Morton and Morton

[2012] FamCA 30

FAMILY COURT OF AUSTRALIA

MORTON & MORTON [2012] FamCA 30

FAMILY LAW – PROPERTY SETTLEMENT – Trust – Husband one of many beneficiaries to beneficiary trust – Wife seeks assets of the trust be included in the property pool – “Property” – Husband’s entitlement under the trust classified as financial resources. 

Family Law Act 1975 (Cth)

Hickey & Hickey & Attorney-General for the Commonwealth of Australia (2003) FLC 93-143
Kennon v Spry (2008) 238 CLR 366

APPLICANT: Ms Morton

RESPONDENT:	Mr B Morton
FILE NUMBER:	SYC	7644	of	2008
DATE DELIVERED:	3 February 2012

PLACE DELIVERED: Brisbane

PLACE HEARD: Sydney

JUDGMENT OF: Bell J

HEARING DATE: 7 and 8 November 2011

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr John Lloyd of Senior Counsel appearing for the Applicant Wife

SOLICITORS FOR THE APPLICANT: Paul & Paul Lawyers

COUNSEL FOR THE RESPONDENT: Mr Julian Millar of Counsel appearing for the Respondent Husband

SOLICITORS FOR THE RESPONDENT: Pearson Family Lawyers

Orders

1. That within three (3) months of the date of these Orders (“the due date”), the Husband pay to the Wife the sum of $801,468.60 (“the settlement sum”). 

2. In the event of default of payment by the Husband to the Wife of the settlement sum by the due date, the parties forthwith do all acts and things necessary to list the property known as … C Street, Sydney Suburb 1 (“the C Street property”) for sale at the best price reasonable in the following manner:

   (a)       within fourteen (14) days of the Husband’s failure to pay the Wife the        settlement sum by the due date, or such other date as the parties may   agree upon in writing, list the C Street property with such agent as the     Wife appoints (“the agent”);

   (b)       the reserve price of the C Street property for the purpose of the auction, shall be such price as may be mutually agreed upon by the parties in writing, or in the absence of agreement reached within fourteen (14) days of the date of the appointment of the agent, shall be      the price nominated as the fair market value of the C Street property by a valuer appointed by the President for the time being of the      Australian Property Institute (Inc), (“the valuer”) on the application of  either party, the costs of and incidental to such appointment to be borne equally by the parties as and when those costs fall due;

   (c)       the parties shall each cooperate in every way with the agent including,       without limited to the provisions of this paragraph:

   (i)making all relevant keys available to the agent;

   (ii)allowing inspection of the C Street property at all reasonable times requested by the agent;

   (iii)doing or saying anything to hinder or prevent the sale being effected;

   (iv)ensuring the C Street property, including the grounds, are in a neat and clean condition at the time of inspection by the agent and prospective purchasers (and the costs of such work shall be borne equally between the parties as and when the same fall due);

   (v)signing all documents requested by the agent in relation to the listing for sale of the C Street property except a Contract or Agreement for sale that has not been authorised by the parties’ solicitors;

   (vi)if the bidding at the auction does not reach the reserve price, the parties or such of them that attends the auction may negotiate with the highest bidders or any other interested persons and effect a sale of the C Street property of a price which is not more than 5 per cent lower than the reserve price, or such other price as the parties agree upon in writing;

   (d)       if the C Street property remains unsold fourteen (14) days after the  auction, the parties shall do all acts and things and sign all    documents necessary to continue to relist the C Street property for sale      by public auction again at three (3) monthly intervals (or such other date    that the agent shall recommend) and the provisions of these Orders         relating to the sale of the C Street property shall apply successively until    the C Street property has been sold so that at each successive auction the       reserve price shall be 5 per cent less than the reserve price at the           immediately preceding auction, unless otherwise agreed upon by the          parties in writing;

   (e)       the Husband shall execute a Contract for Sale of the C Street property in     the form prepared by the solicitors having conduct of the sale at the sale        price;

   (f)       the solicitor appointed by the Wife shall have primary conduct of the         sale on behalf of both parties provided that the Husband’s solicitor shall          be entitled to independently advise and represent the Husband in respect      of the sale and all matters arising in connection with the sale and all    costs properly payable to the solicitor appointed by the Husband, shall      form part of the legal costs of sale and be deducted from the proceeds of         sale as provided for in Order (3)(a). 

3. That upon settlement of the sale of the C Street property the proceeds of sale be applied as follows:

   (a)       all costs and expenses of sale including legal costs and disbursements,       agents’ commission, advertising expenses, valuers’ fees and auction expenses (including repayment of any such expenses as have been paid      by either or both of the parties);

   (b)       the amount necessary to discharge any mortgage secured on the C Street     property;

   (c)       the amounts required to pay all municipal and water rates outstanding;

   (d)       in payment to the Wife the settlement sum plus interest as and from the      due date to the date of completion of the sale; and

   (e)       the balance to the Husband. 

4. That except as otherwise provided in these Orders, each party is declared to have no further interest in the items of property in the possession of the other. 

5. That except as otherwise provided in these Orders each party is solely responsible for all liabilities in the name of that party. 

6. That pursuant to s 81 of the Family Law Act, the parties intend these Orders shall finally determine their financial relationship and avoid further proceedings between them. 

7. That all documents produced on subpoena be returned to the person or corporation who produced them. 

8. That pursuant to s 106A of the Family Law Act, if either party refuses or neglects to sign or execute any document, then on the application of either party, a Registrar of the Family Court of Australia is hereby authorised to sign on behalf of that party. 

9. That all outstanding applications be dismissed. 

10. That these proceedings be removed from the list of cases awaiting finalisation. 

11. That each party has liberty to apply on seven (7) days notice to the other party for the working out of these Orders.

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

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYC7644/2008

Ms Morton

Applicant

And

Mr B Morton

Respondent

REASONS FOR JUDGMENT

1. Notwithstanding the provisions of Hickey & Hickey & Attorney-General for the Commonwealth of Australia (2003) FLC 93-143, I consider in this case that I should very briefly set out the circumstances surrounding the cohabitation of the parties which, in this matter, is not very much in dispute.

2. I compliment the parties on the fact that there have been concessions made by both of them as to the allegations of support and contribution during cohabitation, whilst there may be a degree of dispute as regards the extent of such contributions.  They are in effect comparatively minimal, save of course for the Wife’s support of the Husband during what has been a very long, tedious and debilitating illness.

3. I compliment both of the parties for struggling through, not only the Husband’s illness, but also towards the later stages of that of the Wife who has suffered a back injury and it is most debilitating, preventing her from being able to work gainfully since March 2011.

4. The Wife was born in 1948 and the Husband in 1952.  He was born in South Africa and came to Australia in about 1981.

5. They commenced cohabitation in July 1996, married in September 1998 and subsequently they separated on either 12 October 2008 (paragraph 18 of the Husband’s affidavit filed 31 October 2011) or 3 December 2008 (Chronology of the Wife filed 23 September 2011).  The Decree Nisi became absolute in August 2010. 

6. There are no children of this relationship although the Wife has a daughter and two sons from previous marriages and one of these children, Mr P, is severally handicapped with deafness, blindness and epilepsy.  The Husband had not previously married.

7. These proceedings were commenced by the Wife by way of her Initiating Application filed on 23 December 2008, with such application heard before me on 7 and 8 November 2011.  Counsel for the Wife also referred me in his written submissions to the latest variation of final orders sought by the Wife, as contained in Annexure A to her Case Outline document of 1 November 2011.  The Wife seeks, if I may précis that document, $1,000,000 by way of property settlement; that the property situated at C Street, Sydney Suburb 1(“the C Street property”) be sold; that otherwise the parties retain all other property and chattels to the exclusion of the other; that each party is solely responsible for all liabilities in the name of that party; and that the Husband pay the Wife’s costs of and incidental to these proceedings. 

8. Final Orders as sought by the Husband are contained in the Minute of Orders handed up during trial, seeking the Wife’s Application for Final Orders be dismissed; that each of the Husband and the Wife be equally liable for any further assessment or liability incurred by the Husband or any company, trust or entities in which he has, or has had, an interest in respect of the period up to and including the date of making of final orders; and that otherwise the parties be solely entitled to all other property in the possession of each to the exclusion of the other.  The Husband also sought the Wife pay his costs of these proceedings. 

9. The Husband’s Minute of Orders perhaps has the effect of seeking, inter alia,

   
   

   s 78 declarations in relation to the property or interests in property held by the parties.  However as a result of my findings infra it is unnecessary to consider the order sought in paragraph 1.  Order 2 is subsumed in my general orders. 

10. However, the Husband does however make submissions at paragraph 73 of his written submissions in relation to whom should bear certain tax liabilities, that is, the Husband submits that in the event the Australian Taxation Office determines its investigation into the F Street property development, “the Wife should share responsibility for any tax liability which arises from it and which may fall upon the husband”.

    “73.…It is submitted that this approach is consistent with authority since if she wishes to have the Court take into account the value of the trust as a resource, or even more so as property, of the husband then it would be unfair to the husband if any corresponding tax liability is not also brought to account.”

11. Notwithstanding the Husband’s concern and not purporting to having determined the matter, it does not appear to me infra that the Wife has made or may have made contributions to this interest of the Husband of a nature which could attract taxation liabilities. 

12. As I have already indicated, there has been a great deal of common ground between the parties as to the history of the relationship, particularly in regard to the acquisition of various properties (see Lloyd SC’s (for the Wife) written submissions dated 15 November 2011).

13. Once again referring to the extensive written submissions of both Lloyd SC and Millar of Counsel, and I am of the opinion these facts are uncontested, at the date of cohabitation the Wife was the owner of an unencumbered property at S Street, Sydney Suburb 2, worth about $750,000, savings of about $30,000, household contents of about $5,000 and a motor vehicle of insignificant value.  There were no liabilities on the part of the Wife.

14. The Husband had less than the Wife at commencement of the parties’ cohabitation.  He has set out his assets in paragraph 44 of his affidavit filed

    
    

    31 October 2011 as a 50 per cent interest in K Street, Sydney Suburb 3, having a value of approximately $423,000, a loan to the Morton Trust of about $1,155, a motor vehicle and some household contents.

15. The Wife was, at the commencement of cohabitation, employed as a sales assistant at G Company.  She subsequently obtained a sales position in a store where she worked until December 2006.  The Wife did not work in such a position again until after separation, wherein she obtained employment at a store in or about July 2009 (see paragraph 23 of the Wife’s affidavit filed 20 October 2011). Unfortunately as I have indicated above, she was injured in her workplace and has been unable to work since earlier last year, in or about March 2011. She is in receipt of Workers Compensation in about the amount of $271 per week (Financial Statement of the Wife filed 20 October 2011). 

16. Lloyd SC submits that the Wife has worked throughout the marriage and now earns some additional income, albeit of a comparatively modest nature, in the education field.  She has presently a maximum of about 17 students from which she receives approximately $574 gross per week (submissions of the Wife, paragraph 18). 

17. I note that Counsel for the Husband submits that the Wife gave varied evidence in relation to these earnings, namely that the Wife had given oral evidence that her work in the education field amounted to $595 per week (by way of 17 students at $35 a lesson) and that “it had at one time been $840 according to her evidence in cross examination”.  I will however prefer the figure of $574 proffered by the Wife in both her financial statement and affidavit of evidence in chief, as occasional discrepancies in earnings are surely to be expected in such a profession. 

18. At the commencement of cohabitation in relation to the Husband, he says that he worked for his brother Mr S Morton in A Pty Ltd.  He paid to the Wife out of income from this enterprise some $400 per month and subsequently increased it.

19. The outgoings associated with the Wife’s home at S Street appear to be somewhat in dispute.  It is quite clear that the Husband paid some moneys towards the maintenance of that property and has expended moneys on the improvement of it as well.

20. It appears, on the Wife’s deposition, that after living together for a few years the Husband commenced to pay rates, electricity and telephone expenses (see paragraph 36 of the Wife’s affidavit filed 20 October 2011).

21. The Husband however deposes that he paid all of the outgoings in relation to the S Street property and the costs of many major repairs (paragraphs 51 to 52 of his affidavit filed 31 October 2011).   Details of the renovations and repairs to the S Street property are detailed at paragraphs 52 and 53 of the Husband’s affidavit. 

22. The Wife concedes by way of her written submissions that the Husband did in fact pay some of the expenses associated with the S Street property, as did she.  However Lloyd SC goes on to submit that the Wife was not cross-examined on her affidavit evidence in relation to this point (from paragraph 23 onwards of the Wife’s affidavit sworn 30 June 2011, section titled “My Financial Contributions during Cohabitation”) and this submission reflects my recollection of the Wife’s evidence. 

23. About six months after cohabitation the Husband says he sold the aforesaid property at K Street and received about $423,000.  He says in his affidavit filed 31 October 2011 (see paragraph 56) that those funds were applied to a company known as “[W Pty Ltd]”, the Trustee of the “[Mr B Morton] Discretionary Trust”. 

24. Again, the eventual whereabouts of this sum is a live issue between the parties, however I will accept the Husband’s submission that these proceeds were applied to the cost of development carried out by W Pty Ltd at the V Street properties.  In turn, the Husband deposes the proceeds of the sale of V Street, some $835,220, were applied to the living expenses of the parties; renovations to the S Street property, the deposit on the C Street property of some $260,000; two overseas trips by both parties; and the purchase of the Husband’s VW motor vehicle and the Mazda motor vehicle used by the Wife. 

25. The assets and liabilities of the parties have been set out in the Wife’s submissions at paragraph 64.  It appears to me that there is little or no dispute between the parties about the assets, save for the last two under the column “Assets” which is the interest in Morton Trust and the interest in T Pty Ltd.  In noting that the joint Balance Sheet is somewhat at variance to this document, I will primarily adopt and set out the estimates in the Wife’s submissions, which has not been objected to in quantum.  I have also supplemented the Wife’s figures with those additional figures which appear in the joint Balance Sheet and have generally preferred the Husband’s value of his own figures where he concedes as much.  The property pool is, then, as follows:

    “…

    Assets

    C Street, Sydney Suburb 1 [H]  $ 2,100,000.00

    S Street, Sydney Suburb 2 [W]  $ 1,350,000.00

    Funds at Bank [W]  $          160.00

    Credit card balance [W]  $       7,120.00

    Shares in listed companies [W]  6,050.00

    Household contents [W]  $       5,000.00

    Artworks & jewellery [W]  $     12,000.00

    IAG shares [H]  $        1,368.00

    Volkswagen [H]  $      15,000.00

    Household contents [H]  $       5,000.00

    Credit loan a/c Morton Trust [H]  $       1,676.00

    MLC Masterkey Superannuation [H]                  $        8,555.00

    * Interest in Morton Trust [H]  $    354,018.00

    *Interest in T Pty Ltd [H]  $    193,624.00

    $ 4,059,571.00

    Liabilities

    Mortgage secured on husband’s home [H]         $      54,453.00

    Credit card [H]  $        3,103.00

    Debt to Mr H [W]  $      20,000.00

    $      77,556.00

    Net Assets  $ 3,982,015.00

1. Further to the above assets and liabilities, I will here insert a section for “Add backs” in accordance with the concessions of both parties in the course of written submissions. 

   Add backs

   Legal fees [W]  $ 115,000.00

   Legal Fees [H]  $  69,329.00

   Interim payment received by the Husband         $  17,629.00

   Total add backs   $201,958.00”

1. Insofar as any further add backs are concerned, I cannot accede to Millar’s submission to add back any or either of the Wife’s Mazda motor vehicle, nor the figure of some $3,300 expended on her “home improvement”, nor the sum of rent received by the Wife for the S Street property. 

2. However both the Husband and Wife have conceded their legal fees ought be added back into the pool.  Additionally, the Husband admits the sum of $17,629 ought to be added back as an interim payment received by the Husband as a result of a drawdown on the C Street mortgage.  I note the Wife’s value for same is listed at $28,366 in the joint Balance Sheet put before me, however, I will prefer the figure conceded by the Husband himself. 

3. The Husband submits the sum of $6,735 drawn down by the Wife from her superannuation fund ought to be added back to the property pool.  The Wife submits this figure has been explained by her and could not possibly form part of an argument to be added back.  I agree with the Wife. 

4. Returning to the assets and liabilities contended for by the parties, a matter of great concern to me is, in particular, the amount as alleged by the Wife in her submissions as being an interest of the Husband in T Pty Ltd (see paragraph 64 of the Wife’s submissions).  In that submission it is alleged that the Husband has an interest in T Pty Ltd in the amount of $193,624.  From my reading of the material, and I must confess I find it very confusing, it appears (see paragraph 132 of the Husband’s affidavit filed 31 October 2011) that T Pty Ltd was registered in New South Wales in 2005 and that Mr S Morton, that is the Husband’s brother, is the sole director and secretary.  J Pty Ltd as Trustee for the Morton Trust is the sole shareholder in T Pty Ltd.  The Morton Trust received distributions from the Z Trust and made distributions to T Pty Ltd.

1. In the Husband’s financial statement filed 31 October 2011 at page 12 thereof the following appears:

   “I estimate the [Morton Trust] has the following assets and liabilities, based on the latest balance sheet prepared as at 30 June 2011:

   Book value              Market value

   Investments  2,799  2,799

   [… E Street, Sydney Suburb 2]          391,972                    1,100,000

   Loan to me $1,675.68  -1,676  -1,676

   Loan to [Mr S Morton] $691                 -691   -691

   [T Pty Ltd] –

   Beneficiary Entitlement                 -390,988   -390,988

   GST       -1,407  -1,407

   9  708,037”

   [underlining mine]

2. Note at the last paragraph of this excerpt it said:

   “On 24 May 2005 [T Pty Ltd] was registered in New South Wales” (see above).

   This is supported at paragraph 132 of his affidavit filed 31 October 2011.

   “[Mr S Morton] is the director and secretary.  [J Pty Ltd] as trustee of the [Morton Trust] is the sole shareholder in [T Pty Ltd].  The assets and liabilities of [T Pty Ltd] are:

   Book valueMarket value

   Cash  1  1

   Trust entitlements – [J Pty Ltd]        390,988                         390,988

   Loan from [Mr S Morton]      -3,740  -3,740

   ...”

   [underlining mine]

3. Insofar as the Morton Trust, which it is alleged that the Husband has an amount of $354,000 as and by way of an entitlement in that Trust, it is clear on the material before me this is a discretionary trust.  Mr S Morton and the Husband are not the only beneficiaries.  The beneficiaries are extensive in that they include, but are not limited to, Mr S Morton, the Husband, their mother, any grandchildren or remote relatives and any company or trust in which Mr S Morton and the Husband has an interest.  By extension the beneficiaries of the Trust also include T Pty Ltd.  Obviously T Pty Ltd has received an entitlement from the Trust as I have particularised hereinbefore.

4. Lloyd SC asserts at paragraph 64 his submissions that T Pty Ltd is “owned” by the Morton Trust.  The Morton Trust has a liability somewhere in the sum of $390,988, as monies owed to T Pty Ltd by way of T Pty Ltd’s entitlement as a beneficiary of that trust. J Pty Ltd is trustee for the Morton Trust and the Husband is equal shareholder and director of J Pty Ltd together with his brother, Mr S Morton. Mr S Morton, I may reiterate, is also sole director and secretary of T Pty Ltd. The sole shareholder of T Pty Ltd is J Pty Ltd.

5. It appears the Wife seeks to point to the Husband, in his capacity as director of the trustee company, as having “control” of the trust. Yet his brother Mr S Morton is appointed and acts in an identical capacity.  Millar of Counsel submits at paragraph 21 of his written submissions that neither the Husband nor his brother “has control of the trustee company and their rights are the same”.

6. I must also emphasise the fact the brothers are in fact also joint appointors, with the power to remove and appoint a trustee. Yet as Millar goes on to submit, again at paragraph 21, these arrangements mean “neither has a better right in this regard than the other... They are beneficiaries of the trust but they are merely two beneficiaries among several others and potentially many other beneficiaries”.

7. I concede that on the face of it, circumstances such as these could give credence to the Wife’s submissions.  However I am equally satisfied that such a set of circumstances can, as I have found to be the case here, represent a bona fide trust arrangement.

8. Notwithstanding the evidence before me shows there is a close, warm and loving relationship between the brothers and that there has been a good deal of inter-mixing of funds, not only their own personal funds, but funds from various entities which they have created and which have subsequently “died”, there is not sufficient evidence before me to convince me that the Husband has that sufficient control over the entities to which I have referred, to make me believe that they are in fact his property.  Consequently I shall take them into consideration as a financial resource and a matter which will be taken into consideration at s 75(2).

9. The Wife has pointed to what Counsel submits are “disclosures” made by the Husband on a certain National Australia Bank Loan Application, exhibit 10 to these proceedings.

10. Upon my reading of this exhibit I have discerned the only relevant portion of this document as the top of page 4, whereby the bank requests the loan applicant list the assets owned by them. The application specifically states: “Please include all Assets that you own individually, jointly (ie. both applicants) or with any 3^rd parties”. Here the Husband lists the following properties:

    o   C Street

    o   E Street in a trust – 50% beneficiary

11. In the Wife’s submissions in reply, Lloyd SC further states at paragraph 9, “he (the husband) indicated to his Bankers he was entitled to one half of the income generated by the Trust (as opposed to an expectation a resolution of the Trustee might authorise such income)”.

12. To my mind, the representation made by the Husband by way of the aforementioned loan application does not necessarily lend itself to a disclosure that goes toward “control” in so far as trust property is concerned.  The Husband is clearly representing the property as owned by a trust and of which he is a 50 per cent beneficiary, not, as the Wife submits, as property that he owns or that he could draw upon personally. Millar goes on to concede the Husband’s beneficiary interest in the trust is a financial resource and as I have previously indicated, I will consider the Husband’s beneficiary entitlement as such.

13. I am more than satisfied of the evidence before me and taking into consideration the authority of Kennon v Spry (2008) 238 CLR 366 and the principles applicable thereto unless I am satisfied that a person has control of a Trust, in other words that it is his alter ego, I do not believe that it can be suggested that any interest that the Husband may have in Morton Trust, in this case as a beneficiary, is in fact property.  It has been conceded by himself to be a financial resource and I will take that into consideration as a financial resource which sounds under the provisions of s 75(2) and not otherwise.

14. Unfortunately this amount of some $354,000 to which I have hereinbefore referred, has caused me a great deal of confusion and consternation.  However, I make it quite clear that I am satisfied that the Husband’s interest in Morton Trust does not amount to property. 

15. After all this it appears as though the money owed to T Pty Ltd is money in the possession of J Pty Ltd and J Pty Ltd is Trustee for the Morton Trust and it appears to be a circular argument.  I feel as though the sum of $390,988, hereinbefore characterised as the liability of J Pty Ltd and beneficial interest of T Pty Ltd, is the Trustee’s money and consequently I am met with the same argument that I have referred to insofar as Morton Trust is concerned and I feel that it is quite clear that there is no or insufficient evidence to convince me that the Husband has control of T Pty Ltd or of the Trust either by way of control himself or through J Pty Ltd.  The shares in J Pty Ltd are two, one each to the Husband and his brother. 

16. The Wife also submits that the Husband’s interest in T Pty Ltd be attributable to the Husband insofar as property settlement is concerned. I have already touched upon T Pty Ltd but say in passing (paragraph 132 of the Husband’s affidavit filed on the 31 October 2011) that T Pty Ltd was registered in 2005 and that Mr S Morton, that is the Husband’s brother, is the sole director and secretary.  J Pty Ltd is Trustee of the Morton Trust and is the sole shareholder in T Pty Ltd, therefore J Pty Ltd controls T Pty Ltd.  As appears from that paragraph, Morton Trust has received distributions from Z Trust and made distributions to T Pty Ltd.  That appears insofar in paragraph 64 of the Wife’s submissions to which I have referred.  The sole shareholder of T Pty Ltd is J Pty Ltd.  J Pty Ltd is in effect controlled, if I may use that word, by the Husband and his brother Mr S Morton and I have indicated that there is not sufficient evidence to convince me that the Husband alone has control of J Pty Ltd.

17. Consequently I will delete not only the interest in Morton Trust but also any interest in T Pty Ltd. 

18. Consequently the assets of the parties total $3,511,929 less $77,556, being the liabilities referred to in paragraph 25.  Together with the total add backs of $201,958 it appears to me that the property pool for division is $3,636,331.

19. There has been a great deal of evidence in relation to a loan in which a company known as L Limited was involved.  The negotiations for the $4 million loan which has been referred to extensively in evidence, almost smacks of a James Bond movie, where parties were discussing various matters towards the end of 2002 in a hotel at Sydney Suburb 1 and that moneys appear to have changed hands with little or no evidence of any form of security being given.

20. I had complained bitterly during this trial for some written evidence to indicate where these moneys had gone.  It appears that the amount of $4 million eventually raised was something in excess of $5 million having taken into consideration the interest relating to this amount.

21. It was, as put forward by the Wife, a highly suspicious undertaking wherein it has been suggested that the moneys were in fact the moneys of the brother, Mr S Morton, moneys of the Husband, moneys of his mother or moneys which had not been accounted to the Wife and were available for the use of not only the Husband but of his brother and his mother.

22. It was not until – perhaps half way through – the final day of the trial that it became quite clear on the evidence before me that in fact there was a valid charge created for the purposes of securing this property and that I am more than satisfied on the evidence before me that the amount of moneys has been expended in accordance with that of the evidence of the Husband (as original document has gone missing from the Exhibit Room).  I note also that Counsel for the Husband has particularised the interest on this charge at paragraph 48 of his written submissions. 

23. I must confess that I found his evidence somewhat tentative and I am surprised that a person who appears to have been “the bookkeeper” of his brother was as vague as what he was, however I feel that his tremendously bad health probably has something to do with it.

24. I am not concerned about that L, if I may use that word, loan.

25. Consequently it now behoves me to consider the contributions of the parties which I have touched upon insofar as cohabitation is concerned, and I am more than satisfied the evidence before me, notwithstanding that the Wife brought to the marriage somewhat more than the Husband, but during that period the parties endeavoured in their very best way to assist each other and contributed, on the face of it equally, to the acquisition of the income, property, and financial circumstances of the parties. 

26. However, great emphasis has been made by the Wife to the effect that the Husband’s very ill health caused her a tremendous amount of work and that she devotedly looked after him for a considerable period.  I think as much in what she says in relation to that and I believe that this is a contribution which must sound to a certain extent in the percentage. 

27. Lloyd SC for the Wife submits I ought to find the parties have contributed equally to the marriage, by way of the Wife’s role as the primary homemaker and her efforts in caring for the Husband during his ill health.  Additionally the Wife has worked in some form of paid employment for most of their relationship and applied her earnings from those pursuits to the relationship. 

28. Counsel for the Husband submits that the parties’ contributions ought be assessed 55 per cent to the Husband and 45 per cent to the Wife, based on the “very significant disparity of contributions between the parties”. 

29. Having considered the contributions contended for by both parties, I must agree with Lloyd SC in his submissions that the parties have contributed equally to the marriage.  While the Husband has been the primary breadwinner throughout the marriage, the Wife brought a great deal to the relationship at the commencement of cohabitation and has continued to contribute through both paid employment and her role as a homemaker and a carer.  Consequently, prima facie the property of the parties will be divided 50/50 between the Wife and the Husband.

30. However the s 75(2) factors are different.  I have given consideration to, inter alia, the age and state of health of the parties and their respective income, property and financial resources.

31. The Husband has, what has been conceded as I understand by Counsel on his behalf, to a financial resource not only in the Morton Trust which is of some considerable value, varying between either $700,000 or $1.1 million, in which other beneficiaries are entitled, and also insofar as T Pty Ltd is concerned, to something like $900,000.

32. Whilst these amounts as I have said are not property in his hands, they are matters that I have to take into consideration.  He receives a small amount of some $400 per week as and by way of dividends from Morton Trust, but he does not at this stage appear to have had any other adequate sums to enable him to exist.

33. The Husband is currently aged 59 years of age but his health is dreadful (see affidavit of Professor BB filed 3 December 2010).  I note and refer to paragraph 66 of the Husband’s submissions whereby Millar of Counsel recites a list of ailments that cause me to feel comparatively sorry for the gentleman.  He presented, I thought, remarkably well and had quite a charming manner about him.  Regrettably, I feel that he does not have the opportunity of looking forward to a very good prognosis and it is a matter of which I do take into consideration.

34. The Wife on the other hand, currently aged 63 years, is a woman who does have a bad back.  She has an unencumbered property.  She will be receiving a considerable amount of money as a result of the property settlement hereinbefore and notwithstanding that, she may physically be in a slightly better position than her Husband. 

35. As aforementioned, the Wife earns a modest wage of some $574 per week in the education field.  In addition, the Wife receives workers compensation of $271 per week.

36. Lloyd SC submits that the Wife’s earning capacity is very limited, given her age, lack of training and bad back.  I reject Millar’s submission that the amount of $574 the Wife receives in the education field is the “least amount she could earn”. 

37. On the other hand, the Husband submits he has no earning capacity at all, and this is supported by the affidavit of Professor BB.  The Husband does, however, as I have mentioned several times, have a significant financial resource in his interest in the Morton Trust and the weekly distribution he receives in accordance with that interest. 

38. The Husband submits I ought to make a 5 per cent adjustment in his favour, but I fail to recognise his precise reasoning as to why.  Lloyd SC’s submissions sounded strongly in accordance with the provisions of s 75(2) and consequently I find the Wife ought to be entitled to a 10 per cent adjustment, least of all because their respective health indicates the Wife will more than likely long outlast the Husband. 

39. Consequently it appears to me that the Wife should be entitled to an amount representing 60 per cent of the nett property pool, that being above determined to be $3,636,331.  Therefore the Wife is entitled to $2,181,798.60. 

40. How is the Wife to be provided with this?  Once again looking at the assets particularised in the Wife’s submissions at paragraph 64 and in particular at the final page ie. page 19, the Wife has in her possession the amounts as set out therein, that being $1,380,330 in assets, including the S Street property.  The only liability of the Wife is the $20,000 loan to her brother, Mr H.  This leaves an amount of $801,468.60 owing to the Wife to facilitate property settlement. 

41. The Wife seeks orders for the transfer of a sum of money to effect property settlement and I will so order the transfer of the aforementioned sum of $801,468.60. 

42. In the event the Husband cannot provide that sum to the Wife in the time period specified by my Orders, I will accede to the orders sought by the Wife in relation to the sale of the Husband’s property at C Street in order to give effect to property settlement. 

43. The property is valued at $2.1 million and encumbered by a mortgage of some $54,000. 

44. Otherwise I will make Orders that each party is declared to have no further interest in the items of property in the possession of the other as listed as at paragraph 25 of these Reasons. 

I certify that the preceding seventy-four (74) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Bell delivered on 3 February 2012.

Associate: 

Date:  3 February 2012