Olsen & Rich (No 2)
[2022] FedCFamC1F 647
Federal Circuit and Family Court of Australia
(DIVISION 1)
Olsen & Rich (No 2) [2022] FedCFamC1F 647
File number(s): SYC 5822 of 2018 Judgment of: SCHONELL J Date of judgment: 29 August 2022 Catchwords: FAMILY LAW – PROPERTY – Where both parties sought financial adjustment following a 19 year relationship – Where both parties made substantial contributions – Where the wife sought an adjustment in her favour for family violence that she contended the husband perpetrated – Where it could not be established that the alleged family violence made her contributions significantly more arduous – Where the husband sought an adjustment in his favour for money that he contended the wife lost through being reckless and/or negligent – Where it was not established that the wife’s actions were reckless and/or negligent – Where the wife had the full post-separation care of the now adult child and where she will continue providing ongoing care – Where a just and equitable outcome is 52.5 per cent to the wife and 47.5 per cent to the husband. Legislation: Family Law Act 1975 (Cth) ss 75, 79, 90XT
Family Law (Superannuation) Regulations 2001 (Cth) Pt 6
Cases cited: Adamson & Adamson (2014) FLC 93-622; [2014] FamCAFC 232
Benson & Drury (2020) FLC 93-998; [2020] FamCAFC 303
Britt & Britt (2017) FLC 93-764; [2017] FamCAFC 27
Browne v Green (1999) FLC 92-873; [1999] FamCA 1483
Carlson & Fluvium [2012] FamCA 32
Dickons v Dickons (2012) 50 Fam LR 244; [2012] FamCAFC 154
Hickey & Hickey & Attorney-General for the Commonwealth of Australia (intervener) (2003) FLC 93-143; [2003] FamCA 395
Horrigan & Horrigan [2020] FamCAFC 25
Jabour & Jabour (2019) FLC 93-898; [2019] FamCAFC 78
Keating & Keating (2019) FLC 93-894; [2019] FamCAFC 46
Kennon & Kennon (1997) FLC 92-757; [1997] FamCA 27
Kowaliw & Kowaliw (1981) FLC 91-092; [1981] FamCA 71
Marlowe–Dawson v Dawson(No 2) (2014) 53 Fam LR 568; [2014] FamCA 599
Omacini & Omacini (2005) FLC 93-218; [2005] FamCA 195
Singerson & Joans [2014] FamCAFC 238
Spagnardi & Spagnardi [2003] FamCA 905
Stanford v Stanford (2012) 247 CLR 108; [2012] HCA 52
Trevi & Trevi (2018) FLC 93-858; [2018] FamCAFC 173
Whisprun Pty Ltd v Dixon (2003) 200 ALR 447; [2003] HCA 48
Division: Division 1 First Instance Number of paragraphs: 105 Date of hearing: 19 and 22 August 2022 Place: Sydney Counsel for the Applicant: Mr Rosic Solicitor for the Applicant: Dorter Family Lawyers and Mediators Counsel for the Respondent: Ms Beck Solicitor for the Respondent: Newnhams Solicitors Solicitor for the Intervener: E Pty Ltd ORDERS
SYC 5822 of 2018 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS OLSEN
Applicant
AND: MR RICH
Respondent
E PTY LTD
Intervener
order made by:
SCHONELL J
DATE OF ORDER:
29 august 2022
THE COURT ORDERS THAT:
1.Within ninety (90) days the parties do all acts and things and sign all document necessary to sell the property situated at C Street, Suburb D, New South Wales (“the Suburb D property”) for the best price reasonably obtainable in the following manner:
1.1list the Suburb D property for sale by private treaty or public auction (as recommended by the agent) with such agent as the parties may agree to appoint and in default of agreement as to agent:
1.1.1within seven (7) days the applicant wife (“the wife”) is to propose three (3) agents;
1.1.2within seven (7) days thereafter, the respondent husband (“the husband”) is to nominate one of the agents nominated by the wife; and
1.1.3if the either party fails, omits or neglects to propose or nominate the agents within the time frame stipulated then the other party is at liberty to choose one of the agents.
1.2the sale price or reserve price (as the case may be) at which the Suburb D property shall be listed shall be mutually agreed upon by the parties, and in the absence of such agreement being reached within fourteen (14) days then such sale price or reserved price shall be the price recommended by the agent;
1.3the parties shall co-operate in every way with the agent including (without limiting the generality of the foregoing):
1.3.1making the key available to the agent;
1.3.2allowing inspection of the Suburb D property at all reasonable times requested by the agent;
1.3.3doing or saying nothing to hinder or prevent a sale being effected;
1.3.4ensuring the Suburb D property is in a neat and clean condition at the time of inspection by the agent and prospective purchasers; and
1.3.5signing all documents requested by the agent in relation to the listing for sale of the Suburb D property except a contract or agreement for sale which has not been authorised by the parties’ solicitors.
1.4the husband and wife execute a contract for sale in the form prepared by the solicitors having the conduct of the sale at a price agreed upon by the husband and wife or, in the absence of any agreement, at or above the price recommended by the agent;
1.5the parties shall instruct such solicitors as they agree upon to have the conduct of the sale on behalf of both parties and in the absence of such agreement being reached within seven (7) days, then:
1.5.1within seven (7) days the wife is to propose three (3) solicitors to act on the sale;
1.5.2within seven (7) days thereafter, the husband is to nominate one of the solicitors nominated by the wife; and
1.5.3if the either party fails, omits or neglects to propose or nominate the solicitors within the time frame stipulated, then the other party is at liberty to choose one of the solicitors.
1.6neither the husband nor the wife may confer on any agent without the consent of the other any right to any sole or exclusive agency in respect of the Suburb D property or to any commission;
1.7in the event the Suburb D property does not sell by private treaty within ninety (90) days pursuant to Order 1.1 herein, then within a further thirty (30) days the parties shall list the Suburb D property for sale by auction;
1.8in the event the Suburb D property is listed for sale by auction and bidding at the auction does not reach the reserve price the parties are to negotiate with the highest bidders or any other interested person and effect a sale of the Suburb D property at a price which is not more than five per cent below the reserve price; and
1.9if the Suburb D property remains unsold at auction, the parties shall do all acts and things and sign all documents necessary to immediately relist the Suburb D property for sale by public auction again, on a date nominated by the said agent.
2.The parties shall do all acts and things necessary to distribute the proceeds of sale of the property in the following manner and priority:
2.1payment of any agent’s commission and any auction fees associated with the sale;
2.2in payment of legal costs and disbursement incurred in the sale;
2.3any rates, taxes or levies upon, attributable or arising out of the sale of the property;
2.4in payment of the Commonwealth Bank Mortgage Account…01;
2.5in payment of the Commonwealth Bank Mortgage Account…62;
2.6the remaining balance of proceeds as to:
2.6.147.5 per cent to the husband; and
2.6.252.5 per cent to the wife.
3.In the event that the judgment obtained by the intervener E Pty Ltd (“the intervener”) has not been set aside then after payment to the husband pursuant to Order 2.6.1 there be paid to the intervener from the wife’s share of the proceeds of sale the sum of $92,402.02 plus interest and for the purposes of giving effect to this order the parties are to do all acts and things and sign all documents necessary to direct the solicitor acting on the sale to make such a payment.
4.The wife shall pay the intervener’s cost as agreed or taxed.
5.The husband pay to the wife the sum of $278,748 within 14 days.
6.The wife within 7 days transfer to the husband her interest in the CBA ComSec Trading Account.
7.The husband transfer to the wife his interest in the parties painting collection and Motor Vehicle 1.
8.The husband’s superannuation entitlement with Superannuation Fund 1 be dealt with as follows:
8.1That the following order has effect from the operative time;
8.2That in accordance with s 90XT(1)(a) of the Family Law Act 1975 (Cth), whenever a splitable payment becomes payable to the husband from his interest in the Superannuation Fund 1, the wife is entitled to be paid an amount calculated in accordance with Pt 6 of the Family Law (Superannuation) Regulations 2001 (Cth), using a base amount of $129,060.52 and there is a corresponding reduction in the entitlement the husband would have had but for these orders;
8.3That, having been accorded procedural fairness in relation to the making of this order, this order binds the Trustee of the Superannuation Fund 1;
8.4The operative time for this order is 7 days from the service of this order upon the Trustee.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Olsen & Rich has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
SCHONELL J:
These are proceedings for financial adjustment following a 19-year relationship. Whilst the affidavits addressed a broad-ranging sweep of allegations, by the time the matter came to submissions, the factual dispute between the parties was very narrow.
The applicant wife (“the wife”), for her part, submitted that the parties’ contributions including not just in the period of the relationship but subsequently, should be found to be equal. The wife thereafter sought a 7.5 per cent adjustment under s 75(2) of the Family Law Act 1975 (Cth) (“the Act”) for what was described as the wife’s ongoing obligation to support the parties’ adult daughter as well as the income and earning capacity differential between the parties. Those matters were said to warrant overall a 57.5 per cent adjustment in favour of the wife.
The respondent husband (“the husband”), for his part, contended that the parties’ contributions should be found in the proportions as to 55 per cent to the husband as a consequence of his post-separation financial contributions, and that there should be a further adjustment under s 75(2) of two per cent to the husband for what was described as “waste” by the wife of monies lost in a business. Those matters were said to warrant overall a 57 per cent adjustment in favour of the husband.
The parties were in agreement as to how the assets, in a structural sense, should be divided. In that respect, they agreed that the former matrimonial home at Suburb D (“the Suburb D property”) should be sold and that the net proceeds be divided in the proportions as determined by the Court. Likewise, all of the other assets of the parties, excluding superannuation, should be divided in the same proportion.
In relation to the collective superannuation entitlements of the parties, the wife contended that it should be divided in the same proportion as found by the Court, while the husband contended that the superannuation entitlements of the parties should be divided equally.
On the first morning of the trial, Ms F, representing E Pty Ltd, sought leave to intervene. The wife contended that she did not have notice of the application by Ms F and Ms F’s appearance was then adjourned to the next day. I will address discretely the application for intervention.
The wife, for her part, relied upon the following documents:
(1)Amended Initiating Application filed 22 July 2022;
(2)Affidavit of wife filed 23 December 2021 (“trial affidavit”);
(3)Affidavit of wife filed 22 February 2022 (“affidavit in reply”);
(4)Financial Statement of wife filed 23 December 2021;
(5)Affidavit by Ms G filed 23 December 2021; and
(6)Affidavit by Ms G filed 17 August 2022.
The husband, for his part, relied upon the following documents:
(1)Response to Initiating Application filed 31 October 2018;
(2)Affidavit of husband filed 1 February 2022; and
(3)Financial Statement of husband filed 8 February 2022.
A number of single experts had prepared affidavits in the proceedings but neither of them were required for cross-examination. In that respect, Mr H, valuer, prepared a retrospective valuation of the wife’s property at Suburb J, with it being contended by him to have a value as at 1 May 1996 of $125,000 and to have a value as at 1 September 1997 of $215,000. Ms K, accountant, prepared a report as to the value of the wife’s business.
Application for intervention by E PTY LTD
On the first morning of the hearing, Ms F, lawyer, sought leave to intervene on behalf of E Pty Ltd (“the intervener”) seeking orders for the payment of their legal fees totalling $92,402.02.
The affidavit in support identified that the intervener had been retained by the wife pursuant to a costs agreement that the wife signed on 9 July 2021. The affidavit identifies that on 4 April 2022, a Notice of Ceasing to Act was filed and served on the wife. On 13 May 2022, the intervener wrote to the wife advising that their file would be available for collection upon payment of their invoice. On 14 June 2022, the intervener again wrote to the wife indicating that if their invoice was not paid, they would commence proceedings for recovery.
In mid-2022, a Statement of Claim was filed in the Local Court of New South Wales. The affidavit contends that the wife failed to file a Defence and a default judgment was entered.
When the matter was first called in mid-2022, counsel for the wife indicated to the Court that the wife had not been served with the Statement of Claim. The matter was subsequently adjourned to the second day of the hearing. On that occasion, the wife filed a Response to the application in which she sought various orders. In the affidavit in support of the Response, the wife conceded that she had received a copy of the Statement of Claim in mid-2022, contrary to what had been indicated earlier.
The wife sought the following orders as contained in a Minute of Order (Exhibit 8):
1.That the Intervener, [E Pty Ltd] be granted leave to join the Proceedings and receive all updates as to the progression of the proceedings.
2.That the Interveners Application be stayed pending the outcome of the assessment.
3.That within seven (7) days from the date of these Orders, the Respondent do all acts and things and sign all documents necessary to:
a. Apply for a Stay of the Default Judgement; and
b. Apply for an assessment of costs.
4.That forthwith upon settlement of the sale of the property located at [C Street Suburb D], NSW, the parties shall direct the lawyer or conveyancer engaged by the parties for the purpose of the sale of the [Suburb D Property] (the Conveyancer) to transfer the sum of $100,000 into the trust of Dorter Family Lawyers & Mediators pending assessment of the Interveners legal costs rendered to the Respondent pursuant to Order 3 herein.
5. That the Respondent, [Ms Olsen] shall:
a. Provide a copy of these orders to the Conveyancer;
b. keep the Intervener informed of the following:
i. The name of the Conveyancer;
ii. The date the [Suburb D Property] is listed for sale;
iii. Exchange of contracts on the [Suburb D Property]; and
iv. The date of settlement of the sale of the [Suburb D Property].
6.That forthwith upon receipt of the assessment, the Respondent shall do all acts and things and sign all documents necessary to pay the assessed amount to the Intervener from the funds held in the trust account of Dorter Family Lawyers & Mediators and the balance to be directed by the Respondent.
The wife through her counsel indicated that the wife intended to seek to set aside the judgment.
That is ultimately a matter for the wife. The fact remains that the intervener has the benefit of a judgment that has not as yet been set aside. No reasons were advanced before me in support of the stay.
What I propose to do is make orders that from the wife’s share of the proceeds of sale, there be paid to the intervener the sum of $92,402.02 in the event that the judgment sum has not been set aside. As the sale will take some time, there will be more than sufficient time for the wife to take such steps as she desires in relation to the judgment.
Ms F, on behalf of the intervener, sought an order for her costs. Counsel for the husband did not want to be heard on costs but rather said that the costs of the intervener should be either as agreed or taxed. It is not apparent to me that the sum sought by the intervener is at scale or on some other method of calculation. In those circumstances, I propose to order that the intervener’s costs be agreed or taxed.
Background facts
The husband was born in 1966 and is currently aged 56 years.
The wife was born in 1970 and is currently aged 52 years.
In July 1993, the wife purchased a property at Suburb J in Victoria (“the Suburb J property”) with her former partner.
The parties were at issue about when they commenced cohabitation and whether or not, at the time of commencement of cohabitation, construction of a home on the Suburb J land had commenced. The date of commencement of cohabitation on the part of the husband was said to be no later than early 1997, whilst on the part of the wife, it was said to be late 1997. Pausing there, it is clear that there is no evidence as to the value of the Suburb J property at the cohabitation date contended for by the husband. In my view, little turns on when the parties commenced their cohabitation given that I am required to assess holistically the parties’ contributions, which now span a period of nearly a quarter of a century. Likewise, it does not matter at all when a home had commenced being constructed on the land at Suburb J.
For the part of the wife, at the commencement of cohabitation, she contends that her assets comprised the Suburb J property. As is apparent from the evidence of Mr H, that property had a value of $215,000 as at September 1997. The wife contends that the property was subject to a mortgage as at February 1997 of $175,600. The evidence of the husband was that at the commencement of cohabitation, he had savings of $15,000, Motor Vehicle 2 and superannuation of approximately $10,000.
In 1998, the parties purchased a property at Suburb L (“the Suburb L property”) in which to live. The equity in the Suburb J property was used as partial security for the loan.
The parties were married in early 1999 and resided in Sydney until approximately 2001 when they moved to Melbourne.
The Suburb L property was sold in 2002 and the proceeds of sale were used to discharge the mortgage on the Suburb J property.
There is one child of the parties’ marriage, Ms X, born in 2003.
I note the wife’s evidence in her trial affidavit, which was not the subject of challenge and which I accept, was:
12. [Ms X] was a difficult child to settle and although I continued to work part time, the first years of her life were very taxing. My mother cared for [Ms X] when I returned to work in Melbourne, so that we did not have to pay for child care and so that [Ms X] could remain at home as a baby. When we moved to Sydney in 2005, for more than a year, my mother would fly up to Sydney and back again to Melbourne for 3 days every week (Monday to Wednesday) to continue looking after [Ms X], on the days that I worked. We paid for the flights. In addition to caring for [Ms X], my mother attended to the cooking and cleaning for the family when she was with us. This had also been the case when we were living in Melbourne.
In 2005, the Suburb J property was also sold and the parties moved back to Sydney to live.
In early 2007, the parties purchased a property at Suburb D (“the Suburb D property”) for approximately $1.3 million, with the parties using almost all of the Suburb J property monies together with savings and a mortgage to complete the purchase.
The wife remained in employment until 2008 when she assumed the full-time care of Ms X.
The husband conceded that the wife was, from 2008, the primary carer of Ms X and the primary homemaker up until the time that the parties separated.
The wife gave evidence in her trial affidavit as follows:
5. …[Ms X] suffers from depression, anxiety and has been diagnosed as having a borderline personality disorder. She is being treated by a Psychiatrist and an Accredited Mental Health Social Worker. [Ms X] has not seen [Mr Rich] since he and I separated in September 2016.
Whilst the husband conceded that Ms X has mental health issues, he contended that he was largely in the dark as to the full extent of her health issues and that attempts to contact one of her treating doctors was unsuccessful.
The issue of Ms X’s mental health loomed large in the proceedings and I will address that later on in these reasons.
In 2009, the husband purchased in his sole name a property in Suburb M, Queensland (“the Suburb M property”). The property was purchased as an investment and was tenanted during the period of ownership.
Following the purchase of the Suburb D property, in 2014, the parties commenced major renovations to the Suburb D property. The parties are at issue as to how much those renovations cost. The wife contends the parties spent at least $632,000 on the renovations. The husband contends that the parties spent over $1,000,000 on the renovations. The wife gives evidence in her trial affidavit to the following effect:
62. Towards the end of the renovations (around 2015), [Mr Rich] said to me on multiple occasions, “We’re going over budget on the renovations”. Around this time [Mr Rich] also said, “We’ve now spent $1,100,000 on the renovations”.
I am not able to resolve the controversy as to the cost given the limited cross-examination and the absence of documents to support many of the contentions asserted by the parties. The husband’s evidence is at least consistent with a conversation which the wife asserts took place towards the end of the renovations around 2015. The husband was cross-examined about $165,000 that he withdrew from what the wife described as the line of credit. The husband said that he used that money to pay outstanding costs in relation to the renovations. The husband’s assertion was not challenged and I accept his evidence. In my view, it matters little what the parties spent on the renovations.
It is clear that from at least 2008 till the time of the parties’ separation, the husband was the parties’ sole income earner. In the years leading up to separation, it is clear that the husband earnt a significant sum of money. The wife’s evidence in her trial affidavit, which was not challenged, was:
22. …
c. 2019 – [Manager, N Company], base salary of $404,405.40 per annum (inclusive of superannuation). \
23. In addition to his base salary, [Mr Rich] also received bonuses during his employment with [O Company]. A review of the subpoena materials provided by [O Company] evidenced the following:
24. In 2015, [Mr Rich] received a Discretionary Bonus Payment ("DBP") of $296,556.75.
25. In 2016, [Mr Rich] received a DBP of $290,276.84.
26. In 2017, [Mr Rich] received a DBP of$262,800.
27. In 2018, [Mr Rich] received a DBP of $306,000.
28. In 2019, [Mr Rich] received a DBP of $344,925.
29. In 2020, [Mr Rich] received a DBP of$197,100.
(As per the original)
An issue that looms large in the parties’ cross-examination and affidavits was the conduct of a business by the wife called ‘P Pty Ltd’. The business has been the subject of a valuation by Ms K. As at the date of that valuation, namely, 30 June 2022, the business had a negative value of $153,863. Ms K identifies that the liabilities of the company include a loan from the wife of $196,614. The husband contends this was a liability incurred by the wife during the course of the parties’ relationship and represents a waste of monies by the wife.
The husband invokes the principles identified in Kowaliw & Kowaliw (1981) FLC 91-092 (“Kowaliw”), where Baker J said at 76,644:
As a statement of general principle. I am firmly of the view that financial losses incurred by parties or either of them in the course of a marriage whether such losses result from a joint or several liability, should be shared by them (although not necessarily equally) except in the following circumstances:
(a) where one of the parties has embarked upon a course of conduct designed to reduce or minimise the effective value or worth of matrimonial assets, or
(b) where one of the parties has acted recklessly, negligently or wantonly with matrimonial assets, the overall effect of which has reduced or minimised their value.
Conduct of the kind referred to in para (a) and (b) above having economic consequences is clearly in my view relevant under sec 75(2)(o) to applications for settlement of property instituted under the provisions of sec 79.
The husband contends this was the second business conducted by the wife that failed. He referred to an earlier business of the wife called ‘Q Company’, which distributed health products and provided coaching services. In his affidavit, he says the following:
49.… [Q Company] failed to turn a profit and [Ms Olsen] abandoned the business in or around 2014.
…
51. … [Ms Olsen] and I had previously had conversations about [Q Company] when I showed her Profit and Loss Statements I produced for her showing accumulating losses. In 2013 I said to [Ms Olsen] words to the effect of:
a)“This business is losing money. You are carrying too much stock and you are unable to sell it at a profit.”
b) “Please just shut it down and go back to work as a [professional]”
52. [Ms Olsen] did not tell me anything about [P Pty Ltd] when it was initially incorporated. I only found out about it in January 2016 when I noticed mail arrived at our home addressed to [Ms Olsen] as director of [P Pty Ltd]. I did not open the letter and gave it to [Ms Olsen]. Upon learning about [P Pty Ltd], I opened a bank account in my sole name and directed my salary to be paid into this account. I had seen how [Q Company] had gone and was worried about significant losses. I wanted to reduce the potential amount of these losses by preventing [Ms Olsen] from drawing on my income to put money into the business, especially given the expense of the renovations of the [Suburb D Property].
I accept the husband’s evidence.
It is not an issue that the company continued to lose money. The husband says that the wife’s entry into this business was one that he did not support. His counsel submitted that the wife had no experience or expertise in conducting a business of this type, and that the entry by the wife into this business and the incurring of the loss was negligent and/or reckless.
The wife, for her part, contends that in 2017, she became aware that her social media networking was being impacted. She says that in September 2017 she retained a technician to examine the computer system, and it is the wife’s evidence that there was a wide-ranging hacking of her computer system. It would appear that she seems to contend that this hacking had an adverse impact upon the business. Her Case Outline made the following assertion:
15. The company has been hacked online and the wife believes the husband is responsible.
This assertion was not established in the evidence or through any cross-examination of the husband and I do not accept the proposition. The wife’s counsel did not make a submission that I could make any such finding in relation to this business.
In Marlowe–Dawson v Dawson (No 2) (2014) 53 Fam LR 568, Kent J observed after referring to Baker J’s statement in Kowaliw as follows:
106. It may be accepted that the above statement by Baker J in Kowaliw (supra) and subsequent cases which have considered and applied it (see, for example, In the Marriage of Omacini (2005) 33 Fam LR 134; (2005) FLC 93-218; [2005] FamCA 195; In the Marriage of DJM and JLM (1998) 23 Fam LR 396; (1998) FLC 92-816; In the Marriage of A D and A C Townsend (1994) 18 Fam LR 505; (1995) FLC 92-569; Browne v Green (1999) FLC 92-873; Chorn & Hopkins (2004) FLC 93-204; Cerini & Cerini [1998] FamCA 143 (Cerini & Cerini); SMB & MFB [2006] FamCA 46; Polonius & York [2010] FamCAFC 228) establish guidelines for the exercise of the s 79 discretion as distinct from requiring the application of a fixed legal rule to the facts on which the operation of the rule depends. (Lovine & Connor (2012) FLC 93-515; [2012] FamCAFC 168 at [101]–[103]).
107. However it appears clear from those authorities that in the context of a claim of reckless, negligent or wanton conduct, as advanced here, at least two elements must be fulfilled for the guidelines to have application. First, that the conduct can be so characterised and, second that there exists a direct causal connection between the conduct so characterised and the loss or reduction of value so caused.
Whilst I accept that the business has lost money, I do not accept the submission advanced by the husband’s counsel that the wife’s entry into the business was reckless and/or negligent.
The cross-examination of the wife focused on the outcome rather than the conduct. There is no evidence that the wife set out to intentionally lose money. It was not suggested to her that she did. This was an unsuccessful attempt by the wife to make money. Whilst the consequence was a loss, the evidence falls far short of establishing the requisite elements. I note in passing that the husband lost over $50,000 in gambling. Such losses more readily attract the descriptor of reckless and negligent conduct. Not unsurprisingly, the husband’s counsel did not submit that such conduct should fall to be considered in the same light.
The Full Court in Browne v Green (1999) FLC 92-873 observed:
53.… There can be little doubt that had the Hayle project succeeded, the wife would have sought to share in the fruits of that success, and there would seem to be no reason why she would not have been entitled to do so. It is this last-mentioned consideration, being that parties generally expect to share the economic profits of a marriage, which, in our view, requires that there should be good and substantial reasons for departing from the principle that where there are economic losses incurred in a marriage, those losses should be shared, absent any negligence, recklessness or deliberate dissipation of assets by one party. No such good and substantial reasons are apparent to us in this case.
Their Honours observations are equally apposite to what happened in this case.
The wife contended that she had been subject to family violence that made her contributions more onerous and arduous than they otherwise might have been but for the family violence. The family violence identified by the wife appears in her trial affidavit to be the following:
84. As I was not engaging in paid employment and I was looking after [Ms X] on a full-time basis, I had no income. [Mr Rich] exercised rigid control over the provision of money to me and on many occasions complained about my spending and what he described as my wasting of his money.
85. [Mr Rich] was verbally abusive towards me and threatened physical abuse. On several occasions, [Mr Rich] stood over me and threatened to hit me. He drank alcohol to excess on many occasions, would come home at various times, as suited him and would fall asleep on the sofa due to being intoxicated ...
…
87. After a stalemate continuing for about two weeks, [Mr Rich] eventually moved out of the [Suburb D Property] in September 2016. When he was moving out, he said to me, “If I move out of this house you are going to get fucked over and I will leave you with nothing”.
In the wife’s affidavit in reply, she says:
20. At paragraph 48, [Mr Rich] notes that my business “[Q Company]” failed to turn a profit and that I abandoned same. Whilst it is true that my business was not profitable, I assert that this was due to the constant belittlement I experienced by [Mr Rich]. I stopped actively marketing the business as a result of [Mr Rich]’s continued criticism of my work with Health options [Mr Rich] would often say to me:
“You are an idiot”; and
“You don’t know what you are doing”
There were some occasions when this belittlement by [Mr Rich] was so constant, that our daughter would decide to step in and defend me. As a result of these conversations with [Mr Rich] and his ongoing criticism of my capabilities, I stopped marketing this business venture. However, when I later established [P Pty Ltd], I was expanding on the concept of [Q Company], which was also associated with health, wellness and coaching, […] These […] were to become the key ingredients in my [P Pty Ltd] products.
…
32. As to paragraph 101, I reiterate that [Mr Rich] was verbally abusive towards me. He called me:
- “A dumb bitch”;
- “Fucking stupid”
[Ms X] was often the mediator during arguments, often having to put herself between [Mr Rich] and I, to prevent the argument escalating into a physical assault.
The husband admitted that the parties argued but denied her assertions as to family violence. The wife’s allegations are said by her counsel to be relevant to that part of the adjustment under s 75(2) of the Act that attracts the obiter comments of the Full Court in Kennon & Kennon (1997) FLC 92-757 (“Kennon”). The adjustment arising as a consequence of allegations of family violence was addressed by their Honours in Kennon at 84-294 to the following effect:
Put shortly, our view is that where there is a course of violent conduct by one party towards the other during the marriage which is demonstrated to have had a significant adverse impact upon that party’s contributions to the marriage, or, put the other way, to have made his or her contributions significantly more arduous than they ought to have been, that is a fact which a trial judge is entitled to take into account in assessing the parties’ respective contributions within s 79. We prefer this approach to the concept of “negative contributions” which is sometimes referred to in this discussion.
Further at 84-294–84-295, their Honours said:
It is essential to bear in mind that the relatively narrow band of cases to which these considerations apply. To be relevant, it would be necessary to show that the conduct occurred during the course of the marriage and had a discernible impact upon the contributions of the other party. It is not directed to conduct which does not have that effect and of necessity it does not encompass (as in Ferguson) conduct relating to the breakdown of the marriage (basically because it would not have had a sufficient duration for this impact to be relevant to contributions). …
In Keating & Keating (2019) FLC 93-894, their Honours in the Full Court observed, in regard to both the Full Court’s decision in Kennon as well as the Full Court’s decision in Spagnardi & Spagnardi [2003] FamCA 905, as follows:
39.… the Court in Spagnardi was merely reinforcing the need for there to be an evidentiary nexus between the conduct complained of and the capacity (and or effort expended) to make relevant contributions. And, depending upon the nature of the violence established, in the absence of express evidence about the effect that violence had on the victim spouse's contributions, how difficult it might be for the Court to draw inferences which would establish the evidentiary nexus (see Spagnardi at [42]). …
40.In any event, the primary judge gave no consideration to the inferences that might properly be drawn from the wife’s albeit limited evidence as to the effect on her of the husband's violence taken in conjunction with her evidence of the severity of the violence...
The Full Court directs that the necessary nexus between the alleged conduct and the contributions being made significantly more arduous can be established either by direct evidence or by inference. As their Honours in the Full Court in Britt & Britt (2017) FLC 93-764 observed:
74.The respondent submitted that the appellant’s evidence was not relevant to an issue because even if it was evidence of family violence, the appellant had called no evidence to suggest that the violence had made her contributions more onerous. This submission overlooks the obvious point that the court can infer from appropriate evidence that there was a nexus between the conduct and the relevant contributions.
In Benson & Drury (2020) FLC 93-998 (“Benson & Drury”), the Full Court observed as follows:
50.… An inference is an assent to the existence of a fact which is based on the proven existence of some other fact or facts, drawn as part of the fact finding process as an exercise of ordinary powers of deduction and reason in the light of human experience, unaffected by any rule of law (G v H (1994) 181 CLR 387 at [4]). Obviously, the strength of the subject inference depends upon the quality of the underlying evidence. It must be reasonable to draw the inference from primary facts. Mere conjecture will not suffice (Seltsam Pty Ltd v McGuiness (2000) 49 NSWLR 262 at 275–278 per Spigelman CJ; Carr v Baker (1936) 36 SR (NSW) 301 at 306–307 per Jordan CJ). Importantly, the evaluation of the evidence from which the subject inference is sought to be drawn should be thorough and balanced. In the context of a Kennon argument, any factual controversies over the alleged misconduct of one spouse and its alleged deleterious consequential effects upon the other spouse should be resolved by familiar forensic techniques. Disputed but untested allegations, are not facts (Keating at [55]–[66]).
Notwithstanding the wife’s evidence, her counsel conceded that there was no direct evidence of the wife’s contributions being made more onerous or arduous as a consequence of the family violence. However, I accept that in certain circumstances inferences can be drawn.
In Benson & Drury, the Full Court reminds:
18.We pause to note that although sometimes, in the context of the Kennon argument, words such as “adverse impact”; “more arduous” or “more onerous” are used, the guideline requires the conduct of one party to have had a significant adverse effect on the contributions of the other or to have had made that party’s contributions significantly more arduous than they ought have been. The conduct has to have had a discernible impact upon the contributions of the other party (Kennon at 906).
(Emphasis in original)
I am not satisfied either by direct evidence or inference that the wife has established, assuming that it occurred, that the alleged family violence had a significant adverse effect on her contributions. No submission was put to me as to how I might draw the relevant inference. The wife bears the onus and has not discharged it.
In early 2017, the husband unilaterally sold the Suburb M property. The wife makes some complaint that she was not consulted about the sale of the property. The husband denies same. It is not in issue that the husband received the net proceeds of sale of $90,993.
The parties separated in or around September 2016. At the time of separation, Ms X was in Year 9 at school.
The husband agreed that from October 2016, he has not spent any time with Ms X other than on one occasion for lunch. It is the wife who has been Ms X’s sole carer in the period subsequent to separation.
Of that period, at least three of those years are referable to the completion of her schooling.
Whilst the wife initially contended in her cross-examination that the husband made a limited contribution in the period post-separation, that position was ameliorated somewhat later in her cross-examination. The wife reluctantly acknowledged, despite initially saying access to a credit card ceased in December 2016, that she in fact had access until at least March 2018. The husband did not establish how much money the wife had access to on the card but I accept his evidence that it was available to the wife’s use. It was not in dispute that between March 2018 and February 2021, the husband provided the sum of $2,300 each month by way of support for the wife and Ms X. For some of this period, the wife was in full time employment. The husband also paid post-separation approximately $152,000 by way of school fees for Ms X’s attendance at R School, mortgage payments in excess of approximately $300,000 as well as the house insurance, car insurance and private medical insurance for Ms X, and other expenses in the period post-separation.
The husband’s counsel said that I should find the wife to be untruthful. It was not made clear to me why it would be necessary to make such a finding. The factual controversy between the parties was almost non-existent and to the extent that it existed it was irrelevant.
The Full Court in Adamson & Adamson (2014) FLC 93-622 cited with approval Kent J’s decision in Carlson & Fluvium [2012] FamCA 32, where his Honour observed:
165.As a general proposition, civil courts usually refrain from specific adverse credit findings against litigants if the disposition of the case can legitimately be achieved otherwise. There are good reasons for that approach. For example, a specific finding that a litigant has misled the court might be tantamount to a finding of perjury. Further, it can be accepted as a given that human beings have the capacity to reconstruct or rationalise or even misconstrue past events or conduct, or to engage in self-justification, particularly in recounting events in highly emotive settings or in respect of highly emotive issues. This may make the distinction between an honest, although wrong, account on the one hand, and a deliberate and calculated obfuscation on the other, difficult to draw.
166.To deny significant limitations in the capacity to use assessment of the demeanour of a witness as an entirely reliable guide to his or her truthfulness would be to deny the existence of plausible liars; or those who may be timid, uncertain or unconvincing, but nevertheless truthful, in relating events.
His Honour’s observations are apposite to this matter and the submission. It was not submitted why a credit finding was necessary or how it would assist in the determination of the matters arising under s 79. In my view it does not. Absent such a submission, I do not accept the submission that she was untruthful.
The husband conceded that Ms X has mental health issues. I note that the following from the wife’s trial affidavit was not the subject of any cross-examination and which I accept:
106. In around 2014, I observed changes in [Ms X] who was becoming more withdrawn and depressed. She reported being bullied at school and there was a drop in her self-confidence and self-esteem.
107. [Ms X] had a course of appointments with a psychologist at [Suburb S] named [Ms T] in 2014 …
…
109. After the renovations at the [Suburb D Property] concluded in 2015, we moved back into the property. At this time, following my communications with the school counsellor and the psychologist in [Suburb S], I said to [Mr Rich]:
“[Ms X] is suicidal, we really need to do something about this.”
…
113. I was, and still am, required to spend a lot of time supporting [Ms X]. I would, in the past, drive her to school every day and pick her up on 2 or 3 afternoons. She was very difficult to get moving in the mornings and usually would not get up early enough to go to school by public transport.
I accept that the wife’s contributions to the support of Ms X have been significant in the period post-separation. Caring for a child who has mental health issues, who has been suicidal, and is under the care of a psychologist and psychiatrist is, in my view, a significant contribution to the support of a child.
Approach to property proceedings
The approach to be adopted in a financial adjustment case under s 79 of the Act is to follow the well-recognised four-step process (see Hickey & Hickey & Attorney-General for the Commonwealth of Australia (intervener) (2003) FLC 93-143). Following such an approach, the Court identifies and values the assets and liabilities at the date of hearing for the purposes of division. Secondly, the Court assesses the contributions of the parties within the meaning of s 79(4) of the Act and determines a contribution based entitlement. Thirdly, the Court identifies the relevant matters under s 75(2) and determines such adjustment as is necessary to the contribution based entitlement. Finally, the Court considers the effect of the findings and must then determine whether the order as proposed is in all the circumstances just and equitable.
Whilst no submission was made consistent with the ratio arising out of the High Court's determination in Stanford v Stanford (2012) 247 CLR 108, I am of the view that it is just and equitable that an order be made adjusting the property interests of the parties. The parties are no longer living together and there is no longer the common use of their property. The assumptions and undertakings that governed the use of their property ended with separation and both parties sought that there be an adjustive order.
Balance sheet
The parties’ assets and liabilities were captured in a document, which became Exhibit 1 in the proceedings. By the time of submissions, it revealed the following:
Ownership Description Applicants value Respondents value ASSETS 1 W C Street, Suburb D (see note) $4,650,000 $4,650,000 2 W CBA Account…12 (as at 27.07.2022) $2 $2 3 W U Bank …61 (as at 29.07.2022) $2,186 $2,186 4 W U Bank…41 (as at 29.07.2022) $17 $17 5 W U Bank…11 (as at 29.07.2022) $4 $4 6 W P Pty Ltd (see note) $42,751 $42,751 7 J CBA Account…63 (as at 18.07.2022) NIL NIL 8 J CBA CommSec Trading Account $1,249 $1,249 9 J NAB Account…76 NK NIL 10 J Painting Collection $1,000 $1,000 11 H CBA Account…01 (as at 30.06.2022) $1,721 $1,721 12 H CBA Account…84 (as at 04.08.2022) $542,573 $542,573 13 H Undisclosed Bank Account (see note) NK 14 H CommSec Portfolio (as at 15.07.2022) $19,625 $19,625 15 H V Company…66 (W: as at 09.08.2022) (H: as at 04.08.2022) $1,406 $1,406 16 H W Financial Services (see note) NK 17 H Motor Vehicle 1 $12,410 $12,410 18 H Motor Vehicle 3 $33,800 $33,800 19 W Interim property settlement $18,362 $18,362 Total $5,327,106 $5,327,106 ADDBACKS 20 H Funds withdrawn from cash portfolio $194,000 NIL Total $194,000 $0 LIABILITIES 27 J CBA Home Loan Account…01 (as at 30.06.2022) $228,568 $228,568 28 J CBA Home Loan Account…62 (as at 30.06.2022) $462,715 $462,715 29 H Y Credit Card Account…00 (as at22.06.2022) NIL NIL 30 H CBA Premium Awards Credit Card Account…61 NIL NIL 31 H Unpaid Legal Fees NIL NIL Total $691,283 $691,283 SUPERANNUATION Member Name of Fund Type of Interest Applicants value Respondents value 35 W Superannuation Fund 2 (as at 25.07.2022) Accumulation $106,476 $106,476 36 H Superannuation Fund 3 (as at 17.07.2022) (see note) Accumulation $342,165 $342,165 Total $448,641 $448,641
The only matter in dispute as between the parties in relation to the construction of the Balance Sheet is the addback contended by the wife to be $194,000. The husband was cross-examined about Annexure N to the wife’s trial affidavit, which identified that as at 30 June 2017, the husband held a cash portfolio having a value of approximately $280,000. The husband was then cross-examined about a Financial Statement sworn by him in October 2018 that identified the balance in that cash portfolio had reduced to $86,579. During the course of his cross-examination, the husband was asked what happened to the money and he said that it was discretionary expenditure and had been spent on socialising. The wife contended that these funds should be added back.
In Omacini & Omacini (2005) FLC 93-218, the Full Court said:
30.To date, three clear categories of cases have emerged where the Court has determined that it is appropriate to notionally add back to the pool of assets, that is, assets that no longer exist. They are:
(a) Where the parties have expended money on legal fees. In DJM and JLM (1998) FLC 92-8l6 the Full Court said at 85,262:
“11. 6 For reasons set out in Farnell, s 117 provides that each party to proceedings under the Family Law Act shall bear their own costs unless the Court otherwise orders. Failing to add back monies expended by parties on costs frequently has the effect of defeating the policy of s 117 by permitting the pool of available assets for distribution between the parties to be diminished by any monies that either of the parties have managed to spend on their costs up to the date of trial. We are of the view that the normal approach ought be to add costs already paid back into the pool. Whilst there may be cases where that approach is inappropriate, the reasons why it is not taken ought normally be spelt out.”
(b) Where there has been a premature distribution of matrimonial assets. In Townsend and Townsend (1995) FLC 92-569 Nicholson CJ as he then was with whom Fogarty and Jordan JJ agreed, said at 81,654:
“In my view, what occurred in this case, as I said during the course of argument was, in fact, a premature distribution of a proportion of the matrimonial assets. What the husband did was to distribute to himself an asset in which the wife had a legitimate interest. In such circumstances I consider that it would be unjust in the extreme to simply treat such conduct by the husband as a matter to which regard should be had under section 75(2). It seems to me that the husband has had the benefit of that money. Had he retained, for example, the taxi licence instead of selling it, that would have been brought into account as an item of property which would have been dealt with in the same way as the remaining items of property in this case. Accordingly, I am of the view that the correct way in which to deal with the husband's receipt of those moneys is to bring them into the pool of assets on a notional basis and make a distribution accordingly.”
(c) In the circumstances outlined by Baker J in Kowaliw and Kowaliw (1981) FLC 91-092 at 76,644:
“As a statement of general principle, I am firmly of the view that financial losses incurred by parties or either of them in the course of a marriage whether such losses result from a joint or several liability, should be shared by them (although not necessarily equally) except in the following circumstances:
(a) where one of the parties has embarked upon a course of conduct designed to reduce or minimise the effective value or worth of matrimonial assets, or
(b) where one of the parties has acted recklessly, negligently or wantonly with matrimonial assets, the overall effect of which has reduced or minimised their value.
Conduct of the kind referred to in para. (a) and (b) above having economic consequences is clearly in my view relevant under sec 75(2)(0) to applications for settlement of property instituted under the provisions of sec 79.”
In Trevi & Trevi (2018) FLC 93-858, the Full Court observed:
27.The Full Court held in Omacini and Omacini that addbacks fall into “three clear categories”: where the parties have expended money on legal fees; where there has been a premature distribution of matrimonial assets; and “waste” or wanton, negligent, or reckless dissipation of assets.
28.However, the Full Court also made it clear that an addback does not necessarily occur whenever “a party has expended money realised from the disposition of assets that existed as at the date of separation”, the Full Court describing such a proposition as “unduly simplistic”. An earlier Full Court made the same point, saying that adding back is “the exception rather than the rule”.
29.The fundamental precept that addbacks are exceptional, reflected in the decisions just referred to, also mirrors what has been said in earlier decisions of the Full Court that, for example, “the Family Court must take the property of a party to the marriage as it finds it” at trial. An important parallel proposition is that the parties do not “go into a state of suspended economic animation” after separation. Thus, reasonably incurred expenditure does not usually come within accepted categories of addback.
30.Two fundamental premises emerge from Omacini and the authorities preceding it. First, “adding back” is a discretionary exercise. When the discretion is exercised in favour of adding back, it reflects a decision that, exceptionally, in the particular circumstances of a case, justice and equity requires it. The second premise is its corollary: in cases that are not “exceptional” justice and equity can be achieved, not by adding back, but by the exercise of a different discretion – usually by taking up the same as a relevant s 75(2) factor. Indeed, it has been said that the latter is “a course which is, perhaps, technically more correct” than adding back to the list of existing interests in property.
(Footnotes omitted)
The husband’s counsel submitted that an addback of this amount came as a surprise and sought leave to re-open to tender various documents. Leave was granted and various bank statements were tendered to explain what had happened to the $194,000 (Exhibit 12).
The re-opening demonstrated that part of the $280,000 held in the husband’s bank account as at June 2017 represented the proceeds of sale of the Suburb M property of approximately $91,000. The husband’s counsel sought to account for the moneys by drawing the Court’s attention to the husband’s evidence that in the period between June 2017 and October 2018, the husband purchased an Motor Vehicle 3 motor vehicle for approximately $63,000 in July 2018 (which was already in the pool of assets albeit at a lesser value) and paid approximately $90,000 to his mother over a four-day period in April 2018 from the same account. The Court’s attention was drawn to the husband’s Financial Statement that disclosed that between 2 and 7 October 2019 his mother returned to him the sum of $67,000. The husband’s counsel’s submission was that this money formed part of the funds represented in part by the husband’s current bank balances. I also note the husband’s evidence that in early 2018, he gambled approximately $50,000. I have already made reference to this expenditure within the context of the husband’s submission as to waste.
These amounts account in some way for the funds said to be an addback. The car is in the pool of assets and some of the money paid to his mother was returned. Each party has lost money. Addbacks are the exception not the rule. I am not satisfied that it is appropriate that monies should be added back.
Assessment of contribution
Much of the evidence in the affidavits was of limited assistance and much of it amounted to broad ranging submissions and criticisms of the other party’s behaviour or conduct. Mercifully, much of this irrelevant material was not the subject of cross-examination or submission reinforcing the conclusion of irrelevancy.
I have, however, read all of the evidence relied upon in the proceedings including the Exhibits but do not propose to repeat all of it in these reasons. As the High Court reminds in Whisprun Pty Ltd v Dixon (2003) 200 ALR 447:
62. … A judge’s reasons are not required to mention every fact or argument relied on by the losing party as relevant to an issue. Judgments of trial judges would soon become longer than they already are if a judge’s failure to mention such facts and arguments would be evidence that he or she had not properly considered the losing party’s case.
The assessment in a property case calls for the exercise of a discretion and a holistic value judgment of the respective contributions of the parties. The Court is required to consider all of the contributions of the parties as the Full Court in Dickons v Dickons (2012) 50 Fam LR 244 makes plain:
24.… the task of assessing contributions is holistic and but part of a yet further holistic determination of what orders, if any, represent justice and equity in the particular circumstances of this particular relationship. So much is clear from the terms of s 79 itself and, in particular, s 79(2). The essential task is to assess the nature, form and extent of the contributions of all types made by each of the parties within the context of an analysis of their particular relationship.
25.Doing so is also consistent with the demands of authority that the ultimate assessment of contributions should be made without “giving overzealous attention to the ascertainment of the parties’ contributions” (Norbis v Norbis (1986) 161 CLR 513 at 524 ; 65 ALR 12 at 18 ; 10 Fam LR 819 at 825 ; [1986] HCA 17) and the well-established recognition in the authorities (acknowledged specifically by her Honour in this case) that the process required of the court by s 79 is the exercise of a wide discretion, not the performance of a mathematical or accounting exercise.
26.The necessarily imprecise “wide discretion” inherent in what is required by the section is made no more precise or coherent by attributing percentage figures to arbitrary time frames or categorisations of contributions within the relationship. Indeed, we consider that doing so is contrary to the holistic analysis required by the section and, in the usual course of events, should be avoided.
The Full Court as recently in Horrigan & Horrigan [2020] FamCAFC 25 emphasised and reinforced that the proper approach to the assessment of contributions is:
35.… well established that an assessment of contributions is not a mathematical exercise, but rather involves the identification and assessment of all of the parties’ respective contributions, in a holistic way across the course of the relationship and in the post separation period to the point of assessment. …
I am also mindful of what the Full Court said in Singerson & Joans [2014] FamCAFC 238 at [66] that for the purposes of s 79 of the Act, there is nothing to suggest that any category of contribution needs to be quarantined and applied solely to particular assets. In my view, the authorities require evaluation of all contributions to the property of the parties, notwithstanding that the categories of property may be different. This view has been confirmed by subsequent Full Courts such as in Jabour & Jabour (2019) FLC 93-898, where their Honours observed that a primary judge should be cautious in emphasising the importance of an increase in value of a particular item of property at the expense of “the myriad of other contributions that each of the parties has made during the course of the relationship” (at [35]).
The consistent theme from the authorities is that the multifarious contributions over the relationship and subsequently of all types are to be assessed in a holistic way.
Guided by such Full Court determination, I propose to assess the parties’ contributions.
As I stated earlier in these reasons, each of the parties contended for a different outcome in relation to the assessment of contribution. I refer to the findings I have made above in respect of the contributions of the parties.
I am satisfied that each of the parties made substantial contributions over the course of the relationship and in the years following the parties’ separation. I note the wife’s contribution during the course of the relationship and note that from 2008 onwards she was the primary homemaker and parent. I also take note of the husband’s significant contributions by way of income. I also recognise each party’s respective contributions to the renovations to the Suburb D property and acknowledge the contribution by the wife of the Suburb J property that was used as partial security for the purchase of the Suburb L property. I note that in the period post-separation, the husband been paying rent whilst the wife has had the benefit of occupation of the former matrimonial home.
The husband contends that his financial contributions in the period subsequent to separation are substantial and warrant an adjustment in his favour. The husband’s payments post-separation have to be viewed in the context of the substantial income he earned to which I have referred to earlier and to which the wife had clearly made contributions.
The husband’s submission, however, ignores entirely the wife’s contributions in the period post-separation towards the parties’ child, noting that she is the only one making contributions of a non-financial nature to her support. It is agreed that she has mental health issues. I refer to the wife’s unchallenged evidence about Ms X’s health to which I have referred to already. It is, in my view, a substantial contribution made solely by the wife.
In relation to the husband’s contributions to mortgage payments, I recognise that that is a significant financial contribution by him.
I also recognise his contractual obligation to meet the mortgage payments and that by meeting those payments he preserved the equity in the former matrimonial home, which was ultimately to his and the wife’s advantage in the distribution of the assets.
In assessing the parties’ contributions in a holistic sense over the entire period from 1997 to the date of the hearing, I am satisfied that the parties made an equal contribution.
Adjustments under section 75(2) of the Act
Each party sought an adjustment in relation to the matters under s 75(2).
On the part of the husband, the adjustment was said to be two per cent arising solely as a consequence of what was said by him to be the reckless and negligent acts by the wife in losing money in relation to her business. I have addressed this earlier in my factual findings. I do not find that the wife was reckless or negligent. As no other matter was the subject of a submission, I find there is no warrant for an adjustment in favour of the husband.
The wife’s counsel submitted contended that there should be a 7.5 per cent adjustment in her favour for matters arising under s 75(2). That was said to relate to the disparity in income and earning capacity between the parties and the wife’s ongoing care of Ms X.
The wife is currently in full-time employment, having been in such employment since 2019. She earns approximately $100,000 per annum. The husband’s counsel submitted that the wife is not using her earning capacity to the fullest. There is insufficient evidence to permit me to draw such a conclusion. The husband is currently unemployed and has been unemployed since approximately May 2021. He gives evidence in his affidavit, which was not the subject of any challenge, of attempts to obtain employment. I note that the husband’s income in the last couple of years of his employment was in excess of approximately $600,000 gross per annum. There is clearly, therefore, an income and earning capacity disparity between the parties. The wife, for her part, is certainly in employment and earning approximately $100,000, whilst the husband is unemployed. There is no evidence of the wife’s earning capacity beyond that which she is currently earning, whilst the evidence of the husband’s earning capacity is that at least as at May 2021, it was more than $600,000.
The wife also gives some evidence of her obligation to ongoing support of Ms X. She says the following in her in trial affidavit:
117. … [Ms X] is currently working 3 hours per week at [Z Company].
118. I am currently supporting all of [Ms X's] needs and living expenses, including but not limited to healthcare, housing, travel and everyday necessities. [Mr Rich] ceased making any payments towards [Ms X's] care as soon as she turned 18.
119. Maintaining a good diet for [Ms X] is very important and each day I spend time preparing her meals and making sure that all of [Ms X's] needs are met. [Ms X] continues to attend fortnightly sessions with [Ms G] in relation to treatment for her mental health and I meet all payments associated with same. If she is very unwell, the appointments can be weekly. These treatments are […] $ 180 per visit. Up to 14 visits per annum are partially subsidised through Medicare.
120. [Ms X] is supposed to attend her psychiatrist, [Dr AA] monthly, at a cost of $350.
121. She also sees a chiropractor once per fortnight at a cost of $60 per visit.
122. [Ms X] has pharmaceutical costs, at a cost of $70 per month, plus a vitamin supplement at a cost of $108 per month.
123. In total, I meet [Ms X's] medical/health related costs are $242 per week as follows:
[Ms G] - $90 per week;
[Dr AA] - $81 per week;
Chiropractor - $30 per week;
Pharmaceuticals - $41 per week
124. I have set out in my Financial Statement other expenses I meet for [Ms X]. The only expense [Mr Rich] is presently meeting is [Ms X’s] private health insurance.
These matters were not the subject of any challenge in cross-examination and I accept the wife’s evidence. It is clear from the above that Ms X’s costs are approximately $242 per week, albeit some of that may be able to be claimed under a health fund or Medicare. The wife’s Financial Statement identified a weekly cost for Ms X of $639 per week. The wife identified that Ms X’s income is $60 per week.
I also note that there are issues in relation to the wife’s health. In that respect, the following evidence from the wife’s trial affidavit was not the subject of challenge:
101. I grew extremely anxious and fearful at the thought that someone has broken into my property multiple times and had access to my personal and work-related information. As a direct result, I did not have access to my work emails since 29 November 2021 and they have only recently been restored. This email account was the only secure email account that I had and it was my primary source of communication with my solicitors. It also impacted upon my capacity to work and I have been on personal leave during this time.
102. This harassment has impacted my health immensely. I also say that the invasion of my privacy has significantly impacted upon my ability to not only run the business but also generally my capacity to work. It has caused me significant stress and anxiety. …
…
104. In 2016 I became unwell once more and after about 6 months of investigation, ... Ever since, I have found that I tire easily and cannot cope with long hours at work.
105. In approximately October 2021, I began suffering from migraines again. I have attended upon my treating practitioner, [Dr BB] in respect and been referred to [Dr CC], Neurosurgeon at [DD Hospital]. [Dr CC] confirmed on 20 December 2021, that I continue to have [a cyst]. Annexure X is a letter from my GP [Dr BB], dated 8 December 20221 to [Dr CC], also enclosing the CT Scan. I have recently had to have about 2 weeks off work due to my migraines.
I am of the view, taking into account the above matters, it is appropriate that an adjustment be made in the wife’s favour of 2.5 per cent.
The consequence of my findings is that the property of the parties should be divided as to 52.5 per cent to the wife and 47.5 per cent to the husband. I am of a view that this is a just and equitable outcome.
The parties propose that the Suburb D property should be sold and divided in accordance with my percentage findings, and I will make orders to give effect to this. The other property of the parties, excluding the parties’ superannuation, will be divided as to 52.5 per cent to the wife and 47.5 per cent to the husband. I note that the remaining property of the parties totals $677,106. 52.5 per cent of that to the wife is $355,480. According to the agreed Balance Sheet, the wife has assets in her possession having a value of $76,732. Accordingly, I will order the husband to pay to the wife the sum of $278,748. In circumstances where the husband has funds in a bank account, I will order that the husband pay the wife that amount within 14 days.
The parties are the owners of a joint CBA Com Sec trading account and accordingly, I will order that the wife transfer that account to the husband. The parties are owners of a joint painting collection. No submission was put as to how to divide that so I will order that it be transferred to the wife. I will order the husband to transfer to the wife the Motor Vehicle 1.
In relation to superannuation entitlements, the husband said they should be divided equally, whilst the wife said they should be divided in accordance with the percentage entitlement findings. No submission was put by the husband’s counsel as to why there should be a different outcome in relation to the superannuation entitlements of the parties. In those circumstances, I propose to divide them in accordance with my percentage findings.
I am of the view that the above represents a just and equitable division of the parties’ assets and accordingly, I will make orders to give effect to that.
I certify that the preceding one hundred and five (105) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Schonell. Associate:
Dated: 29 August 2022
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