Norman and Norman
[2009] FamCA 239
•25 March 2009
FAMILY COURT OF AUSTRALIA
| NORMAN & NORMAN | [2009] FamCA 239 |
| FAMILY LAW – PROPERTY – Alteration of property interests – Property acquired before marriage – Property acquired after separation – Contributions – Just and equitable |
| Family Law Act 1975 (Cth) |
| APPLICANT: | Ms Norman |
| RESPONDENT: | Mr Norman |
| FILE NUMBER: | CSC | 985 | of | 2007 |
| DATE DELIVERED: | 25 March 2009 |
| PLACE DELIVERED: | Cairns |
| PLACE HEARD: | Cairns |
| JUDGMENT OF: | Watts J |
| HEARING DATE: | 24 – 25 March 2009 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr McPherson |
| SOLICITOR FOR THE APPLICANT: | Bruce K Gillan |
| COUNSEL FOR THE RESPONDENT: | Mr Fellows |
| SOLICITOR FOR THE RESPONDENT: | Williams Graham Carman |
Orders
Order 3 made 26 May 2008 is discharged.
Pursuant to s. 79 of the Family Law Act an order be made in the terms of paragraphs 3 to 12 as set out below.
The husband will be declared to have sole right, title and interest in the following assets:-
3.1.P Street property
3.2.ANZ share trade account …
3.3.ANZ access savings account …
3.4.Subaru Forrester 2006
3.5.Catamaran
3.6.4m Quintrex boat and 25ph motor
3.7.Vemeer wood chipper
3.8.Box trailer
3.9.Husband’s superannuation – Q Super
3.10.Proceeds of sale of Telstra shares
3.11.Proceeds of sale of hovercraft
3.12.Proceeds of sale of Toyota Hilux utility.
The wife be declared to have sole right, title and interest in the following assets:-
4.1.R Street proeprty
4.2.NAB general savings a/c
4.3.NAB flexiDirect a/c …
4.4.Bendigo cash management a/c …
4.5.Suncorp term deposit a/c
4.6.Kia Grand Carnival 2007
4.7.Wife’s superannuation – Q Super.
The wife will have sole responsibility for the mortgage to the ANZ Bank in relation to the property at R Street.
On or before the 6th May 2009:
6.1.the wife shall transfer to the husband all her right title and interest in the property at L Street being Lot … on Registered Plan …; and
6.2.simultaneously with such transfer the husband shall pay to the wife the sum of $228,763.00.
On or before 8th April 2009 the husband and wife shall:
7.1.advise N Realty (“the agent”) that the agent is released from any obligation under clause 3 of the Order of this Court dated 26th May 2008;
7.2.authorise the agent to pay to the trust account of the solicitors for the husband, Williams Graham & Carman such sum of money as they may be holding on behalf of the husband and wife (presently estimated to be $22,138).
On or before 8th April 2009 the husband shall sign all such documents as may be prepared by the solicitors for the wife sufficient to transfer to the wife all of the husband’s right title and interest in:-
8.1.the following shares held solely by him
Number of shares
Telstra Corporation
8190
Woolworths
1526
BHP Billiton
552
ANZ Bank
5,429
Bluescope Ltd
910
Suncorp Metway Ltd
5235
8.2.the following shares held jointly with the wife:
Number of shares
Telstra Corporation
2,000
Suncorp Metway Ltd
550
Wesfarmers
97
ANZ Bank
213
and the husband’s right title and interest in such dividends as may be due and unpaid by the above-named companies as at 25th March 2009.
In the event that the husband receives, on or after 25th March 2009, any dividend from the companies named in paragraph 8 he shall forthwith account for the same to the wife.
The husband shall forthwith hand to the wife National Australia Bank Cheque 58619 5887 dated 26/2/09 for an amount of $3,019.87.
In the event that the amount in paragraph 6.2 is not paid within the time set out in that paragraph, both parties shall do all things and sign all necessary documents to sell by private treaty the property at L Street at a price to be agreed upon between the parties and failing agreement at a price to be determined by Heron Todd White and that the net proceeds of sale be distributed in the following way:-
11.1.Payment of the costs of sale including agent’s fees and legal expenses.
11.2.Payment to the wife of 38 percent of the net proceeds of sale.
11.3.Payment to the husband of 62 percent of the net proceeds of sale.
Each party be solely entitled to the exclusion of the other to all other property, chattels and superannuation in their respective names or possession as at the date of these orders and that each party indemnify the other in relation to any debt associated with any asset that is kept by each of them respectively.
If either party refuses or neglects to sign (within fourteen (14) days of a written request to do so) any documents necessary to effect the terms of these Orders, the Registrar of the Cairns Registry of the Family Court of Australia is hereby appointed pursuant to the provisions of Section 106A of the Family Law Act to execute such documents on behalf of such party.
COSTS
The wife be granted leave to make a partial application for costs in relation to the parenting aspects of the matter.
The wife’s application for costs in relation to parenting be dismissed.
Notation
It is noted that neither party makes an application for costs in relation to the property proceedings.
IT IS NOTED that publication of this judgment under the pseudonym Norman and Norman is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)
| FAMILY COURT OF AUSTRALIA AT CAIRNS |
FILE NUMBER: CSC 554 of 2009
| MS NORMAN |
Applicant
And
| MR NORMAN |
Respondent
EX TEMPORE REASONS FOR JUDGMENT
INTRODUCTION
These proceedings are about what alteration, if any, should be made in respect of the property of the parties.
By her amended application filed on 18 June 2008, the wife seeks orders in effect for an equal distribution of the assets of the parties.
The husband, in his case outline document filed at the commencement of the hearing, seeks orders providing for a division of assets of the parties in the amount of 70 per cent to himself and 30 per cent to the wife.
DOCUMENTS READ
I have been invited to read the following documents:
4.1.the wife's affidavit filed 6 March 2009;
4.2.the wife's financial statement filed 6 March 2009,
4.3.paragraph 5(a) of the affidavit of the husband filed 16 January 2008;
4.4.the husband's affidavit filed 6 March 2009;
4.5.the husband's financial statement filed 6 March 2009.
There are various documents which have been made exhibits during the hearing.
SHORT HISTORY
The husband was born in July 1958 and is 50 years of age.
The wife was born in September 1960 and is 48 years of age.
The parties commenced cohabitation in late 1990.
There are two children of the marriage: A, who was born in November 1993 and is currently 15 years of age, and C, who was born in April 1995 and is currently 13 years of age.
The parties married in April 1994 and separated on 19 March 2005. The period for which the parties lived together was approximately just over 14 years.
PARENTING ORDERS
Final parenting orders were made by consent at a Magistrate's Court on 29 May 2005. Before me, both parties withdrew competing applications for new final parenting orders and consequently the 2005 orders remain in place between the parties. They provide that the children reside with the wife. There is a joint responsibility order which establishes joint responsibility for making decisions about the long term care, welfare and development of the children. The order provides that the children spend time with their father every second weekend from the conclusion of school on Friday until the following Tuesday morning and on the alternate Monday night, so in the alternate week from after school on Monday to Tuesday morning. The husband is also to have the children for half the school holidays.
On the evidence before me it seems that arrangements have been implemented for the majority of time, that is, the husband has the children five nights a fortnight during school term and half the school holidays.
The husband gave some evidence that A had not consistently spent time with him in accordance with the orders. They had had a disagreement when A was 13 relating to A having formed a relationship with an 18 year old man. Consequently A did not come all the time. The husband indicated in evidence that he would estimate that she came about three-quarters of the time.
CREDIT
Both parties seemed to attempt to answer questions in a straightforward and forthright manner and I do not believe either party deliberately attempted to mislead the Court.
It is clear however that some of the things that the husband said in his affidavit were inaccurate. One example was an assertion by him that he spent $50 000 on the children when that figure should have been $5000. Another example, at paragraph 51 of his affidavit, was an assertion by him that the amount of money that the wife received from the L Street property after separation greatly exceeded the child support to which she was otherwise entitled from the husband.
The husband also asserted in his affidavit that the initial acquisition costs of the two N Street properties were $14 300 and he conceded that the wife's record of those costs being $10 000 was the accurate record.
I also did not accept the husband's assertion in his oral evidence that the wife only went back to work in 1999 for her own personal gain. The husband did indicate that following his accident in 1986 he had some difficulty in dealing with detail. He gave evidence that he had difficulty reading the wife's affidavit because of the emotions he felt arising out of some of the matters to which the wife referred in the document.
Having seen both parties in the witness box, if there is a difference between the parties as to what they remembered the situation to be, I prefer the memory of the wife over the memory of the husband.
CHRONOLOGY OF EVENTS
Prior to the parties getting together the husband purchased two blocks of land at N Street. The total cost for those properties was $10 000. The husband constructed a dwelling on block 1 N Street, but it was not finished at the date of cohabitation.
On my calculation, the husband commenced employment with T Company in 1981 and by the time of his redundancy in 1996 he had been working there for 15 years.
He suffered an injury as a result of an accident in 1986.
In 1989 the husband purchased a third property at E Street for $55 000.
The parties commenced living together in late 1990 and at that time their taxable incomes were both about $30 000.
The wife was working as a shop assistant. The husband continued to work at T Company.
In March 1992 the parties jointly purchased a property at H Street, for the sum of $117 000. They jointly borrowed $80 000 from the Commonwealth Bank. The balance of the purchase price came from savings. The wife had $8000 in her own account. The balance came from a term deposit in the husband's name in the sum of $30 000 which it is agreed that the husband had at the commencement of cohabitation.
The parties commenced living together at H Street upon the completion of the acquisition of the property.
In late September 1992 the wife was well into her pregnancy with A and she ceased part-time employment.
In October 1992 the husband received a net payment of $48 000 arising from his accident in 1986. There is no real indication in the evidence about what happened to that money, but I infer that it was used by the parties on joint living expenses. Neither party alleges against the other that it was used for a purpose which was for the sole benefit of one of the parties.
As I have said, A was born in November 1993. The parties married in April 1994. C was born in April 1995.
In early 1996 the husband accepted a redundancy package from T Company. The parties differ on the amount that he received, but I accept the wife's version which she gives at paragraph 17 of her affidavit that the amount was $124 707. The husband contracted Gillian Barre syndrome and actually could not work for a period of five months in the latter part of 1996, and I infer that the wife's contributions in attending not only to him, but to the children during that period were elevated as a result of that illness. The husband then chose to remain out of full time employment until 1999. There is no indication that the wife put up any resistance to that happening. She certainly does not make any complaint about it in her evidence.
During the following six years the husband worked, not very successfully, for a tradesman. He did mainly odd handyman jobs and attended to maintenance and renovations to the properties that the parties either jointly or severally owned. The wife was not in paid employment during this period and the husband conceded that she was the person who was primarily responsible for looking after the children. When the husband took his redundancy A was two and C was a baby.
Monies from the redundancy package from T Company were used to purchase a four unit complex at L Street in February 1996 for a purchase price of $275 000. An amount of $120 000 was paid from the redundancy monies for this property and an amount of $160 000 was borrowed from the ANZ Bank to pay the balance of the acquisition costs.
The loan was paid out in full in 1997 after the H Street property was sold. In October 1996 the husband's mother died and left the husband a property at P Street. The property was unencumbered. There is no evidence before me as to what the property was worth at the time, except the wife's unchallenged estimate in her affidavit that it was worth $100 000. I accept the submission by counsel for the husband that after the acquisition of this property by way of inheritance the property was subject to a considerable amount of work.
The parties, as I have just mentioned, sold H Street and the sale price was $167 000. I infer that most of the net proceeds of the sale were used to extinguish the mortgage that had been raised to purchase the units at L Street. The parties moved from H Street to P Street in about February 1997.
In March 1999 the wife began studying for her Certificate 3 in early childhood education and also commenced part time work in two child care centres in the area. As I have said, I reject the husband's assertion that she did that for her own personal gain. The income disclosed by the husband in his 1997, 1998 and 1999 tax returns was not at a sufficient level to be able to maintain the family and I infer that the wife went back to work in 1999 to financially assist the family.
In March 2000 one of the properties at N Street was sold for $42 500. The sale proceeds were used to buy shares.
In June 2000 the wife commenced part time employment with a school.
In May 2001 the second property at N Street was sold for $121 000 and the net proceeds were again used to purchase shares.
In November 2002 the husband commenced employment at D Organisation.
In July 2003 the E Street property was sold for $82 000 and the proceeds of the sale were used to buy shares.
By 2004 the husband's taxable income was $42 399.
In October 2004, the wife formed the intention to separate from the husband. She opened up a new account to receive the rent from the L Street units.
The wife left the husband on 19 February 2005. At that time she took $37 000 in savings and she continued to receive some of the rents.
An order was made on 26 May 2008 for M Accountants to carry out an audit of the share portfolio and the husband sets out at paragraph 57 of his affidavit what their October 2008 report records as the amount of dividends received after separation up until 26 May 2008. That evidence from the husband indicates that he received $41 357 whereas the wife received $2320. The husband asserted in his evidence that many of the dividends were reinvested. However, the document prepared by M Accountants that is detailed in the husband's affidavit indicates that the amount of dividends reinvested was in the sum of $21 709.
The evidence indicates clearly that there is a significant disparity in relation to dividends received by the husband and dividends received by the wife between February 2005 and May 2008. In addition, the husband sets out at paragraph 59 of his affidavit that he received $98 750 in relation to the selling of BHP shares. Therefore the husband received $140 000 post-separation from those sources. The husband concedes that he lost $70 000 in gambling. The parties agree that that loss is effectively represented by an asset which is on the balance sheet, specifically an ANZ share trading account in the sum of $51 273. Although that account is on the balance sheet against the husband, I am told that effectively there is nothing in that account.
It is by this means that the gambling losses have been taken into account. It would be double counting therefore to take the loss of $70 000 by way of gambling into account again. The husband also says that $10 000 was expended on legal fees. There was another $26 000 lost on the depreciation of two motor vehicles that the husband has acquired since separation. The second of those motor vehicles is on the balance sheet as the husband's now current motor vehicle at its current value. On my calculations that leaves approximately $34 000 unaccounted for. Counsel for the husband asserted that the dispositions set out in paragraphs 57 and 59 of the husband's affidavit would have attracted tax.
There is no evidence before me as to what, if any, tax has been attracted. I do not know whether or not the dividends that were received were fully franked, but I take into account in a general way the possibility that some tax was paid in relation to those distributions.
Summarising the above, there is no doubt that the husband received some advantage that needs to be weighed from post separation dispositions of funds that have been referred to in paragraphs 57 and 59 of his affidavit, and I weigh my consideration of his receipt of those funds in light of the discussion that I have just outlined, avoiding double counting.
On 9 November 2005 the wife purchased R Street for $140 000. She borrowed $123 000 from the ANZ Bank and I infer that the balance of the acquisition costs came from monies that she took with her at the time of separation, which I have mentioned, in the sum of $37 000. That property is now worth $220 000.
At the end of 2005 the wife commenced living with Mr F.
A commenced at G School in January 2006. C commenced there in January 2008.
The wife commenced her own business in February 2006.
Mr F, prior to that time in 2004, had been operating a repairs business. The wife and Mr F have kept their business operations separate. They have filed separate tax returns. Although they share premises, the evidence is that they are in different sections of the same premises and those individual rents are reflected in the respective profit and loss statements of the wife and Mr F.
The husband sold 4000 Telstra shares in April 2008 for $18 205 and retained the proceeds.
In July 2008 the wife obtained a loan of $20 000 to purchase her current motor vehicle. That liability by agreement has been excluded from the balance sheet.
THE APPROACH I TAKE TO THESE PROCEEDINGS
In this matter my task is to:
56.1.Identify and value the property, assets, financial resources and liabilities of the parties;
56.2.Identify relevant contributions and assess them;
56.3.Consider relevant matters referred to in s 79(4)(d) – (g) of the Family Law Act 1975 (Cth) (the Act);
56.4.Ensure that my order adjusting the property, assets and liabilities of the parties is just and equitable.
BALANCE SHEET
The parties were able to resolve all outstanding issues in relation to questions of valuation and they have provided me with an agreed list which became Exhibit A and which I will incorporate into these reasons. It is agreed that the net assets of the parties are $1 528 731.
ASSETS
Ownership
Value
Real estate 1. P Street H $325,000.00 2. 4 units at L Street J 600,000.00 3. R Street W 220,000.00 Shares 4. Share portfolio H & J 217,162.00 5. Proceeds of sale of Coles Myer shares J 3,019.00 Bank accounts 6. ANZ share trade account H 51,273.00 7. ANZ access savings account H 1,978.00 8. NAB general savings a/c W 16,654.00 9. NAB flexiDirect a/c W 3,092.00 10. Bendigo cash management a/c W 837.00 11. Suncorp term deposit a/c W 841.00 Vehicles/boats 12. Kia Grand Carnival 2007 W 31,000.00 13. Subaru Forrester (2006) H 32,000.00 14. Catamaran H 1,600.00 15. 4m Quintrex boat and 25hp motor H 1,200.00 16. Vemeer woodchipper H 5,000.00 17. Box trailer H 400.00 Other Furniture & personal effects W Divided equally Furniture, tools & personal effects H Divided equally Superannuation 18. Husband’s superannuation – Q Super H 81,090.00 19. Wife’s superannuation – Q Super W 13,372.00 20. Rent retained by management agent 22,138.00 LIABILITIES 21. ANZ mortgage (R Street) W (120,229.00) ADD BACKS 22. Proceeds of sale of Telstra shares H 18,204.00 23. Proceeds of sale of Hovercraft H 1,200.00 24. Proceeds of sale of Toyota Hilux utility H 1,900.00 $1,528,731.00
CONTRIBUTIONS
I will now move to the second thing that I have to do and that is look at contributions. Some of what I will say now repeats matters to which I have already referred in the chronology. The husband points to a number of significant contributions that have been made by him. It is undisputed that the husband had three unencumbered properties prior to the commencement of the cohabitation. They were the N Street properties and the E Street property.
The first property at N Street was acquired nine years before the cohabitation for $4300. It was vacant land. It remained vacant land. Apart from some mowing and I infer the requirement to pay statutory outgoings, the contribution made to this asset during cohabitation was otherwise negligible. The land was sold in 2002 for $42 500 and the proceeds were used to acquire shares.
The second property at N Street, was acquired again nine years before the cohabitation as vacant land for a sum of $5800. The husband commenced to construct a house on the property. As I have mentioned, there was a dispute as to the state of completion of the construction of the property at the time of cohabitation, but I prefer the version given by the wife.
The wife asserts in paragraph 55 of her affidavit that the property was worth approximately $100 000 at the date of cohabitation and there is no valuation evidence otherwise. That is the only evidence before me that puts a figure on it. The second property at N Street was sold in 2001 for $121 000 and the proceeds were used to acquire shares.
The property at E Street was acquired a year before the parties commenced living together for $55 000. It was vacant land. There was some evidence that one thousand trees were planted and water was connected. The property was sold for $82 000 in 2003. Again the sale proceeds were used to buy shares.
The husband, at paragraph 11 of his affidavit, says that at the date of cohabitation he had $30 000 in personal savings and that those monies were eventually applied some time later to the purchase of H Street. The wife accepts that. The husband had a hovercraft which he had built. He had a catamaran. He had inherited a quantity of tools and equipment from his late father. The husband himself was a qualified tradesman and had many of his own tools.
Although the husband asserts that the wife had no significant assets at the commencement of the relationship, that is overstating it. He agreed that he moved in to the wife's premises at the commencement of cohabitation and that she had a fully furnished rental accommodation. She estimated that her household chattels at the time were worth $20 000. That was not challenged. She had a car which had an equity in it of about $2000. She had $12 000 in savings and $3000 in Colonial Mutual Life.
As mentioned above, the husband received $48 000 in 1992 and there is no evidence as to what happened with those monies, but I have already indicated what inference I draw in respect of how those monies were used.
I have referred to the redundancy the husband received in 1996. I pause to note that at that time the parties had been living together for six years. The husband had been with T Company for 15 years. I have also mentioned that the husband, in 1996, received unencumbered from his late mother's estate the property at P Street which soon after became the family home. It freed up H Street which was the previous matrimonial home which was then sold and, as I have said, the proceeds of that sale went to extinguish the borrowing that was used to acquire the L Street property.
The husband conceded in his oral evidence that the mother fulfilled the primary role of homemaker and parent, although given that the husband was not in full time employment for a period of six years, I infer that he was involved with the children to some degree when they were little in a role as parent. I find, however, that it was primarily the wife who fulfilled that role while the husband was doing other things, including part time work and working on maintenance of the properties that the parties had.
It is an agreed fact that by 1997 the parties were basically debt free. The share portfolio which currently stands at a value of $217 000 was primarily put together as a result of the sale of the properties which the husband owned on an unencumbered basis prior to the commencement of cohabitation, subject to the improvements that had been carried out to one of the N Street properties.
The wife says that in December 1996 the parties moved into the second N Street property and although the husband had built a dwelling, there was still a lot of unfinished work to do. The husband contested that assertion. No questions were put to the wife to change what she said in paragraph 22 of her affidavit and I find that the work that she asserts was done to N Street after the parties started to live together, was in fact done. The property was fenced. The painting inside and out was finished. The interior was sealed and built in wardrobes were installed. There was a fence under one side in weldmesh. Weldmesh and block pillars were placed along the front of the property. The garage was painted, gardens were landscaped and interior doors were replaced.
The wife can point to no direct contribution on her part towards the acquisition of P Street. That property came to the husband through his mother's will and was clearly a contribution made by his late mother to the assets of the parties on behalf of the husband. The husband, however, concedes that by virtue of the wife's residence within the home over a nine year period from 1996 to 2005, the wife made a contribution to its ongoing maintenance and conservation.
The wife indicated at paragraph 12 of her affidavit that H Street was purchased for $113 000. The parties took out a mortgage for $80 000. They paid out that mortgage within the two year period and also outlaid $15 000 to renovate the property.
Most of the materials used to renovate the property were purchased from garage sales and demolition yards, lowering the cost of the renovations to H Street. I have already dealt with what happened to the proceeds of the sale of H Street.
To reiterate, the L Street units were purchased with the combination of the husband's redundancy package and a borrowing from ANZ Bank, which was then paid off from the proceeds of the sale of H Street. That property is now a major asset of the parties. It is worth $600 000. After separation, the husband concedes that the wife bore a greater day to day responsibility for the care of the children.
I have mentioned that at the date of separation the wife took $37 000 with her. On 5 December 2005 she purchased the property in which she currently lives at R Street. It has increased in value.
There is a dispute between the parties as to the adequacy of the financial contribution made by the husband since separation towards the expenses of the children. It seems mutually agreed that for a significant period of time after separation the parties had reached an agreement whereby the wife chose not to rely upon a formal assessment of child support, but in lieu was content to collect rental income from L Street. The wife says that the agreement between the parties was that any balance entitlement would be the subject of an adjustment at this hearing.
For my purposes it is fairly irrelevant in working out a just and equitable settlement between the parties in relation to altering their property. As to whether or not there was an agreement between the parties and what the terms of that agreement were, if I was forced to I would accept the wife's version of the agreement.
In fact, when one looks at Exhibit B, had the husband paid child support at the assessed value in October 2006 the annual rate would have been $16 157. By August 2007 it had increased to $17 812 and in July 2008 it had dropped back to $14 340. Exhibit C indicates that half of the husband's rental income that the wife was receiving in the 2006 financial year was $6943. In the 2007 financial year that figure was $8021.
Counsel for the wife did a calculation based on Exhibits B and C which indicates a national underpayment of $24 400 between 19 February 2005 and 30 June 2008. The calculation was not disputed by counsel for the husband. I find that the wife was not paid the normal rate of child support during the post separation years and as a result she bore a disproportionate burden in terms of paying for the children's expenses. The husband has now been assessed to pay child support at a rate of $247 per week and has been doing that since September 2008. Given that the parties have been apart for four years after the separation, the fact that the wife has played the primary role of providing for the children's housing and food and education are matters that I give some weight to.
The children were aged 11 and 8 at the time their parents separated. Overall, in respect of post separation contributions, I find the contributions favour the wife in as much as she bore a far greater day to day responsibility for the costs of the children and she invested the funds that she had more wisely. Considerable physical work was done in relation to working on various properties during the time the parties were together. I find that the husband did the majority of that work, but I also find that the wife assisted in the ways that she has asserted in her evidence. The photographs which are Exhibit F demonstrate a snapshot of the husband's efforts, but they also contain one photograph of the wife standing in work attire in a large cutting on one of the properties.
I am satisfied that a lot of the non-financial contributions towards the development of assets were a joint endeavour. The husband conceded in cross-examination on one occasion, somewhat reluctantly, that whilst he was working the wife was primarily responsible for looking after the two young children. Counsel for the husband in his written submissions attempts to carry out a mathematical analysis of the contributions made by the husband. He submits by way of example contributions that he asserts the husband was making through major assets which were:
Shares $185,000
P Street $325,000
L Street $600,000
Total $1,110,000
Counsel for the husband asserts that the husband could claim a 75 per cent contribution in relation to those assets which would be a contribution of $832,000.
He further breaks that analysis down by saying that if one took an asset by asset approach as a test in respect of the contributions to the shares, to P Street and to L Street, one would assign one hundred per cent contribution to the husband in relation to the shares, 90 per cent contribution in relation to P Street and 65 per cent contribution in relation to L Street, and if you do that calculation the check figure is $867 500. I have some difficulty with those mathematics. I have accepted the wife's evidence that in relation to N Street a reasonable amount of work was done to that property after the parties moved in and I otherwise infer that the wife was involved in the maintenance of the property after the parties moved in.
The sale of that property was one of the sources of the monies used to acquire the shares, so assigning one hundred per cent of the contributions to the shares to the husband would not be an appropriate thing to do.
In relation to P Street, the husband concedes that the wife over a six year period maintained the property and the husband himself conceded that a reasonable amount of work was done to P Street after they moved in. I have already mentioned the wife's uncontested estimate that the property was worth $100 000 when they moved in. It is now worth $325 000, and I have no indication as to how that increase has come about. There is no expert evidence to tell me.
In relation to the L Street units, whilst the deposit monies came from the husband's redundancy, he did not then work after that for a period of six years in full time employment.
Although cases like Clauson 18 Fam LR 693 approve a pseudo-mathematical approach as a starting point, the consideration of contributions that I have just indicated demonstrates the difficulty of using mathematics with any precision in the facts of this case. As invited, I intend to adopt a global approach to the assessment of contributions. Taking into account everything I have said so far, I assess the contributions that the parties have made to the overall assets on the balance sheet as being a 65 per cent contribution made by the husband and a 35 per cent contribution made by the wife.
SECTION 79(4)(d) - (g) FLA MATTERS
The wife now lives in a de facto relationship with Mr F who has filed evidence in these proceedings but was not called by the husband for cross-examination. The wife and Mr F share financial resources and income as detailed in Mr F’s affidavit filed on 9 March 2009.
The wife is 48 years of age and apparently in good health. The husband is 50 years of age and I do not have any evidence about difficulties with his health. His presentation in the witness box would indicate that he may still have some residual difficulties from his 1986 accident, but that impairment must be minor given his current ability to maintain full time employment.
He has been in full time employment since 1981, except for the period between 1996 and 2002. That period owed more to his own voluntary choice to withdraw from full time employment and to do the things that he otherwise decided to do at that time, apart from that period of five months at the beginning when his illness obviously precluded him from working.
The wife is self employed in her shop. She does not sell on commission, so she has built up a stock which she owns. She had estimated in her financial statement that her business was worth $20 000, but the parties have agreed not to ascribe a value to the business, but rather to treat it as a resource from which the wife generates her income.
According to her financial statement, the wife's total average weekly income is $687. That is to be compared with the husband's average weekly income on his financial statement of $1035.
The children live primarily with their mother, but spend five nights a fortnight with their father and half school holidays. The wife spent $6668 on school fees on the two children since separation without any assistance from the husband in relation to payment of school fees. The husband said he is content with the secondary schools which the children currently attend, although he complained that he had not been properly consulted in relation to their placement there. He did, however, give unimpressive evidence about whether or not he intended to contribute towards the cost of their schooling in the future.
It seems that that depended on whether or not the wife is prepared to change her attitude in relation to dealing with him as the other parent of the children. I do not currently have any confidence given the attitude that the husband displayed that he would make more generous contributions towards the cost of the children's schooling in the future and I find that it will probably be that the wife in the future is the one who bears that financial responsibility.
Counsel for the husband submitted that an analysis of the wife's financial statement would lead to the conclusion that the husband pays a little under 25 per cent of what the wife says her overall household costs are. Those household costs, however, do not include costs for accommodation.
The husband, as I have said, now pays regular child support in accordance with his assessment and the wife makes no complaint about the punctuality with which those payments are made. She says there are no arrears in relation to the current assessed payments. Given my findings in relation to contributions, if assets were divided on that basis, the husband would have a superior financial position in terms of the assets which he held compared to the wife and, as I have already said, the husband has a better ability to regenerate capital given that his income is higher and his financial responsibilities for the children are less.
Apart from what I have already described, the 15 years of cohabitation has not significantly affected either party's ability to earn income.
The wife, in her financial statement, alluded to the fact that she could have made a spousal maintenance application in the period since separation, but chose not to. I do not take that matter into account, although as I have already indicated, I have taken into account the history of monies that both parties have received since separation when assessing the overall contributions that the parties made to assets.
Taking those matters into account under s 79(4)(d) to (g) and finding that there are no other relevant factors under those various subsections that I need to take into account, I find that an appropriate adjustment to be made for those matters in the wife's favour would be five per cent.
JUST AND EQUITABLE
Given those conclusions in relation to contributions and s 79(4)(d) to (g) matters, it would follow, based on those findings, that the split of the assets should be 60 per cent to the husband and 40 per cent to the wife.
Currently the assets are $1 528 731. On my calculation, about 32.5 per cent of the assets are currently in the hands of the husband. About 10.8 per cent of the assets are in the hands of the wife. The remaining 55 per cent of the assets are held in some mixed way between the parties.
The parties have agreed that in relation to the assets where there is an intermingling, the wife will receive the entirety of the share portfolio no matter whose name that share portfolio is in. Ignoring the furniture which has not been ascribed a value because it is going to remain where it is and it has already been divided equally, there are 24 items on the balance sheet.
Using the numbering on the balance sheet, the husband will have the following assets:
1.
P Street
$325,000.00
6.
ANZ share trade account
51,273.00
7.
ANZ access savings account
1,978.00
13.
Subaru Forrester 2006
32,000.00
14.
Catamaran
1,600.00
15.
4m Quintrex boat and 25hp motor
1,200.00
16.
Vemeer wood chipper
5,000.00
17.
Box trailer
400.00
18.
Husband’s superannuation – Q Super
81,090.00
22.
Proceeds of sale of Telstra shares
18,204.00
23.
Proceeds of sale of hovercraft
1,200.00
24.
Proceeds of sale of Toyota Hilux
1,900.00
$520,845.00
The wife will receive the following assets:-
3.
R Street
$220,000.00
8.
NAB general savings a/c
16,654.00
9.
NAB flexiDirect a/c
3,092.00
10.
Bendigo cash management a/c
837.00
11.
Suncorp term deposit a/c
841.00
12.
Kia Grand Carnival 2007
31,000.00
19.
Wife’s superannuation – Q Super
13,372.00
21.
ANZ mortgage (R Street)
(120,229.00)
$165,567.00
The remaining four assets will be divided as follows:-
H
2.
L Street
$600,000.00
W
4.
Share portfolio
217,162.00
H
5.
Proceeds of sale of Coles Myer shares
3,019.00
H
20.
Rent retained by management agent
22,138.00
$842,319.00
In order to receive 40 per cent of the assets, the wife needs to receive $611,492. The amount, therefore, that the husband needs to pay the wife is the sum of $228,763.
I will give the husband a period of eight weeks to make that payment. If the husband does not make the payment within the period of eight weeks, then the parties are to do everything necessary to effect the sale of the L Street property. The parties have agreed that the value of that property is $600,000. The wife would receive, by way of a percentage from the proceeds of the sale of the L Street property, if that default order has to be put in place, a percentage of 38 per cent of the proceeds. The 38 per cent is $228,763.
The draft order had a date for the payment of this money as 6 May 2009, so I will insert that as the date, rather than eight weeks. If the money is not paid by 6 May 2009, then the default provision for the sale will apply.
COSTS
In this matter the wife makes an application for costs only in relation to money spent in respect of parenting issues between the parties. The matter did not have a particularly unusual history. The husband filed an application in effect seeking extra time. The wife opposed that application. The matter in the usual way in preparation for a hearing was referred to a family consultant who prepared a Family Report. That Family Report was made available to the parties some time after 29 October 2008. It is clear from the Family Report that there were a number of reasonably complex issues involving the children discussed by the report writer arising out of her interviews with the parties and the children.
The Family Report refers to the husband's difficulty in accepting various things that have happened and various behaviours that the children were exhibiting. It talks about the fact that he was still dealing with the grief of the breakdown of the relationship notwithstanding the time that has passed. None of that is particularly unusual. The unusual part about this costs application is that it claims costs for work done during the preparatory stage of the hearing before the release of the Family Report and not much else. An offer was made on 27 November. That is the only other work subsequent to the release of the Family Report that is pointed to.
It is unusual to find exceptional circumstances to make costs orders in a parenting case. The general rule, of course, is in s 117(1) which states that both parties would ordinarily bear their own costs.
I do not find anything in the documents that have been tendered that would lead to me finding any special circumstances justifying departure from the usual rule, particularly in parenting cases. Both parties will bear their own costs. It seems that the father had written on a couple of occasions after the release of the Family Report indicating that he did not intend to seek any amendment to the current orders. The wife's lawyers did no significant work. In those circumstances I dismiss the application for costs.
I certify that the preceding one hundred and eleven (111) paragraphs are a true copy of the ex tempore reasons for judgment of the Honourable Justice Watts.
Associate:
Date: 14.4.2009
Key Legal Topics
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Family Law
Legal Concepts
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Jurisdiction
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Costs
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