Parkes and Parkes
[2016] FamCA 44
•5 February 2016
FAMILY COURT OF AUSTRALIA
| PARKES & PARKES | [2016] FamCA 44 |
| FAMILY LAW – PROPERTY SETTLEMENT – Just and equitable – contributions – where the wife’s parents gifted the former matrimonial home to the parties at the commencement of the marriage – whether an adjustment of the property should be made on the basis of the total assets of the parties or whether the superannuation and non-superannuation assets should be considered separately – treatment of legal costs where the husband has paid legal costs from income earned post-separation and the wife has paid legal costs from capital – future earning capacity of the parties considered – final orders made that the wife make a payment to the husband reflecting an adjustment of non-superannuation assets and that the superannuation entitlements of the parties be equalised |
| Family Law Act 1975 (Cth), 75(2), 79(2), 79(4) Evidence Act 1995 (Cth), s 140 |
| Bevan & Bevan (2013) FLC 93-545 Bolger & Headon (2014) FLC 93-575 Chorn & Hopkins (2004) FLC 93-204; [2004] FamCA 633 Coghlan & Coghlan (2005) FLC 93-220 Dickons & Dickons (2012) 50 Fam LR 244 Marsh & Marsh (2014) FLC 93-576 Singerson &Joans [2014] FamCAFC 238 Stanford & Stanford (2012) 247 CLR 108 |
| APPLICANT: | Ms Parkes |
| RESPONDENT: | Mr Parkes |
| FILE NUMBER: | MLC | 5484 | of | 2014 |
| DATE DELIVERED: | 5 February 2016 |
| PLACE DELIVERED: | Melbourne |
| PLACE HEARD: | Melbourne |
| JUDGMENT OF: | Thornton J |
| HEARING DATE: | 12, 13, 14 & 15 October 2015 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Werner |
| SOLICITOR FOR THE APPLICANT: | Taussig Cherrie Fildes |
| COUNSEL FOR THE RESPONDENT: | Mr Dickson QC |
| SOLICITOR FOR THE RESPONDENT: | Lander & Rogers |
Orders
That on or before the expiration of ninety (90) days, the Wife pay or cause to be paid to the Husband the sum of $492,456 (“the payment”).
That contemporaneously with the payment, the Husband:
(a)do all acts and things and sign all such documents as may be required to transfer to the Wife at her expense all of his right, title and interest in the real property situate at and known as B Street, Suburb C in the State of Victoria, being the whole of the land more particularly described in Certificate of Title Volume … and Folio … (“the Suburb C property”);
(b)vacate the Suburb C property;
(c)deliver to the Wife all keys pertaining to the Suburb C property; and
(d)do all things necessary and sign all such documents as are required to authorise the payment of the funds in the joint accounts to the Wife and thereafter close the said accounts.
That in the event the whole of the payment has not been made by the date:
(a)the parties do all acts and things and sign all such documents as may be required so as to effect the sale of the Suburb C property altogether out of Court (“the sale”) by an agent at a price and upon terms to be agreed, and in default of agreement, to be nominated by the President from time to time of the Real Estate Institute of Victoria and the proceeds of sale be applied:
(i)firstly, to pay all costs, commissions and expenses of sale;
(ii)secondly, so much of the payment as is then outstanding to the Husband together with interest thereon at the rate prescribed by the Family Law Rules 2004 (Cth) from time to time; and
(iii)thirdly, the balance to the Wife.
That pending the payment and/or the completion of the sale:
(a)the Husband have the sole right to occupy the Suburb C property;
(b)neither party encumber the Suburb C property without the consent in writing of the other party;
(c)the parties hold their respective interests in the Suburb C property upon trust pursuant to these Orders;
(d)the Husband pay all outgoings, house insurance and utilities with respect to the Suburb C property as and when same shall fall due for payment and indemnify the Wife in respect thereof.
That the Husband retain to the exclusion of the Wife, sole right, title and interest in:-
(a)his musical equipment;
(b)his Term Deposit with the D Bank (“DB”);
(c)his watches;
(d)his Wesfarmer shares;
(e)his motor vehicle;
(f)bank accounts and any other investment credits in his name;
(g)personal belongings, furniture and chattels in his possession (the personal possessions, furniture and like chattels in the Suburb C property being deemed to be in the Husband’s possession, save as otherwise agreed).
That the Wife retain to the exclusion of the Husband, sole right title and interest in:-
(a)her jewellery;
(b)her Term Deposit with the DB;
(c)her shares in E Pty Ltd;
(d)her MLC Navigator Managed Fund;
(e)her Telstra shares;
(f)her bank accounts and other investment credits in her name;
(g)personal belongings, furniture and chattels in her possession; and
(h)the proceeds of the NAB joint account and DB joint accounts.
That having been accorded procedural fairness, paragraphs 8 to 11 (inclusive) of this Order are binding upon the Trustee of the Catholic Superannuation Fund (“the Fund”) in the name of the member spouse, Ms F (born … 1962).
That in accordance with s 90MT(4) of the Family Law Act 1975 (Cth) (“the Act”), a base amount of $44,093 is allocated to the Husband (Mr Parkes, born … 1960) out of the Wife’s interest in the Fund.
Pursuant to section 90MT(1)(a) of the Act, whenever a splittable payment becomes payable in respect of the Wife's interest in the Fund, the Husband shall be entitled to be paid an amount calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations2001 (Cth) (“the Regulations”), using the base amount and there be a corresponding reduction in the entitlement the Wife would have had but for these Orders.
That Order 9 has effect from the operative time.
The operative time for the purposes of Order 10 of these Orders is four (4) business days after the date of service of these Orders upon the Trustee of the Fund.
That until such time as the Superannuation split to the Husband pursuant to these Orders can be rolled over onto a separate account to the Husband: -
(a)the Wife provide to the Husband no less than twenty-eight (28) days’ notice before such time as she elects to retire from and/or take voluntary retirement and/or for any reason accept or become entitled to access in whole or in part her entitlement in the Fund.
(b)the Wife direct and authorise the Trustee of the Fund to communicate with the Husband and/or any person authorised by him in writing:
(i)to answer any reasonable inquiries as may be made by him or on his behalf from time to time in relation to his entitlement in the Fund; and
(ii)to provide to the Husband and/or his authorised representative with a copy of any notice of any application or request by the Wife which seeks release of entitlements in the Fund in so far as that release may affect the Husband’s entitlement in the Fund pursuant to these Orders.
(c)the Wife by herself, her servants and/or agents be and hereby are restrained from doing any act or thing which would prevent the Husband, his heirs, executors, administrators or nominees from receiving the benefits in the Fund to which he is entitled pursuant to these Orders.
(d)in the event that the Superannuation split to the Husband pursuant to these Orders can be rolled over into a separate account to the Husband each of the parties do all acts and things and execute all such documents as may be necessary to facilitate and to implement that rollover.
That unless otherwise specified in these Orders and save for the purposes of enforcing any monies due under these or any subsequent Orders:
(a)each party be solely entitled, to the exclusion of the other, to all other property (including choses-in-action) in the possession of such party as at the date of these Orders;
(b)monies standing to the credit of the parties in any bank account are to become the property of the party in whose name the account is registered and the joint accounts be deemed to be the property of the Wife;
(c)each party retain and the other relinquish any interest in any superannuation benefits belonging to or earned by the other;
(d)insurance policies remain the sole property of the owner named thereon;
(e)each party be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these Orders;
(f)any joint tenancy of the parties in any real or personal estate be expressly severed.
AND IT IS DIRECTED THAT
All documents produced to the Court pursuant to subpoena and exhibits relied upon by the parties be returned by the Subpoena Clerk at the Family Court of Australia Melbourne Registry to the person or organisation who produced same after the expiration of 30 days from the date of these orders or otherwise upon the conclusion of any appeal.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Parkes & Parkes has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| FAMILY COURT OF AUSTRALIA AT MELBOURNE |
FILE NUMBER: MLC 5484 of 2014
| Ms Parkes |
Applicant
And
| Mr Parkes |
Respondent
REASONS FOR JUDGMENT
Introduction
This proceeding concerns competing applications for final alteration of the property interests of the parties to a marriage. There are no children of the marriage and the duration of the marriage was approximately eight years and four months. Neither party has re-partnered. The parties are in agreement that it is just and equitable for orders to be made for the alteration of property interests.
The valuation of the property of the marriage is agreed. This was conveniently settled by counsel for the parties in a table which was Exhibit C1. Both parties accepted the valuations and the ownership of property which was set out in Exhibit C1. The parties’ total net assets including superannuation amount to $3,455,280. Included in this figure is the combined superannuation of the parties of $788,538. There are no relevant liabilities. It was agreed that all assets stated as owned by the husband will be retained by him and that all assets either stated as owned by the wife or owned jointly will be retained by the wife. In closing submissions counsel for the wife conceded that the husband should retain the contents of the former matrimonial home when he vacates the property.
The only real property of the marriage is the former matrimonial home at B Street, Suburb C (“the Suburb C property”), which is registered in joint names. This property was purchased by the wife’s parents six months after the date of the marriage. The parties agree that the Suburb C property, which is unencumbered, should be retained by the wife. The husband has been living in the Suburb C property since the parties separated. He agrees to vacate that property upon payment by the wife of a sum of money by way of property settlement.
The husband seeks that the property be distributed on the basis that he receive 42.5 per cent of the net non-superannuation assets. Taking into account the agreed property to be retained by the parties, the husband seeks that the wife pay him $825,798. The husband also relies upon a number of s 75(2) factors for this distribution. He also seeks that the wife’s superannuation be subject to a splitting order so as to achieve an equal division of the parties’ superannuation assets. This would require a payment of approximately $44,000 from the wife’s superannuation fund to the husband’s superannuation fund.
It was submitted on behalf of the wife that it was just and equitable for there to be a distribution of property in her favour which reflected 70/30 of the total net assets of the parties, inclusive of superannuation entitlements. In the alternative it was proposed that any superannuation splitting order “should come at the expense of any payment by the wife to the husband.”
The wife seeks that each party retain their superannuation. She proposes that she pay the husband $350,000 by way of property settlement. This is calculated on the basis of contributions being assessed at 75/25 in the wife’s favour, allowing for an adjustment of, at most, five per cent for the husband having regard to the s 75(2) factors for each party.
Counsel for the husband submitted that there should also be an adjustment in favour of the husband pursuant to s 75(2)(o) because the wife had paid the sum of $80,000 towards her legal costs from the remainder of a term deposit account which was part of the property of the marriage, while the husband had paid his legal fees from his post separation income.
In reply to the submission that the wife’s legal costs, if not added back, should be taken into account under s 75(2)(o) either against her or in the husband’s favour, counsel for the wife submitted that the fact that the wife paid her legal costs from a “cash reserve which was present during the marriage is totally irrelevant – this is the position generally speaking and also on the specific facts of this case.” Counsel relied upon what he referred to as the general rule that the assets of the parties are assessed at the time of the trial. He submitted that if an “add-backs argument” were accepted, then the wife’s legal costs cannot be added back without also adding back the legal costs of the husband, noting that the legal costs of both parties are substantially the same. Counsel for the wife pointed to the fact that the reason that the husband was in a position to pay his legal costs from his post separation income rather than capital was because in the post-separation period he was living rent-free in the house purchased by the wife’s parents. In contrast, the wife incurred rental expenses as well as expenses in re-furnishing.
The submissions on behalf of the husband focused upon the financial contributions made by the husband at the commencement of the marriage and his financial contribution by way of salaried income during the marriage. At the commencement of the marriage the husband owned a property at G Street, Suburb H (“the Suburb H property”). This was sold soon after the parties married and the net proceeds of $265,000 were invested. Counsel for the husband emphasised that the wife has benefited from the generosity of her father and continues to have a good relationship with him which is likely to continue into the future for her benefit. He relies upon the establishment of the company E Pty Ltd for the proposition that the wife’s parents intended to benefit the children by way of a testamentary trust and that as one of two children it was an ordinary expectation that the wife would benefit from her father. Counsel for the husband submitted that this is a s 75(2)(o) factor which should be taken into account in favour of the husband.
Counsel for the husband also submitted that interpreting the evidence of the wife’s expert witness Dr I, the wife was capable of full-time work where she might earn a gross income of $105,000 per annum. In contrast he submitted that the husband was vulnerable in his employment and his continued employment was uncertain. He emphasised the disparity between the parties’ qualifications, submitting that the wife has the capacity to explore other options in employment whilst the husband’s options in the future for employment were limited by his lack of tertiary qualifications and his age.
Background
The parties were married in 2005, separated on 7 November 2013 and their divorce was finalised on 6 March 2014. There are no children of the marriage and neither party has any dependents.
There was some dispute between the parties whether there was any cohabitation prior to the date of marriage. The husband maintained in evidence that he had lived with the wife for about six months prior to the marriage but this was not disclosed to the wife’s parents. The wife disagreed and gave evidence that the parties were not living together until the date of marriage. This is not an issue of any great moment because there was no dispute that the wife was living in a rental property in Suburb C before the marriage and that the rent for that property was paid by her parents. Whenever the husband stayed there, this obviously benefited both parties. Ultimately there were no submissions about this issue and it is not a factor which would affect my conclusions.
The husband is employed full-time by J Pty Ltd. He is aged 55 and has no formal qualifications but has been employed with the same employer for approximately 36 years.
The wife is aged 53 and is employed by K School and currently works three and a half days per week. She has been employed by K School for 13 years, initially on a full-time basis but from 2010 on a part-time basis. The wife has a Bachelor of Arts degree and a number of Graduate Diplomas.
The Issues
The issues identified by the parties for determination were as follows:
·Whether there should be a splitting order so as to effect an equalisation of the parties’ superannuation. This would require a payment of approximately $44,000 from the wife’s superannuation fund to the superannuation fund of the husband;
·The weight which ought to be afforded to the parties’ respective financial contributions pursuant to s 79(4);
·What adjustment should be made, if any, on the basis of s 75(2) factors for each party;
·The approach to the alteration of property interests and whether it should be made on the basis of the global total assets of the parties or the total non-superannuation assets of the parties; and
·The quantum of funds to be paid by the wife to the husband (the husband claiming $825,798 and the wife conceding $350,000).
The Evidence
The documents relied upon by the parties are listed in Annexure A.
The Exhibits admitted into evidence in the trial are:
Court Exhibits
Exhibit C1: Agreed table of assets and property to be retained by each party
Exhibit C2: Joint conferral statement by accountants Mr L and Mr M
Exhibits for the wife
Exhibit A: Wife’s letter of legal costs incurred to final hearing dated 13 October 2015
Exhibit B: Husband’s letter of legal costs paid since February 2014 to October 2015
Exhibit C: Table of assets and calculations of wife
Exhibit D: Table of comparative incomes during the relationship prepared by the wife
Exhibits for the Husband
Exhibit 1: Husband’s legal costs letter dated 26 September 2015
Exhibit 3: Financial Statement of the wife filed 24 June 2014
Exhibit 4: Wife’s divorce application filed 2 December 2014 referring to date of separation
Exhibit 5: Activity statement of the wife addressed to email address “…” dated 20 June 2014
Exhibit 6: Financial report for the year ended 30 June 2009 for E Investments Pty Ltd
Exhibit 7: Table of comparative personal exertion income of the parties during the relationship prepared by the husband
Exhibit 2 was a list of musical equipment tendered by the husband for identification only.
Pre-trial ruling
The parties were in dispute pre-trial as to the valuation of the Suburb C property. By consent the parties had obtained an order from Registrar Kaur on 5 August 2014 that provided for a valuation of the Suburb C property by an agreed valuer. A single expert, Mr L, valued the Suburb C property.
In a contested pre-trial application, the husband sought leave to adduce evidence from his own sworn expert valuer, Mr M, as to the valuation of the Suburb C property. He also sought an order that his valuer confer with Mr L. The husband was successful in that application and an order was made on 1 October 2015 granting leave for the husband to file and rely upon the affidavit of Mr M. A further order was made that as soon as practicable, the single expert and Mr M confer in respect of the valuations in an attempt to reach agreement then provide a joint conferral note setting out (a) those issues upon which they agree; and (b) any points of difference. The orders and reasons for judgment are set out in Annexure B to these reasons.
After the single expert and the husband’s shadow expert conferred, the parties reached agreement at the commencement of the trial as to the valuation of the Suburb C property.
Subpoena objections
At the commencement of the trial the wife’s parents, Ms E and Mr E, objected to three subpoenas issued by the husband on 22 June 2015.
The first subpoena was addressed to the parents of the wife, Ms E and Mr E seeking a copy of his/her current will and copies of all previous wills made since 1 January 2004. The husband did not press the production of the previous wills.
There were three other subpoenas addressed to three companies of which Mr E was the Proper Officer and to which he objected.
The second subpoena was addressed to E Family Holdings Pty Ltd seeking the production of taxation returns, financial records and ATO activity statements for the company.
The third subpoena was addressed to E Investments Pty Ltd seeking the production of taxation returns, financial records and ATO activity statements for the company from 30 June 2010 to date.
I made rulings setting aside each of those subpoenae and my orders and reasons for judgment are outlined in Annexure C to this judgment.
The following witnesses were cross-examined at trial:
·The wife and the husband;
·Ms N, the wife’s accountant;
·Dr I, expert respiratory physician for the wife; and
·Mr O, witness for the husband.
During the trial and after hearing evidence from all of the witnesses referred to above, counsel for the husband made an application on 14 October 2015 to adduce evidence from Mr E, the father of the wife. He relied upon a subpoena to give evidence which had been issued by the husband on 18 August 2015. That application was refused and brief oral reasons delivered on 15 October 2015 during the trial. When those reasons were delivered I indicated that written reasons would be included in these reasons for judgment. The order and those reasons are outlined in Annexure D to this judgment.
Standard of proof
In determining the facts, I have applied s 140 of the Evidence Act 1995 (Cth), which is the civil standard of proof. Where I have made findings, I am satisfied that the facts have been proven on the balance of probabilities.
Legal Principles
Section 79 of the Family Law Act 1975 (Cth) (“the Act”) provides for the discretionary alteration of property interests between the parties to a marriage. Under s 79(2) of the Act, an order cannot be made unless it is just and equitable in all the circumstances.
The relevant factors under s 79(4) of the Act which must be taken into account in considering what order (if any) should be made are as follows:
(a)the financial contribution made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(b)the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(c)the contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage and any children of the marriage, including any contribution made in the capacity of homemaker or parent; and
(d)the effect of any proposed order upon the earning capacity of either party to the marriage; and
(e)the matters referred to in subsection 75(2) so far as they are relevant; and
(f)any other order made under this Act affecting a party to the marriage;
…
In Bevan & Bevan (2013) FLC 93-545 (“Bevan”) at 87,232, the Full Court of this Court considered s 79 of the Act and set out the three fundamental propositions in relation to this section which the High Court of Australia laid down in Stanford & Stanford (2012) 247 CLR 108 (“Stanford”). These are 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. (original emphasis)
In applying those principles, the parties’ legal and equitable interests in property must first be identified.
The Approach
Counsel for the husband relies upon the decision in Singerson &Joans [2014] FamCAFC 238 (“Singerson & Joans”) in support of the proposition of an avoidance of an overly mathematical approach and instead considering overall the justice and equity of any alteration.
In Bolger & Headon (2014) FLC 93-575, the Full Court emphasised that
s 79(4) of the Act requires a holistic assessment of the parties’ contributions. The Full Court referred to the authorities and the well-established recognition that s 79 requires the Court to exercise a wide discretion, and not perform a mathematical or accounting exercise. The Full Court cautioned against “over-zealous attention to the ascertainment of the parties’ contributions”.[1]
[1] Bolger & Headon (2014) FLC 93-575 at 79,058, quoting Norbis & Norbis (1986) 161 CLR 513 at 524.
The approach I have taken is to consider the contributions of the parties by determining the nature, form and characteristics of all contributions across the whole of the marriage and post-separation. In Marsh & Marsh (2014) FLC
93-576, Murphy J observed at 79,075:
The expression “post-separation contributions” has, of course, been used widely in many authorities within the context of discussions about the assessment of contributions. But, importantly, it is not the fact of separation or when contributions are made that is the delineator. It remains crucial to analyse and weigh that nature, form and characteristics of all contributions across the whole of the period under consideration.
It is not possible to ascribe a mathematical value with any precision to the comparable weight of the differing contributions between the parties and this would be inconsistent with the holistic approach required by s 79.
There are a number of factors to be taken into account under s 75(2) of the Act when considering what, if any, order should be made under s 79. These factors are considered later in these reasons.
The parties are in dispute about whether the alteration of the parties’ property interests should be made by apportioning a percentage of the total property including superannuation or whether the superannuation property should be considered in isolation from the non-superannuation property.
The wife contends for a single pool approach. The husband relied upon the decision in Coghlan & Coghlan (2005) FLC 93-220 (“Coghlan’s case”) for the proposition that a two pools approach is not mandatory but preferable.
Counsel for the husband argued that the superannuation should be equalised or, “at worst, remain where it is”, but strenuously opposed an approach of an alteration of property interests based on the total assets comprising superannuation and non-superannuation assets which was urged by counsel for the wife. He relied upon Coghlan’s case in support of the two pools approach being appropriate because of the difference between the respective characteristics of superannuation and non-superannuation assets. He submitted that the effect of the wife’s proposal in treating the total assets of the parties as comprising both non-superannuation and superannuation assets would mean that the husband would owe the wife money. He submitted that the single pool analysis proposed by counsel for the wife would result in unfairness for the husband.
Counsel for the husband submitted that both parties had contributed to the superannuation funds during the marriage, including by way of salary sacrifice, and there was no basis for an adjustment of 70/30 for the superannuation.
The husband’s proposal was that there should be an equalisation of the parties’ superannuation which would result in the amount of approximately $44,000 being paid from the wife’s superannuation fund to his superannuation fund.
I have considered the outcome on either scenario. Including the superannuation benefits in the joint property pool would result in the wife paying a lump sum to the husband which would be less than what would be required if the superannuation is removed from the property pool.
I accept the submissions of counsel for the husband about treating the superannuation interests of the parties separately from the net non-superannuation assets. I have adopted that approach referred to in Coghlan’s case and treated the superannuation entitlements separately from the non-superannuation assets of the parties. Different considerations apply to the assessment of the respective contributions to the net non-superannuation assets and non-superannuation benefits. I have considered the relationship between the years of fund membership and the marriage, the actual contributions made by the parties to the superannuation funds at the commencement of the marriage, during the marriage and the fact that there was a salary sacrificing of the wife’s income which contributed to her superannuation fund.
Is it just and equitable to make an order?
There were no submissions regarding Stanford and the trial proceeded on the basis that both the husband and the wife are satisfied that it is just and equitable for orders to be made altering the existing legal and/or equitable interest in the property. I note that page 17 of the husband’s case outline provides: “Both parties seek an alteration of property interests and agree that it is just and equitable in the circumstances to make such an adjustment”, referring to Stanford.
It is clear that both parties agree that the property arrangements that existed during their marriage are at an end and there will no longer be ongoing common use of the former matrimonial home. They both wish to put an end to their financial relationship by way of a distribution between them of their property. In these circumstances I have no hesitation in finding that it is just and equitable under s 79(2) of the Act to make orders for adjustment of property interests between the parties. The Suburb C property is registered in joint names but both parties propose that the husband transfer his interest in that property to the wife upon payment of a lump sum by way of property settlement. Upon payment of a lump sum by the wife, it is agreed that the husband contemporaneously vacate the property.
Identification of Existing Property Interests
Agreed Assets
The valuation and identification of the assets, superannuation, liabilities and financial resources is agreed between the parties but for the sake of clarity I will identify them. This was settled between the parties and submitted in a table (Exhibit C1). It was agreed that all assets stated as owned by the husband will be retained by him and that all assets either stated as owned by the wife or owned jointly will be retained by the wife.
I find that the value and ownership of the assets and superannuation of the parties as agreed is as follows:
Asset
Owner
Value (Est)
B Street Suburb C
Joint
$1,850,000
NAB Term Deposit Account (…)
Joint
$27,467
D Bank (“DB”) Everyday Account (…)
Wife
$2,438
DB Term Deposit Account (…)
Wife
$140,000
MLC Navigator Managed Fund
Wife
$308,578
Jewellery
Wife
$18,950
Telstra Shares (2,000)
Wife
$11,200
Musical Instruments
Husband
$25,950
DB Term Deposit Account (…)
Husband
$218,131
DB Everyday Account (…)
Husband
$1,097
DB Everyday Account (…)
Joint
$532
DB Everyday Account (…)
Husband
$200
DB Online Saver (…)
Joint
$10
Watches
Husband
$3,450
Wesfarmers Shares (461)
Husband
$18,339
Motor Vehicle
Husband
$14,000
Funds in Trust
Husband
$26,400
Total Non-superannuation Assets
$2,666,742
Superannuation
Catholic Super
Wife
$438,362
Mercer Super
Husband
$350,176
Total Superannuation
$788,538
Assets
Non-superannuation
$2,666,742
Superannuation
$788,538
Total Assets
$3,455,280
It was common ground that the parties have no liabilities which are relevant for present purposes. There was no evidence that either party holds a financial resource.
The total non-superannuation net assets of the marriage are $2,666,742.
The value of the non-superannuation assets to be retained by the husband is $307,567. The value of the non-superannuation assets to be retained by the wife is $2,359,175.
The total superannuation of the parties is $788,538. The wife’s superannuation is $438,362 and the husband’s superannuation is $350,176.
The total assets of the parties including superannuation are $3,455,280.
Submissions for the Wife
Counsel for the wife submitted that weight must be afforded to the Suburb C property, which was a gift by the wife’s parents to the parties, representing about 70 per cent of the non-superannuation asset pool. He submitted that the former matrimonial home represents about 52 per cent of the total pool. Relying on the modest duration of the marriage and the fact that at the commencement of the marriage her superannuation was significantly more than that of the husband, the wife seeks that each party retain their own superannuation.
The parties have agreed to retain the property in their possession and for the husband to transfer his interest in the Suburb C property to the wife upon payment of a lump sum. The wife seeks to pay the husband $350,000 having regard to a marriage of marginally more than eight years where neither party have any dependents or children.
The wife’s case is that the parties did not live together prior to the marriage and that it was only when they were married that the husband commenced living with her in a rental property in Suburb C paid for by her parents.
It is the wife’s case that the parties’ initial contributions at the commencement of the marriage were approximately equal and any disparity is immaterial. Her evidence is that at the commencement of the marriage, the husband contributed $265,000 being the net proceeds of sale of the Suburb H property owned by him. She deposed that he also had superannuation benefits of $66,000 and $24,000 in liquid funds in his bank account. It is the wife’s case that at the commencement of the marriage she had assets of $350,000. This comprised superannuation, shares, funds and personal chattels including a motor vehicle.
It is not in dispute that six months after the marriage the former matrimonial home was gifted to the parties by the wife’s parents. It was submitted on behalf of the wife that it was only because of the provision of rent-free accommodation for six months by the wife’s parents following the marriage and the gift of the former matrimonial home that the parties were able to build an asset base and save their income. For six months after the marriage, the parents of the wife paid the parties’ rent and provided a motor vehicle for the wife to drive. It was argued that the only payments to be made were rates and property insurance and the disposable income of the parties was available because of the largess of the wife’s parents.
It is submitted by the wife that taking account of the pre-tax income of the husband being higher than the wife, the contributions should be assessed at 75/25 in the wife’s favour.
In closing submissions counsel for the wife produced Exhibit D, a table which he argued is a more comprehensive assessment of the parties’ efforts than Exhibit 7, the table produced by the husband.
He argued that columns 1, 8 and 9 of that table add to the figures the husband produced in his table (Exhibit 7) because they include interest, dividends and distributions from the wife’s Navigator fund which was a pre-marital investment. Counsel for the wife emphasised that Exhibit D included tax paid on income which was not included in the husband’s table which makes the husband’s table “unhelpful”. He emphasised that the parties’ income from personal exertion and investments were intermingled. Therefore during the marriage, the parties were taxed on their salaried income together with their investment income. Whilst conceding that the husband’s personal salaried income was higher than that of the wife’s, he argued that the egg could not be “unscrambled” and accordingly the contributions of the parties by way of salary and investments should be treated as an equal contribution having regard to the short duration of the marriage.
Counsel for the wife submitted that as a result of surgery in 2010 the wife has been unable to work in a full-time capacity. She is employed three and a half days per week and her 2013/2014 tax return indicates an income of $51,893. The wife argues that on the evidence of Dr I her employment on a part time basis is necessary due to her present symptoms which have persisted for five years now.
In terms of s 75(2) factors, it was submitted by counsel for the wife that the husband has 36 years of stable employment and earns approximately $138,000 per year. Counsel for the wife submitted that there is no evidence that the husband’s employment is vulnerable other than to the ordinary vicissitudes of life. Some adjustment in favour of the husband of approximately five per cent was conceded by the wife to take into account that the husband will not have accommodation.
Counsel for the wife submitted that a just and equitable outcome would be a distribution of property being 70/30 inclusive of superannuation entitlements and that if a superannuation splitting order was made it “should come at the expense of the payment by the wife.” It was argued that any adjustment in favour of the husband cannot be more than five per cent.
Submissions for the Husband
Counsel for the husband submitted that the approach to be taken was a holistic determination of what constitutes justice and equity having regard to the outlook of both parties. He relied on the decision of Dickons & Dickons in 2012 which was referred to in the case of Singerson & Joans.[2] There was no dispute about the value of the net non superannuation assets and superannuation of the parties.
[2] Dickons & Dickons (2012) 50 Fam LR 244; Singerson & Joans [2014] FamCAFC 238.
The proposal of the husband was that the wife pay him $825,798. The proposed payment takes into account the property which was agreed should be retained by each party. This represents 42 per cent of the non-superannuation assets.
Counsel for the husband submitted that the husband had contributed significantly more than the wife in financial contributions at the commencement of the marriage. He relied on paragraph 13 of the husband’s affidavit and clarification in cross-examination, for the proposition that the husband had two cars which were sold for a total of $19,000, furniture and appliances which had not been valued, and musical equipment which he sold for about $30,000 (banking the proceeds). He submitted that the evidence supported a value of about $55,000 in total for musical equipment in possession of the husband at the commencement of the marriage. He submitted that the husband had the following other property:
·Shares worth $18,000;
·Savings of $24,000 which were conceded;
·The net proceeds of sale from the Suburb H property which was conceded to be $265,000;
·Cash savings which on the husband’s evidence amounted to $40,000 corroborated as to $35,000 in cash in early 2005 on the evidence of Mr O, which was not shaken.
He pointed out that Mr O’s evidence was not challenged and it was not suggested that he had fabricated the evidence and therefore the contribution of the husband’s cash of at least $35,000 could comfortably be satisfied on the evidence. Counsel for the husband submitted that excluding superannuation of $66,000 at the beginning of the marriage, the husband’s contributions amounted to a total of $421,000.
On the other hand he submitted that at the beginning of the marriage the wife had approximately $120,000 in superannuation, $50,000 in savings and $168,000 invested in MLC.
Exhibit 7 was a table of the personal exertion of both parties during the relationship which was compiled by the husband. This was to demonstrate a disparity in income from personal exertion between the parties and the table did not include the year 2005 because there was a dispute about the pre-marriage relationship. This table did not include investment income and the figures included fringe benefits, salary and employer contributions to superannuation and salary sacrifice to superannuation. The table is entirely comprised of gross figures and does not include any income tax.
A table prepared by the wife, Exhibit D, was referred to by counsel for the husband as being “skewed” in the figures because the wife’s table includes investment income which included the proceeds of sale from the husband’s Suburb H property which she took control of and which she used to make financial and investment decisions for the family. He submitted that the way the wife determined those investments created a disparity.
Neither of the tables assisted me in determining this matter.
Counsel for the husband submitted that the wife should not be given credit for her contribution by way of the motor vehicle which had been provided by E Investments Pty Ltd for her use. Relying on Exhibit 6, the financial report of E Investments Pty Ltd for year ended 30 June 2009, he submitted that the deduction of registration, insurance and depreciation expenses claimed by E Investments Pty Ltd for the vehicle must have been claimed as necessary to earn income for the company and the only inference is that the wife works for the company otherwise it could not be claimed as a deduction.
As to s 75(2) factors, counsel for the husband submitted that the wife’s medical evidence was less than conclusive and that tests needed to be undertaken which had not yet been followed up. He submitted that treatment may hold a solution to her medical condition and criticised the wife for failing to adduce evidence from Dr P to whom she had been referred for additional testing. He submitted that Dr I eliminated a number of diagnoses but did not find a solution in respect of the wife’s medical condition and that he was of the belief that Dr P might hold a solution but that there was no evidence about this. He referred to the evidence of Dr I suggesting that stress is a likely contributor and submitted that it is likely that on the wife’s evidence stress has been relevant for some time.
He submitted that there is no evidence that the wife cannot work full-time because the evidence of the doctor was that he had adopted the wife’s “level of comfort” with three and a half days work. He referred to the fact that the wife has not worked full-time for about five years and submitted that she has not tested working full-time. He submitted that dust and changes in temperature would not be any different if the wife were working five days rather than three and a half days per week. He submitted that should the wife work full-time she was capable of earning an income of $105,000 per annum.
Counsel for the husband suggested that the husband’s employment was precarious because had been served with a redundancy letter in 2006 and again in 2010 when he was aged 50. He conceded that the redundancies had not proceeded because the husband was involved in new projects but argued that because the husband is now 55, there is “some delicacy and uncertainty” as to his future. He referred to the fact that the husband has no qualifications and “nothing to fall back on.” In contrast he argued that the wife has qualifications, is younger and can explore other options in a way that the husband cannot in terms of employment.
He submitted that the wife’s father had paid for her motor vehicle and for the purchase of the matrimonial home which she earned working for the company. He pointed to the fact that the wife is one of two children and the fact that the company E Pty Ltd had been established suggests an intention of the parents to benefit the children. He submitted that there was no other reason for the company to have been set up and to have the children named as shareholders. He submitted that it was an ordinary expectation that the wife would benefit from her father because she has a harmonious relationship with him.
Counsel for the husband submitted that to suggest that the payment proposed by the wife would enable the husband to buy back into the property market was “a nonsense”. He referred to the fact that the wife has the advantage of forgoing the payment of any stamp duty in contrast to the husband who must find other accommodation and after paying the fees associated with these proceedings (excluding counsel’s fees) will not have much remaining of his term deposit of approximately $218,000. He referred to the expense of accommodation for the husband because of the fact that the husband has lived in Suburb C for the last 10 years and proposes to continue to live in that area suggesting that accommodation costs there are high.
Regarding legal costs, counsel for the husband proposed that some adjustment should be made for the fact that the wife had paid her legal fees from capital from the joint asset pool. He proposed that this should be taken into account under s 75(2)(o) of the Act. He relied on the decision of Chorn & Hopkins (2004) FLC 93-204; [2004] FamCA 633 to argue for an adjustment in favour of the husband because the husband had paid his legal fees from post-separation income.
The Wife’s Evidence
The wife deposes that at the commencement of the marriage she had superannuation of $120,760 with Catholic Super Fund.[3] She deposes to initial non-superannuation contributions totalling $230,377. This was comprised of the following:
MLC Navigator Investment Plan $168,431
Savings $53,946
2000 Telstra Shares $8,000
[3] Affidavit of the wife filed 10 August 2015, paragraph 22
The wife’s evidence was that for a period of six months after the marriage (from the date of the marriage in July 2005 and before settlement of the Suburb C property in early February 2006) her parents paid for the rental costs of the parties so that her parents made a financial contribution on her behalf before the Suburb C property was settled.
There is no dispute that the wife’s parents made a financial contribution on her behalf by purchasing the Suburb C property and paying all the expenses associated with the purchase including stamp duty. The wife’s evidence was that this was a sum of $1,036,104 and that the sale of the property settled on 3 February 2006.
There was no dispute that since separation and until about May 2014 the wife continued to contribute to the outgoings including the utilities of the Suburb C property. The wife deposes at paragraph 38 of her affidavit filed 10 August 2015 as to her rental expenses incurred post-separation. Her evidence was that between May 2014 and August 2015 she has paid rent of $41,600 and that by the time of trial her rent will amount to a sum of $46,800. There was no evidence to contradict this and I accept this evidence.
The wife conceded that the husband had savings of $22,672 and owned the Suburb H property at the commencement of the marriage.
When cross-examined by counsel for the husband, the wife conceded that the husband had two motor vehicles at the commencement of the marriage which were both sold in 2006, after the marriage, realising a total of $19,000.
The wife was also cross-examined as to her knowledge of the musical equipment owned by the husband at the commencement of the marriage. A list of the musical instruments purportedly owned by the husband at the commencement of cohabitation was Exhibit 2. This list was admitted into evidence for identification only. Subsequently, when the husband was cross-examined it became clear that this list had not been compiled by him.
Cross-examined about that list of musical instruments, the wife stated that “I’m familiar with some of them but I don’t know the exact details of every single amp and guitar”. The wife could not say whether Exhibit 2 was an exact list of the instruments and equipment owned by the husband. She conceded that the husband had “quite a bit” and was in the practice of buying and selling musical instruments and equipment. Her evidence as to the husband’s method of buying and selling the instruments and equipment was that it was usually by cash but sometimes settled by credit card or electronic funds transfer.
When cross-examined about the husband’s cash reserves at the beginning of the marriage, the wife’s evidence was that the husband had “some cash but not a lot of cash”. The wife was unaware as to the exact amount the husband had; she said it was not something they discussed.
The wife also conceded that the husband possessed two watches at the commencement of the marriage, being a Breitling and a Tag Heuer. The Breitling watch is still owned by the husband and was the subject of expert valuation. It was included in the parties agreed table of assets (Exhibit C1). The Tag Heuer was sold during the marriage.
In the wife’s Case Outline at paragraph 20, the wife’s taxable income is listed as $51,893. The wife confirmed her gross salary before tax as $1,255 per week (as is recorded in the wife’s financial statement filed 10 August 2015). That amount was said by the wife to exclude superannuation contributions made by her employer at a rate of about 9 per cent.
Given that the wife lists her taxable income as $51,398 but her gross salary is approximately $65,000, counsel for the husband asked the wife what deductions she has made. The wife conceded that she had the benefit of salary sacrificing in the past but her evidence was that she was not presently salary sacrificing any of her income. The wife agreed that her gross salary of $65,000 was for working part-time at 0.7.
The wife began working at K School 13 years ago. The wife’s evidence in relation to her employment is that she began working part-time in 2010 although she first made the request to reduce her hours at the end of 2009. Prior to 2010, the wife worked full-time. The wife has not sought to increase her working hours since 2010. She deposes at in her affidavit filed 10 August 2015:
40.I continue to suffer the effects of the lung tumour with which I was diagnosed in April 2010.
36.The impact on my health of the two major surgeries I required, my persistent cough caused by my medical condition which the surgery has not completely rectified has caused me to reduce my hours of work. I am required to undergo ongoing medical treatment.
The wife was cross-examined as to her medical history. The wife gave evidence that she developed a persistent cough at the end of 2008 and that a tumour in her lungs was found and removed in 2010. She gave evidence as to her involvement with a number of different medical professionals since that time. Her primary doctor has been Dr I, respiratory physician, who prepared a report for the trial and who was also cross-examined. The wife’s evidence was that when she first consulted Dr I, she visited him quite often and that after 2011, the frequency of her appointments declined. In the last two years, the wife has attended upon Dr I approximately every six months. The wife said that her last appointment with Dr I was in June 2015. The wife’s evidence was that there was “no real agreement as to what was causing the problem”. The wife agreed that it was fair to say that her appointments were made on an “as needed basis”; her next appointment with Dr I was scheduled for the end of October 2015.
There was some cross-examination of Dr I directed to the fact that his notes show that the wife had only three appointments since October 2013. I am satisfied on the evidence of Dr I that there was correspondence and contact with other professionals coordinated with Dr I, but this does not detract from the credibility of the wife about her appointments.
When counsel for the husband put to the wife that there was nothing she could do in three and a half days of teaching that she could not do in five days, the wife responded that the more she does and the more she moves around, the more often her cough is triggered. Her evidence was that by working a little less, she can better contain her cough. The wife also stated that changes in temperature and humidity affect her cough.
The wife was cross-examined as to her involvement with the family companies. She was a director of E Investments Pty Ltd from 1988 until 2009 when she was removed from that position. Her evidence was that she was made a director so that she could assist her parents when they were travelling, which occurred for about two months every year. According to the wife, her assistance was effectively limited to the signing of cheques and documents and to the payment of invoices. She did not agree that she “signed off on accounts” when she was a director or that she was aware what was in the accounts of E Investments. The wife’s evidence was that she continued to assist her parents following her removal as a director in 2009, with her primary assistance being in the form of signing documents and cheques on behalf of her parents when they were away. When pressed by counsel for the husband, the wife conceded that she did sign a cheque to purchase the German motor vehicle which is owned by E Investments Pty Ltd currently driven by her and that her parents were present at the time.
The wife also gave evidence as to attending two or three body corporate meetings as a proxy for her father in relation to one property in Suburb Q and another in Suburb R. She also said that she has dealt with real estate agents in relation to renovations and repairs to be conducted on units on behalf of her father.
The wife confirmed that she has an email address relating to E Investments Pty Ltd that she has used on behalf of her father. She gave evidence that she used that email “very infrequently” and that the last time she used it was six months ago. She denied having any dealings on behalf of the company with the accountant of E Investments Pty Ltd or with the Australian Tax Office on behalf of any of the companies.
The wife was cross-examined about Exhibit 5 which was her personal tax activity statement which her accountant had addressed to an email address “…” on 20 June 2014. The wife’s evidence was that she has set up the email address in her name because her parents are not computer literate. She said that the email address has now changed but it was a “one-off type of thing” to assist her parents.
The wife was cross-examined specifically as to the German motor vehicle which was purchased and is owned by E Investments Pty Ltd but which is used by the wife. The wife gave evidence that she is not aware of how the Mercedes is dealt with in the accounts of E Investments Pty Ltd. She confirmed that E Investments pays for registration and insurance in relation to the Mercedes and admitted that her financial statement filed 24 June 2014 (Exhibit 3) contained an error in that it stated in Part F that E Investments paid for “motor vehicle insurance, registration and repairs” of the vehicle. The wife’s evidence is that she has always paid for petrol and repairs of the motor vehicles purchased for her use by E Investments Pty Ltd.
E Pty Ltd
E Pty Ltd was established in June 2013. The wife holds 250 shares of $1 in that company. The wife’s evidence about E Pty Ltd was that she did not know anything about the company but that it was set up to keep her father’s name. Her understanding from discussions with her parents was that her father wanted to keep the E name after his death. She stated “it’s a bit of an Italian thing”. When cross-examined about whether the intention of the company was to hold assets, she stated “possibly in the future… We discussed that in the future it could be a company in terms of a testamentary trust”. When asked about the shareholders she stated that they were “myself, my sister and my parents”. She stated that she did not know the details of the company and that it was dormant and did not have an ABN number. When asked about the directors of that company she stated that she did not know.
The wife’s evidence was consistent with the evidence of the accountant Ms N.
Evidence of the Accountant, Ms N
Ms N is the accountant for the wife personally and the wife’s parents, E Pty Ltd, E Family Holdings Pty Ltd, and E Investments Pty Ltd.
Ms N deposed that the wife has never been a director or shareholder of E Family Holdings Pty Ltd nor has she derived any benefit or payment from the said company. She deposed that neither of E Investments Pty Ltd and E Family Holdings Pty Ltd is a trustee of a trust.
Regarding E Investments Pty Ltd, she deposed that from 28 July 1988 through to 26 May 2009, the wife was a director of E Investments Pty Ltd and that at no time was she a shareholder. She stated that the wife did not receive any director’s fee for the period of her directorship. She deposed that E Investments Pty Ltd is the owner of a German motor vehicle driven by the wife, and that the wife pays all costs in respect of the vehicle save for registration and insurance.
At paragraph 6 of her affidavit filed 10 August 2015 she deposes that the wife “has not liaised with [her] in relation to the [E Group] including to request respectively accountancy, corporate or financial planning advice, to provide instructions, undertake transactions or in any manner deal with me for, or on behalf of the [E Group]”. She deposed that the wife has “signed cheques, run errands and undertaken deliveries when required by [her] or her parents only when they have been offshore on holiday from time to time”. She goes on to depose that whilst she has undertaken accounting work for the wife since in or about 1994, she has rarely met with her personally prior to in or about 2011.[4]
[4] Affidavit of N filed 10 August 2015, paragraph 6.
She deposed that the wife does not have an interest in any partnership or under any trust other than a unit holding in the “MLC Navigator Investment Plan” which is a retail managed investment trust.
She gave evidence that she did not have any discussions with the wife about the details of the purpose of the company E Pty Ltd. When asked about the purpose of this company she stated that it was incorporated for the purpose of a testamentary trust but there was no financial activity and the shareholders are both parents of the wife, the wife and her sister. Each have a holding of 25 per cent and the company owns no assets other than share capital of $1,000. She deposed in her affidavit filed 10 August 2015 that E Pty Ltd was registered on 4 June 2013 and that it has undertaken no financial activities since that time. She deposed that the wife holds 250 shares in E Pty Ltd. When questioned about why the holding was 25 per cent for the daughters, in cross examination she stated “because Mr and Ms E were also 25 per cent and because obviously when the time of the testamentary trust comes into existence, who knows who’s going to be around first and that so for continuity of properties to go into that…”.
Exhibit 5 was an activity statement for the wife which had been emailed to her via an email address entitled … on 20 June 2014. When asked about the email address, the accountant stated that “that is an email address I have for [Mr E]… [Mr E] was trying to get involved in email and [the wife] helped him with that… That’s the only address I had for the [E Family]”. However her evidence was that she was not in the habit of emailing to that address and that she usually sent correspondence by mail rather than email. She confirmed in cross-examination that the company owned the German motor vehicle driven by the wife and that it had been purchased by E Investments Pty Ltd which paid for registration and insurance.
This is a company of the wife’s parents and the wife has not ever controlled the company or owned the company at the relevant time. The documents sought relate to a period after the wife ceased her role as director. The husband is aware that the wife has received the benefit of the use of the company car which has been conceded from the outset. There is no evidence that the wife or husband have a role in the company for the years for which the comprehensive financial documents are sought. There is evidence that the wife assisted her parents by running errands and paying invoices on their behalf during periods of about six weeks when they were out of the country. There is no evidence that she was remunerated as an employee or a beneficiary of the company. It was common ground that the car was provided for the use of the wife at the beginning of the marriage through her father’s loan account from the company.
Subpoenae addressed to E Pty Ltd
The response to the subpoena to E Pty Ltd speaks for itself and no documents matching the description in the subpoena exist and therefore cannot be produced. The proper officer of that company has answered the subpoena.
I certify that the preceding fourteen (14) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Thornton delivered on 12 October 2015.
Associate:
Date: 5 February 2016
Annexure D
FAMILY COURT OF AUSTRALIA
| PARKES & PARKES | [2015] FamCA |
| PRACTICE AND PROCEDURE – Subpoena – where the wife’s father objects to a subpoena to give evidence in the trial – subpoena struck out for lack of relevance and probative value |
White & Tulloch v White (1995) 19 Fam LR 696 |
| APPLICANT: | Ms Parkes |
| RESPONDENT: | Mr Parkes |
| FILE NUMBER: | MLC | 5484 | of | 2014 |
| DATE DELIVERED: | 15 October 2015 |
| PLACE DELIVERED: | Melbourne |
| PLACE HEARD: | Melbourne |
| JUDGMENT OF: | Thornton J |
| HEARING DATE: | 14 October 2015 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Werner |
| SOLICITOR FOR THE APPLICANT: | Taussig Cherrie Fildes |
| COUNSEL FOR THE RESPONDENT: | Mr Dickson QC |
| SOLICITOR FOR THE RESPONDENT: | Lander & Rogers |
Orders
The subpoena to give evidence addressed to Mr E filed 18 August 2015 be set aside.
.
| FAMILY COURT OF AUSTRALIA AT MELBOURNE |
FILE NUMBER: MLC 5484 of 2014
| Ms Parkes |
Applicant
And
| Mr Parkes |
Respondent
EX TEMPORE
REASONS FOR JUDGMENT
Objection to subpoena to give evidence addressed to Mr E filed 18 August 2015
The husband has subpoenaed the wife’s father, E, to give evidence in this trial. There is no affidavit filed or proof of evidence served from E in the trial, perhaps for obvious reasons. The wife objects to her father being called as a witness for the husband, on the basis that any evidence to be adduced is irrelevant to the issues in the trial.
The husband seeks to adduce evidence from Mr E about E Pty Ltd, a company he registered on 4 June 2013. The wife has disclosed and deposed that she has 250 shares in that company, which are valued at $250, because the assets of the company amount to $1000.
I have heard additional evidence in the trial, of course, from the wife and Ms N, who is the accountant for the companies and the wife and also for Mr and Ms E, and that evidence is significant, as is the evidence of the wife. I have also had an opportunity of observing the witnesses as well, and assessing the evidence of the husband and the wife in this case at this stage.
Counsel for the husband seeks to adduce evidence from the wife’s father about the purpose of the company E Pty Ltd and to suggest that, to the extent that the children are shareholders, that it is a testamentary trustee company. He submits that the relevance of this evidence is a tendency to suggest that the daughters are beneficiaries. He concedes, on the basis of the authorities and, in particular, the case of White & Tulloch v White (1995) 19 Fam LR 696, that he does not seek to pursue this as a financial resource of the wife, but he wishes to adduce evidence from Mr E for the purposes of section 75(2)(o) factors.
He also seeks to adduce evidence from the witness, Mr E, about the deductibility of the expenses for the car driven by the wife based on the financial report for the year ended 30 June 2009, which was referred to the in cross examination of Ms N, the accountant. This is Exhibit 6. This report relates to the company E Investments Pty Ltd. He also seeks to adduce evidence from Mr E about the extent of his wealth and rental income in 2009 in reference to a property in Suburb Q, which was briefly referred to in the evidence of the wife.
This is opposed by counsel for the wife on the basis that the evidence of the wife and the accountant and the financial statement of the wife speak for themselves. The future intentions of the wife’s father are irrelevant and there is no necessary connection between the evidence that the company E Pty Ltd was constituted possibly with a view to being used as a testamentary trust, and any suspected expectancy.
I made an earlier ruling setting aside a number of subpoenae issued by the husband. The same reasons given for that ruling apply here. The evidence in the trial has not changed the facts in my view, having taken the opportunity of reviewing all of my notes in relation to that evidence, and considering the evidence of the wife and her accountant, which is important to my decision here, because what I was concerned about yesterday was whether there was any evidence that could be relied upon in the trial to establish a sufficient nexus with what is then asserted on the husband’s case. After having reviewed all of that evidence, it has not changed the situation, in my view, and it does not provide a basis for adducing the same evidence through Mr E.
The new evidence relied upon by the husband is not evidence of the existence of a testamentary trust, but, at its highest, evidence that the company E Pty Ltd might be used in the future for that purpose. The assets of that company amount to $1000, and the wife has a shareholding of 250 $1 shares. There is no other evidence which might be a foundation for the relevance of the evidence sought to be adduced from Mr E about this company, and having reviewed the evidence of the wife about the limited extent of her involvement with the company, I am comfortably satisfied in coming to that conclusion.
There is no worthwhile nexus with this evidence and the husband’s case that there is an expectancy for the wife or that she is a beneficiary in some way from a testamentary trust. The other evidence about E Investments Pty Ltd, the wife’s use of the car is not relevant. It is conceded that the wife has had and will continue to have the benefit of the German motor vehicle, which she has had through her father’s loan account from the company E Investments Pty Ltd. There is no basis to extend the trial by adducing evidence from Mr E, and any evidence he could give is limited as the witness of the husband. There is the additional aspect that there is no affidavit and no proof of evidence from the witness who has been subpoenaed, which does not afford procedural fairness to the wife.
I am not satisfied that in all the circumstances, having heard the evidence of Ms N and the wife and the concession made by counsel for the wife yesterday, that the wife’s father will continue to provide her with the use of a motor vehicle and will continue to fund her insurance and registration that the evidence of Mr E is relevant to the issues in this trial. Accordingly the husband’s application to adduce evidence from the wife’s father, Mr E is refused and the subpoena to give evidence is set aside.
I certify that the preceding ten (10) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Thornton delivered on 15 October 2015.
Associate:
Date: 5 February 2016
Key Legal Topics
Areas of Law
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Family Law
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Equity & Trusts
Legal Concepts
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Constructive Trust
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Procedural Fairness
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Remedies
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Costs
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Injunction
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Res Judicata
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