband’s affidavit paras. 41, 43 to 45 sworn 4 June 2009
[35] Husband’s affidavit paras. 51 to 62 and 65 sworn 4 June 2009
I find the contributions made by the husband during the marriage were as follows:
(a)The husband contributed his income during the marriage. In paragraph 26 of his affidavit the husband set out his income for the tax years 1984 to 2008. He also tendered his tax return for the 2009 tax year. The content of paragraph 26 and the table that follows is misleading. The reality of this emerged as a result of reference in the wife’s submissions (paragraph 59) to a “summary of [the husband’s] Tax Returns” contained in part of exhibit X4. That document asserts a different picture to the contents of paragraph 26 of the husband’s affidavit. Because the husband had investment properties in his name his taxable income was significantly smaller than his practice income. The husband did not tender the copies of his tax returns from which he drew the figures which appear in paragraph 26 of his affidavit. The document forming part of exhibit X4 to which the wife has referred to in her submission shows the following taxable income for the husband.
(b)Comparing the same years as the wife was able to provide, i.e. from 1 July 1999 to 30 June 2006 the husband’s average taxable income was not possible to calculate. In relation to the three years 2004, 2005 and 2006 his taxable income averaged $89,215. This compares with the wife’s average taxable income for the 2000 to 2006 period of $52,482. Looking at the earlier years than 2000 it can reasonably be assumed that the husband’s income was higher than the wife’s for most of the marriage, however it could not be said to be significantly greater. There were years when the husband had large tax losses such as $281,629 in 1991 and $277,242 in 1989.
(c)During the marriage properties were acquired by the parties from time to time. A property at O was acquired. A property at … was acquired. Properties in regional New South Wales and Newcastle were acquired. In relation to those investments I accept the husband carried out the tasks he describes in paragraph 47 and 48 of his affidavit.
(d)The husband has managed the Mistle Superannuation Fund since 1994. I accept he carried out the tasks as set out in paragraph 47 of his affidavit.
(e)The husband has made a contribution as home maker and parent. As can be seen earlier I have concluded that the wife performed the vast majority of the home maker and parent tasks which were undertaken by the parties. I accept however that the husband made a significant contribution in this area as well. I accept the contents of paragraphs 41 (household tasks), 42 (garden maintenance), 43 (family washing), 44 (arranging for the dry cleaning to be done), 45 (unpacking the groceries), 49 (managing the household finances).
(f)The husband made other non financial contributions as described in paragraph 46 of his affidavit. These contributions related to the work done by the husband associated with the improvements to the former matrimonial home in about 1997.
Post separation
The husband set out the contributions relied upon in his Case Outline document as follows:
Contributions Separation to Trial:
The Husband’s mother died subsequent to the institution of the present proceedings resulting in the Husband receiving the benefit of her estate.
The Wife cannot be regarded as contributing to this inheritance and there is no evidence of unusual circumstances which would provide a basis for such a claim.
It is in those circumstances and consistent with In the Marriage of Bonnici[36] more appropriate to consider the property of the parties separately from the inheritance received by the Husband and the contributions addressed below are contributions to the property of the parties and not the inheritance.
[36] (11991) 15 FamLR 138.
a)At the date of separation the parties’ youngest child, [D], was aged 17.
b)The Husband and the Wife thereafter derived personal exertion incomes and each received financial assistance from their mothers;
c)The Wife asserts she received $165,888 from her mother to the present.[37]
[37] Calculated by reference to the schedules of the Wife filed pursuant to direction made 3 October 2008.
d)The Husband asserts he received $215,488.28 from his mother to the date of her death on […] August 2007.[38]
e)What is relevant in relation to this period is what contribution each made to the property of the parties or each other or the children to the extent that is relevant having regard to their age.
f)The Husband’s financial contributions of this kind were $148,144 to 4 June 2009.[39]
g)The Husband’s further contributions were
·The provision of the property for the benefit of the Wife; and
·$30,000 paid towards the acquisition of the property at [E] [40] (Husband’s total $178,144)
h)The Wife’s financial contributions over this period were payment of 40% of the mortgage payments in respect of the former matrimonial home (calculated by reference to the Husband’s payments at $14,327.30) and payments in respect of the children during so much of the period post separation that is relevant.
[38] Husband’s affidavit para. 28 at page 9 (the reference to 16 August 2006 should be 25 August 2007) and para. 38, items 1 to 3, which are payments pre-dating the death of the Husband’s mother sworn 4 June 2009.
[39] Husband’s affidavit para. 67 (the superannuation fund payment may involve double counting which will be resolved prior to trial) sworn 4 June 2009.
[40] Husband’s affidavit para. 70 sworn 4 June 2009 and Note A to Financial Statement sworn 7 August 2009.
I find the husband made the following contributions post separation.
(a)I accept that the best approach to the consideration of this case is not to consider the husband’s inheritance at this point. Clearly if it was to form part of the pool of assets in which the assets acquired by the parties at the time of marriage and up to the date of separation then he must be seen as having contributed all of the inheritance.
(b)Following the separation the husband has continued to work and his income has been disclosed to the court.
(c)The husband has received $215,488 from his mother between the date of separation and the date of her death.
(d)In paragraph 67 of the husband’s affidavit he sets out what he has paid in the nature of family expenses since the separation. He sets out the expenditure by financial year. In total he has paid $148,142. That sum includes $12,000 contributed to the Mistle Superannuation Fund in the 2009 tax year.
(e)Since the separation the husband has acquired the E property. The property was acquired in May 2009. The husband paid a deposit of $45,000 from his inheritance and his own income. The purchase price for the property is $180,000 plus $6,000 in stamp duty and costs. The husband borrowed $140,000 and that loan forms part of the $198,802 liability to NAB as stated in the balance sheet.
(f)The husband paid the Medfin liability of $40,000 with money provided to him by his mother.
Contribution to Superannuation:
The balance sheet illustrates that the husband’s interest in the Mistle Superannuation Fund is vastly greater than the wife’s. The husband’s interest is $650,319 while the wife’s is $58,161. There is no specific evidence before the court which shows how the parties interests have been valued. The fund is a private fund and it is reasonable to assume that the fund has grown through the contributions of the parties and investment growth.
I accept that the parties entitlements in the fund reflect the proportions of their contributions to the funds. I also accept that the primary value in the fund arose as a result of the parties making contributions during the course of the cohabitation.
Money received by the parties from their respective mothers post separation.
The parties each have received significant sums of money from their mothers post separation. The husband I have found received $617,386 from his mother and from her estate (ie drawn from estate accounts) post separation. The wife received $207,489 from her mother post separation. This is a very difficult area of contribution to assess. There is no specific evidence as to how each party conducted their financial affairs post separation. I consider the approach which is likely to give rise to a just and equitable result is to have regard to the receipt of these funds by the parties post separation under section 75(2). To do otherwise would in my view have the potential to be prejudicial to the wife.
Conclusion based on Contribution
The husband submits that the contributions to the parties’ assets and superannuation should be determined to be weighted in the husband’s favour 55 to 60 per cent to the husband and the balance to the wife. The husband submits that the post separation contributions should be seen as equal and therefore no departure from the division assessed as favouring the husband.
The wife submits the assessment of contribution should be somewhere between 50 and 51 per cent to herself.
Weighing up all the contributions, I conclude the contributions must favour the husband significantly. The matters which are the most significant in this balance are as follows:
·The husband’s initial contributions were about twice those of the wife (about $200,000 as opposed to the wife’s $83,000)
·The husband’s income earned during the marriage was probably greater than the wife’s but not significantly so.
·The wife’s contribution as home maker and parent was much greater than the husband’s.
·The contribution from the husband’s mother during the marriage was far greater than that received by the wife from her mother. The husband received $498,500 whilst the wife received $212,514.
·Post separation each party has contributed significantly. The husband’s contribution has been principally financial and the wife’s has been both financial and in the area of caring for the children even though two were adults at separation and D was 18 in the year following separation.
I determine that the contribution assessment should favour the husband over the wife and be reflected in the percentage 60 per cent to the husband and 40 per cent to the wife.
Consideration of Section 75(2) Matters
Each of the parties have made submissions in relation to the relevant matters to be taken into account under s 75(2) of the Act. I find the relevant matters are as follows.
The husband is 62 years of age and the wife 55 years of age. Both have suffered significant health problems during the marriage. I must reasonably assume that health issues are likely to be a recurring theme for each of the parties into the future.
The division of the parties net assets as determined after assessment of contribution will give the husband $2,482,792 in assets and the wife $1,655,194 in net assets.
The husband retains $8,930,845 in net estate assets.
Post separation the husband received total funds of $617,386 from his mother. These were monies either paid to the husband prior to his mother’s death ($179,488 by 25 August 2007) or are funds which he has drawn from his mother’s estate.
The wife was diagnosed with cancer in 2002. Resulting from that illness the wife has a reduced capacity to work. I have found that into the foreseeable future the wife should be able to work 20 hours per week as a medical practitioner. The number of hours she can work might gradually increase as the tension surrounding these proceedings declines and she discovers energy which has been diverted to other causes since 2002.
The Wife concedes that there is a likelihood that she would continue to receive benefits amounting to approximately $17,513 per annum on average from her mother either directly or through her mother’s Family Trust.
I consider that in the reasonably foreseeable future it is probable the wife will have control over not less than one million dollars which may be applied for her own use should, arising from the death of her mother and the increase in assets of her mother’s Family Trust.
The husband has a liability to pay annual leave and long service leave for GY, an employee of his, (a total liability of $26,817).
From the date of separation in July 2006 until 15 May 2009 the wife received gifts from her mother totalling $207,489 (see exhibit W4)
In the 2007 tax year the wife’s income was $55,969. In the 2008 tax year it was $52,751. The husband’s 2009 taxable income is $209,195.
The wife and children have had occupation of the matrimonial home post separation.
Although the children are now adults they are not yet self supporting. I accept that the wife will probably bear the onus of providing accommodation and financial support for the children for some years to come. The husband appears to have little or no relationship with the children and that adds to the probability that the children will first turn to the wife for assistance. Further it seems probable that the wife will continue to own the property which the children would consider their home. The property is likely therefore to be attractive to the children to remain living in until they form relationships which require separate accommodation from that of the wife.
The husband concedes that there needs to be an adjustment in favour of the wife. He submits that 5 per cent of the matrimonial asset pool is sufficient as an adjustment.
The wife submits there should be a very substantial adjustment in her favour. She submits that adjustment should be 40 per cent
Conclusion on s 75(2)
I conclude there needs to be a very substantial adjustment in favour of the wife. The husband retains assets received from his mother’s estate of $8,930,845. This sum is more than twice the available property in the matrimonial pool.
The wife does not pursue a result which would see her receive more than the net assets in the matrimonial property pool of $4,137,986. That is appropriate.
Having regard to all of the matters set out above I consider an adjustment which would see the wife receive 80 per cent of the asset pool is appropriate. That would mean an adjustment of 40 per cent to the wife.
The effect of such a determination would mean the wife receives $3,310,389 in net property and the husband receives $827,597.
Just and Equitable
The result translates to the wife receiving the B matrimonial home, subject to the debt, and otherwise retains all of the property and superannuation standing to her credit on the balance sheet. She will need to pay the husband $27,230.
The Orders to be made by the Court
The wife is to receive $3,711,658 in assets (i.e. items 1, 11 to 19 on the balance sheet). She will be responsible for $432,200 in debt (items 20 and 21 on the balance sheet). She will retain her superannuation of $58,161 (item 28 on the balance sheet).
The wife will be required to indemnify the husband in relation to the mortgage on the matrimonial home and the debt to the Council in relation to rates.
The wife will need to pay the husband the sum of $27,230. In the circumstances of this case I consider six weeks is sufficient to allow the wife to raise that money. In the unlikely event that the wife does not make that payment the husband will have liberty to apply to seek the sale of assets to meet the payment. Further he will not be required to transfer his interest in the matrimonial home until the payment is made.
Each party will otherwise retain the assets standing in their name and be responsible for any debt owed by them individually.
That result is, in my view, just and equitable.
I certify that the preceding two hundred and ten (210) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Le Poer Trench.
Associate:
Date: 22 January 2010
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