NADELLA & NADELLA
[2019] FCCA 40
•21 January 2019
FEDERAL CIRCUIT COURT OF AUSTRALIA
| NADELLA & NADELLA | [2019] FCCA 40 |
| Catchwords: FAMILY LAW – Alteration of property interests – long marriage – assessment of contribution and future needs – Kennon claim decided – just and equitable order. |
| Legislation: Family Law Act 1975 (Cth), ss.75(2), 79 |
| Cases cited: Bevan & Bevan [2013] FamCAFC 116 Stanford & Stanford [2012] HCA 52 |
| Applicant: | MS NADELLA |
| Respondent: | MS NADELLA |
| File Number: | SYC 826 of 2017 |
| Judgment of: | Judge Altobelli |
| Hearing dates: | 24-26 September 2018 |
| Date of Last Submission: | 26 September 2018 |
| Delivered at: | Wollongong |
| Delivered on: | 21 January 2019 |
REPRESENTATION
| Counsel for the Applicant: | Mr Blackah |
| Solicitors for the Applicant: | Calabrese Lawyers |
| Counsel for the Respondent: | Mr Schonell, SC |
| Solicitors for the Respondent: | Rossi Simicic Lawyers |
ORDERS
That within 14 days, the Wife and Husband do all acts and things and sign all documents necessary to close the Members Equity joint account (account number …), and in the event there are nominal funds contained within such account, such funds be divided between the parties 57.5:42.5 per cent in the Wife’s favour.
That within 42 days of the date of these Orders, the Wife and Husband do all acts and things and sign all documents necessary for the Wife to transfer to the Husband, all of her right, title and interest in the property known as and situate at Property J1in the State of NSW, being the whole of the land described in Folio Identifier ….
That within forty-two (42) days of the date of these Orders, the Wife and Husband do all acts and things and sign all documents necessary for the Husband to transfer to the Wife, all of his right, title and interest in the property known as and situate at Property H1 in the State of NSW, being the whole of the land described in Folio Identifier … .
That within a further 30 days after the time prescribed in Orders 2 and 3 above, the Husband pay to the Wife the sum of $329,027.65, failing which interest will accrue on the said sum at the rate prescribed under the Family Law Act, its Rules and Regulations.
That within 30 days, the Wife provide to the Husband, one half of all original photographs in the Wife’s custody, possession or control, and the remaining one-half of photographs be provided by the Wife to the Husband as copies.
That the Wife, to the exclusion of the Husband, be declared to have sole right, title and interest in:
(a)The property situate at Property H1 in the State of NSW, being the whole of the land described in Folio Identifier …;
(b)The property situate at Property F in the State of NSW, being the whole of the land described in Folio Identifier … ;
(c)Her share of the property situate Property D in the State of NSW, being the whole of the land described in Folio Identifier … ;
(d)Her share of the property situate at Property K in the State of NSW, being the whole of the land described in Folio Identifier … ;
(e)Motor Vehicle, Registration … .
That the Husband, to the exclusion of the Wife, be declared to have sole right, title and interest in:
(a)The property situate Property J1 in the State of NSW, being the whole of the land described in Folio Identifier … ;
(b)The property situate Property J2, in the State of NSW, being the whole of the land described in Folio Identifier … ;
(c)The property situate Property H2 in the State of NSW, being the whole of the land described in Folio Identifier … ;
(d)Motor Vehicle Registration … ;
(e)Motor Vehicle.
That as between the Wife and Husband, and subject to the above Orders, the Wife and Husband shall each retain all interest in and entitlement to:
(a)All personal property now in his/her respective possession or control.
(b)All shares, debentures, units in unit trusts, bank, building society or credit union accounts standing in his/her sole name respectively.
(c)All interests in life insurance policies and superannuation funds standing in his/her sole name respectively.
That in the event that either party refuses or neglects to execute any deed, document or instrument necessary to give effect to these Orders, the Registrar of the Court be appointed pursuant to section 106A of the Family Law Act 1975 to execute such deed, document or instrument in the name of the said party and do all acts and things necessary to give validity and operation to the deed, document or instrument upon the Registrar being provided with verification of such refusal or failure by way of Affidavit.
Liberty be granted to the parties to relist the matter on 7 days’ notice before Judge Altobelli as regards the interpretation, implementation and enforcement of these Orders.
IT IS NOTED that publication of this judgment under the pseudonym Nadella & Nadella is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT WOLLONGONG |
SYC 826 of 2017
| MS NADELLA |
Applicant
And
| MR NADELLA |
Respondent
REASONS FOR JUDGMENT
Introduction
These Reasons for Judgment explain the Orders that the Court makes for alteration of the property interests of the parties.
Background
The Wife is the Applicant in this case. She is 57 years old and describes herself as a professional. The Husband is the Respondent. He is also 57 years old and describes himself as a tradesman. After a period of courtship, the parties married and commenced cohabitation in … 1987. They are both of nationality… background and are, in fact, first cousins. The Wife was born in Town A and lived here all of her life. The Husband was born in Country B and met the wife whilst she was travelling there. In 1986 they became engaged, and he arrived in Australia in … 1987. They have one son, Mr C, now 27 years old. The parties separated in either November or December 2014 (nothing turns on the precise date).
As at the date of the marriage, the Wife already had a one-half share in a property at Property D, as a result of a gift to her from her parents. The Wife’s sister, Ms E, owned the other half share in the property. This interest in property remains in existence and has an agreed value on the balance sheet of $242,500.
After the parties commenced cohabitation, they lived in a property owned by the Wife’s parents at Property F. In fact they lived there rent-free for a period of the first three years of their marriage. The Husband contends, and the Court accepts, that for most of this period, when the Husband was not working in his own paid employment, he assisted the Wife’s parents in performing work for them on various properties. Notwithstanding this, even the Husband conceded in cross-examination, that the provision of free accommodation for the first three years of their marriage was a significant contribution made by the Wife’s parents.
There is an issue between the parties as to the Husband’s initial financial contribution as at the date of cohabitation. The Husband says that, as a result of working since he had left school in 1975, he had accumulated savings which he used to buy the Wife some jewellery, provide her some cash whilst they were in Country B to take to Australia, and then brought with him cash on arrival in Australia, which he then gave to the Wife. The Husband says that his initial financial contribution may well have amounted to about $40,000AUD. The Wife denies that he made this contribution. The Court prefers the Husband’s evidence in this regard. For reasons that will be discussed below, the Court will find that the Wife is an unreliable historian as to financial matters. Even though the Husband was robustly cross-examined about his evidence in relation to initial contribution by Counsel for the Wife, his evidence remained intact. The Husband’s contention that he paid this money to the Wife, who then banked it, is consistent with the overall evidence of both the Husband and the Wife that, for the vast majority of their marriage, the Wife, in fact, was the person responsible for managing and controlling the finances.
In any event, it was clear from the evidence that the Husband worked very hard in various full-time jobs throughout the course of the relationship, and after separation.
On … 1989, the Wife and her sister, Ms E, purchased Property G. The following year, in … 1990, the Husband acquired Ms E’s interest in this property. The property consisted of two rental units. It was purchased for $130,000 with a mortgage from the Bank, but $80,000 was provided by the Wife’s parents. The Wife contends, and the Court accepts, that her parents made all mortgage repayments on the Bank mortgage and that this was discharged on or about … 1989. The Court does not accept the Husband’s evidence that, by the time of purchasing the property, between the Wife and himself, they had saved $100,000 as the deposit towards the purchase of this property. It is simply implausible. Moreover, the Court does not accept the Husband’s evidence about an asserted arrangement between the parties and the Wife’s parents and sister as to beneficial ownership of this property. What is clear from the evidence is that after the Husband and Wife became joint owners of the property, it was rented out and the mortgage was paid from that rental, together with the Husband’s and Wife’s earnings. The property at Property G was sold in … 1993 for $175,000. It is important to recognise that, as a result of the generosity of the Wife’s parents, her interest in this property was, in effect, gifted to her and, in this respect, the Husband made no direct financial contribution to her share.
In … 1990, the Husband and the Wife purchased the property at Property H1 for $103,000. They lived in this as their first family home. Indeed, they lived there for three years. It is common ground between the parties that the purchase price of $103,000 was funded by a mortgage of $85,000, together with savings they had accumulated at that time. After three years, the property at Property H1 was rented out. This property is on the Balance Sheet at an agreed value of $770,000. The Court accepts that, at all relevant times, the Wife has been in receipt of the rental, which was paid in cash. This continued after separation. The Husband contends that he has been responsible for the maintenance of the property. The Court accepts his evidence in this regard.
In 1993, the parties sold Property G for $175,000. The sale proceeds were used to purchase Property J1 for $185,000. The balance was paid from savings. The property at Property J1 became the family home. On separation, the Wife moved out of this home, and the Husband continues to reside there. This property appears on the Balance Sheet at an agreed value of $840,000.
In … 1995, the Wife’s parents purchased a property at Property K in the names of the Wife, her sister, Ms E, and her brother, Mr L. The property has at all relevant times been rented out, but the rental was not received by her – it was paid to her parents. Nonetheless, it is common ground that the Wife declared one-third of the rental received from this property and paid taxation each year on it. The Wife’s one-third interest in Property K, appears in the balance Sheet at an agreed value of $256,666. The Husband asserts that he assisted in maintaining the property. The Court accepts his evidence. Nonetheless, he does not contend that he made a direct financial contribution towards its acquisition. The Court accepts that he made an indirect financial contribution in the sense that the Wife’s taxation liability in relation to rental may well have been met, at least in part, by his income.
In 1997, the Wife inherited a property at Property K, from the estate of the late Mr M. This is now her home. This property appears on the Balance Sheet as having an agreed value of $770,000.
In 2002, Mr N died, leaving in his will a bequest to the Husband and the Wife of one half of the residue of the estate. This resulted in the Husband acquiring in his name the property at Property J2. The husband borrowed $81,000 to complete the purchase. This property appears in the Balance Sheet as having an agreed value of $650,000.
In their respective cases, each of the Husband and the Wife contend that they made a greater contribution towards the inheritances that were received. The Court does not accept this evidence. The receipt of inheritances were windfalls for the parties.
In 2000, the Husband received compensation in the sum of $10,000 following a workplace injury that he suffered several years earlier. The Husband contends, and the Court accepts, that he applied this sum towards the reduction of the mortgage on Property H1.
On … 2014, the Husband purchased Property H2. The parties had either separated at the time, or very shortly thereafter. The purchase price was $587,000. The property comprised two units which are rented out and which the Husband receives and applies towards the mortgage and his living expenses. It is clear from the totality of the evidence of the parties that the equity in this property came from savings that had been accumulated during the marriage, irrespective of whether these funds were in the Husband’s name, the Wife’s name, or in someone else’s name. The Property H2 property appears in the Balance Sheet with an agreed value of $770,000.
Competing proposals
By the time of closing submissions, the Wife’s case was that contribution should be assessed in her favour as to 60:40 and that there should be an adjustment under s.75(2) of the Family Law Act 1975 (hereafter referred to as ‘the Act’) as to five per cent. In the Husband’s case, he asserted that contribution should be assessed equally and that there should be no adjustment in the Wife’s favour under s.75(2).
Part of the Wife’s case that the Court would assess contribution as to 60 per cent in her favour was a claim known as a Kennon claim. In short, the Wife contends that her contribution was rendered more arduous as a result of the family violence that she suffered and which was perpetrated by the Husband. Her Counsel contended that the claim probably would not exceed two per cent. The Court will find that the Wife’s Kennon claim has not been made out, for reasons to be set out below.
The Court will also need to decide how contribution and s.75(2) factors should be assessed.
The evidence
The Wife relied on the following evidence:
a)Amended Initiating Application, filed 12 September 2018;
b)Financial Statement, filed 25 August 2017;
c)Affidavit of Ms Nadella, sworn 24 August and filed 28 August 2017; and
d)Affidavit of Dr O, sworn and filed 29 September 2017.
The Husband relied on the following evidence:
a)Response, filed 23 March 2017;
b)Financial Statement, filed 10 September 2018;
c)Affidavit of Mr Nadella, sworn 5 September and filed 10 September 2018;
d)Affidavit of Mr P, sworn and filed 12 September 2018; and
e)Affidavit of Mr Q, sworn and filed 21 September 2018.
The applicable law
This is an application under s.79 of the Act, which relevantly provides:
Alteration of property interests
(1) In property settlement proceedings, the court may make such order as it considers appropriate:
(a) in the case of proceedings with respect to the property of the parties to the marriage or either of them--altering the interests of the parties to the marriage in the property; or
(b) in the case of proceedings with respect to the vested bankruptcy property in relation to a bankrupt party to the marriage--altering the interests of the bankruptcy trustee in the vested bankruptcy property;
including:
(c) an order for a settlement of property in substitution for any interest in the property; and
(d) an order requiring:
(i) either or both of the parties to the marriage; or
(ii) the relevant bankruptcy trustee (if any);
to make, for the benefit of either or both of the parties to the marriage or a child of the marriage, such settlement or transfer of property as the court determines.
(2) The court shall not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.
(4) In considering what order (if any) should be made under this section in property settlement proceedings, the court shall take into account:
(a) the financial contribution made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(b) the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(c) the contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage and any children of the marriage, including any contribution made in the capacity of homemaker or parent; and
(d) the effect of any proposed order upon the earning capacity of either party to the marriage; and
(e) the matters referred to in subsection 75(2) so far as they are relevant; and
(f) any other order made under this Act affecting a party to the marriage or a child of the marriage; and
(g) any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage.
Section 79(4) incorporates the provisions contained in s.75(2) of the Act, which states:
(2) The matters to be so taken into account are:
(a) the age and state of health of each of the parties; and
(b) the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment; and
(c) whether either party has the care or control of a child of the marriage who has not attained the age of 18 years; and
(d) commitments of each of the parties that are necessary to enable the party to support:
(i) himself or herself; and
(ii) a child or another person that the party has a duty to maintain; and
(e) the responsibilities of either party to support any other person; and
(f) subject to subsection (3), the eligibility of either party for a pension, allowance or benefit under:
(i) any law of the Commonwealth, of a State or Territory or of another country; or
(ii) any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia;
and the rate of any such pension, allowance or benefit being paid to either party; and
(g) where the parties have separated or divorced, a standard of living that in all the circumstances is reasonable; and
(h) the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income; and
(ha) the effect of any proposed order on the ability of a creditor of a party to recover the creditor's debt, so far as that effect is relevant; and
(j) the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party; and
(k) the duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration; and
(l) the need to protect a party who wishes to continue that party's role as a parent; and
(m) if either party is cohabiting with another person--the financial circumstances relating to the cohabitation; and
(n) the terms of any order made or proposed to be made under section 79 in relation to:
(i) the property of the parties; or
(ii) vested bankruptcy property in relation to a bankrupt party; and
(naa) the terms of any order or declaration made, or proposed to be made, under Part VIIIAB in relation to:
(i) a party to the marriage; or
(ii) a person who is a party to a de facto relationship with a party to the marriage; or
(iii) the property of a person covered by subparagraph (i) and of a person covered by subparagraph (ii), or of either of them; or
(iv) vested bankruptcy property in relation to a person covered by subparagraph (i) or (ii); and
(na) any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage; and
(o) any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account; and
(p) the terms of any financial agreement that is binding on the parties to the marriage; and
(q) the terms of any Part VIIIAB financial agreement that is binding on a party to the marriage.
In Bevan & Bevan [2013] FamCAFC 116, the Full Court of the Family Court of Australia considered the High Court’s decision in Stanford & Stanford [2012] HCA 52, which provided guidance on how s.79 was to be interpreted and implemented. Bevan endorsed the continuing application of the four-step approach articulated by the Full Court in Hickey & Hickey & Attorney General for the Commonwealth of Australia [2003] FamCA395, but on the basis that it is a shorthand distillation of the words of s.79, as opposed to being a statutory edict. The four steps articulated in Hickey at paragraph 39 are:
a)Identify and value the property, liabilities and financial resources of the parties; and
b)Identify and assess the contributions of the parties and express them as a percentage of the net value of the property; and
c)Identify and assess the other facts relevant under s.79(4)(d)-(g) including s.75(2) and determine the adjustment (if any) to be made to the contribution entitlements at step two; and
d)Consider the effect of the above and resolve what order is just and equitable in all the circumstances.
The decisions in Stanford and Bevan also emphasise the importance of making findings that any order is just and equitable for the purposes of s.79(2), independent of the s.79(4) process. In most cases, such as the present one, it makes no difference to the outcome of the alteration of property interests exercise. Even if the just and equitable consideration were treated as a threshold issue in this case the parties have, by their actions (separation, and re-ordering of their financial lives since then), and claims (divergent claims about their property under s.79 of the Act), indicated that they themselves consider it just and equitable that some order be made under s.79 adjusting their property interests as presently held. It is clearly just and equitable in this case to make an order.
Both decisions also emphasise the importance of identifying, according to ordinary common law and equitable principles, the existing legal and equitable interests of the parties in the property. This is not inconsistent with step one in Hickey.
Another issue in this case is how, precisely, I should weigh and assess the initial contribution made by the parties. In this regard, I need to consider the decision of the Full Court in Pierce v Pierce (1998) FLC 92-844. A useful recent decision of the Full Court examines its earlier decision in Pierce v Pierce together with a later case. In Williams & Williams [2007] FamCA 313 the Full Court states as follows at paragraphs 26, 27, 28, 29 and 32:
26. We think there is force in the proposition that a reference to the value of an item as at the date of the commencement of cohabitation without reference to its value to the parties at the time it was realised or its value to the parties at the time of trial, if still intact, may not give adequate recognition to the importance of its contribution to the pool of assets ultimately available for distribution between the parties Thus where the pool of assets available for distribution between the parties consists of say an investment portfolio or a block of land or a painting that has risen significantly in value as a result of market forces, it is appropriate to give recognition to its value at the time of hearing of the time it was realised rather than simply pay attention to its initial value at the time of commencement of cohabitation. But in doing so it is equally as important to give recognition to the myriad of other contributions that each of the parties has made during the course of their relationship.
27. In Pierce v Pierce when speaking of the relevance to be paid to initial contributions the Full Court (Ellis, Baker and O’Ryan JJ) referred to Fogarty J in Money v Money (1994) FLC 92-485 at 81,054; (1994) 17 Fam LR 814 at 816:
…respective contributions of the parties over a long period of marriage “offset” the significance which might otherwise be attached to a greater initial contribution by one party…ultimately, when it comes to the trial such a contribution is one of a number of factors to be considered. The longer the marriage the more likely it is that there will be latter factors of significance and in the ultimate the exercise is to weigh the original contribution with all other, later, factors and those later factors, whether equal or not, may in the circumstances of the individual case reduce the significance of the original contribution.
28. The Full Court (Ellis, Baker and O’Ryan JJ) then said at [28]:
In our opinion it is … a question of what weight is to be attached, in all the circumstances, to the initial contributions. 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.
29. Pierce v Pierce was a case in which the husband brought in $200,000 cash into the relationship. He applied that money towards the purchase of a matrimonial home. He was employed throughout the marriage and supported the wife who, whilst in some paid employment primarily attended to domestic tasks and taking care of the children. The Full Court assessed the parties’ respective contributions to a pool of $320,000 as 70 per cent in favour of the husband and 30 per cent in favour of the wife at the end of a 10 year relationship.
32. In Hunt v Zuryn (2005) FLC 93-226; (2005) 34 Fam LR 169 the Full Court (Kay, May and Boland JJ) allowed an appeal in a property case where a pool of assets of $1.12million had been assessed for contribution purposes as 75 per cent in favour of the husband and 25 per cent in favour of the wife. The Court in allowing the appeal indicated that an assessment of 75:25 fell outside the realms of an acceptable range saying at 79,730; 170:
Such an assessment ought adequately recognise that much of the parties’ wealth can be attributed to the capital growth in the assets introduced by the husband at the commencement of the marriage but at the same time bringing into consideration a myriad of other contributions each made in the course of their relationship.
Accordingly, I must not only identify the contributions of each party, but also assess the weight to be attributed to these contributions having regard to many factors including what has occurred afterwards.
The Court notes that in Kennon v Kennon (1997) 22 Fam LR 1, Fogarty and Lindenmayer JJ stated:
Put shortly, our view is that where there is a course of violent conduct by one party towards the other during the marriage which is demonstrated to have had a significant adverse impact upon that party's contributions to the marriage, or, put the other way, to have made his or her contributions significantly more arduous than they ought to have been, that is a fact which a trial judge is entitled to take into account in assessing the parties’ respective contributions within s 79. We prefer this approach to the concept of “negative contributions” which is sometimes referred to in this discussion.
In the above formulation, we have referred only to domestic violence…but its application is not limited to that.
Later their Honours went on to make this comment:
It is essential to bear in mind the relatively narrow band of cases to which these considerations apply. To be relevant, it would be necessary to show that the conduct occurred during the course of the marriage and had a discernible impact upon the contributions of the other party. It is not directed to conduct which does not have that effect…
Credit issues
This Court finds that the Wife is an unreliable historian as to financial matters unless her evidence is corroborated by independent documentation, and unless indicated to the contrary, the Court prefers the Husband’s evidence about financial matters. The Court found the Wife’s general approach to disclosure of financial matters to be cavalier. Her sworn Financial Statement appears to have been made with scant attention to detail. Her failure to provide an updated Financial Statement was incomprehensible.
The evidence that she gave about the intermingling of her finances with that of her son Mr C and her sister Ms E, created a strong impression that any funds purportedly held in trust with or for either of Mr C or Ms E or in joint accounts, were funds that the Wife could use for her own benefit at any time. The same applies to funds held by her parents, and her financial transactions with them. For example, to the extent that the Wife asserted that she owed money to any member of her family, the Court does not accept this.
The inconsistencies in the Wife’s evidence during cross-examination were plentiful. She was challenged about whether certain transactions were in cash, or by electronic funds transfer; whether an account was owned and controlled by her, or not; whether she had interests in an account. She was challenged about the correctness of the assertion that she made at paragraph 18 of her affidavit sworn 24 August 2017 in relation to the funding for the purchase of Property G. She gave evidence about what jewellery the Husband gave to her as at cohabitation. In all of this evidence, the Wife gave inconsistent answers. Perhaps the nadir of the Wife’s evidence in relation to financial arrangements was about the funding of her purchase of her car and an asserted loan from her son Mr C. A further example of the Wife’s cavalier approach to disclosure was in relation to the evidence she gave about how she funded legal fees that had been paid. The Wife’s evidence in cross-examination was that her parents lent her $50,000, paid to her solicitor on 29 July 2018. But this sum was not referred to in the original costs notice, and the later amended cost notice, in fact, referred to $76,000. Moreover, the later costs notice described the source of the funds for costs paid to be from the net matrimonial pool of assets.
Notwithstanding the above, the Court prefers her evidence about the family violence that was perpetrated by the Husband against herself. In this regard, the Husband’s evidence was less than convincing. As it turns out, the Wife’s Kennon claim failed, but that is not because the Wife had not established the Husband’s violence towards her. The facts are quite clear – even in the Husband’s case. In December 1996, he assaulted her in the home. He was charged and pleaded guilty. His protestations that he did not understand what was happening, and simply did as he was told by the Wife, lacks plausibility. In 2007, as a result of another argument, the Husband was again charged, and pleaded guilty. Once again, the Court rejects the Husband’s case that he did not understand what was going on, and simply did what his Wife told him to do.
The Kennon claim
The Wife’s evidence was that the Husband’s family violence caused her enormous stress and anxiety, which resulted in depression, flashbacks and anxiety. The objective evidence in support of this was limited. In any event, the Court accepts the submissions made by Senior Counsel for the Husband that there is no evidence which establishes how the Wife’s contribution was rendered more arduous. Indeed, that is correct. The reality is, for example, that she continued to be the financial controller in this relationship until almost towards the end of the marriage. Senior Counsel for the Husband was correct in asserting that there is no room for the operation of inferences on the facts of this case, because inferences can only be drawn from the facts, which were largely non-existent. The Wife has failed to establish her claim in this regard.
Assessing contribution
The parties cohabited for 27 years. They both worked hard. They were both lucky in terms of inheritances received. The Husband was always the main breadwinner. The Wife worked, apart from relatively short periods when she was caring for young children at home. The Wife’s case is that the Husband made no contribution towards the property at Property D, and the property at Property K. There is some substance in this submission, but the diversity of the contributions that the Husband made after these properties were acquired, and during the course of a long relationship, cannot be ignored. The current market value of the Wife’s interest in these properties amounts to just under $500,000 or 11 per cent of the net pool of assets available to the parties. It is therefore hard to understand how the Wife can contend for a 60:40 split that would produce a 20 per cent difference in terms of their assets.
In the circumstances, the Court assesses contribution in the Wife’s favour at 55 per cent, having regard to her initial contribution. The Court does not accept that her evidence warrants any further adjustment in her favour.
An adjustment under section 75(2)?
The wife contends for a five per cent adjustment in her favour. The husband contends no adjustment should be made.
The Court acknowledges that there is a big difference between the non-rental income earnt by the Husband ($1,849 per week) and the Wife ($358). The Court also accepts that this reflects the difference in their respective earning capacities. The Husband is in skilled employment; the Wife is not. The Husband discloses a weekly surplus of income over expenses in the sum of $1,247, whereas the Wife discloses a small deficit. Nonetheless, the Court must have regard to the size of the asset pool (agreed to be $4,315,182 net) and the availability of financial resources to both of the parties. In particular, the Husband has long service leave entitlements, the Wife seems to have access to financial support from her parents, and a very flexible financial arrangement with all of her family.
Having regard to all the evidence, the Court accepts that there should be a s.75(2) adjustment in the Wife’s favour, but limited to 2.5 per cent.
The Balance Sheet
The parties produced the following agreed balance sheet at the conclusion of the proceedings:
Balance Sheet @ 19.9.2018
| Ownership | Description | Wife / de facto partner’s value | Husband / de facto partner’s value | |
| ASSETS | ||||
| 1. | J | Property J1 | $ 840,000 | $ 840,000 |
| 2. | H | Property J2 | $ 650,000 | $ 650,000 |
| 3. | J | Property H1 | $ 770,000 | $ 770,000 |
| 4. | H | Property H2 | $ 770,000 | $ 770,000 |
| 5. | W | Property F | $ 770,000 | $ 770,000 |
| 6. | W | Property D | $ 242,500 | $ 242,500 |
| 7. | W | Property K | $ 256,666 | $ 256,666 |
| 8. | W | Motor vehicle | $ 15,000 | $ 15,000 |
| 9. | H | Motor vehicle 1 | $ 2,000 | $ 2,000 |
| 10. | H | Motor vehicle 2 | $ E$1,000 | $ 1,000 |
| 11. | H | CBA account … | $ E25,354 | $ E25,354 |
| 12. | H | CBA account … | $ E24,429 | $ E24,429 |
| 13. | J | Members Equity account … | $ NIL | $ Nominal |
| 14. | W | CBA account … | $ 37 | $ NK |
| 15. | W | Bank account … | $ 4 | $ NK |
| 16. | W | Bank account … (half share) | $ E7,500 | $ E7,500 |
| 17. | W | Bank account … | $ 208 | $ NK |
| 18. | W | 99 x shares ($27.74 per share @ 1.5.2018) | $ 2,746 | $ 2,746 |
| 19. | W | Household furniture | $ 2,000 | $ 2,000 |
| 20. | H | Household furniture | $ 1,000 | $ 1,000 |
| Total | $ E4,380,444 | $ E 4,380,195 |
| ADDBACKS | ||||
| 21. | W | Rental income retained by the wife | $ NIL | $ NK-TBC |
| 22. | $ | $ | ||
| Total | $ 0 | $ 0 |
| LIABILITIES | ||||
| 23. | H | CBA loan account … (secured against Property F) | $ E499,000 | $ 499,000 |
| 24. | W | St George MasterCard | $ 4,043 | $ NK |
| 25. | W | Personal loan (to Mr C - $13,500 & Ms R - $500) | $ 14,000 | $ NIL |
| Total | $ 517,043 | $ 499,000 |
| SUPERANNUATION | |||||
| Member | Name of Fund | Type of Interest | Wife / de facto partner’s value | Husband / de facto partner’s value | |
| 26. | H | Super Fund 1 | $ E360,000 | $ 329,000 | |
| 27. | H | Super Fund 2 | $ 1,372 | $ 1,372 | |
| 28. | W | Super Fund 3 | $ 103,615 | $ 103,615 | |
| 29. | $ | $ | |||
| 30. | $ | $ | |||
| Total | $ E 464,987 | $ 433,987 |
| FINANCIAL RESOURCES | ||||
| Ownership | Description | Wife / de facto partner’s value | Husband / de facto partner’s value | |
| 31. | H | Long Service Leave Entitlement | $ E43,764 | $ N/A |
| Total | $ E43,764 | $ 0 |
| Net Asset Position | $ E4,372,152 | $ E4,315,182 |
A number of items fall for determination.
Items 14, 15 and 17 should be noted as nil due to their nominal value. The Court notes there is an issue about items 24 and 25. Item 24, purportedly the Wife’s personal MasterCard, should not appear on the Balance Sheet as a joint liability. There was no evidence to suggest this was a liability extant at the time of separation. Likewise, item 25 should not appear on the Balance Sheet. The Court is not satisfied that this is a genuine liability. The Court finds that the fluidity of the financial arrangements between the Wife, her son Mr C, and daughter Ms R, as well as her parents, strongly contraindicates that even if this were a loan, that there was any intention for it to be repaid.
Item 26 should be $360,000 based on the Husband’s evidence in cross-examination.
Item 31, the Husband’s long service leave entitlement, should not appear on the Balance Sheet, though the Court accepts its proper characterisation is as a financial resource, which must be taken into account under s.75(2).
The final Balance Sheet, therefore, is as follows:
| Ownership | Description | Court’s value | |
| ASSETS | |||
| 1. | J | Property J1 | $840,000 |
| 2. | H | Property J2 | $650,000 |
| 3. | J | Property H1 | $770,000 |
| 4. | H | Property H2 | $770,000 |
| 5. | W | Property F | $770,000 |
| 6. | W | 1/2 interest in Property D | $242,500 |
| 7. | W | 1/3 interest in Property K | $256,666 |
| 8. | W | Motor vehicle | $15,000 |
| 9. | H | Motor vehicle 1 | $2,000 |
| 10. | H | Motor vehicle 2 | $1,000 |
| 11. | H | CBA account … | $25,354 |
| 12. | H | CBA account … | $24,429 |
| 13. | J | Members Equity account … | NIL |
| 14. | W | CBA account … | NIL |
| 15. | W | Bank account … | NIL |
| 16. | W | Bank account … (half share) | $7,500 |
| 17. | W | Bank account … | NIL |
| 18. | W | 99 x shares ($27.74 per share @ 1.5.2018) | $2,746 |
| 19. | W | Household furniture | $2,000 |
| 20. | H | Household furniture | $1,000 |
| Total | $4,380,195 |
| LIABILITIES | |||
| 23. | H | CBA loan account … (secured against Property H2) | $499,000 |
| Total | $499,000 |
| SUPERANNUATION | ||||
| Member | Name of Fund | Type of Interest | Court’s value | |
| 26. | H | Super Fund 1 | $360,000 | |
| 27. | H | Super Fund 2 | $1,372 | |
| 28. | W | Super Fund 3 | $103,615 | |
| Total | $464,987 |
| Net Asset Position | $4,346,182 |
A just and equitable order?
Having regard to the Court’s findings about contribution and future needs, the Wife would be entitled to an adjustment in her favour of 57.5 per cent, which amounts to $2,499,054.65 of the total net pool of assets.
Neither party contended that the pool of assets should be split as between super, and non-super.
When the orders sought by the parties are compared, there are actually few issues that need to be determined.
In relation to Property H1, a jointly owned property, both parties propose that the Wife receive the benefit of this.
In relation to Property J1, the Wife proposes that it be sold, whereas the Husband proposes that the Wife transfer her interest in the home to him. There appeared no evidence before the Court which would contraindicate Property J1 being transferred into the Husband’s name only.
The parties otherwise propose that the remaining properties be kept by each of them as presently held.
The Husband sought an order that the Wife pay to him $29,550, being half the rental income received from Property H1 from the date of separation to date. The evidence does not establish that such an order should be made. When the financial circumstances of the parties in the post-separation period are compared, the Wife’s case that she used these funds for reasonable living expenses is one accepted by the Court.
The Husband sought a number of Orders in relation to personal property at orders 6, 7 and 8. The Court heard evidence in relation to the photographs referred to at Order 6. The order seems reasonable, and is consistent with the evidence, and thus will be made.
The Court declines to make Orders 7 and 8 because of absence of evidence and lack of specificity. In order to give effect to an adjustment in the Wife’s favour of 57.5 per cent, but on the basis that the Wife receive Property H1 in her sole name, and the Husband receives Property J1 in his sole name, they would thus each receive the following:
| WIFE’S ASSETS & LIABILITIES | ||
| 1. | Property H1 | $770,000 |
| 2. | Property F | $770,000 |
| 3. | 1/2 interest in Property D | $242,500 |
| 4. | 1/3 interest in Property K | $256,666 |
| 5. | Motor vehicle | $15,000 |
| 6. | CBA account … | NIL |
| 7. | Bank account … | NIL |
| 8. | Bank account … (half share) | $7,500 |
| 9. | Bank account … | NIL |
| 10. | 99 x shares ($27.74 per share @ 1.5.2018) | $2,746 |
| 11. | Household furniture | $2,000 |
| 28. | Superannuation | $103,615 |
| WIFE’S TOTAL NET ASSETS | $2,170,027 |
| HUSBAND’S ASSETS & LIABILITIES | ||
| 1. | Property J1 | $840,000 |
| 2. | Property J2 | $650,000 |
| 4. | Property H2 | $770,000 |
| 9. | Motor vehicle | $2,000 |
| 10. | Motor vehicle | $1,000 |
| 11. | CBA account … | $25,354 |
| 12. | CBA account … | $24,429 |
| 20. | Household furniture | $1,000 |
| 23. | CBA loan account … (secured against Property H2) | ($499,000) |
| 26. | Super Fund | $360,000 |
| 27. | Super Fund | $1,372 |
| HUSBAND’S TOTAL NET ASSETS | $2,176,155 |
Thus, the Husband would need to pay to the Wife the amount of $329,027.65. The Court is satisfied that this would result in a just and equitable order.
I certify that the preceding fifty-five (55) paragraphs are a true copy of the reasons for judgment of Judge Altobelli
Date: 21 January 2019
Key Legal Topics
Areas of Law
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Family Law
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Equity & Trusts
Legal Concepts
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Remedies
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Jurisdiction
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Procedural Fairness
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Statutory Construction
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