Nahra and Notano
[2011] FMCAfam 101
•25 February 2011
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| NAHRA & NOTANO | [2011] FMCAfam 101 |
| FAMILY LAW – Property – contributions of parties – special contributions of husband – add-backs as matrimonial asset or liability – unsuccessful investments – relevant section 75(2) factors – wife’s earning capacity – wife’s depression and mental state. |
| Family Law Act 1975, ss.74, 75, 79, 80, 90MT, 106A |
| In the Marriage of Browne and Green (1999) 25 FamLR 482; (1999) FLC 92-873 In the Marriage of Ferraro (1992) 16 Fam LR 1; (1993) FLC 92-335 In the Marriage of Figgins (2002) 29 Fam LR 544; (2002) FLC 93-122 In the Marriage ofHickey (2003) 30 Fam LR 355; (2003) FLC 93-143 In the Marriage of Hill (2005) 32 Fam LR 552; (2005) FLC 93-209 In the Marriage of Kowaliw (1981) FLC 91-092 In the Marriage ofMallet (1984) 156 CLR 605 In the Marriage of McLay (1996) 20 Fam LR 239; (1996) FLC 92-667 In the Marriage of Olliver (1978) 4 Fam LR 360; (1978) FLC 90-499 JEL & DDF (2000) 28 Fam LR 1; (2001) FLC 93-075 Jones v Dunkel (1959) 101 CLR 298 Lambert v Lambert [2003] Fam. 103; [2003] 4 All ER 342 Rosati v Rosati (1998) 23 Fam LR 288; (1998) FLC 92-804; [1998] FamCA 38 |
| Applicant: | MS NAHRA |
| Respondent: | MR NOTANO |
| File Number: | WOC 567 of 2009 |
| Judgment of: | Monahan FM |
| Hearing dates: | 16 & 17 August 2010 |
| Date of Last Submission: | 17 August 2010 |
| Delivered at: | Sydney |
| Delivered on: | 25 February 2011 |
REPRESENTATION
| Counsel for the Applicant: | Mr Millar |
| Solicitors for the Applicant: | Rita Thakur & Associates |
| Counsel for the Respondent: | Mr Gould |
| Solicitors for the Respondent: | Russell McLelland Brown |
ORDERS
Not less than seven (7) and not more than 42 days from the date of these Orders:
(a)the Respondent pay to the Applicant the sum of $313,962.72 (“the cash payment”);
or, in the alternative, provided that the Applicant so advises the Respondent in writing by no later than seven (7) days from the date of these Orders,
(b)the Respondent pay to the Applicant the sum of $158,346.22 (“the composite payment”) and contemporaneously transfer to the Applicant one half of all shares held in the Respondent’s name in the following companies, with an agreed combined value of $155,616.50:
(i) NIB;
(ii) One Steel;
(iii) [B];
(iv) Intec;
(v) BHP; and
(vi) Fosters.
Contemporaneously with paragraph one (1) herein:
(a)the Respondent do all acts and sign all documents as may be required to transfer to the Applicant, free of any encumbrance, all of his right, title and interest in the property situated at and known as Property P, in the State of New South Wales (“the Property P property”) and thereafter the Applicant indemnify the Applicant against any liability in respect of the Property P property;
(b)the Applicant do all acts and sign all documents as may be required to transfer to the Respondent all of her right, title and interest in the property situated at and known as PROPERTY W, in the State of New South Wales (“the Property W property”) and thereafter the Respondent indemnify the Applicant against any liability in respect of the Property W property;
(c)the Applicant do all acts and sign all documents as may be required to transfer the balance of any other jointly owned real property to the Respondent; and
(d)the Respondent do all acts and sign all documents as may be required to discharge any mortgage or liability secured against any other property held jointly with the Applicant and to re-finance any such mortgage or liability in his name only and thereafter the Respondent indemnify the Applicant against any liability in respect of the property or properties.
In the event that the Respondent fails to comply with paragraph one (1) herein, then interest shall thereafter accrue on the cash payment or the composite payment (as applicable) until it is paid in full.
In the event that the Respondent fails to comply with paragraph one (1) herein within 90 days of the date of these Orders, then paragraphs five (5) and six (6) herein will apply in lieu of paragraph (2)(b) and (c) herein (where applicable).
The Respondent and Applicant do all acts and sign all documents necessary to forthwith cause the Property W property to be sold and, upon completion of the sale, the Applicant be paid from the net proceeds of that sale the cash payment or the composite payment (as applicable), together with any interest that has accrued thereon.
In the event that the proceeds from the sale of the Property W property are less than the cash payment or the composite payment (as applicable), the Respondent cause the property situated at and known as PROPERTY D, in the State of New South Wales to be sold and the Applicant be paid from the net proceeds of sale such sum that remains due to her together with any interest that has accrued.
The Respondent do all acts and sign all documents so as to cause any interest he may have in the property in Macedonia situated and known as Property S, MACEDONIA to the Applicant forthwith upon being requested by her to do so and thereafter the Applicant be declared the sole owner of that property.
Except as is otherwise provided in these Orders:
(a)each party is solely entitled to any real property, motor vehicle, shares, monies standing to his or her credit in any bank or financial institution or due and payable by any third party, chattels, furniture, superannuation entitlements and items of personalty (including choses-in-action) in their respective ownership and/or possession as at the date of these orders;
(b)insurance policies remain the sole property of the owner/beneficiary named therein;
(c)each party retain all their respective interest and entitlements in their respective superannuation funds;
(d)the Respondent indemnify the Applicant with respect to all debts and liabilities in the Respondent’s sole name;
(e)the Applicant indemnify the Respondent with respect to all debts and liabilities in the Applicant’s sole name; and
(f)each party is solely liable for and indemnifies the other against any liability encumbering any item of property to which that party is entitled pursuant to these orders.
Paragraphs nine (9) to 16 (inclusive) of these Orders are binding on the Trustee of the [B] Superannuation Fund (“the Fund'').
The base amount of $184,101.00 be allocated to the Applicant out of the Respondent’s interest in the Fund.
Pursuant to s.90MT(1)(a) of the Family Law Act 1975 (“the Act”) whenever a splittable payment becomes payable, the Fund will:
(a)pay to the Applicant or the Applicant’s legal representatives, the amount calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001 (“the Regulations”); and
(b)make a corresponding reduction in the entitlement the Respondent would have had in the Fund but for these Orders.
The Trustee of the Fund do all such acts and things and sign all documents as may be necessary to:
(a)calculate, in accordance with the requirements of the Act and the Regulations the amount to be paid to the Applicant pursuant to paragraphs ten (10) and eleven (11) herein; and
(b)pay the amount pursuant to paragraphs ten (10) and eleven (11) herein whenever the Trustee of the Fund makes a splittable payment out of the Respondent’s interest in the Fund.
Paragraph ten (10) herein has effect from the operative time, that operative time being four (4) business days after the date of service of these Orders upon the Trustee of the Fund.
The Trustee of the Fund do all acts and sign all documents as may be necessary so that in accordance with the obligations set out under the Act and the Regulations, the Trustee of the Fund can calculate the amount due and make payment to the Applicant in accordance with paragraphs ten (10) and eleven (11) of these Orders.
The Applicant do all things necessary, including but not limited to, exercising her request pursuant to r.7A.6(1) of the Superannuation Industry (Supervision) Regulations 1994 for the rollover or transfer of the amount due to her out of the Respondent’s interest in the Fund to a fund of the Applicant’s choosing, to enable the Trustee of the Fund to comply with r.7A.12 of the Superannuation Industry (Supervision) Regulations 1994.
Having been accorded procedural fairness, these Orders require the Trustee of the Fund to observe the requirements of the Act and the Regulations.
In the event that either party refuses or neglects to execute any deed or instrument, the Registrar of the Court be appointed pursuant to s.106A of the Act to execute such deed or instrument in the name of such party and do all acts necessary to give validity to the operation to the deed or instrument.
All extant applications be otherwise dismissed.
IT IS NOTED that publication of this judgment under the pseudonym Nahra & Notano is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
FEDERAL MAGISTRATES |
WOC 567 of 2009
| MS NAHRA |
Applicant
And
| MR NOTANO |
Respondent
REASONS FOR JUDGMENT
Introduction
This is an application by MS NAHRA (“the wife”) against
MR NOTANO (“the husband”) seeking various property orders pursuant to s.79 of the Family Law Act 1975 (“the Act”). The wife’s application is opposed by the husband, who is seeking different property orders.
The parties are in dispute as to their respective property and family contributions made during the relationship and following their separation. They are also in conflict over their respective needs and future income earning capacity.
The wife sought the following orders at the final hearing:[1]
[1] See wife’s ‘Case Outline’ document.
“1. That the husband forthwith do all acts and sign all documents necessary to transfer to the wife free of any encumbrance his entire right, title and interest in the parties’ former matrimonial home known as and situated at Property P, being the whole of the land contained in Certificate of Title Folio Identifier [omitted].
2. That the husband transfer to the wife half the number of his shares as set out in the joint balance sheet filed with the Court with NIB, One Steel/ [B], Intec, Foster and BHP forthwith upon being requested to do so by the wife.
3. That the base amount allocated to Ms Nahra the non-member spouse in these proceedings out of the interest held by Mr Notano in [B] Superannuation Fund is $185,000.00.
4. That pursuant to paragraph 90MT(1)(a) Family Law Act 1975, whenever the Trustee of the [B] Superannuation Fund makes a splittable payment from the interest held by Mr Notano member number [omitted] the Trustee shall pay to Ms Nahra or his/her administrators, executors beneficiaries, heirs or assigns the entitlement calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001 and there shall be a corresponding reduction in the entitlement Mr Notano would have had in the [B] Superannuation Fund but for these Orders.
5. That Order 4 have effect from the operative time and the operative time shall be deemed to be two (2) weeks from the date when these Orders are served upon the Trustee.
6. That this Order binds the Trustee of [B] Superannuation Fund.
7. That the husband shall do all things and execute all documents to cause any interest he may have in the property in Macedonia situated at Property S to the wife forthwith upon being requested by her to do so and thereafter the wife is declared the sole owner of that property as against the husband.
8. That the husband pay to the wife by way of property settlement the sum of $418,004.00 within 42 days of the date of these Orders.
9. That the wife transfer to the husband her entire right title and interest in the property known as and situated at Property W, being the whole of the land contained in Certificate of Title Folio Identifier [omitted] and thereafter the husband shall indemnify the wife and forever keep her indemnified against any liability in respect of the said property.
10. That as between the husband and wife, and subject to the above Orders, the husband and wife shall each respectively retain all interest in and entitlement to:
10.1 All personal property now in his/her respective possession or control.
10.2 All shares, debentures, units in unit trusts, bank, building society or credit union accounts standing in his/her sole name respectively.
10.3 All interests in life insurance policies and superannuation funds standing in his/her sole name respectively.
11. That in the event that either party refuses or neglects to execute any deed, document or instrument necessary to give effect to this Order, the Registrar of the Court be appointed pursuant to Section 106A of the Family Law Act 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.
12. That each party have liberty to apply in relation to the implementation of these Orders and enforcement of these Orders on 7 days notice.”
The husband sought the following orders at the final hearing:[2]
[2] See husband’s ‘Minute of Order’ document.
“1. That within 28 days of the date of these orders the parties are to do all acts and sign all documents as required to transfer the husband’s share in the property at Property P, to the wife.
2. That within 28 days of the date of these orders the parties are to do all acts and sign all documents as required to transfer the wife’s share in the property at Property W, to the husband.
3. That within 28 days of the date of these orders the parties are do all acts and sign all documents as required to transfer the husband’s shareholdings in the following companies to the wife:
a. NIB; and
b. BHP Billiton.
4. That, except as provided herein, the parties to be declared to have the sole right, title and interest in all property in their possession at the date hereof including but not limited to bank accounts, superannuation, real estate, motor vehicles, investments, chattels, goods, furnishings, shares and any other property.
5. That the parties are to be solely responsible for all debts in their name at the date hereof and agree to indemnify the other with respect to same.
6. That the Court allocate as required by section 90MT (4) of the Family Law Act 1975, a base amount of $184,101.00 to the wife out of the husband’s interest in the [B] Superannuation Fund.
7. That in accordance with paragraph 90 MT (1) (a) of the Family Law Act 1975, whenever a splitable payment becomes payable, the [B] Superannuation Fund will:
a. pay to the wife or the wife’s legal personal representatives the amount calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001; and
b. make a corresponding reduction in the entitlement the husband would have had in the [B] Superannuation Fund but for this order.
8. That the Trustee of the [B] Superannuation Fund (“The Trustee”) do all such acts and things and sign all documents are may be necessary to:
a. calculate, in accordance with the requirements of the Family Law Act 1975 and the Family Law (Superannuation) Regulations 2001 the amount to be paid to the wife pursuant to order 9 of this order; and
b. pay the amount whenever the Trustee makes a splitable payment out of the husband’s interest in the [B] Superannuation Fund.
9. That this order have effect from the operative time and the operative time is 4 business days after the service of a sealed copy of these orders upon the Trustee.
10. That the Trustee do all such acts and things and sign all documents as maybe necessary so that in accordance with the obligations set out under the Family Law Act 1975 and the Family Law (Superannuation) Regulations 2001, the Trustee can calculate the amount due and make payment to the wife in accordance with order 9 of these orders.
11. That the wife do all things necessary, including but not limited to, exercising her request pursuant to r.7A .6(1) of the Superannuation Industry (Supervision) Regulations 1994 for the rollover or transfer of the amount due to her out of the husband’s interest in the [B] Superannuation Fund to a fund of the wife’s choosing in accordance with r.7A.12 of the Superannuation Industry (Supervision) Regulations 1994.
12. That pursuant to r.14F of the Family Law (Superannuation) Regulations 2001, any payments from the husband’s superannuation interests made after the Trustee has rollover over or transferred the amount due to the wife to a fund of the wife’s choosing are not splittable payments.
13. Having been accorded procedural fairness, these Orders require the Trustee to observe the requirements of the Family Law Act 1975 and the Family Law (Superannuation) Regulations 2001.
14. In the event that either party refuses or neglects to execute any deed or instrument, the Registrar of the Court be appointed pursuant to Section 106A, to execute such deed or instrument in the name of such party and to do all acts and things necessary to give validity to the operation to the deed or instrument.
15. That the Wife’s Application, including her claim for Spousal Maintenance, be otherwise dismissed.”
Background
These proceedings were commenced in the Wollongong Registry on
26 June 2009 and came before Brewster FM on 5 August 2009. The matter was subsequently adjourned to 12 August 2009 and on that occasion his Honour made the following order:
“That the husband forthwith pay to the wife from the savings in his CUA bank account the sum of $20,000. The characterisation of this payment and its ultimate treatment will be a matter for the Federal Magistrate conducting the final hearing.”
The parties subsequently attended a Conciliation Conference before Registrar Whitten on 28 August 2009. Despite some optimism that the dispute had settled in principle at the Conciliation Conference, no agreement was reached.
The matter next came before Altobelli FM on 30 October 2009 where his Honour adjourned the matter for final hearing on 8 March 2010. Unfortunately, the matter was not able to be heard by Altobelli FM on 8 March 2010 and was adjourned for final hearing before me.
The final hearing proceeded on 16 August 2010. Both parties were legally represented and each gave evidence in support of their case.
Relationship history
The wife was born [in] 1955 and is currently aged 55 years. The husband was born [in] 1952 and is currently aged 58 years.
The parties commenced cohabitation upon their marriage in Macedonia [in] 1974.
There are three children of the relationship, namely [X], born [in] 1975 (“[X]”), [Y], born [in] 1984 (“[Y]”), and [Z], born [in] 1987 (“[Z]”) (collectively, “the children”).
The parties separated on 8 February 2008. Neither party appears to currently have another partner.
The wife asserts that she is not in good health and has been receiving treatment for depression. She works part time as a [omitted] and is currently receiving a Disability Support Pension.[3]
[3] Transcript, 16 August 2010, page 19.
The husband is a [occupation omitted] employed by [B]. He anticipates working full-time until aged approximately 65 years.[4]
[4] Ibid, page 70.
As to significant events in their relationship, the parties were not in dispute, or not in any significant dispute in relation to the following:
·1973/1974: the husband arrives in Australia and commences employment with [omitted], parties marry;
·1975/1976: [X] is born; parties purchase property at Property A for approximately $16,950.00 (financed by mortgage to Commonwealth Bank and loan of $2,000.00 from wife’s father which was repaid);
·1980: parties sell Property A and purchase property at Property P;
·1984: [Y] is born;
·1987: [Z] is born;
·1990/1992: parties purchase Property P, for $170,000.00 (the “Property P property”); parties sell Property P;
·1995/1997: parties purchase a property at Property W, for $130,000.00 (asserted by wife) or for $150,000.00 (asserted by husband); parties purchase Property W, (“the Property W property”) for $45,000.00[5]; husband commences to operate [business omitted] in rented premises at Property C; husband inherits his father’s house in Macedonia occupied by the husband’s step-mother on what appears to be a life tenancy basis and also by his sister rent-free (“the husband’s Macedonian family home”);
·1998/1999: wife retrenched from [omitted] and receives redundancy payment of $70,000.00 (asserted by husband) or $100,000.00 (asserted by wife) plus an unfair dismissal compensation payment of $2,000.00; parties purchase motor vehicle for $24,000.00; wife and children holiday in Macedonia;
·2002/2003: parties purchase Property C for $95,000.00; parties sell Property W, for $189,000.00; wife commences receiving treatment for depression;
·2004/2005: parties sell Property C for $335,000.00; proceeds used to reduce debt and towards the purchase by the wife of a unit in Macedonia in the amount of $70,000.00 (“the unit in Macedonia”); parties purchase [omitted] property at Property D, for $712,500.00 (“Property D property”); parties sell Property P to [X] for $120,000.00;
·2006: husband invests approximately $38,000.00 in the business operated by [C] Pty Ltd;
·2007/2008: husbands sells 12,070 BHP shares acquired during his employment realising $519,000.00; husband subsequently purchases 10,120 BHP shares for $392,000.00 and later sells them for approximately $425,000.00; parties renovate kitchen in former matrimonial home; parties separate; husband purchases a further 10,000 BHP shares for $320,000.00; wife forms relationship with Mr P (May-October 2008); wife asserts Mr P loans her $21,000.00; and
·2009/2010: husband sells 3,000 BHP shares realising $117,640.62; husband gives [Z] $21,000.00 (and wife asserts that the husband also paid out [Z]’s then credit card debt of $1,700.00); wife asserts she borrows approximately $7,975.00 from friends.
[5] The husband refers to both of these addresses in his affidavit sworn 18 February 2010 and filed 19 February 2010 (paragraphs 40 and 58). The wife in her affidavit sworn 16 February 2010 and filed 18 February 2010 only makes a reference to “Between 1980 until 2004 the husband and I purchased three other properties” (paragraph 15).
Issues
The following issues were in dispute at the hearing:
·the parties’ contributions made prior to the relationship;
·the parties’ contributions made during the relationship and whether or not the husband made a special or extra contribution from his various real property and share acquisitions;
·the parties’ contributions made following the breakdown of the relationship;
·whether various disputed items, referred to later in this decision, should be included as matrimonial assets, ‘add-backs’ to matrimonial assets and matrimonial liabilities; and
·the parties’ respective future needs and obligations and, in particular, the wife’s on-going mental health issues.
Evidence
Both parties provided the Court with oral and affidavit evidence as detailed below and were cross-examined.
The joint medical expert, DR H, psychiatrist, also gave evidence.
The husband also cross-examined one of the wife’s witnesses, Ms S.
Following an objection by the husband, the Court determined that the wife could not rely on the evidence of her psychologist, Dr R, and, more specifically, Dr R’ affidavit sworn and filed 4 August 2009.[6]
[6] Transcript, 16 August 2010, page 54.
The husband did not require the wife’s accountant, Mr M, for cross-examination.
Wife’s evidence
The following documents were relied upon by the wife:
·Initiating Application filed 26 June 2009;
·
Updated Financial Statement sworn 16 February 2010 and filed
18 February 2010;
·the wife’s affidavit sworn 25 June 2009 and filed 26 June 2009 (“the wife’s first affidavit”);
·the wife’s affidavit sworn 16 February 2010 and filed 18 February 2010 (“the wife’s second affidavit”);
·
the affidavit of Ms S sworn 2 July 2010 and filed 6 July 2010
(“Ms S’s affidavit”);
·the affidavit of Mr M sworn 4 February 2010 and filed 18 February 2010; and
·Case summary document and minute of order.
The wife presented as a highly emotional person and many of her answers were unfocused and vague. She remains distressed by the breakdown of the relationship and asserted that the husband treated her poorly during it.[7]
[7] Ibid, page 22.
Husband’s evidence
The husband relied upon the following documents:
·Response filed 4 August 2009;
·Updated Financial Statement sworn and filed 3 August 2010;
·
the husband’s affidavit sworn 18 February 2010 and filed
19 February 2010 (“the husband’s first affidavit”); and
·the husband’s affidavit sworn 12 August 2010 and filed 13 August 2010 (“the husband’s second affidavit”); and
·Case Outline document, Balance Sheet, Schedule of Profits made by husband and Proposed Orders sought.
The husband presented as a polite and focused witness, however, he was prone to interrupt whilst questions were being asked. He generally had a good recollection of transactions and events that occurred during the relationship although he could not always remember specific details.
Dr H’s evidence
The affidavit of DR H was sworn 23 February 2010 and filed 3 March 2010 and it annexed an assessment report in respect of the wife.
In that assessment report, Dr H describes the wife’s “report of the relationship” as follows:
“Ms Nahra told me that she and her husband were quite happy initially, however her desire to become part of the Australian community was not shared by him. He, throughout the time she stayed has been more interested in being with his friends and other males than being with Ms Nahra, or the children. It became especially marked after the birth of their second child.
Ms Nahra tells me that she attended English classes and has a number of female friends with whom she has maintained regular contact. The marriage was unhappy, and there were many occasions when she thought, “that she should leave him”. This however never occurred as, if she were to do so, she would be the first member of her family to be divorced. She believes that this would bring shame not only on herself, but her family. Her past husband however came from a family where his father had been married four times, and this was one of the reasons why her family were not keen for her to many him in the first place.
Ms Nahra told me that her husband’s attitude to her was “always negative and hostile”. He would criticise her for being lazy, criticise her for not looking after the children and keeping the house clean. If she wanted to go out as a family, or do something that other couples do, he would make negative and disparaging comments towards her.
Sexual activity and intimacy ceased over 20 years ago, and the couple have not been close since.
On many occasions, Ms Nahra attempted to discuss the relationship with her husband, and she pleaded with him to attend counselling, or do things to improve the relationship. His attitude to her was “dismissive and belligerent”. She told me that he could never speak to her in a nice way, and that all his comments made her feel like “a slave, or useless woman”.
When I asked her how she managed to survive such a difficult relationship for so long, she told me “she focussed on looking after the house and the children”. She was never happy, and would frequently feel sad and depressed but the needs of the children, and the home, were paramount. She was also frightened of the emotional shame and disapproval that the community would reap [sic] upon her, should she separate. She believes that the community would see it as her failure, for failing to keep her husband.”
As to the wife’s account of her mental state post-separation, Dr H reports:
“Ms Nahra describes herself as ‘being devastated’. She has been very depressed and distressed by what has occurred. Although she realises that she could not have done anymore, she feels this is a failure and that she has been shamed.
She told me that over the last 12 months she has been ‘avoiding going out’. She is frightened that people look at her, and criticise or judge her. She has a number of friends who have been attempting to maintain contact with her, but her shame and fear of going out is such that she has avoided them as best she can.
Sleep, concentration, ability to organise herself and do housework, and her ability to concentrate have all been very impaired for some time.
Her daughters have been very concerned about her, and provided some ongoing support but this did not make her feel better, it increased her guilt at being unable to care for her home, and look after herself.
There have certainly been times in the past when she felt ‘that she’d be better off dead’. Despite this, she does not believe that she would ever act on the suicidal thought that she’s had. To do so, would even further shame herself, and her daughters. She has four grandchildren, and another daughter to get married so there are ongoing responsibilities that keep her occupied.”
Dr H detailed the wife’s psychiatric and medical history as well as an assessment based on his own examination of the wife’s mental state and concluded that:
“Medication will not cure this situation. It may be of use in assisting sleep, and anxiety relief.
Psychosocial interventions including time, psychological counselling, and gradually increasing the range of social contacts that she has will be the most effective clinically. These will take some time to achieve, and will require some ongoing support.”
Lastly, Dr H provided the following prognosis of the wife’s mental health condition:
“I don’t know how ‘Ms Nahra’s current depression can be compared to her previous depression’. She describes herself as having been unhappily married, but socially she had a purpose, believed that she was able to go out and hold her head high. She is now depressed, and feels that she has lost her purpose, and has embarrassed her community.
She is certainly somewhat more symptomatic than she had been, but I believe that the major change has been ‘the loss of pride and a feeling of social acceptability’. Given the rigidity of her personality, and the fact that this sense of pride has been such a driving force for so many years, I doubt very much that this is likely to change or improve significantly. She will not go out with another man, and is likely to remain the aggrieved divorcee for the remainder of her life.
At his point in time, she is working 2 x 4 hour shifts. She had been working 4 days a week prior to the break-up. Her current symptoms and attitudes are such that she is unlikely to increase these hours for the foreseeable future. From a therapeutic point of view, there would certainly be some benefit if she were able to increase back towards hill-time work, but her embarrassment, and sense of shame, are likely to prevent this from occurring.
With this in mind, there may be some room for some slight improvement in the next year or two, but I do not believe that she will return to her previous level of function.”
With leave of the Court, Dr H gave his oral evidence by way of telephone and was only required by the husband for cross-examination.
When cross-examined, Dr H confirmed his diagnosis that the wife was currently suffering from a significant adjustment disorder with marked anxiety and depression.[8] Dr H stated that he was unaware that the wife had been in an intimate relationship with Mr P and that this contradicted the wife’s assertion to him that she “wouldn't be going out with any other men”. Dr H agreed that it was likely the marriage breakdown had contributed to her complaint and that in similar cases, anxiety and depression would settle down over time.[9]
[8] Transcript, 16 August 2010, page 64.
[9] Ibid, page 65.
In both his affidavit and oral evidence Dr H acknowledged having read the reports of the wife’s general practitioner, Dr B, and the wife’s psychologist, Dr R. While he acknowledged that in the medical report dated 4 August 2009, Dr B was of the view that the wife could resume full-time work by late September 2010 and go off sickness benefits, he thought that it was a predictive comment only.[10] That said, he further acknowledged that Dr B had been the wife’s general practitioner for
34 years.[11] Dr H agreed that the wife’s post-separation trip overseas may be indicative of the wife having “a sufficient sense of independence and capability”.[12]
[10] Ibid, pages 65-66.
[11] Ibid, page 66.
[12] Ibid.
Law and discussion: the four steps
Section 79(1) of the Act provides that the Court may make such orders as it sees fit to alter interests in matrimonial property. The Court’s discretion is not unlimited and must be exercised in accordance with the factors set out in the legislation and, more specifically, s.79(4) of the Act.
The preferred approach to the exercise of the discretion has been outlined in numerous decisions of the Full Court of the Family Court of Australia (“the Full Court”), such as in In the Marriage ofHickey (2003) 30 Fam LR 355; (2003) FLC 93-143.
The preferred approach involves four interrelated steps:[13]
·Step 1: identify and value the parties’ property, liabilities and financial resources as at the date of the hearing;
·Step 2: identify and assess the parties’ “contributions” within the meaning of ss.79(4)(a), (b) and (c) of the Act and determine the parties’ contribution-based entitlements expressed as a percentage of the net value of the parties’ property;
·Step 3: identify and assess the relevant matters referred to in ss.79(4)(d), (e), (f) and (g) of the Act including, because of s.79(4)(e) of the Act, the matters referred to in s.79(2) of the Act so far as they are relevant, and determine the adjustment, if any, that should be made to the contribution-based entitlements of the parties determined at Step 2; and
·Step 4: consider the effects of the findings of steps 1-3 and resolve what order is just and equitable in all of the circumstances of the case.
[13] L Young & G Monahan, Family Law in Australia, 7th ed, LexisNexis Butterworths, Australia, 2009, pp.614-615.
Step 1: the asset pool
Based on submissions by both counsel and further questioning by the Court, the following table, drawn from the ‘Balance Sheet’ prepared by the wife, represents the agreed assets and liabilities of the parties including superannuation entitlements:[14]
[14] In the table, ‘H’ refers to property registered in the husband’s name or otherwise legally owned by him or in his possession; ‘W’ refers to property registered in the wife’s name or otherwise legally owned by her or in her possession and ‘J’ denotes property registered in the joint names of the husband and the wife.
Assets
Valuation
Property D (H)
$725,000.00
Property W,(J)
$340,000.00
Property P, (the former matrimonial home) (J)
$420,000.00
Unit in Macedonia (W)
$75,000.00
CUA Account [1] (H)
$4,242.00
CUA Account [2] (H)
Nominal
ANZ Account [3] (H)
$14,311.00
[C] Pty Ltd (H)
Nominal
Ford Transit (H)
$17,500.00
1998 Mercedes (H)
$10,500.00
Caravan (H)
$2,000.00
Furniture/Contents (Property D property) (H)
$5,000.00
Furniture/Contents (Property P property) (W)
$7,200.00
5,200 NIB shares (H)
$6,625.00
1,954 One Steel shares (H)
$5,803.00
5,596 [B] shares (H)
$13,095.00
7,546 Intec shares (H)
$218.00
7,000 BHP shares (H)
$282,100.00
570 Fosters shares (H)
$3,392.00
Toyota motor vehicle (W)
$8,000.00
Pajero motor vehicle (H)
$7,500.00
Jewellery (W)
$1,000.00
CBA Bank Account (W)
Nominal
Subtotal/Assets
$1,948,486.00
Liabilities
ANZ Bank mortgage (H)
$268,088.00
Subtotal/Liabilities
$268,088.00
Superannuation
[A] and [R] (W)
$22,043.00
[B] (H)
$390,245.00
Subtotal/Superannuation
$412,288.00
The parties are in disagreement about the following issues relating to matrimonial assets, ‘add-backs’ to matrimonial assets and matrimonial liabilities:
·whether the husband’s Macedonian family home should be included as a matrimonial asset or treated as a financial resource of the husband;
·whether the husband should ‘add-back’ the monies he has given to:
o the parties’ daughter [Z] ($22,700.00 as asserted by wife);
o the husband’s sister ($30,000.00); and
o himself, being money withdrawn by him for the proposed driveway renovation ($20,000.00);
·whether the husband should ‘add-back’, otherwise account or take responsibility for, the loss of the investment he made in [C] Pty Ltd ($40,000.00 as asserted by wife);
·whether the wife should ‘add-back’ the $20,000.00 payment she received by way of the order of Brewster FM made 12 August 2009, or should such be considered as an order for lump sum spousal maintenance;
·whether the parties should ‘add-back’ the monies spent by them to date on legal fees for this dispute ($38,975.00 by the husband; $5,715.00 by the wife);
·whether the husband’s potential capital gains tax liability should be included as a matrimonial liability ($11,309.00 as asserted by husband);
·whether the wife’s credit card debts should be included as a matrimonial liability ($3,500.00 as asserted by wife);
·whether the loans asserted by the wife should be included as matrimonial liabilities (loan by Mr P of $21,000.00; loan by Ms S of $7,975.00); and
·whether the husband’s yet to be finalised workers compensation claim should be treated as a financial resource of the husband.
These issues need to be resolved before the Court can determine the net available property pool.
The husband’s Macedonian family home
The wife seeks the inclusion of the husband’s Macedonian family home as a matrimonial asset. Alternatively, she seeks that it be treated as a financial resource of the husband. The wife asserts its value at $70,000.00 but no formal valuation was tendered. The husband is unaware of the value of the house but describes it as a mud-brick house which is “very basic on a small block in a small town…I do not know what it would be worth if it were to be sold, perhaps $20, 000 to $30, 000 but that would only be a guess.”[15]
[15] Husband’s first affidavit, paragraph 71.
The husband was cross-examined about this property. His evidence was that, as the only son of his late father, he inherited the property which he described as the “family home”.[16] He has never lived in the property since becoming the registered owner, however, his late step-mother and his sister have lived there without the husband receiving any financial benefit. He acknowledged that he would be likely to stay in the property if he visited Macedonia.[17] He also confirmed that he had given his sister the sum of $30,000.00 to effect necessary repairs to the property.
[16] Transcript, 16 August 2010, page 75.
[17] Ibid.
This particular item is complicated by the lack of any valuation evidence. The wife provides no basis for her estimate of value. Moreover, the Court accepts the husband’s evidence that the property is occupied by his sister rent free. Unfortunately, there was no evidence as to how long the husband’s sister will be likely to continue to reside in the property.
In the circumstances, the property will be included as a financial resource available to the husband.
‘Add-backs’ for various monetary gifts made by the husband
The wife is seeking that the husband ‘add-back’ into the property pool the various monetary gifts he has made to:
·[Z] of $22,700.00, as asserted by the wife;
·the husband’s sister of $30,000.00 to effect necessary repairs to the husband’s Macedonian family home; and
·to himself of $20,000.00, being the monies withdrawn by him for the incomplete driveway renovation.
As there was evidence before the Court that the parties have financially assisted their other children, the Court is satisfied that the husband’s gift to [Z], despite its timing and the lack of consultation by the husband with the wife, should not be added-back into the property pool.
That said, there is no evidence before the Court that the wife agreed for the husband to gift the sum of $30,000.00 to his sister, allegedly for renovation to the husband’s Macedonian family home. Nor is there evidence of agreement between the parties for the husband to retain the sum of $20,000.00, ear-marked for the incomplete driveway renovation, but which was “spent” by the husband on items of expenditure which he was unable to identify under cross-examination.[18]
[18] Ibid, page 76.
Consequently, these two sums will be ‘added-back’ by the husband into the property pool.
‘Add-back’ for the [C] Pty Ltd investment made by husband
The wife is seeking that the husband ‘add-back’ into the property pool, or otherwise take responsibility for the loss of, the investment he made in [C] Pty Ltd, a company which operated an [omitted] business managed by the parties’ son-in-law (“the business”).[19] The wife asserts that this investment totalled $40,000.00 and the husband admits it was approximately $38,000.00 to $40,000.00.[20]
[19] Husband’s first affidavit, paragraph 70.
[20] Husband’s first affidavit, paragraph 70; see also Transcript, 16 August 2010, page 77.
Unfortunately, the husband asserts that the business has not been profitable. The husband further asserts that despite remaining a shareholder and director, he has no current involvement in the running of the business.[21] Under cross-examination, the husband denied that his investment in the business was a loan but rather “a good venture…but it didn’t work out”.[22]
[21] Ibid.
[22] Transcript, 16 August 2010, pages 77-78.
Nevertheless, the question arises as to whether one or both of the parties shoulder any responsibility for the failure of the business?
In property proceedings, a party may submit to the Court that the other party has made a ‘negative’ rather than a ‘positive’ contribution to the assets thereby ‘wasting’ rather than increasing the value of the net asset pool. Negative contributions, like positive contributions, should be taken into account where relevant. The principal case is In the Marriage of Kowaliw (1981) FLC 91-092 (“Kowaliw”) where the Court determined that financial losses incurred by the parties or by either of them during the course of the marriage, where such losses result from several or joint liability, are generally shared by the parties, although not necessarily equally.[23]
[23] M Broun et al (eds), Australian Family Law and Practice, CCH Australia Limited, Sydney, 2008, p.28,794.
In Kowaliw, Baker J stated that the general principle of joint liability does not apply in the following circumstances:
“(a) where one of the parties has embarked upon a course of conduct designed to reduce or minimise the effective value or worth of matrimonial assets, or
(b) where one of the parties has acted recklessly, negligently or wantonly with matrimonial assets, the overall effect of which has reduced or minimised their value.
Conduct of the kind referred to in para. (a) and (b) above having economic consequences is clearly in my view relevant under sec.75(2)(o) to applications for settlement of property instituted under the provisions of sec. 79.” [24]
[24] In the Marriage of Kowaliw (1981) FLC 91-092 at 76,654.
The Full Court in In the Marriage of Browne and Green (1999) 25 Fam LR 482; (1999) FLC 92-873, rejected the proposition that the above statement from Baker J was a principle. However, the Full Court did acknowledge that it was a “well accepted guideline.” [25]
[25] In the Marriage of Browne and Green (1999) 25 Fam LR 482 at 497; (1999) FLC 92-873 at 86,360 (per Lindenmayer, Finn and Holden JJ).
Therefore, if a Court finds that a party to a marriage has wasted assets then that party may receive a lesser proportion of the net property pool or may be called to account for the loss.
The husband was quite candid in his evidence that his investment in the business had proved to be unsuccessful. There is no evidence that he acted recklessly, negligently or wantonly in the investment in the company. Conversely, there is evidence that he was expecting the investment to turn a profit and that it has otherwise assisted his son-in-law with employment.
Consequently, the husband will not be required to add-back into the property pool, or otherwise take responsibility for, the loss of the investment he made in the business.
The $20,000.00 payment received by the wife pursuant to Court order
As stated, on 12 August 2009 Brewster FM made an Order directing the husband to pay to the wife the sum of $20,000.00 (“the payment”) with “the characterisation of this payment and its ultimate treatment [to] be a matter for the Federal Magistrate conducting the final hearing”.
The obvious issue that arises is whether the payment should be considered as lump sum spousal maintenance or, alternatively, whether the payment should be considered an interim distribution of property which the wife should ‘add-back’ into the property pool.
Clearly, the Orders of 12 August 2009 made by his Honour leave the determination of the payment to the Federal Magistrate conducting the final hearing. That said, the context in which the Order was made remains relevant. Despite the absence of an available transcript for what occurred on the day the order was made, it is clear from a reading of the file that his Honour may have been considering the wife’s interim application[26] seeking $400.00 per week by way of spousal maintenance “until finalisation of these proceedings”. If so, then it is possible that the lump sum order represented the capitalisation of approximately one year’s spousal maintenance based upon $400.00 per week. Ironically, this final hearing did, in fact, occur some 12 months after the Order was made.
[26] See the wife’s Initiating Application filed 26 June 2009.
The alternative would be for his Honour to have considered the payment in the context of an interim property distribution to assist with the wife’s legal costs. That said, if such a lump sum payment was designed to assist with the wife’s relocation or other living expenses then the Court is more likely to conclude that it was in the nature of spousal maintenance.
Having now heard all the evidence and, in particular, being satisfied that the husband had, and continues to have, the capacity to support the wife, and that the wife had, and may continue to have subject to the outcome of these proceedings, a need for support, the Court finds that the payment should be categorised as spousal maintenance and that the payment was ordered pursuant to the Court’s powers under ss.74 and 80 of the Act.
Consequently, the wife will not be required to ‘add-back’ the $20,000.00 payment into the property pool. The wife is, of course, under an obligation to disclose to Centrelink the order and payment made.
The legal fees of the parties
Up to the date of the final hearing, both parties have expended considerable sums on legal fees. The ‘balance sheet’ discloses payment by the husband of some $38,975.00 and by the wife of $5,715.00. It is suspected that their legal expenses will be considerably higher after a two-day final hearing.
As these payments were clearly made post-separation, the Court sees no reason for such payments to be considered matrimonial liabilities. Any outstanding payments are, however, relevant to the parties’ respective future financial resources.
Consequently, these payments will not be added-back into the property pool as a matrimonial liability.
The husband’s potential capital gains tax liability
The husband asserts that his potential capital gains tax liability arising from the sale of the BHP shares should be included as a matrimonial liability. That assertion in itself seems just and equitable. However, the problem that arises is how to quantify such a liability.
In the husband’s first affidavit, the husband states that following his earlier trading in BHP shares in 2007 he incurred an overall income tax liability of $122,836.45.[27] In the husband’s second affidavit, the husband further asserts that his potential capital gains tax liability for the last completed tax year is $11,309.00.[28] This assertion by the husband was challenged by the wife on the basis that there was no evidence as to how that amount was calculated.[29] In response, the husband seeks to rely on a letter from his accountant dated 9 August 2010 which forms annexure “D” to the husband’s second affidavit.
[27] Husband’s first affidavit, paragraph 69.
[28] Husband’s second affidavit, paragraph 15.
[29] Transcript, 16 August 2010, page 46.
The Court understands the wife’s concerns that the accountant’s letter is not evidence that the husband will be required to pay the sum of $11,309.00 in income tax. That said, it is evidence that the husband has a potential liability in that amount.
The Court agrees with the submission made by the husband that, given the Full Court’s decision in Rosati v Rosati (1998) 23 Fam LR 288; (1998) FLC 92-804; [1998] FamCA 38, the Court can either make an allowance in the property pool for the tax to be paid or, in the alternative, take the prospect of such tax being incurred by the husband into account as a relevant s.75(2) factor.[30]
[30] Ibid, page 45; see also Rosati v Rosati (1998) 23 Fam LR 288 at 316; [1998] FamCA 38 at [6.44] (per Ellis, Lindenmayer and Kay JJ).
Given the present circumstances, the Court finds it appropriate to make an allowance in the property pool for the estimated tax to be paid by husband.
The wife’s credit card debts
The wife seeks the inclusion of her credit card debts totalling $3,500.00 as a matrimonial liability. As these debts were accumulated post-separation, it is difficult to see why they should be considered matrimonial liabilities unless they added value to the property of the parties.
Apart from the wife’s evidence,[31] it is noteworthy that the relevant credit card statements were neither attached as an annexure to either of the wife’s affidavits nor tendered in evidence. Consequently, it is difficult for the Court to determine what expenses were incurred by the wife or whether they were relevant to the property pool as a post-separation contribution.
[31] See for example, the wife’s second affidavit, paragraphs 26, 28-30, 34-36.
Furthermore, in light of the Court’s determination in respect of the $20,000.00 payment made by the husband to the wife pursuant to Brewster FM’s order, the Court sees no reason for these debts to be included as a matrimonial liability. Nevertheless, this debt would be a relevant s.75(2) factor in relation to the wife.
The wife’s loans from friends
The wife also seeks that the monies received by her as loans from friends be included as a matrimonial liability. Details of these alleged loans are set out in both of the wife’s affidavits, in particular in the wife’s second affidavit.[32] In summary, the wife is alleging that she received $21,000.00 from her former partner, Mr P and a further $7,975.00[33] from her friend, Ms S.
[32] Ibid, paragraphs 26, 29 and 36.
[33] The figure of $7,975.00 is asserted in the wife’s ‘Balance Sheet’. The wife’s second affidavit, which was sworn 16 February 2010, asserts the amount then owing to be $2,775.00 (see paragraph 36).
It is worth noting at this stage that Mr P did not give any evidence on behalf of the wife. On the other hand, the wife relied on Ms S’s affidavit and also gave evidence by way of telephone from Croatia and was cross-examined by the husband.
As stated, the wife alleges that she borrowed the sum of $21,000.00 from Mr P to assist with expenses following separation from the husband. The wife provided no documentation to support this alleged personal loan nor did Mr P give any evidence that supported its existence. Given the High Court’s decision in Jones v Dunkel (1959) 101 CLR 298,[34] the Court does not find that this alleged personal loan is a relevant matrimonial liability.
[34] For a discussion of the rule in Jones v Dunkel see Heydon, J.D. (2004) Cross on Evidence (7th edition), Chatswood, New South Wales: Lexis Nexis Butterworths, [1215].
The wife also asserts that she borrowed the sums totalling $7,975.00 from Ms S. Ms S’s affidavit confirms that sums totalling $7,500.00 were advanced to the wife on the basis of what is described as a “verbal agreement for Ms Nahra to return the money to me once she received her property settlement”.[35] Under cross-examination Ms S confirmed that the amount was probably $7,500.00 and that it remained unpaid.[36] This debt owed by the wife to Ms S was ultimately conceded by the husband during final submissions.[37]
[35] Affidavit of Ms S sworn 2 July 2010 and filed 6 July 2010, paragraph 6.
[36] Transcript, 16 August 2010, page 58.
[37] Transcript, 17 August 2010, page 94.
As the loan from Ms S was accumulated post-separation, there is an issue about whether it should be considered a relevant matrimonial liability or simply be counted as a relevant s.75(2) factor in relation to the wife.
Given the Court’s determination in respect of the $20,000.00 payment made by the husband to the wife pursuant to Brewster FM’s order, and given earlier comments about the treatment of the wife’s credit card debts, the Court finds that this debt is not a relevant matrimonial liability but is a relevant s.75(2) factor in relation to the wife.
The husband’s workers compensation claim
The husband gave evidence confirming that he is likely to receive a payment of $9,750.00 arising from a workers compensation claim against his employer.[38] In support, attached to the husband’s second affidavit is a copy of a letter dated 28 April 2010 from the law firm Slater and Gordon who are representing the husband outlining the proposed claim.[39] The husband also confirmed under cross-examination that he would not be making any further claim against his employer in relation to this particular workers compensation claim.[40]
[38] See husband’s second affidavit, paragraphs 4-8; see also Transcript, 16 August 2010, page 80.
[39] Ibid, Annexure “A”.
[40] Transcript, 16 August 2010, page 80.
Given the husband’s evidence, the Court finds that this workers compensation claim is a relevant s.75(2) factor in relation to the husband.
Net value of asset pool
Given the above determinations, the Court finds that the net available property pool is $1,719,089.00 (excluding superannuation entitlements) and $2,131,377.00 (including superannuation entitlements). This is calculated as follows:
Assets
Valuation
Property D (H)
$725,000.00
Property W (J)
$340,000.00
Property P (the former matrimonial home) (J)
$420,000.00
Unit in Macedonia (W)
$75,000.00
CUA Account [1] (H)
$4,242.00
CUA Account [2] (H)
Nominal
ANZ Account [3] (H)
$14,311.00
[C] Pty Ltd (H)
Nominal
Ford Transit (H)
$17,500.00
1998 Mercedes (H)
$10,500.00
Caravan (H)
$2,000.00
Furniture/Contents (Property D property) (H)
$5,000.00
Furniture/Contents (Property P property) (W)
$7,200.00
5,200 NIB shares (H)
$6,625.00
1,954 One Steel shares (H)
$5,803.00
5,596 [B] shares (H)
$13,095.00
7,546 Intec shares (H)
$218.00
7,000 BHP shares (H)
$282,100.00
570 Fosters shares (H)
$3,392.00
Toyota motor vehicle (W)
$8,000.00
Pajero motor vehicle (H)
$7,500.00
Jewellery (W)
$1,000.00
CBA Bank Account (W)
Nominal
‘Add-backs’ as determined (H)
$50,000.00
Subtotal/Assets
$1,998,486.00
Liabilities
ANZ Bank mortgage (H)
$268,088.00
Estimated capital gains tax liability (H)
$11,309.00
Subtotal/Liabilities
$279,397.00
Superannuation
[A] and [R] (W)
$22,043.00
[B] (H)
$390,245.00
Subtotal/Superannuation
$412,288.00
Net property pool (excluding superannuation)
Assets
$1,998,486.00
(less) Liabilities
$279,397.00
$1,719,089.00
Net property pool (including superannuation)
Assets
$1,998,486.00
(add) Superannuation
$412,288.00
$2,410,774.00
(less) Liabilities
$279,397.00
$2,131,377.00
Step 2: contributions
From the evidence, it is clear that the parties have, throughout much of their relationship, specialised their respective roles into that of significant ‘breadwinner’ and significant ‘homemaker and parent’. This is quite a normal and sensible division of labour in our society that usually advances both the financial prosperity and the overall welfare of the couple and their children.
While there is no presumption that for contribution assessment purposes such specialised roles equalise,[41] an outcome favouring equality is not unusual in cases involving long relationships following an analysis of the evidence relevant to s.79(4)(a)-(c) of the Act.[42] Of course, such an outcome may alter following consideration of the other s.79 factors, in particular s.79(4)(e) of the Act.[43]
[41] In the Marriage ofMallet (1984) 156 CLR 605, In the Marriage of Ferraro (1992) 16 Fam LR 1; (1993) FLC 92-335, In the Marriage of McLay (1996) 20 Fam LR 239; (1996) FLC 92-667.
[42] In the Marriage of McLay (1996) 20 Fam LR 239, at 248-250 (per Nicholson CJ, Fogarty and Dessau JJ).
[43] Ibid, at 250.
The Court is required to consider the parties’ contributions made on and from the commencement of their relationship,[44] during their relationship, and following separation.[45]
[44] In the Marriage of Olliver (1978) 4 Fam LR 360; (1978) FLC 90-499.
[45] In the Marriage of Ferraro (1992)16 Fam LR 1; (1993) FLC 92-335.
Financial and non-financial contributions
It is clear that both parties have made financial and non-financial contributions to the acquisition, conservation and improvement of their matrimonial property. This is particularly so given their mutual investment of their earnings into their property pool and their labours associated with the conservation of the former matrimonial home.
It is also clear from the evidence that the husband, through the parties’ decision to specialise their respective roles, has been able to significantly contribute more of his income and energy into making relevant financial and non-financial contributions than the wife.
The husband argues in this case that his various successful property and share transactions should be considered so ‘special’ or ‘extra’ that they should attract greater weight in terms of his financial contributions to the acquisition of matrimonial property. Indeed, it was argued that the husband’s investments had produced profits in the order of $1,376,000.00, being more than half the net asset pool.[46]
[46] See “aide-memoire” document prepared by Mr Gould.
The ‘special considerations’ issue appears to have arisen out of the “normal range” comments made by the Full Court in the cases of In the Marriage of Ferraro (1992) 16 Fam LR 1; (1993) FLC 92-335 (“Ferraro” ) and In the Marriage of McLay (1996) 20 Fam LR 239; (1996) FLC 92-667 (“McLay”). In In the Marriage of JEL & DDF (2000) 28 Fam LR 1; (2001) FLC 93-075 (“JEL & DDF”) the Full Court referred to the following comments which the Court had previously approved in McLay:
“What I do take their Honours [in Ferraro] to be saying is that if the existence of ‘special factors’ or the application of ‘special skills’ to the accumulation of assets is established, that may justify the Court considering that contribution through the performance of the role undertaken ‘to be above the normal range’, entitling a party to recognition of an ‘extra’ or ‘special’ contribution. But it is the existence of ‘special factors’ or ‘special skills’ which attracts the added weight to a role which would not otherwise be qualitatively assessed, but left to be considered to be within the normal range”.[47]
[47] (2000) 28 Fam LR 1 at 29 (these comments were made by Moore J, the trial judge in McLay).
The Full Court in JEL & DDF went on to say:
“The issue of a ‘special’ or ‘extra’ contribution by the husband or wife is a question of fact. In our view, the determination of such a contribution is not necessarily dependent upon the size of the asset pool or the ‘financial product’ achieved by the parties … One can imagine a number of examples where a ‘special’ contribution may not necessarily result in assets to a value of millions of dollars but which ought nevertheless to be recognized”.[48]
[48] In the Marriage of JEL & DDF (2000) 28 Fam LR 1, at 30–1 (per Kay, Holden and Guest JJ).
After reviewing the case law relevant to the issue of ‘special contributions’, the Full Court in JEL & DDF provided the following general principles:
“(a) There is no presumption of equality of contribution or ‘partnership’.
(b) There is a requirement to undertake an evaluation of the respective contributions of the husband and the wife.
(c) Although in many cases the direct financial contribution of one party will equal the indirect contribution of the other as homemaker and parent, that is not necessarily so in every case.
(d) In qualitatively evaluating the roles performed by marriage partners, there may arise special factors attaching to the performance of the particular role of one of them.
(e) The court will recognise any such special factors as taking the contribution outside the ‘normal range’ in the sense that that phrase was understood by the Full Court in McLay, above.
(f) The determination of an issue of whether or not a ‘special’ or ‘extra’ contribution is made by a party to a marriage is not necessarily dependant upon the size of the asset pool or the ‘financial product’. When considering such an issue, care must be taken to recognise and distinguish a ‘windfall’ gain.
(g) While decisions in previous cases where special factors were found to exist may provide some guidance to judges at first instance, they are not prescriptive, except to the extent that they purport to lay down general principles.
(h) It is ultimately the exercise of the trial judge's own discretion on the particular facts of the case that will regulate the outcome.
(i) In the exercise of that discretion, the trial judge must be satisfied that the actual orders are just and equitable, and not just the underlying percentage division.”[49]
[49] Ibid at 34-35.
The Full Court reconsidered the issue of ‘special’ contributions in In the Marriage of Figgins (2002) 29 Fam LR 544; (2002) FLC 93-122 (“Figgins”). In that case the trial judge held that a sizable inheritance received by the husband was not a windfall but rather a “special factor” in the sense that the term was used in McLay and explained in JEL & DDF.[50] On appeal, the Full Court held that the trial judge had erred in finding that the inheritance was a ‘special factor’ of skill or capacity that gave rise to a loading in favour of the party providing it.[51] In their joint judgment, Nicholson CJ and Buckley J opined that it might be time to reconsider the so-called doctrine of ‘special’ contribution:
“We are troubled that in the absence of specific legislative direction, courts consider they should make subjective assessments of whether the quality of a party’s contributions was ‘outstanding’. It is almost impossible to determine questions such as: Was he a good businessman/artist/surgeon or just lucky? Was she a good cook/housekeeper/entertainer or just an attractive personality? We think it invidious for a judge to in effect give ‘marks’ to a wife or husband during a marriage. We think that this doctrine of ‘special contribution’ should, in an appropriate case, be reconsidered.”[52]
[50] (2002) 29 Fam LR 544 at 550.
[51] Ibid, at 556–7 (per Nicholson CJ and Buckley JJ); at 572 (per Ellis J).
[52] Ibid, at 557.
In Lambert v Lambert [2003] Fam. 103; [2003] 4 All ER 342, the English Court of Appeal held that while a ‘special’ contribution remained a legitimate possibility, it should only be considered in exceptional circumstances. That said, in adopting the view expressed by the Full Court in Figgins, the English Court of Appeal stated that “[i]t would be both futile and dangerous even to attempt to speculate on the boundaries of the exceptional”.[53]
[53] [2003] 4 All ER 342 at 359 (per Thorpe LJ; May LJ and Bodey J agreeing).
In the subsequent case of In Marriage of Hill (2005) 32 Fam LR 552; (2005) FLC 93-209, the Full Court did not ‘reconsider’ the so-called doctrine of ‘special’ contributions. However the Full Court did consider whether a post-separation increase in the parties’ asset pool in that case ought to have been regarded by the trial judge as a result of the husband’s “special stockbroking skills” or as a result of “market forces” in the nature of a windfall. The Full Court stated:
“We agree with the submissions made on behalf of the wife that without specific findings as to the particular components of the pool at separation, it was not open to make findings as to whether the growth in the parties’ assets post-separation was due to profits made by the husband applying his expertise in share trading or by increases in the value of the shares held by the parties pre-separation as a result of market forces.” [54]
[54] (2005) 32 Fam LR 552 at 570 (per Kay, Holden and Boland JJ).
In the present case, it is hard for the Court to ignore the reality that much of the wealth of this relationship has less to do with their receipt of income from their respective employers and more to do with the investment decisions made by the parties, and, on the evidence, more particularly the husband, than to the normal type of capital appreciation seen by many couples over recent decades in relation to their earlier investment in real estate and shares.
The wife, understandably, asks the Court to consider her own contributions, not just to the conservation and improvement of the former matrimonial home in which the parties lived during their relationship and to her contribution to the parties’ living expenses, but also her own competing family contributions that act to erode the significance of the husband’s on-going financial and non-financial contributions.
During the relationship the wife also made a significant financial contribution from the monies she received after ending her employment with [omitted] in 1998. Although she claimed to have received $100,000.00 by way of a redundancy payment,[55] it is clear from the evidence that the wife actually received a net cash benefit of $59,940.84 together with a further sum of $10,012.95 being superannuation that was ‘rolled over’ to her [A] superannuation policy.[56]
[55] The wife’s second affidavit, paragraph 18.
[56] See Exhibit “RH1”.
Family contributions as homemaker and parent
As has been previously noted, in addition to the wife’s contributions made pursuant to s.79(4)(a) and (b) of the Act, the Court is satisfied that the wife was the primary homemaker for the parties and the primary carer for the now adult children.
Consequently, the Court finds that the wife has made a significant contribution to the family pursuant to s.79(4)(c) of the Act.
Global or asset-by-asset assessment of contributions
Given the length of the parties’ relationship and its history, the ‘global’ approach to the assessment of contributions is the most appropriate to the parties’ circumstances.
Step 3: s.75(2) and related factors
The parties are both aged in their mid-to-late fifties and are in average physical health.
As previously stated, the wife asserts that she has been receiving treatment for depression since 2002 and that this has impacted upon her opportunities to work.[57]
[57] The wife’s second affidavit, paragraph 20.
Although Dr H confirmed that the wife is currently suffering from a significant adjustment disorder with marked anxiety and depression,[58] he did agree that it was likely that the marriage breakdown had contributed to her complaint and that, in similar cases, anxiety and depression would settle down over time.[59] Although he was not as confident as Dr B that the wife could resume full-time work and go off sickness benefit “by late September 2010”, Dr H did acknowledge that the wife had not told him about her relationship with Mr P and that
Dr B had been the wife’s general practitioner for 34 years.[60]
[58] Transcript, 16 August 2010, page 64.
[59] Ibid, page 65.
[60] Ibid, page 66.
In light of the above-mentioned circumstances, the Court agrees with the submissions made by the wife that there should be an adjustment her favour pursuant to s.75(2) and related factors.[61] As to the relevant percentage, the Court finds that an adjustment of 8% (as proposed by the wife)[62] is appropriate in all the circumstances.
[61] Transcript, 17 August 2010, page 107.
[62] Ibid.
Step 4: justice and equity
Section 79(2) of the Act provides that:
“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.”
This case concerns a reasonably long marriage where the assets available for distribution are significant.
Overall, the Court is satisfied that on a contributions analysis, the matrimonial property should divided 40% in favour of the wife and 60% in favour of the husband.
In addition, as indicated above, the Court is satisfied that a further adjustment of 8% in the wife’s favour to reflect the considerations in s.75(2) and related factors is warranted. As a result, the wife should receive money or assets to the value of 48% of the overall net property pool and the husband 52%.
Based on the agreed valuations and determinations made by this Court, and excluding superannuation entitlements, this represents an amount of $825,162.72 in favour of the wife and $893,926.28 in favour of the husband.
Subject to accounting, the parties agree that the wife should retain the Property P property. They each also agree that the other should retain the relevant personal property in their current possession. This should clearly extend to their motor vehicles, household contents and bank accounts. The wife should also be able to retain the jewellery in her possession and, ideally, the unit in Macedonia. This would result in the wife needing to receive a payment and/or net assets in the sum of $313,962.72. This figure is determined as follows:
| Wife’s 48% share of net matrimonial assets (excluding superannuation) | $825,162.72 |
| Less | |
| Property P (the former matrimonial home) (J) | $420,000.00 |
| Unit in Macedonia (W) | $75,000.00 |
| Furniture/Contents (Property P property) (W) | $7,200.00 |
| Toyota motor vehicle (W) | $8,000.00 |
| Jewellery (W) | $1,000.00 |
| CBA Bank Account (W) | Nominal |
| Balance | $313,962.72 |
Subject to the accounting above, the husband would retain all the other net matrimonial property including responsibility for the payment and discharge of the ANZ bank mortgage.
In relation to the payment of the balance of the wife’s share, the husband will, within 42 days, pay the wife the sum of $313,962.72 or, providing notice is given, the wife will have the option of requiring the husband, within 42 days, to pay to her the sum of $158,346.22 and contemporaneously transfer to her one half of all shares held in the husband’s name and reflected in the net asset pool, with an agreed value of $155,616.50.
In the event that the husband fails to comply with the relevant order above then:
·interest shall thereafter accrue on the sum of $313,962.72 until full payment is made; and
·in the event that the husband has failed to make full payment within 120 days of the date of the final orders, then the parties will cause the Property W property to be sold and the wife shall be paid from the net proceeds of sale the sum of $313,962.72 together with any interest that has accrued. In the event of any shortfall, then the husband will cause the Property D property, to be sold and the wife shall be paid from the net proceeds of sale such sum due to her that remains outstanding, together with any interest that has accrued on the said amount.
Contemporaneously with the payment, or payment and share transfers, outlined above by the husband to the wife, the wife shall sign and deliver to the husband all necessary documents to transfer the balance of any jointly owned property to the husband and he will then assume all liability and otherwise indemnify the wife for the ANZ bank mortgage.
In relation to superannuation, the Court is satisfied that an equal division of the superannuation assets, as proposed by the husband, is just and equitable.[63] Consequently, there will be a superannuation splitting order in respect of the husband’s superannuation entitlements (i.e. with an agreed value determined at $390,245.00) that will value the wife’s interest in the husband’s relevant entitlements at $184,101.00 and will allow her to retain her current superannuation entitlements (i.e. with an agreed value of $22,043.00).
[63] The Court notes that the wife is proposing that there be a superannuation splitting order of the husband’s relevant superannuation policy with a base amount of $185,000.00 and that she retain her relevant superannuation entitlements. Such an outcome represents an approximately equal division of the parties’ superannuation entitlements, albeit favouring her in the amount of $899.00.
Conclusion
As stated, the Court is satisfied that the net available property pool, being $1,719,089.00, excluding superannuation entitlements, should be divided 48% in favour of the wife and 52% in favour of the husband. The wife’s percentage share incorporates an adjustment in her favour of 8% to reflect s.75(2) and related factors.
There will be orders to reflect the division of the net available property pool, excluding superannuation entitlements, along the lines set out in paragraphs 109-114 herein.
Subject to the orders referred to above, there will also be orders that each party retain all other property currently in their respective possessions, free of any claim from the other. This will include the motor vehicles, monies standing to their individual credit in any bank or financial institution and any furnishings, household or personal effects, including jewellery.
Each party will be required to indemnify the other with respect to any debts and liabilities standing in that party’s sole name.
In relation to superannuation, there will be a superannuation splitting order in favour of the wife in respect of the husband’s [B] Superannuation fund using the base amount of $184,101.00 from the current amount of the fund. The Court notes that the trustee of the relevant fund has been accorded procedural fairness in respect of the proposed the superannuation splitting order. The wife will retain her whole interest in her [A] and [R] superannuation policies.
There will be final orders of the Court to reflect this decision.
I certify that the preceding one-hundred and twenty-one (121) paragraphs are a true copy of the reasons for judgment of Monahan FM
Associate:
Date: 25 February 2011
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