NUNN & MAYFIELD
[2019] FCCA 542
•8 March 2019
FEDERAL CIRCUIT COURT OF AUSTRALIA
| NUNN & MAYFIELD | [2019] FCCA 542 |
| Catchwords: FAMILY LAW – Property – where both parties seek orders for final property distribution – where a two pool approach applied – where assets acquired by the parties post-separation considered – where the husband made significant initial contributions – where the husband made greater financial contributions throughout relationship – where the parties unsuccessfully underwent four cycles of IVF during the marriage. |
| Legislation: Family Law Act 1975 (Cth), ss.75, 79, 80, 81, 117 |
| Cases cited: AJB Potter v LJ Potter [2003] NZCA 103 |
| Applicant: | MS NUNN |
| Respondent: | MR MAYFIELD |
| File Number: | SYC 2344 of 2017 |
| Judgment of: | Judge Harper |
| Hearing date: | 30 August 2018 |
| Date of Last Submission: | 4 September 2018 |
| Delivered at: | Sydney |
| Delivered on: | 8 March 2019 |
REPRESENTATION
| Counsel for the Applicant: | Mr Campton SC |
| Solicitors for the Applicant: | Blumberg Family Lawyers |
| Counsel for the Respondent: | Ms Christie SC |
| Solicitors for the Respondent: | Blanchfield Nicholls |
THE COURT ORDERS THAT:-
Within forty-two (42) days of the date of these Orders:
(a)the Applicant Wife transfer to the Respondent Husband all her right, title and interest in the property known as and situate at Property A in the State of New South Wales, being the property referred to in Certificate of Title Folio Identifier … (“the Property A property”);
(b)the parties do all acts and things and sign all documents and the Respondent Husband pay all monies, and the Applicant Wife and join in with the Respondent Husband to execute any Authority to Discharge document or similar, as necessary, to secure the Applicant Wife’s release from the mortgage registered number … to HSBC Bank Australia Limited on the title to the Property A property; and
(c)the Applicant Wife take such steps and sign such documents as may be necessary to transfer to the Respondent Husband her interest in HSBC mortgage offset bank account number … and HSBC bank account number …, held in the United Kingdom.
Simultaneously with the Applicant Wife’s compliance with Order 1 above, the Respondent Husband pay to the Applicant Wife the sum of $728,109.
The Respondent Wife transfer to the Applicant Husband or his nominee all her shares in Company B UK.
That the orders following have effect from the operative time:
(a)That in accordance with paragraph 90XT(1)(a) of the Family Law Act 1975 (Cth) (“the Act”), whenever a splittable payment becomes payable in respect of the Respondent Husband’s interest in the Personal Superannuation fund, the Applicant Wife is entitled to a base amount of one hundred and thirty-six thousand eight hundred and ten dollars ($136,810) and there is a corresponding reduction in the entitlement of the person whom the splittable payment would have been made but for these orders.
(b)That, having been accorded procedural fairness in relation to the making of this order, this order binds the trustee of the superannuation fund.
(c)That operative time for this order is four (4) business days after the date of service of the orders on the trustee of the superannuation fund.
That save as otherwise provided in these Orders, the Applicant Wife be declared solely responsible for, and indemnify the Respondent Husband and keep the Respondent Husband indemnified forever, with respect to any debt, liability or claim in her sole name or any liability that may arise in relation to items of property vesting in her pursuant to these Orders.
That save as otherwise provided in these Orders, the Respondent Husband be declared solely responsible for, and indemnify the Applicant Wife and keep the Applicant Wife indemnified forever, with respect to any debt, liability or claim in his sole name or any liability that may arise in relation to items of property vesting in him pursuant to these orders.
That unless otherwise specified in these Orders, and as between the parties, each party otherwise retain sole legal and beneficial ownership of:
(a)all personal property now in his or her respective name, possession or control;
(b)all shares, debentures, units in unit trusts, accounts held at any bank, building society, credit union or other financial institution;
(c)his or her Superannuation;
(d)any other assets and financial resources including but not limited to motor vehicles, investments, personal possessions;
(e)as to the Respondent Husband, all right, interest and shareholding in Company B Australia and Company B UK.
In the event that either party refuses or neglects to comply with any of these Orders in relation to the execution of any deed, instrument or document the Court appoints and authorises pursuant to s.106A of the Act the Registrar of the Family Court of Australia, Sydney Registry, to execute such deed, instrument or document in the name of the party who so refuses or neglects and further appoints that Registrar to do all acts and things necessary to give validity and operation to the deed, instrument or document. The party who has refused or neglected to execute the documents will pay the other party’s legal costs on an indemnity basis in relation to any application under s.106A of the Act.
That the parties each promptly do all acts and things and execute all documents, authorities and writing as are necessary to give effect to all or any of these Orders.
If any party seeks an order for costs, an appropriate application to the Court may be made within 28 days of today’s date (supported by any documentary material) to be filed and served within that time period and a copy forwarded to my Chambers. If no such application is made within the time period specified, no order will be made as to costs.
THE COURT NOTES THAT:
A.Any application as to costs will be dealt with by way of written submissions, unless the parties request to be heard orally.
IT IS NOTED that publication of this judgment under the pseudonym Nunn & Mayfield is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT SYDNEY |
SYC 2344 of 2017
| MS NUNN |
Applicant
And
| MR MAYFIELD |
Respondent
REASONS FOR JUDGMENT
Introduction
These are property proceedings between the applicant wife, Ms Nunn (“the wife”) and the respondent husband, Mr Mayfield (“the husband”) whereby each party is seeking orders for property adjustment after the breakdown of their marriage.
Procedural history
The matter first came before me in a Duty List on 10 July 2017. On this occasion the matter was referred for a Conciliation Conference.
A Conciliation Conference took place on 18 September 2017. The matter did not settle.
On 9 October 2017, the matter returned before me and was listed for Final Hearing and directions were made for preparation for Final Hearing.
On 30 April 2018, the matter went before her Honour Judge Henderson (as she then was) for call-over and the Final Hearing dates were confirmed.
Final Hearing took place on 30 August 2018. After the closing of the evidence, there was insufficient time to receive oral submissions so the Court directed the wife provide written submissions by 31 August 2018, and the husband provide written submissions by 5 September 2018.
On 31 August 2018, the wife’s submissions were received.
On 4 September 2018, the husband’s written submissions were received.
As of 4 September 2018, judgment was reserved.
Material relied upon
The wife relied upon:
a)Case Outline filed 20 August 2018 and marked Exhibit “D”;
b)Her amended Initiating Application filed 18 July 2018;
c)Her Financial Statement filed 18 July 2018;
d)Her Affidavit affirmed 17 July 2018 and filed 18 July 2018;
e)Affidavit of Mr C affirmed 17 July 2018 and filed 18 July 2018; and
f)Written submissions received and dated 31 August 2018.
The wife and her partner, Mr C (“Mr C”), were cross-examined.
The husband relied upon:
a)Case Outline filed 27 August 2018 and marked Exhibit “1”;
b)His Response filed 3 July 2017;
c)His Affidavit sworn and filed 25 July 2018;
d)His Financial Statement filed 25 July 2018;
e)Written submissions received 4 September 2018 and dated 5 September 2018.
The following documents were placed into evidence:
Exhibit Label
Document
Tendered by
A Joint Balance Sheet filed on 28 August 2018 Wife B Valuation of Property A, New South Wales, including a rental valuation Wife C Email correspondence between Mr D, Super Fund Limited, and Rosina Blake, Associate, Blumberg Family Lawyers, dated 2 August 2018 Wife D Wife’s Case Outline filed 20 August 2018 Wife E Letter from Belinda Nixon, Blackman Legal, to Ms E dated 15 January 2018; Letter from Belinda Nixon, Blackman Legal, to Blanchfield Nicholls Partners dated 23 March 2018; email correspondence between Ms F and Belinda Nixon, Ms Nunn & Mr G on 15 January 2018 & 22 January 2018 Wife F Cost Notice Letter from Rosina Blake, Blumberg Family Lawyers to Ms Nunn dated 29 August 2018; Costs Notice as at 29 August 2018 for Respondent Husband Joint 1 Husband’s Case Outline filed 27 August 2018 Husband 2 Exhibit M1 to the Affidavit of the husband sworn 25 July 2018 Husband 3 Valuation Report –Property A NSW Husband 4 Super Fund Client Review as at 12 August 2016
Investor: Mr MayfieldHusband 5 Financial Reports for the year ended 30 June 2016 & 30 June 2017 for Company B Husband 6 Spreadsheet produced in the operation of Company B setting out the income and expenses of Company B Pty Ltd for the period 2015-2016 and 2017-2018 Husband 7 ANZ Access Advantage Statement (Acc no: …) in the name of Ms Nunn and Mr C for the period 27 October 2017 to 30 October 2017 Husband 8 Trust Deed, ‘Variable Discretionary Trust’ dated 9 September 2015 Husband 9 Document setting out:
a) husband’s deposits to mortgage offset account (Acc no: …) from his HSBC account (Acc no: …); and
b) wife’s deposits to mortgage offset account (Acc no: …) from her HSBC account (Acc no: …);
from 9 November 2011 to 10 November 2015
Husband 10 ‘Statement of advice prepared for Mr Mayfield’ by Mr H, Financial Advisor, dated 22 April 2009 Husband 11 Signed Consent Orders dated 10 July 2017 Husband
I note Exhibit B was admitted subject to relevance. In my view it was relevant to the wife’s contention that post-separation the parties lost the benefit of $1,000 per week in rental income by reason of the husband’s occupation of Property A, New South Wales, (“the Property A property”).
In respect of Exhibit E, I ordered pursuant to s.136 of the Evidence Act 1995 (Cth) that the evidence contained in the first bullet point of the email dated 22 January 2018 was limited to proving the assertions therein were made and not as to the truth of what was asserted.
Competing proposals
By her Amended Initiating Application filed 18 July 2018, the wife sought orders as follows:
(1)That both parties take all necessary steps and execute all necessary documents to cause their property situated at Property A New South Wales and being the whole of the land in title reference … to be sold by private treaty at the earliest possible date at a price to be agreed on between the parties and failing such agreement to be determined by the proper officer of the Real Estate Institute of New South Wales or their nominee and that the proceeds of the said sale be disbursed as follows:
(a)Payment of agent’s commission and advertising expenses and legal expenses of the sale;
(b)Payment of any money due and owing to the mortgagee;
(2)The net balance to be divided between the parties as follows:
(a)50% to the applicant; and
(b)Further payment of $309,000 to the applicant; and
(c)The balance to the respondent.
(3)That in the event that the property fails to be sold by private treaty within a period of 3 months hereof, then each party take all necessary steps and execute all necessary documents to cause the said property to be sold by auction at the earliest possible date at a reserve to be agreed upon between the parties and failing such agreement to be determined by the proper officer of the Real Estate Institute or their nominee and that the proceeds of the said sale be disbursed as follows:
(a)Payment of agent’s commission and advertising expenses and legal expenses of the sale;
(b)Payment of any money due and owing to the mortgagee;
(4)The net balance to be divided between the parties as follows:
(a)50% to the applicant; and
(b)Further payment of $309,000 to the applicant; and
(c)The balance to the respondent.
(5)That until the sale of the property the Respondent Husband continue to pay as they fall due all regular instalments in respect of the mortgage, council rates and water rates in respect of the property and pay forthwith any arrears in respect of the said instalments.
(6)[Struck-out]
(7)That contemporaneously with the transfer set out above the Applicant do all such acts and things and sign all necessary documents so as to transfer her interest in Company B (UK Entity) to the Respondent.
(8)That the orders below have effect from the operative time.
(a)That in accordance with paragraph 90MT(1)(a) of the Family Law Act 1975, whenever a splittable payment becomes payable in respect of the Respondent Husband’s interest in the Personal Superannuation fund, the Applicant Wife is entitled to a base amount of one hundred and ninety-six thousand two hundred and fourteen dollars ($196,214) and there is a corresponding reduction in the entitlement of the person to whom the splittable payment would have been made but for these orders.
(b)That, having been accorded procedural fairness in relation to the making of this order, this order binds the trustee of the superannuation fund.
(c)That operative time for this order is 4 business days after the date of service of the orders on the trustee of the superannuation fund.
(9)That other than as otherwise set out in this agreement the parties have the sole right title and interest in any other property which is at the date hereof in their possession title or name and they shall solely be liable for and indemnify the other against any personal liabilities.
(10)That the Applicant and Respond net [sic] do all acts and things and give all consents and execute all documents and writings necessary to give effect to the orders made herein.
(11)That 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 of the Family Law Act 1975, 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 of the deed or instrument.
(12)That unless otherwise specified in these orders and except for the purposes of enforcing the payment of any money under these or any subsequent orders:
(a)Each party be solely entitled to the exclusion of the other to all property, including choses-in-action, in the possession of such party as at the date of these orders;
(b)Any money standing to the credit of the parties in a bank account are to be retained by the party in whose name the account appears;
(c)Each party hereby forgoes any claim they may have to any superannuation benefit that is belonging to or owned by the other save as provided for in these orders;
(d)All insurance policies are to become the sole property of the owner named hereon;
(e)Each party be solely liable for and indemnify the other against any liability encumbering any item of property to which that party in entitled pursuant to these orders; and
(f)Any joint tenancy of the husband and wife in any real or personal estate is hereby expressly severed.
It is necessary to record here that, as conceded by the wife during the hearing and confirmed in her written submissions, she does not press for the sale of the Property A property by way of her primary relief. She submitted that she had no objection to the husband retaining the Property A property in specie in return for the husband making a cash payment to her and causing the discharge of the joint liabilities secured on the property. At the opening of the trial, after questions from the Court, senior counsel for the wife submitted she broadly contended for a cash payment of approximately $1,250,000 if the parties’ superannuation was split equally. In her written submissions the wife refined this figure to $1,265,892.
By way of his Response filed 3 July 2017, the husband sought orders as follows:
(1)An Order that
(a)within 28 days of the date of these Orders, the Applicant Wife transer [sic] to the Respondent Husband all her right, title and interest in the property known as and situate at Property A in the State of New South Wales, being the property referred to in Certificate of Title Folio Identifier … (the Property A property);
(b)within twenty-eight (28) days of the date of these Orders, the parties do all acts and things and sign all documents and the Respondent Husband pay all monies, and the Applicant Wife I [sic] join in with the Respondent Husband to execute any Authority to Discharge document or similar, as necessary, to secure the Applicant Wife’s release from the mortgage registered number … to HSBC Bank Australia Limited on the title to the Property A property; and
(c)the Applicant Wife take such steps and sign such documents as may be necessary to transfer to the Respondent Husband her interest in HSBC mortgage offset bank account number ….
(2)An Order that, simultaneously with the Applicant Wife’s compliance with Order 1 above, the Respondent Husband pay to the Applicant Wife the sum of $500,000.
(3)An Order that the Respondent Wife transfer to the Applicant Husband or his nominee all her shares in Company B (UK Company number …).
(4)An Order that, save as otherwise provided for in these Orders, the Applicant Wife be declared solely responsible, and indemnify the Husband and keep the Respondent Husband indemnified forever, with respect to any debt, liability or claim in her sole name or any liability that may arise in relation to items of property vesting in him pursuant to these Orders.
(5)That save as otherwise stated in these Orders, The Respondent Husband be declared solely responsible for, and indemnify the Applicant Wife and keep the Wife indemnified forever, with respect to any debt, liability or claim in his sole name or any liability that may arise in relation to items of property vesting in him pursuant to these Orders.
(6)That unless otherwise specified in the Orders, and as between the parties, each party otherwise retain sole legal and beneficial ownership of:
(a)all personal property now in his or her respective name, possession or control;
(b)all shares, debentures, units in unit trusts, accounts held at any bank, building society, credit union or other financial institution;
(c)his or her Superannuation;
(d)any other assets and financial resources including but not limited to motor vehicles, investments, personal possessions;
(e)as to the Respondent Husband, all right, interest and shareholding in Company B …) and Company B (UK Company number …).
(7)An Order that in the event that either party refuses or neglects to comply with any of these Orders in relation to the execution of any deed, instrument or document the Court appoints and authorises pursuant to section 106A of the Act the Registrar of the Family Court of Australia, Sydney Registry, to execute such deed, instrument or document in the name of the party who so refuses or neglects and further appoints that Registrar to do all acts and things necessary to give validity and operation to the deed, instrument or document. The party who has refused or neglected to execute the documents will pay the other party’s legal costs on an indemnity basis in relation to any application under s 106A of the Act.
(8)That the parties each promptly do all acts and things and execute all documents, authorities and writing as are necessary to give effect to all or any of these Orders.
(9)That save, for the costs of the Applicant Wife’s Application for Interim Orders, the parties each pay their own costs of, and incidental to, these proceedings.
The wife agreed to transfer her shareholding in a company called Company B (UK Company number …) (“Company B UK”) to the husband, and for the husband to retain the funds which stand in the joint HSBC accounts (Acc No …; Acc No …). I will further discuss these items of property later in these reasons.
The Law
Part VIII of the Family Law Act 1975 (Cth) (“the Act”) sets out the legislative provisions relating to property orders that may be sought when parties are or were married. The central provision is s.79 of the Act which gives the Court power to make such orders for alteration of property interests as it considers appropriate. Subsections (2) and (4) are particularly important.
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.
Section 79(4) of the Act set outs the factors to be taken into account in considering what order, if any, should be made. These will be discussed in detail below.
Section 80 grants specific powers to the Court to adjust property interests. Specifically s.80(1) is in the following terms:
The court, in exercising its powers under this Part, may do any or all of the following:
(a) order payment of a lump sum, whether in one amount or by instalments;
(b) order payment of a weekly, monthly, yearly or other periodic sum;
(ba) order that a specified transfer or settlement of property be made by way of maintenance for a party to a marriage;
(c) order that payment of any sum ordered to be paid be wholly or partly secured in such manner as the court directs;
(d) order that any necessary deed or instrument be executed and that such documents of title be produced or such other things be done as are necessary to enable an order to be carried out effectively or to provide security for the due performance of an order;
(e) appoint or remove trustees;
(f) order that payments be made direct to a party to the marriage, to a trustee to be appointed or into court or to a public authority for the benefit of a party to the marriage;
(h) make a permanent order, an order pending the disposal of proceedings or an order for a fixed term or for a life or during joint lives or until further order;
(i) impose terms and conditions;
(j) make an order by consent;
(k) make any other order (whether or not of the same nature as those mentioned in the preceding paragraphs of this section), which it thinks it is necessary to make to do justice; and
(l) subject to this Act and the applicable Rules of Court, make an order under this Part at any time before or after the making of a decree under another Part.
Section 81 of the Act is also relevant, although the Full Court has held it is neither a ‘head of power’ nor an absolute requirement; it reflects a policy of making Orders which finally determine the financial relationship between the parties and avoid further proceedings, but this is only to be taken ‘as far as (is) practicable’: In the Marriage of Crapp and Crapp (No 2) [1979] FamCA 17; (1979) 5 Fam LR 47; (1979) FLC 90-615. Section 81 is in the following terms:
In proceedings under this part [i.e. Pt VIII], other than proceedings under section 78 or proceedings with respect to maintenance payable during the subsistence of a marriage, the court shall, as far as practicable, make such orders as will finally determine the financial relationships between the parties to the marriage and avoid further proceedings between them.
The approach to be taken
Prior to the High Court of Australia’s decision of Stanford v Stanford [2012] HCA 52, parties routinely relied upon the “4 step process” set forth in Hickey & Hickey & Attorney General for the Commonwealth of Australia [2003] FamCA 395; (2003) FLC 93-143. It is unnecessary to set this process out in detail.
The Full Court of the Family Court of Australia in Bevan & Bevan [2013] FamCAFC 116; (2014) 49 Fam LR 387 has held that the decision in Stanford (supra) has not overruled the 4 step approach, it neither approved nor disapproved such an approach. Rather Stanford (supra) serves as a reminder that the 4 step process “merely illuminates the path to the ultimate result” being “no more than a shorthand distillation of the words of a statute which has but one ultimate requirement, namely not to make an order unless it is just and equitable to do so.”: at [61] to [63], [65].
More recently, after consideration of Hickey (supra), understood in the light of Stanford (supra), and taking account of the commentary by the Full Court in Bevan (supra) and subsequent decisions, Judges of this Court have articulated a “five step” process. In Giles & Giles & Anor [2018] FCCA 194 at [35], his Honour Judge Monahan, citing the decision of her Honour Judge Bender in Rockman & Rockman [2014] FCCA 1966 at [84] set out the five steps as follows:
(a) firstly, what is the parties’ legal and equitable interests in property;
(b) secondly, is it just and equitable to make an order adjusting the parties legal and equitable interests in that property;
If the answer to (b) is in the affirmative:
(c) thirdly, identify and assess the contributions of the parties within the meaning of ss.79(4)(a), (b) and (c) of the Act and determine the contribution-based entitlements of each party as a percentage of the net value of the property of the parties;
(d) fourthly, identify and assess the relevant matters referred to in ss.79(4)(d), (e), (f) and (g) and s.75(2) of the Act and determine the adjustment, if any, that should be made to the contribution-based entitlements of each party as a percentage of the property of the parties; and
(e) fifthly, given s.79(1) empowers the court to make such orders affecting the parties’ interest in the property as are appropriate, determine what orders, if any, altering the parties’ interests are “appropriate” to enable the parties’ entitlements as determined pursuant to steps (c) and (d) to be achieved.
If a four step process merely illuminates the path to the ultimate result, for the same reasons so does a five step process. It is not necessary to choose between them. I will broadly follow the five step process in conjunction with the relevant legislative framework, discussed in light of the facts of this case in the course of these reasons.
In relation to the just and equitable requirement, the Full Court in Bevan (supra) emphasised that although the pre-condition to making any order for property adjustment is a finding that it is just and equitable to do so in accordance with s.79(2) of the Act, such a finding does not form a threshold issue nor must the requirements of s.79 be followed in a particular order.
The Full Court in Bevan (supra) also summarised three “fundamental propositions” laid down by the High Court of Australia in Stanford (supra) to provide “useful guidance to trial judges in approaching the task under s79” as follows:
1. Determination of a just and equitable outcome of an application for property settlement begins with the identification of existing property interests (as determined by common law and equity);
2. The discretion conferred by the statute must be exercised in accordance with legal principles and must not proceed on an assumption that the parties’ interests in the property are or should be different from those determined by common law and equity;
3. A determination that a party has a right to a division of property fixed by reference only to the matters in s 79(4) and without separate consideration of s 79(2), would erroneously conflate what are distinct statutory requirements.[1]
[1] Bevan (supra) at paragraph 73.
The High Court has held that the very fact of separation and the termination of the relationship affects assumptions about property during the existence of a marriage or de facto relationship and may lead to the ready satisfaction of the just and equitable requirement: Stanford (supra) at [41]- [42]. In Chapman & Chapman [2014] FamCAFC 91; (2014) FLC 93-592; 51 FamLR 176, the Full Court, when commenting on Stanford, observed at [21]-[22] that “satisfaction of the s 79(2) requirement can be inferred, at least in part, from the issues joined and, importantly, not joined, between the parties.” Thackray CJ, said in Fielding and Nichol [2014] FCWA 77 at [43]:
… in most cases the court will not need to discuss the s 79(2) issue, because the cases will be conducted on the basis of acceptance by the parties that it is just and equitable to make some form of adjustment. In those cases, matters arising under s 79(4) will require discussion only when determining the way the adjustment is to be effected.
A positive finding that alteration of property interests is just and equitable may arise by necessary implication from a totality of the Trial Judge’s Reasons for Judgment: Hearne & Hearne [2015] FamCAFC 178 at [71], [72] (per Strickland J).
Here the parties accept it would be just and equitable to make some form of adjustment. The just and equitable requirement has been satisfied by the issues joined and the way the case was conducted.
I will therefore approach the determination of this matter by first identifying the assets and liabilities of the parties, then by dealing with s.79(4) factors, including s.75(2).
The parties
Both parties were cross-examined. Both made submissions calling the value of the other’s evidence into question.
The wife came across as a reasonably reliable witness who endeavoured to give her evidence to the best of her recollection. The husband submitted she displayed a reluctance to concede matters demonstrably within her knowledge such as the fact monies received from her mother were not applied to either IVF treatments or bathroom renovations, when she had asserted that they were.
The husband was also cross-examined. I found him to be reasonably reliable. The wife submitted his oral evidence exposed areas of unreliability such as his assertion that he paid the mortgage on the Property A property after separation, when in fact it was paid from a joint offset account, referred to later in these reasons, which had a credit balance at separation and to which neither party contributed funds after separation.
Overall neither party was entirely satisfactory or reliable. I do not generally prefer the evidence of one over the other.
Further relevant facts
The husband was born … 1971 in Australia. He is presently 47 years of age.
The wife was born … 1974 in the United Kingdom. She is presently 44 years of age.
The parties commenced a relationship in 2006, thereafter commencing cohabitation in … 2007. At this time, they were residing in the United Kingdom.
The parties married on … 2010.
In … 2010, the parties relocated to Australia.
The parties separated in November 2015 when the wife ceased residing at the former matrimonial home, being the Property A property.
The parties were divorced in November 2017.
There are no children of the relationship.
The wife received a total of $75,000 ordered by consent on 10 July 2017 “by way of partial property adjustment”.
Assets, liabilities and financial resources at the date of the hearing
As noted above, the stepped approach requires identification of parties’ property, liabilities and financial resources at the date of the hearing. This is necessary because, as the High Court of Australia made clear in Stanford (supra) at [39], the question whether it is just and equitable to make an order “is not to be answered by assuming that the parties’ rights or interests in marital property are or should be different from those that then exist”.
At trial, the wife tendered a joint Balance Sheet which became Exhibit A. Although tendered by the wife, it represents the joint position of the parties. It is set out as follows:
Assets | A/J/R | Wife’s Value $ | Husband’s Value $ |
| Non-superannuation | |||
| Property A | J | $1,650,000 | $1,650,000 |
| Total bank accounts (detailed breakdown in notes) | H | $392,222 | $392,222 |
| Super Fund | H | $169,369 | E$169,369 |
| Motor Vehicle J | H | $4,000 | E$4,000 |
| Company B (AU entity) | H | $365,563 | $E$252,404 |
| Company B (UK entity) | 50. J | $134,641 | E$134,641 |
| HSBC offset account – … | J | $360,293 | $360,293 |
| HSBC … | 51. J | $70 | $70 |
| Total bank accounts (detailed breakdown in notes) | W | $27,209 | $5,798 |
| Motor Vehicle K | W | $23,500 | NK |
| Suburb L (“Suburb L Unit”) (Wife’s ½ share) | W | $587,500 | $587,500 |
| Total | $3,714,297 | $3,556,297 | |
| Superannuation | |||
| Personal super fund | H | $318,478 | $318,478 |
| Super Fund M | H | $9,297 | $9,297 |
| SIPP | H | $204,478 | $204,478 |
| Australian superannuation | W | $57,960 | $57,960 |
| UK super/pension | W | ||
| Total | $590,213 | $590,213 | |
| Financial Resources | |||
| Family Trust | W | NIL | |
| Total | NIL | ||
| Total Assets | $4,304,510 | $4,146,510 | |
| Liabilities | |||
| HSBC Mortgage secured on title to Property A property | J | $360,608 | $360,608 |
| Line of credit | J | $145,758 | $145,758 |
| HSBC MasterCard account … | H | NIL | |
| Coles MasterCard | W | $8,350 | $8,350 |
| HSBC Loan | W | $916 | NK |
| AMEX | W | $3,436 | NK |
| Mortgage – Suburb L | W | $489,071 | $489,071 |
| Payment due to Mr C for Suburb L | W | $150,000 | NIL |
| Total Liabilities | $1,158,139 | $1,003,787 | |
| Total Net Property | $3,146,371 | $3,142,723 | |
I note that in Exhibit A the wife’s total given for the non-superannuation assets of $3,714,297 appears to the incorrect. The total according to the figures in Exhibit 1 for non-superannuation assets should be $3,714,367. Nothing turns on this.
There were a number of disagreements about items on the Balance Sheet which require findings and conclusions. The area of substantial difference lay in the treatment of post-separation assets and the treatment of a partial property settlement of $75,000 in favour of the wife. The wife argued her interest in and mortgage liability for the Suburb L unit should be excluded, while the husband shares in Company B Australia should be included in the Balance Sheet. The husband argued that the Court should adopt a “simplified” Balance Sheet with all post-separation assets and debts excluded. I will address the details of these arguments in the reasons that follow.
Post Separation Assets – Company B Australia Pty Ltd and Suburb L Unit
There was no dispute that on 30 November 2015, after being made redundant from his then employment with Employer (“Employer”), the husband registered Company B Pty Limited (“Company B Australia”) and began undertaking consultancy work (paragraph 144, husband’s Affidavit filed 25 July 2018).
The parties agreed that the husband’s shares in Company B Australia should be valued primarily by reference to its current cash at bank of $365,563. The wife argued that the shares should be included in the matrimonial pool at this value. The husband argued that using a “simplified” Balance Sheet, the shares should simply be excluded from consideration along with all property acquired post-separation including any interest of the wife in the Suburb L unit.
He also argued that the value of the shares could not be $365,563 because the company would be subject to a tax liability for the financial year ended 30 June 2018. As the wife submitted, there was no evidence about the likely size of any such liability, if it existed, or potential offsetting items such as the carried forward losses appearing in Exhibit 5. It is well settled that the Court may disregard a liability if it is sufficiently uncertain however the assessment of debts and liabilities is not necessarily arrived at by a strictly mathematical or accountancy approach in all cases – a tax liability may be held to exist even if it is at large or has not yet been precisely determined: Biltoft and Biltoft [1995] FamCA 45; (1995) FLC 92-614; 19 Fam LR 39 at pp 82,124-5; 19 FamLR 39 at pp 91-92. The husband also gave evidence that to personally access the funds held by Company B Australia he would have to take them as salary or dividends on his shares. Either way the money received by him would be taxed as income in his hands (paragraph 149, husband’s Affidavit filed 25 July 2018). I accept this is likely to be correct. Therefore, even though the husband’s shares in Company B Australia are a present asset, their true value to him personally is likely to be less than the $365,563 in cash held by the company.
I also observe that if the husband chose to receive as salary some or all of the money held by Company B Australia, the company itself would be a financial resource of the husband, diminished in value by any tax liability.
Both parties argued the Suburb L property should not be included in the Balance Sheet but for different reasons.
It is necessary to recite some additional facts here. In May 2017, the wife commenced cohabitation with Mr C. There was no dispute that the wife and Mr C purchased the Suburb L Unit on 8 September 2017 for $1,200,000. They are both registered as proprietors. It was undisputed the wife made no financial contribution from her own funds to the acquisition of the Suburb L property. The purchase was funded through a combination of a joint mortgage by her and Mr C of $1,000,000 and savings of $254,582 contributed by Mr C (paragraph 73, wife’s Affidavit filed 18 July 2018).
Mr C gave evidence that there was a discussion between him and the wife prior to the purchase to the effect that they would be joint owners and when she received a property settlement she would contribute the same amount as him to the property. It was undisputed that the wife and Mr C opened a joint account into which they contribute equally, and from which mortgage payments, home maintenance, rates, electricity and living expenses are paid.
The prima facie position is that the beneficial ownership of real property is commensurate with the legal title: see, for example, Currie v Hamilton (1984) 1 NSWLR 687 at 690; Black Uhlans Inc v New South Wales Crime Commission & Ors [2002] NSWSC 1060 at [128]. The wife argued that the Suburb L unit should be excluded from the Balance Sheet because on no view of the evidence could a conclusion be reached that she holds any beneficial interest in the property of any value. The wife’s payments towards the mortgage through her joint account with Mr C may, on an accounting between them, have brought into existence an equitable interest, but such an interest cannot be given any value at this stage and, as the wife submitted, at the date of trial, any contribution she has made by way of mortgage payments since purchase would be insufficient to account equitably to Mr C for his contribution.
I accept these submissions. Calverley v Green [1984] HCA 81; (1984) 155 CLR 242 makes clear there is a distinction between the purchase price and the money borrowed to pay it (see 251, 257, 267-8). Borrowed money normally becomes the beneficial property of the borrower, in this case the wife and Mr C: AJB Potter v LJ Potter [2003] NZCA 103. The borrowed money is treated as a contribution to the purchase price by the parties who have borrowed the money from the mortgagee: Calverley (supra); Murtagh v Murtagh [2013] NSWSC 926 at [67]. So the money advanced on mortgage to purchase the Suburb L unit should be treated as a joint contribution to the purchase by the wife and Mr C equally. Consequently, the wife may well have a beneficial interest in the Suburb L property. However, there was insufficient evidence to make clear what the value of such an interest might be, bearing in mind it is subject to the interest of the mortgagee. At present it may have no value once the interest of the mortgagee is taken into account, together with the extent of Mr C’s greater contribution of $254,582 from his savings.
As noted earlier, the husband argued that the Suburb L unit should be excluded from the Balance Sheet as post-separation property to which he conceded he made no contribution. He submitted, and I accept, that the evidence could not sustain a finding that the wife’s interest is presently subject to any requirement that she pay Mr C any amount.
The approach of both parties leads to the position that the wife’s share of the mortgage liability secured against the Suburb L unit should also be excluded as a liability from the Balance Sheet.
As I understood it, the husband argues that the parties’ property should be identified as at separation, then valued at the date of trial, thereby excluding after acquired property, in particular, Company B Australia and the Suburb L unit. It has been held many times that the exercise of the identification and valuation of the property of the parties is undertaken typically, though not invariably, as at the date of trial: Parker v Parker (1993) 16 Fam LR 863; (1993) DFC 95-139; Wells & Wells [1977] FamCA 62; (1977) 29 FLR 383; (1977) 4 Fam LR 57; (1977) FLC 90-285. However, sometimes the date of separation is more appropriate: Cozanitis v Cozanitis [1979] FamCA 24; (1979) 34 FLR 523; (1978) 4 Fam LR 709; (1979) FLC 90-643. Ordinarily property is valued as at the date of trial: Williams & Williams [1984] FamCA 25; (1984) 9 Fam LR 789; (1984) FLC 91-541; Hauff & Hauff [1986] FamCA 16; (1986) 10 Fam LR 1076; (1986) FLC 91-747; Kardos v Sarbutt [2006] NSWCA 11; (2006) 34 Fam LR 550 at [30]; Maria Saravinovksa v Krste (Chris) Saravinovski; Chris Saravinovski v George Saravinovski (No 6) [2016] NSWSC 964 at [402]ff. The husband contends the present case is a situation where in the period between the date of separation and the trial, substantial new assets have been built up by the endeavours of one or other party or acquired by a party without any contribution of the other party: SJS & NS [2005] FamCA 66; (2005) FLC 93-214; Z & Z [2005] FamCA 996; (2005) FLC 93-241; (2006) 34 FamLR 296; Juliet & Juliet & Anor [2013] FamCA 497 at [274].
In Z & Z (supra) at [13]-[16], Finn J in the Full Court endorsed the statement of the Trial Judge that it is at the discretion of the Court not to take into account transactions and therefore liabilities after separation. I accept that it is an appropriate exercise of discretion in this case to exclude the Company B Australia shares, as well as the Suburb L Unit and its mortgage from the Balance Sheet, for the following reasons.
I am satisfied it is appropriate to exclude the wife’s interest in the Suburb L unit from the Balance Sheet, because although it exists at the date of trial, the evidence and the submissions of the parties in combination satisfy me that the wife’s interest, as registered proprietor, cannot be ascribed any value at present. In addition, the property was clearly acquired after separation with no contribution from the husband. The possibility of her future acquisition of an interest capable of valuation through contributions to mortgage payments and her liability as co-mortgagor can be taken into account later in these reasons under s.79(4)(e) of the Act.
The husband’s shares in Company B Australia may seem initially to be in a different category. As discussed, they are an existing asset with a value. However, on reflection since there is no dispute that the cash at bank held by Company B Australia was in truth the result of the personal exertions of the husband after separation with no contribution from the wife, by parity of reasoning with the approach to the Suburb L unit, the shares should be excluded from the Balance Sheet. Like the Suburb L unit, the shares, together with the possibility that their value to the husband may be diminished by a taxation liability, can also be taken into account under s.79(4)(e) of the Act.
Moreover, it seems to me that excluding the shares and the Suburb L unit from the Balance Sheet ultimately has the same outcome as treating them as after acquired property to which neither other party contributed in assessing contributions. Often Trial Judges assess separately post-separation contributions, even though this is neither required nor proscribed: S & S [2004] FamCA 201 at [17] per Warnick J.
Wife’s Bank Accounts.
In Exhibit A the parties included an item for money held by the wife in bank accounts. The wife put the value at $27,209, while the husband asserted a value of $5,798. The husband made no submissions in support of his figure. I accept the wife’s figure of $27,209.
Addbacks, Partial Property Adjustment, Motor Vehicle K
As already noted, the wife received $75,000 by way of partial property adjustment. According to her evidence, she used this money to purchase a Motor Vehicle K for $26,000, pay $17,000 in legal fees, pay some living expenses, travel to the United Kingdom, and purchase household items (paragraph 68 & 69, wife’s Affidavit filed 18 July 2018).
The wife contended the Motor Vehicle K should be included in the balance sheet at a value of $23,500, and the balance of the $75,000 should be treated as reasonable post-separation expenditure, on the basis that it was not incumbent or realistic to expect that “the wife should provide a precise audit of every item of her expenditure post separation”: Edgehill & Edgehill [2007] FamCA 1102 at [60]; Gollings & Scott [2007] FamCA 397; (2007) FLC 93-319. The wife also cited the Full Court decision in Grier & Malphas [2016] FamCAFC 84; (2016) 55 FamLR 107.
The husband argued that the entire $75,000 should be included as an “add-back” or notional property of the wife, and the Motor Vehicle K should be removed from the Balance Sheet to avoid double counting.
The problem with the wife’s approach is that it fails to take account fully in the Balance Sheet for the $75,000 which was specifically characterised as a “partial property adjustment”. Rather the wife argues that the Motor Vehicle K should be present on the Balance Sheet as an asset, since it was purchased using part of the $75,000, while the balance of the $75,000 should just be treated as reasonable post-separation expenditure. This does not accord with authority in my view. $17,000 of the $75,000 was expended on legal fees. Paid legal fees are one of the three recognised categories of “add-backs” (AJO & GRO) [2005] FamCA 195; (2005) FLC 93-218) but the wife made no specific submissions about them. As I understood the wife’s argument, the $75,000 should be taken into account in the assessment of post-separation contributions.
In my view, the $75,000 should be included in the Balance Sheet as notional property of the wife. This approach accords most closely with its character as a “partial property adjustment” specified in the consent order itself. It also appropriately deals with paid legal fees. I accept, as the husband submits, the Motor Vehicle K should be excluded from the Balance Sheet to avoid double counting.
Superannuation
The Full Court of the Family Court of Australia’s decision in C & C (2005) FLC 93-220 requires the Court, in the majority of cases, to consider the parties’ superannuation interest as a separate species of property, unless the parties consent to it not being treated separately. This allows the Court to assess the parties’ contributions to superannuation as well as other property. It is open however still to the Court to decide whether to treat superannuation interests as a separate list of assets, or as part of one asset list. The majority of the Full Court in C & C (supra) said there is no binding principle as to the exercise of the Court’s discretion in deciding whether a one list or a two list approach should be adopted. In the present matter both parties submitted that superannuation should be treated separately from non-superannuation assets, that is, they supported a two pool approach.
Wife’s Liabilities
The wife seeks to include in Exhibit A number of small debts, being $8,350 on a Coles MasterCard, $916 owed to HSBC and $3,436 owed to American Express, and totalling $12,702. She gives no Affidavit evidence of when or how these arose. While not de minimis, the total does not make a material difference to the overall Balance Sheet. I infer these debts all arose post-separation. I will not include them in the Balance Sheet.
In light of the above findings, the assets and liabilities of the parties at the date of hearing are, as follows:
Assets | A/J/R | Value $ |
| Non-superannuation | ||
| Property A | J | $1,650,000 |
| Bank accounts | H | $392,222 |
| Personal Super Fund | H | $169,369 |
| Motor Vehicle J | H | $4,000 |
| Company B (UK entity) | 77. J | $134,641 |
| HSBC offset account – … | J | $360,293 |
| HCBC … | 78. J | $70 |
| Bank accounts | W | $27,209 |
| Total | $2,737,804 | |
| Addbacks | ||
| Partial property adjustment to the wife | W | $75,000 |
| Total | $75,000 | |
| Superannuation | ||
| Personal Super Fund | H | $318,478 |
| Super Fund M | H | $9,297 |
| SIPP | H | $204,478 |
| Australian superannuation | W | $57,960 |
| UK super/pension | W | NIL |
| Total | $590,213 | |
| Financial Resources | ||
| Family Trust | W | NIL |
| Total | NIL | |
| Total Assets | $3,403,017 | |
| Liabilities | ||
| HSBC Mortgage secured on title to Property A property | J | $360,608 |
| Line of credit | J | $145,758 |
| Total Liabilities | $506,366 | |
| Total Net Property | $2,896,651 | |
Percentages of net assets at hearing
Consequently, if there was no property adjustment, the wife would hold 34% of the parties’ net assets including superannuation and the husband 66%. If non-superannuation assets are viewed separately from superannuation, the wife would hold 40% of the parties’ net non-superannuation assets and the husband 60%. The wife would hold 10% of the superannuation and the husband 90%. Most of the substantial non-superannuation assets are held jointly. Having regard to the parties’ submissions and my assessment of contributions below, I am not satisfied leaving the present position unaltered would be just and equitable.
I turn now to consider the application of Part VIII of the Act and the factors set forth in ss.79 & 75(2).
Contributions under section 79
I will deal first with s.79 of the Act. Section 79(4) of the Act sets out the considerations to be taken into account by the Court in considering what order (if any) should be made under s.79 of the Act in property settlement proceedings.
The Court has a discretion as how to treat the property of the parties, whether on an asset by asset basis or globally: Norbis v Norbis (1986) 161 CLR 513. The parties had a consistent approach in asking the court to deal with non-superannuation assets and superannuation as two pools. I will adopt that approach as discussed in these reasons.
Below is a discussion of the evidence and my findings in relation to the relevant contributions under s.79(4) of the Act. Here I note that ss.79(4)(f) &(g) of the Act are not relevant to the facts of this case.
(a) the financial contribution made directly or indirectly by or on behalf of a party to the marriage
Initial contributions
The parties commenced cohabitation in … 2007 in an apartment in the UK, rented by the husband.
At this time, the wife deposes to having had no significant assets and a debt of approximately £25,000 (paragraph 11, wife’s Affidavit filed 18 July 2018). The husband does not dispute this although he does contend the wife told him she had an “Individual Savings Account” (paragraph 23, husband’s Affidavit filed 25 July 2018).
The husband deposes to having the following assets (paragraph 17, husband’s Affidavit filed 25 July 2018):
a)AUD$ Macquarie Bank accounts with balances amounting to about $215,000. The wife did not dispute this.
b)an equities portfolio with Shares O worth about AUD$135,000. The wife objected to the husband’s Affidavit evidence about this portfolio. I rejected the Affidavit evidence but granted leave for the husband to lead further evidence in chief about it. The husband gave oral evidence that by a process of elimination, referring to a Macquarie Cash Management Account statement and a home loan application from March 2011, he estimated the value of the Shares O portfolio at cohabitation to be AUD$135,000 (Exhibit 2, Tabs 9 and 10). The wife pointed out that the documents used by the husband to give this evidence were disclosed only after my rulings on the admissibility of the Affidavit evidence at trial. However, he conceded in cross-examination that he had been asked for disclosure about this Shares O portfolio by solicitor’s letter dated 12 January 2018 but gave no disclosure until the Trial. The wife submitted that his failure to disclose any other documents raised an inference that they would not have assisted the husband’s case. The husband gave no Affidavit evidence of the fate of the Shares O portfolio between the commencement of cohabitation and the date of trial. The evidence is unsatisfactory. However, I accept the husband had the Shares O portfolio at the commencement of cohabitation and on balance I am satisfied its value at that date was more likely than not to have been approximately AUD$135,000.
c)A portfolio of UK shares worth about £40,000 held in an account with HSBC. Again I rejected the husband’s Affidavit evidence about this, for the same reason. The husband gave oral evidence that his recollection was that he kept the account at about the same level, being about £40,000. I accept this evidence.
d)a HSBC account which had a balance of about £40,000. The wife did not dispute this.
e)Superannuation from the husband’s employment in Australia, which was worth approximately $60,000. In oral evidence, the husband tendered Exhibit 10, a letter from a financial advisor which he said supported this value. This gave a value for the superannuation of $56,000. The wife argued that Exhibit 10 had no evidentiary value because the document simply recorded what the husband had told his financial advisor. However, the document records information given by the husband to his financial advisor in April 2009. This was during the relationship but prior to the marriage. There is no reason why at that time the husband would provide information to his advisor which he believed to be other than accurate. I infer the husband gave information to his advisor which was based upon information the husband had rather than as a purely arbitrary figure. On balance I am satisfied the value of the husband’s superannuation at cohabitation was more likely than not to have been approximately $56,000.
f)A defined benefit pension of unknown value.
It can be seen that the wife does not dispute the existence of the Shares O portfolio, the HSBC share portfolio or the Australian superannuation at cohabitation. She disputes the values attributed by the husband. For the reasons given in the previous paragraph [84], the evidence of the value of these contributions at cohabitation is unsatisfactory, but on balance I accept the values attributed by the husband.
There was no dispute that at cohabitation the wife had no significant assets and debts of at least £25,000. The husband in his evidence seemed to suggest the wife’s debts may have totalled £30,000. He made mention in his Affidavit of an additional £10,000 loan that the wife disclosed in late 2008 or early 2009. It is not possible on the evidence to resolve this factual difference.
At cohabitation, the wife was employed as a professional earning £45,000 (paragraph 13, wife’s Affidavit filed 18 July 2018). The husband contends the wife was earning £35,000 at this time (paragraph 20, husband’s Affidavit filed 25 July 2018).
At cohabitation, the husband gives evidence he was employed by Employer “earning between £90,000-£95,000 per annum plus bonus plus DBP [defined benefit pension]” (paragraph 12 & 17, husband’s Affidavit filed 25 July 2018). The wife’s evidence is broadly consistent, saying the husband was earning £80,000-£90,000 plus bonuses (paragraph 13, wife’s Affidavit filed 18 July 2018).
With respect to joint expenses at this time, both parties agree the husband met all rental payments, and this was done to allow the wife to pay down her debts (paragraph 14, wife’s Affidavit filed 18 July 2018; paragraph 24, husband’s Affidavit filed 25 July 2018).
With respect to other joint expenses, the wife contends that in addition to paying off her debts, she met her “own living expenses including transport, daily food allowance, gym membership” (paragraph 15, wife’s Affidavit filed 18 July 2018). The wife gives evidence she paid off her debts within 18 months.
The parties agree that in September 2007, they opened a joint HSBC bank account (Account No …) (“the joint UK bank account”). The wife gives evidence that both parties made contributions into this account, with such funds “used on various joint expenses including groceries, eating out and paying utilities including the electricity” (paragraph 16, wife’s Affidavit filed 18 July 2018). This presently holds funds with an equivalent value of AUD$70.
The husband alternatively contends he paid, in addition to rent of “between £1,295 per month and £1,450 per month”, council tax, water rates, pay TV, home phone and internet, TV licence, gas and electricity, and costs of a cleaner once per fortnight on behalf of the parties (paragraph 24, husband’s Affidavit filed 25 July 2018). All other joint expenses were met from the joint UK bank account which both parties contributed to. The husband gave evidence that he reviewed the statements for this account between September 2007 and October 2010, and on the basis of this review, the wife deposited about £13,068.47 and the husband £10,291.33. This was in addition to £65,000 which he says he paid for rent and other expenses (paragraph 26 of his affidavit). No bank statements in support were annexed to his Affidavit. The wife did not dispute this evidence.
The use made of initial contributions is relevant; however, initial contributions have to be weighed against all the other relevant contributions of the parties: Pierce & Pierce [1998] FamCA 74; (1999) FLC 92-844 at [28]. I turn to consider those now.
Financial contributions during the relationship
On … 2008, the husband took a voluntary redundancy from Employer and thereafter received payments totalling £79,897.16 (paragraph 29, husband’s Affidavit filed 25 July 2018).
Following leaving Employer until … 2010, the husband deposes he began undertaking consultancy work through a company he established, Company B Ltd (“Company B UK”) (paragraph 30 & 31, husband’s Affidavit filed 25 July 2018). He began taking drawings from Company B UK in or about … 2009 in the amount of £3,700 per month, until … 2009, from which time he took a salary of £800 per month and dividends of £2,000 per month (paragraph 32, husband’s Affidavit filed 25 July 2018).
In 2010, the husband transferred 49.9% of shares in Company B UK to the wife for no consideration. The husband gives evidence this was done to allow a dividend to be paid to the wife and thereafter in April or May 2010, the wife was paid a dividend of between £30,000-£35,000 (paragraph 34, husband’s Affidavit filed 25 July 2018).
In … 2010, the parties relocated to Australia.
The husband gives evidence he obtained employment with Employer. Tab 6 of the bundle of documents marked Exhibit 2 was the offer of employment made by Employer. This document provided that the husband was to receive an annual base salary of $230,000, not including superannuation, and he was to receive an initial sign-on fee of $25,000, with a further sign-on fee of $25,000 payable after twelve months’ service. In her submissions, the wife accepted that these fees were paid into bank accounts of the husband and were used for the purchase of the Property A property.
Upon arriving in Australia, the parties purchased a Motor Vehicle J. The husband says the purchase price was paid from his Macquarie Bank account.
The parties commenced living in a rental property in Suburb P and the husband gave evidence he continued to meet the whole of the rental payments for the property (paragraph 66, husband’s Affidavit filed 25 July 2018). The wife did not dispute this (paragraph 58, husband’s Affidavit filed 25 July 2018).
In … 2011, the parties purchased the Property A property for $950,000. The husband gives evidence that he paid the deposit, being $95,000 from his Macquarie Bank Cash Management account (Acc no …) (paragraph 76, husband’s Affidavit filed 25 July 2018). In addition to the deposit, the parties obtained a HSBC mortgage secured on the property in the amount of $570,000. As part of the mortgage, a joint HSBC mortgage offset account (Acc no …) (“the offset account”) was opened. The husband submits that he contributed $380,000 from funds available to him prior to cohabitation to the purchase of the Property A property, including payment of legal costs and stamp duty (paragraph 37 & 38, husband’s written submissions). The wife did not dispute this.
The husband gives evidence his mother loaned him $60,000 towards the purchase of the Property A property however this loan was not documented and no terms of repayment were discussed between the husband and his mother (paragraph 83, husband’s Affidavit filed 25 July 2018). The wife agrees the husband’s mother gave the parties $60,000 that they applied to the purchase of the Property A property but makes no reference to it being a loan (paragraph 38, wife’s Affidavit filed 18 July 2018). The husband did not seek to have this amount included as a liability on the Balance Sheet. Kessey & Kessey [1994] FamCA 162; (1994) FLC 92-495; 18 FamLR 149 stands for the proposition that a contribution of a parent of a party to a marriage will be taken as a contribution made by or on behalf of the party who is the child of the parent unless there is evidence which establishes it was not the intention of the parent to benefit only his or her child: see 18 FamLR 149 at 181. There is no direct evidence of the intention of the husband’s mother regarding this. I will treat the amount of $60,000 as a contribution by the husband.
In … 2011, the wife commenced a contract with Employer as a professional. The wife gives no evidence as to her income however the husband contends she was paid $55 per hour, working four, sometimes five days per week (paragraph 67, husband’s Affidavit filed 25 July 2018). The husband said that, as the wife was unemployed for a number of months following the parties’ arrival in Australia, he introduced her to an industry contact who found the wife the placement with Employer. The wife did not dispute this.
The parties renovated the bathrooms at the Property A property in 2011. The wife gave evidence that in 2011, her mother gifted her £3,000 which she put towards bathroom renovations (paragraph 39, wife’s Affidavit filed 18 July 2018).The husband denies the wife contributed any funds towards the bathroom renovations (paragraph 93, husband’s Affidavit filed 25 July 2018). The parties agree the renovations were in the region of $30-35,000, but the husband contends he paid for them all. I accept that it is more likely than not that the wife contributed to the renovations even if the husband paid for the lion’s share.
In 2013, the wife contends her mother paid for the parties’ cost of accommodation and flights for a trip to Country Q (paragraph 40, wife’s Affidavit filed 18 July 2018). The husband concedes the wife’s mother paid the costs of accommodation, but that he paid for the parties’ flights (paragraph 68, husband’s Affidavit filed 25 July 2018).
In … 2013, the wife gives evidence her mother gifted her £10,000 which she says was contributed to the mortgage secured on the Property A property (paragraph 41, wife’s Affidavit filed 18 July 2018). The husband agrees (paragraph 94, husband’s Affidavit filed 25 July 2018).
The wife contends she ceased employment with Employer in … 2013. The husband said this employment ceased in … 2013. It was undisputed that thereafter in … 2013 the wife commenced a full-time contract with Employer until … 2014 (paragraph 42 & 43, wife’s Affidavit filed 18 July 2018). The wife provides no evidence as to her income at this time however the husband gives evidence that the wife told him she was receiving a package of $130,000 per annum (paragraph 70, husband’s Affidavit filed 25 July 2018). The wife gives evidence that during the periods she was employed, she contributed monthly to the mortgage repayments (paragraph 44, wife’s Affidavit filed 18 July 2018).
In … 2014, the wife ceased employment with Employer. The wife contends it was a joint decision by the parties for her to cease employment as the parties were undergoing IVF to conceive a child (paragraph 50, wife’s Affidavit filed 18 July 2018). The husband contends it was the wife’s choice to cease her employment with Employer (paragraph 72, husband’s Affidavit filed 25 July 2018). The wife was not in paid employment from … 2014 until separation.
In … 2014, the wife gives evidence her mother gifted her £4,500 towards the parties’ flights to the United Kingdom (paragraph 45, wife’s Affidavit filed 18 July 2018).
In … 2014, the wife gives evidence her mother gave her £5,000 towards IVF expenses (paragraph 46, wife’s Affidavit filed 18 July 2018). The husband agrees that the wife’s mother deposited £5,000 into the parties’ joint UK bank account, but that £2,515.02 was used for accommodation costs of the wife whilst on holiday in the United Kingdom, and a further £104.50 at an online shopping retailer. The husband does not know what happened to the remainder of these funds (paragraph 133, husband’s Affidavit filed 25 July 2018).
On … 2014, the husband gives evidence that he accepted a redundancy from Employer and received payments of $141,054 and US$40,750 (paragraph 56, husband’s Affidavit filed 25 July 2018). The wife submits she made a substantial indirect contribution to the receipt of these funds (paragraph 27, wife’s written submissions).
During the course of the husband’s employment with Employer, he gives evidence he received “for no consideration” 920 shares in each of Shares R and Employer. The husband gives further evidence that on 2 April 2018 and 9 May 2018, he sold these shareholdings and received sale proceeds of US$98,041.02 (paragraph 151, husband’s Affidavit filed 25 July 2018). The wife submits she made a significant direct and indirect contribution to these funds (paragraph 28, wife’s written submissions).
The husband gave evidence that on 30 November 2015, following being made redundant by Employer, the husband registered Company B Pty Limited (“Company B Australia”) and began undertaking consultancy work (paragraph 141, husband’s Affidavit filed 25 July 2018).
According to the husband, during the marriage and after the purchase of the Property A property, his salary from Employer was deposited into his HSBC account … and after retaining about $1,000, the balance was paid into the offset account. The wife also paid about $1,000, sometimes more, into the offset account from her income. The husband also set out a table of the parties’ respective taxable income between 2011 and 2016 at paragraph 97 of his Affidavit. This discloses that he received a total of $2,068,671 in that period while the total received by the wife is not known but was considerably less. According to the husband’s Affidavit evidence (paragraph 89, between November 2011 and November 2015 he deposited $538,841 in to the offset account, while the wife deposited $58,100. He tendered Exhibit 9 which was a schedule of such payments prepared by him. It gives slightly different figures for the same period, $578,089.50 and $57,250 respectively. It is unnecessary to resolve the reason for the difference. The wife did not dispute these figures and agreed they both deposited part of their earnings into the offset account.
Financial contributions post-separation
The wife left the Property A property in November 2015. The husband has remained living in the Property A property since this time.
The husband gave evidence that since separation, he has continued to meet all expenses for the Property A property, “including minor maintenance work and outgoings, including strata levies, council rates and water rates” (paragraph 150, husband’s Affidavit filed 25 July 2018). However, in cross-examination the husband agreed that since separation in November 2015, mortgage payments have been debited to the offset account, which had a credit balance of approximately $400,000 in July 2017. According to the evidence of the husband, which I accept (see paragraph [114] above), the bulk of this amount came from the husband’s earnings.
On 9 November 2015, the husband deposes the wife withdrew a total of $5,841 from the offset account to pay her rental bond. On 30 November 2015, he deposes the wife withdrew a further $1,000 from the offset account, marked ‘rental transfer’ (paragraph 137, husband’s Affidavit filed 25 July 2018).
The husband gave evidence he continued to pay the wife’s gym membership and health insurance for “a couple of months after separation” (paragraph 138, husband’s Affidavit filed 25 July 2018).
In 2018, despite the apparent success of Company B Australia, the husband ceased consulting privately through Company B Australia – he sets out a number of reasons for doing so in paragraph 146 of his Affidavit filed 25 July 2018. Thereafter the husband commenced employment with Employer as a professional. The husband gives evidence that his salary package is $300,000 per annum, plus up to a 20% annual bonus. The husband also gives evidence that his employment package includes a long-term incentive of up to 10% per annum. He deposes he will not know if he will receive this long-term bonus until on or about 2021 (paragraph 148, husband’s Affidavit filed 25 July 2018).
At trial the husband had superannuation totalling $532,253. He held some superannuation at cohabitation, as discussed above. It is not clear what value his superannuation had at separation. Since separation the husband has been employed primarily through his consulting company Company B Australia. The husband tendered a print out from Personal Super Fund which became Exhibit 4. It bears the notation “Client review as at 12 Aug 2016”. On this basis he submitted that the Personal Super Fund portfolio had increased from $224,986 to $318,478 between 12 August 2016 and the date of trial, that is, after separation. I accept this evidence even though Exhibit 4 does not make clear the date period to which it refers.
Since separation, the wife lived in four separate rental premises until she repartnered and moved into the Suburb L property. She gave evidence of being employed with Employer under a 12 month contract at the time of Trial. At Trial the wife had superannuation valued at $57,960. The evidence did not make clear whether the wife’s contributions to this total were made before or after separation. However, since her evidence disclosed limited employment since separation, I infer the superannuation was primarily acquired before separation.
$75,000 paid to the wife as per Orders made 10 July 2017
On 10 July 2017, orders were made by consent for the husband to pay to the wife a total of $75,000 “by way of partial adjustment of property interests between the parties”. The husband submitted the Court should include these funds as “property in her [the wife’s] hands”, and I have already made findings about this amount at [71] to [75] above.
The Suburb L property
I repeat the factual details set out concerning the purchase of the Suburb L unit earlier in these reasons.
The wife contends that she and Mr C make equal contribution towards the mortgage secured on the Suburb L property and to living expenses (paragraph 76, wife’s Affidavit filed 18 July 2018). Mr C’s evidence supported this.
(b) the contribution (other than a financial contribute on) made directly or indirectly by or on behalf of a party to the marriage
I include no discussion separate to my discussion under s.79(4)(a) to which I refer.
(c) the contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage and any children of the marriage, including any contribution made in the capacity of homemaker or parent
The wife gave evidence, which the husband did not dispute, that she agreed to move to Australia because he found attractive work there. The wife left behind her network of family and friends, but supported the husband in what he wanted to achieve professionally. I accept this evidence.
The wife underwent four cycles of IVF between … 2014 and … 2015 (paragraph 52, wife’s Affidavit filed 18 July 2018). This treatment was unsuccessful. The wife submitted this was undertaken as part of the life and partnership plans of the parties. She gave evidence that she found the treatment “incredibly tough” and found the emotional toll on her was significant especially since she had no family support around her. I accept this evidence.
The wife submits that during the parties’ cohabitation and prior to the parties commencing IVF treatment, the parties equally undertook the household and domestic tasks save periods the husband was travelling, which she submits was “50% of his employment”. During the time the wife was not in employment and the parties were undertaking IVF treatment, the wife submits she was “primarily undertaking the household and domestic tasks” (paragraph 31, wife’s written submissions).
The husband gives evidence the parties had a cleaner for the period they resided at the Property A property, who attended fortnightly. Otherwise, the husband submits the parties shared the other household chores and tasks (paragraph 96, husband’s Affidavit filed 25 July 2018), except for the period the wife was not in employment where he concedes the wife undertook more household tasks.
The wife deposes that prior to the parties move to Australia in 2010, she spent considerable time making the necessary arrangements for the move, for example, “terminating utility accounts, arranging for our belongings to be sold including all our furniture and sorting the belongings and clothes we wanted to take with us”. Employer provided a relocation company to assist however the wife gave evidence she selected the parties’ temporary accommodation and coordinated the removal process (paragraph 32, wife’s Affidavit filed 18 July 2018).
The husband said the parties selected the temporary accommodation (paragraph 57, husband’s Affidavit filed 25 July 2018).
(d) the effect of any proposed order upon the earning capacity of either party to the marriage
The proposed orders will not affect the earning capacity of either party.
Assessment of contributions
In accordance with s.79(4) of the Act, the Court must consider all the contributions, both financial and non-financial to the acquisition, conservation and improvement of the parties’ assets as well as to the welfare of the family during cohabitation and after separation. The Court must consider the contributions in an overall sense: Norman & Norman [2010] FamCAFC 66; Hickey (supra); Kowalski and Kowalski (1993) FLC 92-342; G & G [2000] FamCA 1075. A broad approach is preferred, rather than reference to precise mathematical calculations: In the Marriage of Burke (1981) FLC 91-055 although an evaluation of each party’s respective contributions is necessary: JEL & DDF [2000] FamCA 1353; (2001) FLC 93,075. Assumptions about equality of contributions should not be made. Separate assessment of matters occurring after separation is not necessary in arriving at an assessment of contributions: S & S (supra).
The Full Court in Dickons & Dickons [2012] FamCAFC 154; (2014) 50 Fam LR 244 at [15] pointed out that a search for a causal link between contributions and particular property “might be seen to come instinctively to the necessary inquiry” in assessing contributions. However, at [16], the Court also emphasised the distinct role of s.79(4)(c): “While that apparent “causal connection” might be seen in s 79(4)(a) (and (b)), no such connection is apparent from the terms of s 79(4)(c); contributions of that latter type are not linked by the words of the subparagraph to the “acquisition, conservation or improvement of any of the property” or, indeed, to “property” at all.” At [21] to [22] the Full Court went on to say:
[20] Put another way, consistent with authority, the s 79 discretion involves as a necessary requirement that “... trial Judges weigh and assess the contributions of all kinds and from all sources made by each of the parties throughout the period of their cohabitation and then translate such an assessment into a percentage of the overall property of the parties or provide for a transfer of property in specie in accordance with that assessment.” (In the Marriage of Aleksovski (1996) FLC 92-705 at 83,437). In Aleksovski, Kay J outlined the well-known “gold bar” analogy and said “[w]hat is important is to somehow give a reasonable value to all of the elements that go to making up the entirety of the marriage relationship” (at 83,443).
[21] Those same principles can be expressed as saying that the requirements of the section are met by approaching the assessment of contributions holistically and by analysing the nature, form, characteristics and origin of the property currently comprising that to which s 79 applies, and, in turn, analysing the nature, form and extent of the contributions (of all types) contemplated by s 79. That task is also undertaken by reference to the nature and form of the particular marriage partnership manifested by the particular circumstances of this particular marriage…
I accept that the husband made by far the greater financial contribution, including initial contributions. These contributions were instrumental in allowing the parties to acquire the Property A property, and allowing the wife to pay off her initial debts. I accept both parties also made financial contributions according to their earning capacity during the marriage.
The wife submitted she made important contributions by moving to Australia, and undergoing difficult IVF treatment. The wife submitted the IVF treatment was a contribution to be weighed not valued.
The husband submitted that emotional pain associated with participation in the failed IVF treatment and the inability to start a family was not appropriately assessed in the context of contributions. He submitted the wife’s participation in fertility procedures was not a contribution falling within the language s.79(4)(a) or (b) of the Act, since it was not a contribution directly or indirectly to the acquisition, conservation or improvement of property. This much seems correct.
He further submitted that:
a)the participation in IVF treatment was also not a contribution falling within s.79(4)(c), as a contribution to the welfare of the family constituted by him and the wife. This was because it did not free the husband to earn income.
b)that in any event the wife’s argument assumed her contribution was greater than the husband’s in this regard, because it was the wife who underwent the medical procedures, whereas the Court could not either appropriately, or at all, weigh the parties’ joint anguish and loss in relation to the unsuccessful IVF treatment, and not all activities in a marriage may be regarded as matters of contribution.
There is some force in these submissions of the husband but I do not accept them. The wife’s travail in undergoing failed IVF treatments between … 2014 and … 2015 was clearly for the benefit of both parties and for the purposes of the family constituted by the parties to the marriage. This was an attempt to enhance the joint enterprise of their marriage by the introduction of children. The fact that it failed no doubt caused significant distress to both. However, the fact of failure does not diminish the reality that it was the wife who subjected herself to the treatment and that she did it for both parties. She also removed herself from income earning employment while she did so. In my view, the wife’s participation in IVF treatment is appropriately taken into account in assessing contributions, as falling within the language of s.79(4)(c).
The husband submitted there was no rational basis for concluding the wife made a greater contribution as homemaker, except in the period when she was not employed. Both parties were employed for the majority of the marriage. I accept this submission.
I also take account of the fact that the husband paid $44,000 for the IVF treatment.
The wife submitted that the husband, by occupying the Property A property post-separation, received a significant benefit to which she contributed. Although the husband paid $7,500 per annum in rates, strata levies and other expenses, the mortgage payments were made from the offset account and the parties forewent significant rental income, of up to $1,000 per week or $150,000 in total, while the wife has been renting accommodation for between $750 to $820 per week. Moreover, the saving of accommodation costs allowed the husband to accumulate income post-separation in Company B Australia, being the $365,563 in cash held by that company.
I generally accept these submissions subject to the following. As the husband submitted, if the Property A property had been rented out, the income would have been diminished by the expenses which were actually paid by the husband and would likely have been subject to tax liabilities. The husband would have had to pay for alternate accommodation.
The wife submits that contributions with respect to the non-superannuation pool ought be assessed in the ratio of 60% to the husband and 40% to the wife. The husband submitted the wife’s contributions should be assessed at about 20% of the simplified asset pool
Taking account of all the above considerations, I assess the applicant’s contribution entitlement for non-superannuation assets at 33% and the respondent’s at 67%.
With respect to the superannuation assets, as already noted, the parties agreed superannuation should be assessed separately to non-superannuation contributions. The husband had superannuation at cohabitation, becoming a member of Personal Super fund in 1993. He submitted that he made significant contributions to superannuation from post-separation earnings, which I have accepted as discussed above at [121], although the evidence was not entirely clear in this regard. The evidence disclosed that the wife had an interest in a pension fund in the United Kingdom arising out of her employment with Employer, but there was no evidence of its value or likely value. The wife submits superannuation contributions ought to be assessed in the ratio of 52.5% in favour of the husband and 47.5% in favour of the wife (paragraph 52 & 54, wife’s written submissions). The husband made no specific submissions about a percentage assessment of superannuation contributions, except to submit that no percentage adjustment was necessary to the superannuation interests of the parties.
I bear in mind that contributions cannot be approached in a pseudo-mathematical way, but some attempt at a mathematical analysis can be used as rough initial point of reference: PJM & STM [2005] FamCA 1245; (2005) FLC 93-242; T & T (Pension Splitting) [2006] FamCA 207; (2006) FLC 93-263. The evidence showed the husband held his Personal Super superannuation from 1993 to date, a period of some 25 years. The parties’ relationship lasted some 8 years, or 30% of that 25 year period. The husband’s “self-invested personal pension” or SIPP arose from a defined benefit pension to which the husband became entitled through his employment with Employer between late 2005 and December 2008. It is not clear the wife contributed to this superannuation. The husband’s SIPP is modest with a value of $9,297.
Taking account of the superannuation held by the husband well before cohabitation, his higher earning capacity and contributions to superannuation after separation, in my view, the contributions should also be assessed in the ratio of 67% to the husband and 33% to the wife.
I now turn to s.79(4)(e) and the s.75(2) factors.
Section 75(2) adjustment
The Act requires me to take into account the matters referred to in s.75(2) of the Act, so far as they are relevant, when considering what orders should be made in these proceedings. The relevant matters to be so taken into account on these facts are, as follows:
(a) the age and state of health of each of the parties;
The wife is 44 years old. The husband is 47 years old. Both parties are in good health.
(b) the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment;
I repeat the discussion of the parties’ financial resources earlier in these reasons.
I take account of the husband’s shares in Company B Australia and his ability to access $365,563 in cash held by that company as salary or dividends subject to a likely tax liability. Even allowing for the tax impost, this is a significant financial resource.
I also take account here of the wife’s interest in the Suburb L unit. Whilst at the date of hearing this interest could not be said to have any value, the likelihood that after these property proceedings are concluded the wife will make a payment to Mr C sufficient to acquire an equal beneficial interest with him, together with her contributions to the mortgage, lead to the conclusion that the property is likely to become a financial resource of the wife in the future.
The wife is presently employed as a professional with Employer on a twelve-month contract. As per her Financial Statement filed 18 July 2018, she receives a weekly income of $2,958.
The husband is employed as a professional with Employer. The husband gives evidence that his salary package is $300,000 per annum, plus up to a 20% annual bonus. The husband also gives evidence that his employment package includes a long-term incentive of up to 10% per annum. He deposes he will not know if he will receive this long-term bonus until on or about 2021 (paragraph 148, husband’s Affidavit filed 25 July 2018).
The wife submits that the husband’s current income “is twice the current less than secure income of the wife” (paragraph 56, wife’s written submissions). I accept the husband has a significantly greater earning capacity than the wife.
The husband seeks to retain Company B Australia. The husband himself notes that he “had been successful as a consultant” (paragraph 146, husband’s Affidavit filed 25 July 2018) and it is possible he could return to consultancy work in the future.
The wife is also the sole beneficiary of a trust established by her mother in 2015. I infer this is a financial resource of the wife, although the evidence did not disclose the nature of value of any property owned by the trust. The unchallenged evidence of the wife was that she has received no financial benefit from this trust, and does not expect to do so in the near future. However, I take account of the fact, referred to earlier in these reasons that the wife’s mother has given her financial assistance in the past, and infer that the purpose of establishing the trust was to provide a vehicle to assist the wife financially in the future.
(c) whether either party has the care or control of a child of the marriage who has not attained the age of 18 years;
There are no children of the marriage.
(d) commitments of each of the parties that are necessary to enable the party to support:
(i) himself or herself; and
(ii) a child or another person that the party has a duty to maintain;
The wife resides with her new partner and has obligations in respect of the mortgage secured against the Suburb L property. If the husband retains the Property A property, he will continue to service the mortgage.
(e) the responsibilities of either party to support any other person;
I have nothing to add in relation to this factor.
(f) subject to subsection (3), the eligibility of either party for a pension, allowance or benefit under:
(i) any law of the Commonwealth, of a State or Territory or of another country; or
(ii) any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia;
and the rate of any such pension, allowance or benefit being paid to either party;
On the facts of this case, this is not relevant.
(g) where the parties have separated or divorced, a standard of living that in all the circumstances is reasonable;
The parties enjoyed a reasonably affluent standard of living during the marriage. The wife has repartnered and has the opportunity to acquire a beneficial interest in the Suburb L property.
(h) the extent to which the earning capacity of a party would increase by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income;
On the facts of this case, this is not relevant.
(ha) the effect of any proposed order on the ability of a creditor of a party to recover the creditor's debt, so far as that effect is relevant;
The proposed orders will not affect the position of any creditor.
(j) the extent to which a party has contributed to the income, earning capacity, property and financial resources of the other party;
I refer to my earlier discussion of the parties contributions. I have nothing to add here.
(k) the duration of the marriage and the extent to which it has affected the earning capacity of a party;
The marriage was 7 years duration and the parties co-habited for 8 years. The wife’s earning capacity was adversely affected for a time by the IVF treatment. Otherwise, as already noted, both parties earned income during the marriage.
(l) the need to protect a party who wishes to continue that party's role as a parent;
On the facts of this case, this is not relevant.
(m) if either party is cohabiting with another person--the financial circumstances relating to the cohabitation;
The wife presently resides with Mr C in the Suburb L property, of which both are registered proprietors. I refer to my earlier discussion of this property and the contributions to its acquisition. Mr C is providing some financial support to the wife. I have nothing to add here.
The husband gave no evidence that he had repartnered.
(na) any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage; and
On the facts of this case, this is not relevant.
(o) any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account
I have nothing to add in relation to this factor.
Assessment of section 75(2) factors
The wife submitted that the Court would attribute a 2.5% adjustment in her favour as to the superannuation pool, and an adjustment in her favour in the range of 10% as to the non-superannuation pool for s.75(2) factors. On her case this would lead to an equal division of assets.
The husband submitted that the facts of the case do not give rise to a need for any adjustment arising out of consideration of the factors set out in s.75(2), pointing to the relative short length of the marriage, the absence of children and any infirmity or illness, and the ongoing capacity of each party for gainful employment. There is some force in these submissions.
However, on weighing all the s.75(2) factors, I am satisfied the wife should receive an adjustment of 3% in her favour for s.75(2) factors in relation to non-superannuation assets. I am not satisfied there should be any adjustment to superannuation assets for s.75(2) factors. Accordingly, the non-superannuation assets of the parties will be divided 36% to the wife and 64% to the husband, and superannuation should be adjusted in ratio 33% to the wife and 67% to the husband.
The net non-superannuation assets total $2,306,438. On a division of 36%/64%, for her entitlement the wife should receive assets totalling $830,318 and the husband $1,476,120.
The superannuation assets total $590,213. As to superannuation, on a division of 33%/67%, for her entitlement the wife should receive superannuation totalling $194,770 and the husband should retain $395,443.
The wife should receive in total assets and superannuation valued at $1,025,088 and the husband $1,871,563.
In my view, orders which provide for the wife to receive her entitlement in cash and a superannuation split are appropriate.
Are the orders just and equitable?
Section 79(2) of the Act provides that:
The court must 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.
In relation to the just and equitable requirement the High Court cautioned in Stanford (supra) at [40] that to conclude that making an order is "just and equitable" only “because of and by reference to various matters in s 79(4), without a separate consideration of s 79(2), would be to conflate the statutory requirements and ignore the principles laid down by the Act”.
The Full Court of the Family Court of Australia in Manolis & Manolis (No 2) [2011] FamCAFC 105 considered the relevant provisions of the Act in relation to the fourth step in Hickey (supra). At paragraphs [65] and [66] the Full Court made the following observations:
It can be seen that power to make orders in regard to property is not exhausted after the third step. It is not until orders are made that the power is exhausted. The exercise of power pursuant to s 79 of the Act remains subject to the overarching requirement of justice and equity imposed by s 79(2) until it is exhausted…The section does however oblige the court to “stand back” from its preliminary determination, and consider its impact. So doing may inform the terms of the orders appropriate to produce a just and equitable outcome in those terms. It may result in a re-consideration of s 79(4) and or s 75(2) factors, and a different outcome. Whatever the scope of s 79(2), the court’s determination with respect to it cannot be dependent upon findings or conclusions which are irreconcilable with those recorded in the context of a consideration of s 79(4) or s 75(2).
In my view, these judicial statements are applicable at the conclusion of a four or five step process. The Court must ultimately be satisfied the proposed result is just and equitable.
In discharging the task of “standing back” and considering the impact of my determinations on the question of a just and equitable outcome, I bear in mind that the High Court in Stanford (supra) commented at [36] on the meaning of “just and equitable” as follows:
The expression “just and equitable” is a qualitative description of a conclusion reached after examination of a range of potentially competing considerations. It does not admit of exhaustive definition. It is not possible to chart its metes and bounds.[2]
[2] Stanford & Stanford [2012] HCA 52 at paragraph 36 .
To test the justice and equity of this proposed outcome, a comparison with a global approach has some utility. On my analysis of contributions and s.75(2) factors, if a global approach is taken to the assets, a not dissimilar result is achieved. On a global approach I would have held the assets of the parties, including superannuation should be divided 35% to the wife and 65% to the husband. The net value of the property owned by the parties is $2,896,651.00, inclusive of superannuation. On the basis of a 35%/65% division of the total asset pool, the wife would be entitled to receive assets with a value of $1,013,828 and the husband assets with a value of $1,882,823.
The Court is mandated to seek to achieve a final separation of the parties’ financial affairs. To achieve a just and equitable outcome it will be necessary to make orders which bring joint ownership to an end. If the wife were ordered to transfer her interest in the Property A property, Employer UK and the offset account to the husband, she would be left with assets totalling $102,209 for her bank accounts and the partial property adjustment of $75,000. She would require an additional $728,109 to receive $830,318 as her non-superannuation entitlement. Since the wife already has superannuation of $57,960 she requires an additional amount of $136,810 to receive her superannuation entitlement of $194,770. In her proposal the wife sought a splitting order in respect of the husband’s Personal Superannuation fund. I accept this is the appropriate fund to be made the subject of a splitting order.
I am satisfied the outcome embodied in the proposed orders is just and equitable. Both parties are likely to have a working life for at least another decade. The wife will receive sufficient cash to invest or make a payment to Mr C in respect of the Suburb L property, if she wishes, and her superannuation base will be increased to receive the benefit of compounding from a higher base until retirement or other release of her superannuation. The husband will retain his business and the Property A property, although he will be required to take on the sole burden of servicing the borrowings secured against that property. In addition, I do not lose sight of the fact that he will have available to him as a financial resource, the cash held by Company B Australia, less any tax payable. The wife will become entitled at some point in the future to her pension held in the United Kingdom, and any distributions through the trust established by her mother and of which she is the sole beneficiary.
According to the division of net assets and superannuation found above, the wife and husband will have the assets and liabilities, as set out in the below table:
Assets and liabilities to be retained by the wife
Value ($)
Bank Accounts
$27,209
Partial Property Adjustment
$75,000
Australia Superannuation
$57,960
Superannuation Split
$136,810
Payment from the husband
$728,109
Total:
$1,025,088
Assets and liabilities to be retained by the husband
Value ($)
Property A $1,650,000 Bank Accounts $392,222 Super Fund Investment $169,369 Motor Vehicle J $4,000 Company B UK $134,641 HSBC Offset … $360,293 HSBC … $70.00 Superannuation
Personal Super Fund $181,668 Super Fund M $9,297 SIPP $204,478 Liabilities
HSBC Mortgage secured on title to Property A property -$360,608 Line of Credit -$145,758 Payment to wife -$728,109 Total:
$1,871,563
Costs
Section 117 of the Act sets out that each party shall bear his or her own costs, subject to the considerations in s.117(2) of the Act.
Any order for costs must also be determined in light of the substantive judgment and the relative success or failure of the parties. This is naturally something that can only be addressed after judgment has been delivered.
The Court proposes to make the orders and directions in relation to any application for costs that might be made as set forth in the orders at the commencement of these reasons.
I certify that the preceding one hundred and ninety-two (192) paragraphs are a true copy of the reasons for judgment of Judge Harper
Date: 8 March 2019
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