Mokare and Mokare

FAMILY COURT OF AUSTRALIA

MOKARE & MOKARE

[2010] FamCA 490

FAMILY LAW – PROPERTY SETTLEMENT – Agreed adjustment on contributions – Adjustment under s 79(4)(d)-(g)

Family Law Act 1975 (Cth) ss 75(2); 79(4)(d) - (g)

APPLICANT:

Ms Mokare

RESPONDENT:

Mr Mokare

FILE NUMBER:

SYF

3360

2004

DATE DELIVERED:

17 June 2010

PLACE DELIVERED:

Sydney

PLACE HEARD:

Sydney

JUDGMENT OF:

Watts J

HEARING DATE:

20 - 21 May 2010

REPRESENTATION

COUNSEL FOR THE APPLICANT:

Mr Johnston

SOLICITOR FOR THE APPLICANT:

Marks Griffiths & Bova

COUNSEL FOR THE RESPONDENT:

Mr Jackson

SOLICITOR FOR THE RESPONDENT:

MCW Lawyers

Orders

Any prior orders are discharged.
An order be made pursuant to s 79 Family Law Act in the terms of paragraphs 3 to 10 below.
Within 3 months of the date of these orders the husband shall pay to the wife the sum of $744,893.00 by way of property settlement.
Simultaneously with the payment referred to in paragraph 3:
4.1.The wife shall do all acts and things and sign all documents necessary to:
4.1.1.transfer to the husband her right, title and interest in the property situate at and known as the M Business (“the property”) Folio Identifier ….
4.1.2.transfer to the husband her shareholding in the company known as T Holdings Pty Ltd (being the owner of the business known as M Business at M (“the business”)); and
4.1.3.resign as a director of T Holdings Pty Ltd.
4.2.The husband shall do all acts and things and sign all documents necessary to pay out and discharge the following liabilities in the parties’ joint names in respect of the business:
4.2.1.Commonwealth Bank Viridian Business Loan Account No. ….
4.2.2.Debt due in respect of the 2005 Pajero motor vehicle.
4.2.3.Debt due to GE Money in respect of the air conditioners for the business.
AND THAT for the purpose of paragraph 4.2 the wife shall do all acts and things and sign all documents necessary to enable the husband to comply with paragraph 4.2 including but not limited to the signing of discharge authorities.
Simultaneously with the husband’s compliance with paragraphs 3 and 4:-
5.1.the wife shall do all acts and things and sign all documents necessary to transfer to the husband all her right, title and interest in the home unit situate at and known as … (“unit 21”) being the whole of the land contained in Lot 21, Building Plan Unit ….
5.2.the husband shall do all acts and things and sign all documents necessary to pay out and discharge the mortgage with the Bank of Queensland secured against unit 21.
AND THAT for the purposes of paragraph 5.2 the wife shall do all acts and things and sign all documents necessary to enable the husband to comply with paragraph 5.2 including but not limited to the signing of discharge authorities.
Simultaneously with compliance with paragraphs 3, 4 and 5, the wife shall do all acts and things and sign all documents necessary to cause T Holdings Pty Ltd to transfer to the husband all of its right, title and interest in the 2005 Pajero and the coach.
In the event that the husband defaults in complying with paragraph 3, the husband and the wife as individuals and in their capacity as shareholders in T Holdings Pty Ltd shall do all acts and things and sign all documents necessary to cause the property and the business to be sold in accordance with the following conditions of sale:-
7.1.The parties will sign all selling authorities as may be necessary to enable the property and the business to be listed for sale as a going concern but with separate contracts to issue for the property and the business, with such licensed real estate agent or agents as agreed between the parties and in default of agreement such agent or agents as may be nominated by the President of the Real Estate Institute of New South Wales for such purpose.
7.2.The parties will instruct a solicitor to have the carriage of the sale of the property and the business being such solicitor as agreed between the parties or in default of agreement a solicitor appointed by the President of the Law Society of New South Wales for such purpose.
7.3.The parties will list property and the business at such prices as the parties shall agree, or failing agreement, then at such prices as may be determined by a valuer appointed by the President of the Australian Institute of Valuers and Land Economists (INC) New South Wales Division for the time being for such purpose.
7.4.For the purposes of marketing the property, one price (the total of the listing price for the property and the listing price for the business) may be advertised to the public.
7.5.If contracts of sale of the property and the business by private treaty have not been exchanged within two (2) months of the date of listing the business for sale then the parties will cause the business to be listed for sale by way of public auction within two (2) months of the date of listing the business for sale.
7.6.If listed for sale by way of public auction a reserve price shall be fixed by agreement by the parties, and failing agreement the reserve price to be determined by a valuer appointed by the parties or failing agreement appointed by the President for the time being of the Australian Institute of Valuers and Land Economists (INC) New South Wales Division or its then present equivalent upon the written request of either party.
7.7.The husband and the wife may attend such auction sale of the property and business and in the event that the said reserve price of the business is not reached the parties may negotiate with the highest bidder or any other bidder present at the auction or any other interested party in an effort to sell the business at a price not more than ten percent below the reserve price for the business. If contracts for sale of the business are not exchanged at a price of nor more than 10% below the reserve price as aforesaid within fourteen (14) days of the auction taking place then the husband and the wife shall forthwith relist the business for sale by private treaty.
7.8.In the event that the property and the business are to be sold by auction then the husband will pay the auction advertising expenses. The auction expenses shall be deducted from the proceeds of sale of the property and the business prior to any distribution to the parties and the amount the husband has paid will be refunded to him.
Upon completion of the sale of the property and the business the husband and the wife shall do all acts and things and sign all documents necessary to cause the net proceeds of sale to be distributed as follows:
8.1.In payment of all selling costs and real estate agent’s commission and solicitor’s costs on the sale;
8.2.In payment of the following liabilities:
8.2.1.Commonwealth Bank Viridian Business Loan Account No. ….
8.2.2.In payment of the debt due in respect of the 2005 Pajero motor vehicle;
8.2.3.In payment of the debt due to GE Money in respect of the air conditioners for the business;
8.2.4.In payment to the wife of 53 percent of the sale price of the property (but not the business);
8.2.5.In payment of the balance to the husband.
AND upon the payment referred to in paragraph 8.2.4 the wife will comply with her obligations under paragraphs 4, 5 and 6.
The parties are otherwise entitled to the sole legal beneficial ownership of all other items of real and personal property of whatsoever nature and kind in their respective ownership, possession or control as at the date of these orders, including but without limiting the generality thereof, money on deposit, shareholdings, insurance policies, motor vehicles, furniture, furnishings and effects and superannuation entitlements.
Save and except that these orders provide to the contrary, each of the parties shall, by this order, mutually release the other from all debts owing from one to the other.
If either party refuses or neglects to sign (within fourteen (14) days of a written request to do so) any documents necessary to effect the terms of these Orders, the Registrar of the Sydney Registry of the Family Court of Australia is hereby appointed pursuant to the provisions of Section 106A of the Family Law Act to execute such documents on behalf of such party.

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

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYF 3360 of 2004

MS MOKARE

Applicant

And

MR MOKARE

Respondent

REASONS FOR JUDGMENT

INTRODUCTION

The parties in this matter married in 1983 and separated on 20 December 2003. At separation the wife had the care of the three children of the marriage who were at that time E then aged 19, S then aged 15 and J then aged 12.
The parties agreed on their assets and liabilities apart from one item. The parties have agreed that those assets would be divided into two pools. The parties have agreed that contributions towards the first pool of assets should be treated as 55 percent to the wife and 45 percent to the husband. The primary reason that that is an appropriate position for the parties to take is the contributions that the wife made in the role of homemaker and parent in the period of time that has elapsed between the date of separation and the date of hearing. The second of those pools represents an asset that the wife received by way of an inheritance well after the separation. It is agreed the wife made a 100 percent contribution to that asset.
The overall effect of the agreement on contributions across both pools is that there is a 60.6 percent division in the wife’s favour and a 39.4 percent division in the husband’s favour.
The parties are primarily in disagreement about whether or not any further adjustment should be made in the husband's favour considering those matters in s 79(4)(d) - (g) Family Law Act (“FLA”). The wife’s position is there should be no further adjustment. The husband’s position is that there should be a 6.7 percent adjustment in his favour.

SHORT HISTORY

The wife was born in 1954 and is currently aged 55 years. She migrated from Italy in 1959, aged 4 years.
The husband was born in 1958 and is currently aged 51 years.
The parties became engaged in 1978 and were married in 1983.
The parties’ first child E was born in 1984. She is now 26 years old.
The parties’ second child S was born in 1987. She is now 22 years old.
The parties’ third child J was born in 1990. He is now 19 years old.
The parties separated on 20 December 2003 and the wife relocated to Sydney with the children.
The parties were divorced on 12 February 2007.

APPLICATIONS

Wife

The wife seeks the following:
1.That [T] Holdings Pty Limited be joined as a party to these proceedings.
2.That the parties forthwith do all acts and things and execute all documents necessary to sell the property situate at [unit 210 in the State of Queensland (“the Queensland property”) on such terms and with an agent agreed upon by the parties within 14 days of the date of this order and failing agreement then with such agent as the President of the Real Estate Institute of Queensland shall nominate and such agent shall determine the method and terms of sale including sale price.
3.That the proceeds of sale of the pursuant to order 4 shall be distributed in the following order and priority:
i. In payment of all legal costs and agents fees and commissions;
ii. In discharge of the mortgage;
iii. Payment of any Capital Gains Tax;
iv. In payment of the remainder to the wife.
4.That within 6 weeks of the date of this order the husband pay to the wife a capital sum calculated in accordance with the formula in the Schedule hereto (“the capital sum”).
5.That upon payment of the capital sum by the husband to the wife she shall simultaneously:-
5.1do all acts and things and execute all documents necessary to transfer to the husband the whole of her right title and interest in the property situate at and known as […] (“the [M] property”) (Folio Identifier ……….); and
5.2Transfer the share she holds in [T] Holdings Pty Limited (“[T Holdings]”) to the husband;
5.3Resign as a director and secretary of [T Holdings].
6.That upon compliance with orders 5.2 and 5.3 the husband shall indemnify the wife and hold her harmless in respect of any and all liability of [T Holdings] including but not limited to any taxation liability.
7.That in default of payment of the capital sum by the husband to the wife that the wife forthwith upon such default be appointed Trustee for Sale of the [M] property.
8.That simultaneously with the wife’s appointment referred to in order 7 that:-
8.1the husband and [T Holdings] deliver up vacant possession of the [M] property;
8.2the wife appoint a manager to the [M Business];
8.3[T Holdings] deliver up its books of account for the [M Business] to the wife;
8.4[T Holdings] deliver up to the wife all of its vehicles and equipment associated with the business of the [M Business].
9.That pursuant to order 7 above the wife forthwith upon her appointment shall do all acts and things and execute all documents necessary to sell the [M] property and the [M] business on such terms and with an agent agreed upon by the parties within 14 days and failing agreement then with such agent as the President of the Real Estate Institute of New South Wales shall nominate and such agent shall determine the method and terms of sale including sale price.
10.That the proceeds of sale of the [M] property and the [M] business pursuant to order 7 shall be distributed in the following order and priority:
i.In payment of all legal costs and agents fees and commissions;
ii.In payment of any Capital Gains Tax;
iii.In payment of the capital sum to the wife together with interest calculated in accordance with the rates prescribed by the Rules from default to payment;
iv.In payment of the remainder to the husband.
11.That in the event that either party shall fail, neglect or refuse to execute any deed, instrument or document to give validity and effect to these orders then upon the other party filing an affidavit setting out such failure, neglect or refusal then a Registrar or a Deputy Registrar of the Sydney Registry of the Court is hereby appointed pursuant to section 106A of the Family Law Act to execute any such deed, instrument or document in the name of the party who defaults and to do all things necessary to give validity to the operation of the deed, instrument or document.
12.That the parties have liberty to apply on 7 days notice in respect of the implementation of these orders.
13.That the husband pay the wife’s costs of and incidental to these proceedings.

Husband

The husband seeks the following orders:
1.That within 4 months of the date of these orders the husband shall pay to the wife the sum of $615,504.00 by way of property settlement.
2.That simultaneously with the payment referred to in order 1:
a)the wife shall do all acts and things and sign all documents necessary to:
(i)   transfer to the husband her shareholding in the company known as [T] Holdings Pty Ltd (being the registered proprietor of the real property being the whole of the land contained in Folio Identifier […] (“the property”) and which conducts the business known as [M Business] at [M] (“the business”)); and
(ii) resign as a director of [T] Holdings Pty Ltd
b)The husband shall do all acts and things and sign all documents necessary to pay out and discharge the following liabilities in the parties’ joint names in respect of the business:
(i)   Commonwealth Bank Viridian Business Loan Account No. […].
(ii) Debt due in respect of the 2005 Pajero motor vehicle.
(iii)         Debt due to GE Money in respect of the air conditioners for the business.
AND THAT for the purpose of order 2(b) the wife shall do all acts and things and sign all documents necessary to enable the husband to comply with order 2(b) including but not limited to the signing of discharge authorities.
3.That simultaneously with compliance with orders 1 and 2:-
a)the wife shall do all acts and things and sign all documents necessary to transfer to the husband all her right, title and interest in the home unit situate at and known as […] (“unit 21”) being the whole of the land contained in Lot 21, Building Plan Unit […].
b)the husband shall do all acts and things and sign all documents necessary to pay out and discharge the mortgage with the Bank of Queensland secured against unit 21.
AND THAT for the purposes of order 3(b) the wife shall do all acts and things and sign all documents necessary to enable the husband to comply with order 3(b) including but not limited to the signing of discharge authorities.
4.That simultaneously with compliance with orders 1, 2 and 3 the wife shall do all acts and things and sign all documents necessary to cause [T] Holdings Pty Ltd to transfer to the husband all of its right, title and interest in the 2005 Pajero and the coach.
5.That in the event that the husband defaults in complying with order 1, the husband and the wife in their capacity as shareholders in [T] Holdings Pty Ltd shall do all acts and things and sign all documents necessary to cause the real property owned by [T] Holdings Pty Ltd (“the property”) and the business know as [M Business] (“the business”) to be sold in accordance with the following conditions of sale:-
a)The parties will sign all selling authorities as may be necessary to enable the property and the business to be listed for sale with such licensed real estate agent or agents as agreed between the parties and in default of agreement such agent or agents as may be nominated by the President of the Real Estate Institute of New South Wales for such purpose.
b)The parties will instruct a solicitor to have the carriage of the sale of the property and the business being such solicitor as agreed between the parties or in default of agreement a solicitor appointed by the President of the Law Society of New South Wales for such purpose.
c)The parties will list property and the business at such price as the parties shall agree failing agreement then at such price as may be determined by a valuer appointed by the President of the Australian Institute of Valuers and Land Economists (INC) New South Wales Division for the time being for such purpose.
d)If contracts of sale of the property and the business by private treaty have not been exchanged within four (4) months of the date of listing the business for sale then the parties will cause the business to be listed for sale by way of public auction within six (6) months of the date of listing the business for sale.
e)If listed for sale by way of public auction a reserve price shall be fixed by agreement by the parties and failing agreement the reserve price to be determined by a valuer appointed by the parties or failing agreement appointed by the President for the time being of the Australian Institute of Valuers and Land Economists (INC) New South Wales Division or its then present equivalent upon the written request of either party.
f)The husband and the wife may attend such auction sale of the property and business and in the event that the said reserve price of the business is not reached the parties may negotiate with the highest bidder or any other bidder present at the auction or any other interested party in an effort to sell the business at a price not more than ten percent below the reserve price for the business. If contracts for sale of the business are not exchanged at a price of nor more than 10% below the reserve price as aforesaid within fourteen (14) days of the auction taking place then the husband and the wife shall forthwith relist the business for sale by private treaty.
g)In the event that the property and the business is to be sold by auction then each of the parties will, upon demand, pay in equal shares the auction advertising expenses. In the event that either party should fail to do so, then the auction expenses shall be deducted from the defaulting parties’ entitlement from the proceeds of sale of the business.
6.That upon completion of the sale of the property and the business the husband and the wife shall do all acts and things and sign all documents necessary to cause the net proceeds of sale to be distributed as follows:
a)In payment of all selling costs and real estate agent’s commission and solicitor’s costs on the sale;
b)In payment of the following liabilities:
(i)Commonwealth Bank Viridian Business Loan Account No. […].
(ii)In payment of the debt due in respect of the 2005 Pajero motor vehicle;
(iii)In payment of the debt due to GE Money in respect of the air conditioners for the business;
(iv)In payment of the sum of $615,504 to the wife;
(v)In payment of the balance to the husband.
7.That the parties are otherwise entitled to the sole legal beneficial ownership of all other items of real and personal property of whatsoever nature and kind in their respective ownership, possession or control as at the date of these orders, including but without limiting the generality thereof, money on deposit, shareholdings, insurance policies, motor vehicles, furniture, furnishings and effects and superannuation entitlements.
8.That save and except that these orders provide to the contrary, each of the parties shall, by this order, mutually release the other from all debts owing from one to the other.
9.That in default of either or both of the husband and the wife doing all such things and executing all such documents as is necessary to comply with these orders, a Registrar of the Sydney Registry of the Family Court of Australia, or such other person appointed by the court, be authorised to do all such acts things and execute all such documents on behalf of either or both of the husband and the wife and order that in the event that either party procures compliance with the orders set out hereunder by obtaining execution of documents pursuant to this order, then the party procuring such execution of documents shall be indemnified by the other party for his or her costs and expenses incurred in obtaining such compliance.
10.That the interim orders made by consent by the Family Court on 8 July 2004, 5 July 2005 and 7 June 2006 be discharged.
11.No order as to costs with the intent that each party pays his or her own costs.

Counsel for the Wife submitted that the husband’s proposed orders required the business T Holdings Pty Ltd to be joined as a party. The parties own and control the company. I can make orders against the parties, as office bearers of the company, without joining the company as a party.

CREDIT

No issue of credit arises in this case. Both witnesses in my view attempted at all times to honestly respond to questions that they have been asked.

CHRONOLOGY

The chronology that I set out is skeletal only. It is of little relevance to the issues that I have to decide given that the parties have agreed that there should be a 60.34/39.66 division of the assets based on the contributions of the parties. The only matters that I need to carefully consider are the matters referred to in s 79(4)(d) - (g).
The wife was born in 1954 and is currently aged 55 years. She migrated from Italy in 1959, aged 4 years.
The husband was born in 1958 and is currently aged 51 years.
The parties became engaged in 1978.
In 1982 the parties purchased a property at V for $86,000. The wife says a deposit of $2,000 was given to them by her sisters, which was later repaid, and that she had saved an amount which she also put forward. The husband says he funded $25,000 from his savings; the wife agrees he funded $20,000. The balance was financed by way of a mortgage.
The parties were married in 1983 and commenced cohabitation.
In 1983 the parties, in partnership with another couple, purchased a takeaway business. The wife said she contributed to this purchase from her savings. The business was sold in 1985.
The parties’ first child E was born in 1984. She is now 26 years old.
During 1985 the wife worked as a cleaner.
In 1986 the wife obtained work at O School. The parties separated for about 6 weeks during this year.
The wife says that in 1987 the wife’s father made a gift to each of his children of $10,000. This was applied by the parties as a deposit for a holiday home at L.
In February 1987 the parties were appointed directors of T Holdings Pty Ltd. The wife was appointed as Secretary.
The parties’ second child S was born in October 1987. She is now 22 years old.
The wife took some maternity leave from her job at O School in 1987/1988 and returned 6 months after the birth of S. The wife left this job in June 1990.
The parties invested in real estate during the marriage. Properties were purchased at B, D and four units were purchased at C.
The parties’ third child J was born in August 1990. He is now 19 years old.
In 1993 the parties sold the following:
33.1.V property for $240,000
33.2.L property for $140,000
33.3.N property for $90,000
33.4.Pajero
In 1993, following the sale of their properties, the parties moved in with the wife’s mother for approximately 12 months before purchasing the M business.
T Holdings Pty Limited was incorporated in 1993.
The parties purchased the ‘M Business’ for between $700,000 and $800,000 on 5 December 1994.
In 1995 T Holdings purchased a Mercedes Luxury Coach with by way of a $150,000 refinance of the business through the Commonwealth Bank.
In 1995 the wife received a second $10,000 gift from her father. This was applied towards a deposit for a unit.
The parties separated on 20 December 2003 and the wife relocated to Sydney with the two younger children. The children were aged 12, 15 and 19 at that time.
In 2004 the two younger children began at their new schools, and the wife began working as a waitress.
On 25 February 2004 the wife discovered that the husband was no longer paying the MBF benefits for the wife and children. The wife borrowed $2,200 to cover the premiums.
The wife made an application for Centrelink benefits and registered for child support on 19 May 2004.
In November 2004 the wife ceased work due to a cyst on her spine. The wife was admitted to hospital on 20 December 2004.
In December 2004 the wife borrowed $2,000 from her mother to pay for the removal of E’s wisdom tooth.
In February 2005 T Holdings was ordered to pay $18,934 in overdue tax.
On 14 March 2005 the sale of Unit 6 at D settled at $190,000. The wife’s solicitors received half the net proceeds and the wife received $48,000.
In April 2005 the husband purchased a new Pajero for $69,000.
On 20 April 2005 the wife had a malignant cancer removed. Further treatment was required on 27 April 2005, 28 April 2005 and 2 May 2005.
The parties entered into Consent Orders regarding the sale of units 11, 19 and 13 at C on 5 July 2005.
On 3 October 2005 Unit 11, C, was sold for $350,000. The wife’s solicitors received $42,447 of the settlement monies and $21,223.50 was applied by the wife towards the ATO debt for T Holdings Pty Ltd.
In October 2005 the wife commenced employment at a nursing home as a cleaner.
On 13 December 2005 Unit 23, C was sold for $350,000. The wife received $55,110.70, from which $20,500 was paid to the ATO. The husband received $110,220 and also paid $20,500 to the ATO.
In early May 2006 the wife and husband agreed that the wife could sell her Pajero and buy a smaller car for herself and a car for S.
On 16 May 2006 Unit 19, C, was sold for $235,000 and each party received $27,000.
Orders were made by Judicial Registrar Loughlan on 7 June 2006. The wife received $30,000 on the basis of those orders on 8 June 2006, to be applied to accommodate herself and the two younger children.
The parties were divorced on 12 February 2007.
In July 2007 the wife and children moved to rental accommodation. They returned to B in 2008. The youngest child lived with the father for 8 months in 2008.
In February 2008 the wife’s mother died and the wife received a one-third interest in her home in B.

APPROACH TAKEN

In this matter my task is to:
59.1.Identify and value the property, assets, financial resources and liabilities of the parties;
59.2.Identify relevant contributions and assess them;
59.3.Consider relevant matters referred to in Section 79(4)(d) – (g) FLA;
59.4.Ensure my order adjusting the property, assets and liabilities of the parties is just and equitable.

BALANCE SHEET

The assets and liabilities of the parties are as follows:

Pool 1
Assets
Item no.	Title	Description	Husband	Wife	Agreed/ Determined	Value
1	J	T Holdings Pty Ltd	$1,405,000.00	$1,405,000.00	Agreed	$1,405,000.00
2	J	Unit 21	$215,000.00	$215,000.00	Agreed	$215,000.00
3	H	CBA account No. …59	$202.00	$202.00	Agreed	$202.00
4	W	ANZ Savings (…58)	$22,206.00	$22,206.00	Agreed	$22,206.00
5	W	ANZ Savings (…02)	$500.00	$500.00	Agreed	$500.00
6	W	Members Equity …28	$200.00	$200.00	Agreed	$200.00
7	J	2005 Pajero	$7,000.00	$7,000.00	Agreed	$7,000.00
8	W	Ford Focus	$18,000.00	$18,000.00	Agreed	$18,000.00
9	J	Coach	$20,000.00	$20,000.00	Agreed	$20,000.00
10	J	Jewellery (in wife's possession)	$20,000.00	$20,000.00	Agreed	$20,000.00
11	W	Furniture	$2,000.00	$2,000.00	Agreed	$2,000.00
12	H	Furniture	$3,000.00	$3,000.00	Agreed	$3,000.00
13	W	Funds received by wife	$135,819.00	$135,819.00	Agreed	$135,819.00
14	H	Funds received by husband	$176,025.00	$176,025.00	Agreed	$176,025.00
15	W	Hestia superannuation	$22,938.00	$22,938.00	Agreed	$22,938.00
16	H	Host Plus superannuation	$9,789.00	$9,789.00	Agreed	$9,789.00
17	H	Bartercard	$0.00	$31,867.17	Determined	$31,867.17
Total assets			$2,089,546.17
Liabilities
Item no.	Title	Description	Husband	Wife	Agreed/ Determined	Value
18	J	Bank of Qld account …77	$166,661.00	$166,661.00	Agreed	$166,661.00
19	J	Commonwealth Bank Viridian Account	$48,036.00	$48,036.00	Agreed	$48,036.00
20	H	Commonwealth Bank mastercard	$3,390.00	$3,390.00	Agreed	$3,390.00
21	J	Loan for 2005 Pajero	$8,865.00	$8,865.00	Agreed	$8,865.00
22	J	GE Money loan	$7,157.00	$7,157.00	Agreed	$7,157.00
23	Legal fees owed to Mr Bellissimo and counsel	$0.00	$0.00	Agreed	$0.00
Total liabilities			$234,109.00
Total net assets			$1,855,437.17
Pool 2
Assets
Item no.	Title	Description	Husband	Wife	Agreed/ Determined	Value
24	W	33.3% wife’s mother’s home at B	$340,000.00	$340,000.00	Agreed	$340,000.00
Total assets			$340,000.00
Liabilities
Item no.	Title	Description	Husband	Wife	Agreed/ Determined	Value
25	W	Perpetual Limited	$74,000.00	$74,000.00	Agreed	$74,000.00
Total liabilities			$74,000.00
Total net assets			$266,000.00
Total net assets over all pools				$2,121,437.17

Once the two pools are considered together, the overall assets are $2,121,437.
The wife receives 55 percent of pool 1 or $1,020,490 ($1,855,437.17 x 55%) and $266,000 which is all of pool 2. In total the wife receives $1,286,490. This is 60.64 percent of the overall assets (($1,286,490/$2,121,437) x 100).
The husband receives 45 percent of pool 1 or $834,947 ($1,855,437 x 45%) and none of pool 2. In total the husband receives $834,947 which is 39.36 percent of the overall assets ($834,947/$2,121,437 x 100). I will round those calculations to one decimal point (ie a 60.6/39.4 division).

Bartercard

The parties agreed on a joint balance sheet on 30 November 2009. The hearing proceeded on the basis that apart from item 13 on that balance sheet, there was no controversy in relation to the items to be placed on that balance sheet or their value. The parties reached an agreed figure in relation to item 13. Connected to that agreement was an agreement by the parties to amend the figure for item 14 to a figure of $176,025.
In final submissions, counsel for the wife argued that it would be appropriate to add one further item to the balance sheet. That item is the credit that the company (which after I make orders will be in the sole control of the husband) has with Bartercard. The company has a current credit with Bartercard in the sum of $31,867.17. An analysis of the balance sheet which is Exhibit B for the 2009 financial year would indicate that the parties have taken into account all the relevant items on the balance sheet of T Holdings Pty Ltd by exporting relevant items onto the balance sheet in this hearing which is Exhibit A, except for the Bartercard credit. A number of inconsequential items have been overlooked appropriately. For example, a loan to the parties, minor items and a goodwill figure of $49,015 in circumstances where it does not appear that the net maintainable earnings of the business would mean that there is any goodwill value. The major assets and liabilities have otherwise been put onto the balance sheet. As I say, the Bartercard is the sole significant exception.
Counsel for the husband argues that the husband would be denied procedural fairness if the wife was not required to abide by her agreement in relation to the list of items on the balance sheet and there is some force in that argument.
On balance, however, I think it is just and equitable to add the one significant asset that it seems to me the parties have overlooked when preparing the initial balance sheet in November last year. It is an item of some significance in terms of value and it is appropriate that it be added back onto the balance sheet. I add the Bartercard credit of $31,867.17 onto the balance sheet.

CONTRIBUTIONS

As indicated in the introduction, the parties have agreed on a 60.6/39.4 division in the wife’s favour based upon contributions.
The main reason for the adjustment in the wife’s favour is the inheritance she received and the fact that after separation the wife was the sole carer of the two younger children, with the exception of an 8 month period where the youngest child lived with the father. The father would visit the children once or twice a month. The youngest child has an intellectual disability as well as dyslexia.
After separation the mother and the two younger children moved in with the maternal grandmother. Living conditions were cramped and uncomfortable. Rent was not paid as the wife could not afford it. The wife continued her homemaking duties in this home.
After separation the wife was financially responsible for the children, save for a child support income of $20.30 per child per week. The wife’s mother provided a place for the family to live. The wife said she also received loans from other family members.
The husband’s contribution to the children after separation has been minimal. His original assessment was about $20 per week per child, for the two children under 18 years. A reassessment in 2005 led to the payments being increased to $800 per month. The husband says he paid this amount from 2005 to 2006, but decided to dispute the assessment and stopped paying in 2006. At one stage he was $9,000 in arrears, which he paid.
At various times when the wife asked for money for living costs and dentist fees, the husband refused to assist. He also stopped paying MBF premiums, and his reason was “Well, she left me.”
The husband says he paid spousal maintenance from 8 July 2004 to March 2005 of $100 per week in accordance with orders. After this time, he says the wife received proceeds from the sale of the parties’ properties.

SECTION 79(4)(d) - (g) MATTERS

Wife

At 55 years of age, the wife is four years older than the husband.
The wife has had the following employment history:
76.1.Take away shop – the wife worked 7 days per week, with long hours often from 7:30am to 10pm. She worked here up until the day of the birth of first child E. After E’s birth this business was sold by the parties.
76.2.Cleaning – the wife began working as a cleaner within the year after E’s birth in 1985.
76.3.O School – the wife worked here from 1986 to 1987 and 1988 to 1990, before and after the birth of the second child S. She would generally start early in the morning and return home at 9:30pm.
76.4.M Business – the wife worked significant hours at the business owned by the parties until the date of separation, often from 6:30am to 10:30pm, 7 days per week.
After the separation, the wife came to Sydney with the children and lived in her mother’s house. In March 2004 the wife obtained part time employment as a kitchen hand. In October 2005 the wife commenced to work as a cleaner and nurse’s aid at a nursing home. About the beginning of 2007 the wife took on a second job as a cook.
The wife explains that her employment was made more difficult by the chronic back pain she experienced. She had to change her role from Nurse’s aid to cleaner in 2007 to avoid heavy lifting work. The wife continues to take pain medication and continues to feel discomfort which is increasing.
The wife is not in particularly good health. A report by Dr A was tendered late in the submissions, showing that the wife suffered from various ailments, notably back pain and reduced mobility which has and could affect her employment. The wife had an operation to remove a cyst on her back in December 2004 which had her in hospital for a week and having 6 months off work. Her pain continues. The wife asserts she has constant numbness in three toes. Other ailments include migraines, likely melanoma recurrences, gastric ulcer, abdominal pain, and psychological vulnerabilities including stress and anxiety.
The wife has shown that she is able to work a 42 hour work week, and is able to earn a fairly stable income. Her income in the 2009 financial year was $47,972. The wife is working two jobs, working six days a week, 8½ hours per day, with an income of $16 per hour. Her income of $48,000 is not easily earned. The wife works the two jobs as a matter of necessity to make ends meet and hopes to reduce her hours after property settlement.
The wife is illiterate. This significantly restricts the employment she is able to obtain. Even so, the wife does have experience in a number of fields including factory work, nursing, cooking and cleaning. Her employment has been structured so that she need not be exposed to tasks that require literacy skills. The wife gave evidence that these jobs were not difficult to obtain, often secured after a single interview, and at one point her Italian second language gave her an advantage. She has held employment since a young age and has never been fired from a job.
The wife is unable to continue in the nursing field where duties involve heavy lifting, and states that her cleaning duties do impact upon her back pain.
The wife has her adult son and adult daughter living with her as well as her daughter’s boyfriend. All three people contribute $50 a week for board and expenses to the wife however these payments have proven to be unreliable in the past. The wife does not know what the children earn in their employment, nor does the husband. The youngest child’s intellectual difficulties are still an issue.
Counsel for the wife submitted that the second pool of the wife’s inheritance does not put her at a significant financial advantage as the husband suggests, because it is simply a home to live in, just as the husband has the business premises in which to reside. Also, the wife holds only a third interest in the home that comprises the inheritance. The wife’s two siblings who hold the other two third shares also live in the house.
The wife has a loan of approximately $74,000 with ME Bank which covered the part purchase of her sister’s share in her mother’s inheritance, renovations to her area of the inherited home, and stamp duty for the inheritance. The loan is being repaid at a rate of $210 per fortnight.
During final submissions, counsel for the wife abandoned an argument that the wife should receive an adjustment in her favour under s 75(2) because of waste the husband perpetrated arising out of a tax investigation that took place. It was reasonably clear that that tax investigation related to a period of time when the parties were living together and there was nothing in the cross examination of the husband that indicated to me that he had behaved in any underhanded or reckless manner.

Husband

Counsel for the husband submitted that the agreed adjustment between the parties on contributions means that the wife’s assets would be close to $425,000 more than the husband's assets. The true figure is $449,745 ($2,121,437 x (60.6 - 39.4) ¸ 100). This, counsel submitted, ‘changed the goalposts’ of the division, and increased the adjustment originally sought by the husband in his favour for s 75(2) factors, from 2.5 percent as originally sought by the husband to his seeking 6.7 percent.
Counsel submitted that the husband works very long hours for a low income. His income of $25,000 is described by the husband as only ‘on paper’ as he says he draws little out of the company (which is his alter ego). Generally living in and off the business, the husband puts his expenditure at only $100 per week.
If the husband is unable to refinance, so that he can pay the wife out and retain the business after property settlement, he would have to return to the labour market. Counsel for the husband sees this as problematic, considering the husband is nearing 51 and has not worked in the general labour market since 1994. There is no strength in that argument. The husband has not been totally removed from working life, having run a successful business for many years.
The husband has not been unemployed for any significant period. Some of his work experience is:
90.1.Factory work – the husband was a full time factory worker at the date of marriage in 1983.
90.2.Take away shop – the husband says he worked here full time from 1983 to 1985.
90.3.In 1986-1987 the husband worked as a welder for his uncle.
90.4.Between the take away shop and M Business, the husband says he worked as a full time sub-contract courier.
90.5.M Business – the husband worked full time in the parties’ business from 1993 and continues to do so. The husband did a substantial amount of work in relation to hospitality, manual work and financial management. The husband was solely responsible for financial management of the business the parties operated, due to the wife’s illiteracy. Until 2006 the husband drove buses.

The husband outlines in his affidavit the skills he has as a renovator and handyman. He cooks breakfast for the customers at the Business each morning. He sets out how he replaced the gearbox and motor in the coach operated by the Business.
At the age of 51, without significant health problems, I find the husband will be able to support himself even if he is unable to retain the Business.

Conclusions about s 79(4)(d) - (g) matters

Following the agreement as to the adjustment to be made based on contributions, the wife would receive 21.2 percent more of the assets than the husband; or approximately $450,000.
Looking forward, I find the wife has an inferior ability to generate income through personal exertion partly due to her illiteracy and partly due to her health.
The disparity in the financial circumstances of the parties after a long marriage however, does persuade me there should be a 2.5 percent adjustment in the husband’s favour, having considered all the s 79(4)(d) - (g) matters. That is the equivalent to an approximate $53,000 ($2,121,437 x 2.5%) adjustment back to the husband.

JUST AND EQUITABLE

The result achieved having considered an appropriate adjustment under s 79(4)(d)-(g) FLA on the overall assets and liabilities, would be 58.1/41.9 percent division in the wife’s favour. In the event that the husband is to retain the Business and the other assets in his name, he would need to make a payment to the wife in the sum of $745,792. This could be achieved by distributing the assets in the following manner:

H gets 41.9%
Assets
Item No.	Description	Percentage	Value
1	T Holdings Pty Ltd	100%	$1,405,000
2	Unit 21	100%	$215,000
3	CBA account No. …59	100%	$202
7	2005 Pajero	100%	$7,000
9	Coach	100%	$20,000
12	Furniture	100%	$3,000
14	Funds received by husband	100%	$176,025
16	Host Plus superannuation	100%	$9,789
17	Bartercard	100%	$31,867
Liabilities
Item No.	Description	Percentage	Value
18	Bank of Qld account …77	100%	$166,661
19	Commonwealth Bank Viridian Account	100%	$48,036
20	Commonwealth Bank mastercard	100%	$3,390
21	Loan for 2005 Pajero	100%	$8,865
22	GE Money loan	100%	$7,157
Husband pays Wife			$744,893
Net Assets to H			$888,882
W gets 58.1%
Assets
Item No.	Description	Percentage	Value
4	ANZ Savings (…58)	100%	$22,206
5	ANZ Savings (…02)	100%	$500
6	Members Equity …28	100%	$200
8	Ford Focus	100%	$18,000
10	Jewellery (in wife's possession)	100%	$20,000
11	Furniture	100%	$2,000
13	Funds received by wife	100%	$135,819
15	Hestia superannuation	100%	$22,938
24	33.3% B property	100%	$340,000
Liabilities
Item No.	Description	Percentage	Value
23	Legal fees owed to Mr Bellissimo and counsel	100%	$0
25	Perpetual Limited	100%	$74,000
Wife receives		$744,893
Net Assets to W		$1,232,556

The husband gave some evidence that he had had some preliminary discussions with a financial institution. He said that there was a general indication that he might be able to raise in the order of approximately $700,000. No formal loan approval was provided and the evidence was in reasonably general terms. The amount that the husband would have to pay the wife in order to retain the Business is about $45,000 more than the husband indicated that he might be able to raise. On the evidence I have I am not satisfied that the husband has exhausted his ability to raise finance. The orders sought will provide the husband has three months to be able to see whether or not he can raise sufficient finance to pay what I find to be a just and equitable adjustment in order to retain the Business. If he is unable to do so, then the property, including the business, should be sold.
Standing back, I consider that that is a just and equitable distribution of the assets and liabilities of the parties.

FORM OF ORDERS

There was some discussion about the default order. It has to cater for the fact that the business property is in the joint names of the parties but the company owns firstly fittings that will be sold with the business as well as various chattels. It is agreed between the parties that the business would be sold as a going concern if the husband was unable to raise the necessary finance to retain the business.
Both parties have sought that upon the default sale of the property and the business, the wife should receive a sum certain plus interest in accordance with the Family Law Rules. That is not a form of order that would be consistent with the authorities. I find it is more appropriate that the wife receive a percentage division of the sale of the business property. Whilst the sale will be a composite one, there will be an individual contract for the transfer of the real property. The parties agree that the actual real estate itself is worth in the sum of $1,405,000. The amount payable to the wife is in the sum of $744,893. That is, 53 percent of the value of the real estate. On a default sale the wife should receive 53 percent of the sale price of the real estate. The husband will of course take the company which as part of a composite sale will sell fittings and chattels associated with the business, and the business itself, in a separate contract and he will retain the whole of the proceeds of that sale.

I certify that the preceding one hundred (100) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Watts.

Associate:

Date: 17 June 2010

[2010] FamCA 490

17 June 2010

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