Pecora & Pecora
[2023] FedCFamC2F 1647
•22 December 2023
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Pecora & Pecora [2023] FedCFamC2F 1647
File number(s): ADC 4118 of 2022 Judgment of: JUDGE PARKER Date of judgment: 22 December 2023 Catchwords: FAMILY LAW – PROPERTY – modest asset pool – where Husband asserts post-separation decline in earning capacity – where Wife makes superior post-separation contributions – where Wife has sole care of young children with no child support of significance – where Husband’s actions have reduced value of assets available for distributions – adjustment in favour of Wife Legislation: Evidence Act 1995 (Cth), ss 140, 144
Family Law Act 1975 (Cth), ss 75, 79, 90XT, 106A
Federal Circuit and Family Court of Australia Act 2021 (Cth), ss 190, 191
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth), r 12.13
Cases cited:
Aleksovski & Aleksovski [1996] FamCA 111; (1996) FLC ¶92-705
Anson & Meek [2017] FamCAFC 257; (2017) FLC ¶93-816
Antmann & Antmann [1980] FamCA 64; (1980) FLC ¶90-908
Barnell & Barnell [2020] FamCAFC 102; (2020) FLC ¶93-961
Beck & Beck (No 2) [1983] FamCA 7; (1983) FLC ¶91-318
Best & Best (1993) FLC ¶92-418
Bolger & Headon [2014] FamCAFC 27; (2014) FLC ¶93-575
Clauson & Clauson [1995] FamCA 10; (1995) FLC ¶92-595
C & C [2005] FamCA 429; (2005) FLC ¶93-220
Crawford & Crawford [1979] FamCA 38; (1979) FLC ¶90-647
Fields & Smith [2015] FamCAFC 57; (2015) FLC ¶93-638
Holland & Holland [2017] FamCAFC 166; (2017) FLC ¶93-798
Hurst & Hurst [2018] FamCAFC 146; (2018) FLC ¶93-851
I & I [2005] FamCA 432; (2005) FLC ¶93-221
Jabour & Jabour [2019] FamCAFC 78; (2019) FLC ¶93–898
Kowaliw & Kowaliw [1981] FamCA 70; (1981) FLC ¶91-092
Mallet & Mallet [1984] HCA 21; (1984) 156 CLR 605
Money & Money [1994] FamCA 54; (1994) FLC ¶92-485
Norbis & Norbis [1986] HCA 17; (1986) 161 CLR 513
AJO & GRO [2005] FamCA 195; (2005) FLC ¶93-218
Pierce & Pierce [1998] FamCA 74; (1999) FLC ¶92-844
R & R [2003] FMCAfam 234
Russell & Russell [1999] FamCA 1875; (1999) FLC ¶92-877
Singerson & Joans [2014] FamCAFC 238
SJS & NS [2005] FamCA 66
Stanford & Stanford [2012] HCA 52; (2012) 247 CLR 108
Tomlin & Nilsen [2011] FMCAfam 166
Wallis & Manning [2017] FamCAFC 14; (2017) FLC ¶93-759
Watson & Ling [2013] FamCA 57; (2013) FLC ¶93-527
Weir & Weir [1992] FamCA 69; (1993) FLC ¶92-338
Z & Z [2005] FamCA 996; (2005) FLC ¶93-241
Division: Division 2 Family Law Number of paragraphs: 95 Date of hearing: 13-14 December 2023 Place: Adelaide (via Microsoft Teams) Counsel for the Applicant: Mr Anderson Solicitor for the Applicant: Clark Panagakos Counsel for the Respondent: Mr Britton Solicitor for the Respondent: Daniel John Lawyers ORDERS
ADC 4118 of 2022 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MS PECORA
Applicant
AND: MR PECORA
Respondent
ORDER MADE BY:
JUDGE PARKER
DATE OF ORDER:
22 DECEMBER 2023
THE COURT ORDERS THAT:
1.The parties each do all acts and things required to cause the funds held in the trust account of B Company being the proceeds of sale of the property at C Street, Suburb D, South Australia to be distributed as follows:
(a)The sum of $269,768.16 to the Wife; and
(b)The balance to the Husband.
2.The following shall apply to the interest of the Wife in Super Fund 1 (Client ID …, Account ID …) (the Fund):
(a)A base amount of $56,722.97 is allocated, as required by section 90XT(4) of the Family Law Act 1975 (Cth) to the Husband out of the Wife’s interest in the Fund.
(b)In accordance with paragraph 90XT(1)(a) of the Family Law Act 1975 (Cth):
(i)The Husband is entitled to be paid the amount calculated using the base amount of $56,722.97 in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001.
(ii)The entitlement of the Wife and any other person to whom a splittable payment may be made to payments out of the Wife's interest in the Fund is correspondingly reduced.
(c)The trustee of the Fund shall do all such acts and things and sign all such documents as may be necessary to:
(i)Calculate, in accordance with the requirements of the Family Law Act 1975 (Cth) and the Family Law (Superannuation) Regulations 2001, the entitlement of the Husband.
(ii)Pay the Husband the entitlement whenever the trustee makes a splittable payment out of the Wife's interest in the Fund.
(d)These orders have effect from the operative time and the operative time is four (4) days after service of these orders on the trustee of the Fund.
(e)After service of the payment split notice pursuant to part 5 of the Southern State Superannuation Regulations 2009 (the regulations), the Husband shall do all such things and sign all such documents as may be necessary, including but not limited to exercising his request pursuant to the regulations, for either the retention of the Husband's interest in the Husband's name in the Fund, or for the rollover or transfer of the Husband's interest to a complying superannuation fund of the Husband's choosing in accordance with the regulations, or, if appropriate, for the payment of the Husband's interest by way of a lump sum entitlement in accordance with the regulations.
(f)The Court notes:
(i)The value of the Husband's interest is calculated in accordance with the regulations.
(ii)Any payments from the Wife's superannuation interest in the Fund made after the Fund trustee has either created a new interest in the Husband's name in the Fund, rolled over or transferred the Husband's interest to a complying superannuation fund, or paid the Husband his interest by way of a lump sum payment, are not splittable payments in accordance with the requirements of the Family Law (Superannuation) Regulations 2001.
3.Save as otherwise provided for in these orders:
(a)The Wife retain to the exclusion of the Husband all her right, title and interest in all property owned by her or in her possession, including but not limited to:
(i)Motor Vehicle 1 registered in her name;
(ii)All furniture and effects in her possession;
(iii)All funds standing to her credit in bank accounts; and
(iv)All superannuation held by her.
(b)The Husband retain to the exclusion of the Wife all his right, title and interest in all property owned by him or in his possession, including but not limited to:
(i)Motor Vehicle 2 registered in his name;
(ii)All furniture and effects in his possession;
(iii)All funds standing to his credit in bank accounts;
(iv)His interest in the company known as E Pty Ltd and all assets, plant and equipment held by that company; and
(v)All superannuation held by him.
(c)The Wife remain solely liable for and indemnify the Husband against any and all liabilities in her name including but not limited to her MasterCard.
(d)The Husband remain solely liable for and indemnify the Wife against any and all liabilities in his name and/or in the name of E Pty Ltd Pty Ltd including but not limited to all liabilities to the Australian Taxation Office.
4.The parties be at liberty to provide a copy of these orders to B Company for the purpose of implementation of these orders.
5.If either party refuses, fails or neglects to execute any document necessary to put these orders into effect fourteen (14) days after being requested to do so, and any such refusal, failure or neglect is proved by affidavit filed and served by or on behalf of the party alleging this, a Registrar of the Federal Circuit and Family Court of Australia (Division 2) be and is hereby appointed pursuant to section 106A of the Family Law Act 1975 (Cth) to execute such document in the name of such party.
6.All extant applications are otherwise dismissed.
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 a pseudonym has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE PARKER:
INTRODUCTION
The applications before the Court relate to property settlement proceedings between the Applicant Wife, MS PECORA (‘the Wife’), and the Respondent Husband, MR PECORA (‘the Husband’). Each of the parties sought orders dividing their property between them pursuant to section 79 of the Family Law Act 1975 (Cth) (‘the Act’).
BACKGROUND
The Wife was born in 1981 and was aged 42 at the time of the trial. She works two days per week as a public servant and is otherwise engaged in home duties. The Husband was born in 1979 and was aged 44 at the time of trial. He is self-employed as a professional.
The parties married and commenced cohabitation in 2010. There are two children of the marriage, X, who was born in 2015 and was nearly 9 years of age at the date of the trial, and Y, who was born in 2020 and was aged 3 at the date of the trial.
The parties separated under one roof in early 2022 and physically separated in mid-2022 when the Husband vacated the former matrimonial home at C Street, Suburb D, South Australia (‘the Suburb D property’). Their divorce became final in mid-2023.
PROPOSALS
At the commencement of the trial, the Wife sought, in summary, that the entirety of the funds held in the trust account of B Company, being the proceeds of sale of the Suburb D property, be distributed to her, that the Husband retain liability for all debts in his name including his taxation liabilities, that the parties each otherwise retain the non-superannuation assets in their respective possession, and that there be a superannuation split from her superannuation in favour of the Husband using a base amount of $43,420. This would have resulted in her receiving more than 100 percent of the available non-superannuation assets. The position promoted by her Counsel at the conclusion of the trial represented a settlement of between 80 and 90 percent of the non-superannuation assets in her favour. Although her formal application included a Child Support departure application, this was not pressed at trial.
The Husband sought, in summary, that the proceeds of sale of the Suburb D property be divided in such proportions as would be required to effect an overall distribution of the parties’ non-superannuation assets and liabilities in proportions of 55 percent to the Wife and 45 percent to the Husband, that he retain to the exclusion of the Wife his interest in the entity known as E Pty Ltd, that the Wife make available to him a box of hard drives belonging to E Pty Ltd, and that there be a superannuation splitting order in his favour from the Wife’s superannuation using a base amount of $97,496.
Both parties provided evidence of procedural fairness having been afforded to the Wife’s superannuation fund with respect to the superannuation splitting orders they sought.
THE PARTIES AND THEIR EVIDENCE
Although the trial was conducted by Microsoft Teams, the parties and Counsel were present together in the courtroom and the parties each gave their evidence in the witness box. I had a clear view, via videolink, of each of the parties, their facial expressions and their demeanour as they gave their evidence and was well able to form assessments as to each of them.
The Wife gave her evidence in a calm and straightforward manner. The answers she gave under cross-examination were responsive to the questions asked of her and she impressed as a witness who was endeavouring to give honest and accurate evidence. The Wife’s evidence was not undermined in cross-examination.
The Husband’s oral evidence was often evasive. He frequently failed to answer the questions put to him and on a number of occasions gave facetious responses. He did not impress as a generally reliable witness.
THE LEGAL FRAMEWORK
Orders under section 79 of the Act altering the property interests of parties may only be made if the Court is first satisfied, pursuant to section 79(2), that it is just and equitable to make such orders.[1] If the Court determines that it is just and equitable for the property interests of the parties to be altered, section 79(4) sets out the matters the Court must take into account in considering what order, if any, should be made. The Court must identify and assess the parties' contributions within the meaning of sections 79(4)(a)-(c) and then take account of the relevant matters referred to in sections 79(4)(d)-(g) and 75(2).
[1] Stanford & Stanford [2012] HCA 52; (2012) 247 CLR 108.
In accordance with section 140 of the Evidence Act 1995 (Cth), all findings of fact in this judgment are made on the balance of probabilities.
Whether it is just and equitable that orders be made
The parties agree that it is just and equitable that orders be made altering their interests in their property. However, that alone is insufficient, and I must be satisfied that it is just and equitable that an order be made.
In Stanford & Stanford (‘Stanford’)[2], the High Court of Australia made it clear that I must not conflate my determination pursuant to section 79(2) of the Act with my determination pursuant to section 79(4) of the Act. These are separate enquiries, and I must not start with an assumption that one party or the other has the right to have their property divided between them.
[2] [2012] HCA 52; (2012) 247 CLR 108.
The parties no longer live together. Their former home has been sold and they each seek orders as to the distribution of the proceeds of sale which are held on trust and not currently accessible to either of the parties. If there were no adjustment to the legal ownership of their property interests, there would be no justice and equity to the parties. This is clearly one of the ‘vast majority of cases’ referred to by the plurality in Stanford, in which the requirements of section 79(2) of the Act are readily satisfied. It is plainly just and equitable to make an order pursuant to section 79(4) of the Act in these proceedings for a division of property between the parties.
ASSETS AND LIABILITIES
Although there were a number of differences between the parties with respect to the assets and liabilities available for distribution between them at the commencement of the trial, by its conclusion, the parties had agreed that the assets and liabilities were as follows:
Assets Ownership Value Proceeds of sale of Suburb D property Joint $413,606.53 Plant and equipment of Husband’s business Husband $500 Total Assets $414,106.53 Liabilities Ownership Value Commonwealth Bank Mastercard
Wife
$3,490.06
Personal Taxation Debt
Husband
$55,272
E Pty Ltd Taxation Debt
Husband
$307
Total Liabilities
$59,069.06
Net total of non-superannuation assets $355,037.47 Superannuation Ownership Value Super Fund 1 Wife $232,137.60 ATO held super Husband $1,748.57 Total superannuation $233,886.17 Net total including superannuation $588,923.64
In addition to the assets and liabilities outlined above, the parties each have a motor vehicle of modest value, modest funds in bank accounts and furniture and household items, which they agreed could be excluded from the calculations to be undertaken by the Court.
Although the Husband deposed that his superannuation interest had been ‘seized by the Australian Taxation Office,’ it appeared in the financial statement he relied upon for the trial, and he did not seek that it be excluded from the list of assets and liabilities available for distribution between the parties. I note in any event that if the superannuation interest is seized by the Australian Taxation Office and applied to the reduction of the Husband’s taxation debts, his net position will be unaffected.
CONTRIBUTIONS
Contributions at commencement of relationship
It is not a matter of contention between the parties that at the commencement of their cohabitation, the Husband owned the Suburb D property, having purchased it at a time when the parties had commenced dating but were not yet cohabiting. The property was tenanted from its purchase until the parties commenced residing in it following their marriage.
A settlement statement tendered by the Wife[3] demonstrates that the Husband had purchased the property in 2007 for the sum of $475,000, subject to debts totalling $498,177.23, being mortgage finance in the sum of $447,711.75 and vendor finance of $50,465.48. The Husband also owned a motor vehicle and a business he operated as a sole trader.
[3] Exhibit W2.
The Husband deposed in each of two affidavits sworn in October 2022 that he held $89,018 in equity in the Suburb D property at the time of cohabitation. By the time of his trial affidavit sworn on 26 October 2023, his estimate had grown to $120,000 in equity at the time of cohabitation. He asserted in the witness box that the equity he had held at the time of cohabitation had been $127,000. He was cross-examined about how the equity could have grown to such a significant amount in only three years in light of his evidence of earning a gross income of approximately $70,000 per annum at the relevant time. He asserted that the increase in equity could be explained by an increase in value in the property. He adduced no expert evidence of the value of the Suburb D property in 2010.
The Husband asserted that he had calculated the equity by reference to ‘RP Data’ which he insisted was ‘very reputable.’ He was unable to say what either the value of the property or the balance of the mortgage had been at the time of cohabitation and his various differing calculations of the equity therefore all remained unexplained. I do not accept any of the versions of the Husband’s evidence with respect to the equity in the Suburb D property at the time of cohabitation.
The admissible evidence before the Court reveals that as at the time of purchase in 2007, the Husband owed approximately $23,000 more than the value of the property. However, the vendor finance of $50,465.48 was never repaid and that liability is now statute barred and therefore will not be required to be repaid, such that it arguably cannot now be seen to have reduced the Husband’s equity in the property. As such, it would appear that as at the time of purchase, the Husband held equity of approximately $27,000.
Without the benefit of expert valuation evidence or any evidence as to the mortgage balance as at 2010, I am unable to make a precise finding as to the equity at the time of cohabitation three years later. Doing the best I can with the evidence before the Court, having regard to the short passage of time between the purchase of the property and the commencement of cohabitation and to the Husband’s asserted income at the relevant time, I consider the equity held at that time would likely have remained modest. I have regard both to the fact that the Suburb D property became the parties’ matrimonial home and its proceeds now represent their major asset,[4] and to the fact that the significance of initial contributions may be offset by other contributions made over the course of a marriage of the length of the parties’ marriage in the present case.[5]
[4] Having regard to authorities including Pierce & Pierce [1998] FamCA 74; (1999) FLC ¶92-844.
[5] Crawford & Crawford [1979] FamCA 38; (1979) FLC ¶90-647; Money & Money [1994] FamCA 54; (1994) FLC ¶92-485; Clauson & Clauson [1995] FamCA 10; (1995) FLC ¶92-595.
The Wife’s unchallenged evidence was that at the commencement of cohabitation she had held approximately $20,000 in savings, most of which was applied to the parties’ honeymoon, a motor vehicle and superannuation of approximately $45,000. The Husband’s evidence was that the Wife had no savings of significance and a credit card debt of between $3,000 and $4,000. The Wife acknowledged that she had a credit card but deposed that its limit had been $2,000 until it was increased to $3,500 when the parties travelled overseas for their honeymoon. This evidence was not challenged. Based on my observation of the parties as witnesses generally, I accept the evidence of the Wife and find that she had approximately $20,000 in savings and not more than $2,000 in credit card debt.
Contributions during the relationship
The Husband deposed that he had been the primary breadwinner during the parties’ marriage. He worked for most of the duration of the parties’ marriage as a self-employed professional through his business F Business. In or around 2021, he established the company E Pty Ltd and commenced operating through that company, shifting his focus to another area. F Business subsequently ceased operating.
The Wife denied that the Husband had been the primary breadwinner. She also worked in paid employment during the relationship, working full time until the birth of the parties’ first child, at which time she took paid maternity leave before returning to work part time until the birth of the parties’ second child, at which time she took a further period of paid maternity leave before resuming part time work. The parties differed slightly as to the duration of the Wife’s periods of maternity leave. Nothing turns on this.
The evidence of the Wife was that she was the primary caregiver for the parties’ children from their births, had attended to their daily needs and organised and attended to their medical and other requirements. The Husband admitted in his trial affidavit that the Wife had been the children’s primary caregiver, but, apparently having forgotten his evidence, disputed it in the witness box. I accept the evidence of the Wife, whose evidence in relation to this issue was consistent. The parties disagreed as to the extent of the assistance provided by the Husband with respect to the care of the children.
The parties agreed that the Wife undertook the majority of homemaking duties during the parties’ relationship. It was agreed that the Husband attended to some maintenance tasks, though the extent of this was in dispute.
The parties maintained separate finances and separate bank accounts during their relationship. The Wife’s evidence was that they applied their income in accordance with an agreement whereby the Husband made the mortgage payments and the Wife paid for the balance of their household expenses including groceries, household supplies, clothing and household maintenance expenses. Although the Husband asserted that he paid the mortgage in addition to most other household expenses, Counsel for the Husband confirmed in closing submissions that he did not impugn the Wife’s evidence with respect to the payment of household expenses. The Wife acknowledged that she had not made any direct mortgage payments.
Counsel for both parties submitted that the parties’ contributions ought to be assessed as having been equal up until the point of their separation. This accords with my own assessment of the evidence taken as a whole and I do not consider it necessary to determine the minor disputes between the parties as to the details of their respective contributions during the relationship.
Post-separation contributions
Following the parties’ separation, the parties’ two young children have remained in the sole care of the Wife. The Husband has spent very little time with the children since separation, having seen them on only two brief occasions in the presence of the Wife following the parties’ separation. He has not seen them at all since mid-2022. As a result, the responsibility for the care of the children has fallen entirely to the Wife.
The Husband has paid very little by way of Child Support to the Wife since the parties’ separation. It is not a matter of contention between the parties that he paid no Child Support until September 2023. The Wife’s unchallenged evidence was that on two occasions in late 2022, at which time the Husband had, according to a Financial Statement filed by him, a surplus of income over expenditure of $357 per week, her solicitors requested that he pay Child Support but he did not do so. The Husband did not provide a satisfactory explanation for his conduct in this regard.
The Wife alleged that in each of September and October 2023, she received a payment of $41.08, being the assessed monthly Child Support at that time, and that she has received no further payments. The Husband asserted under cross-examination that he had made further payments, which he claimed must not have been passed on by Services Australia. He adduced no documentary evidence to prove this assertion. He inexplicably claimed that it would have been ‘a breach of the Privacy Act’ for him to have followed up Services Australia to enquire as to where the payments he claimed to have made had been directed upon learning of the Wife’s assertion that she had not received them. The Husband’s evidence in this regard was unconvincing. I accept the evidence of the Wife.
The current Child Support Assessment, from October 2023, is $272 per month. Even if paid in full, this amount is insufficient to provide any appreciable relief to the significant financial burden faced by the Wife, who otherwise bears all of the children’s expenses including their living expenses, their medical expenses and education and extra-curricular activity expenses for the elder child. The financial care of the children with no meaningful assistance from the Husband has been another substantial post-separation contribution made by the Wife.
Although the Wife had the benefit of living in the former matrimonial home between the parties’ separation and its sale, to the extent that this could be said to have been a post-separation contribution on behalf of the Husband, such contribution is undermined by the fact that he was not making payments towards the mortgage and outgoings during that time. This contribution is of limited significance compared to the substantial post-separation parenting and other contributions made by the Wife as outlined above.
The Wife sought a 10 percent adjustment for post-separation contributions in circumstances in which she has been providing the sole care for the parties’ children and has been solely responsible for their financial support, while the Husband has not made any contributions of significance during the relevant period beyond the Wife’s occupation of the former matrimonial home.
Assessment of contributions
In Aleksovski & Aleksovski,[6] Kay J held as follows:
It is … necessary that trial Judges weigh and assess the contributions of all kinds and from all sources made by each of the parties throughout the period of their cohabitation and then translate such assessment into a percentage of the overall property of the parties or provide for a transfer of property in specie in accordance with that assessment.
[6] [1996] FamCA 111; (1996) FLC ¶92-705.
His Honour went on to say that ‘what is important is to somehow give a reasonable value to all of the elements that go to making up the entirety of the marriage relationship.’
More recently, the Full Court of the Family Court of Australia (as that Court was then known) in Jabour & Jabour[7] emphasised the importance of recognition of the myriad of contributions that each of the parties has made during the course of their relationship.
[7] [2019] FamCAFC 78; (2019) FLC ¶93–898.
I am not required to dissect each individual contribution and attach a percentage to it. I must make a holistic assessment, taking into account the contributions of all types made by the parties over the duration of their relationship.[8]
[8] Bolger & Headon [2014] FamCAFC 27; (2014) FLC ¶93-575; Fields & Smith [2015] FamCAFC 57; (2015) FLC ¶93-638; Jabour & Jabour [2019] FamCAFC 78; (2019) FLC ¶93–898.
Counsel for the Husband contended that the parties’ contributions should be assessed as equal. As outlined above, the Wife agreed that contributions were equal up to the point of the parties’ separation but contended for a 10 percent adjustment in her favour on account of post-separation contributions. In my view, a holistic assessment of the myriad of the parties’ contributions as outlined above, having regard to the 12 year duration of their marriage and the comparatively short duration of the period between their separation and the trial during which I accept that the Wife made significant contributions which were not matched by contributions made by the Husband, leads to a conclusion that there should be an adjustment of 5 percent in the Wife’s favour on account of contributions. I therefore assess the parties’ contributions as having been made 55 percent by the Wife and 45 percent by the Husband.
SECTION 75(2) FACTORS
Prospective considerations
The parties are of similar ages and there is no medical evidence before the Court to suggest that either of them suffers from any health or medical conditions that would be pertinent to the Court’s consideration pursuant to section 75(2) of the Act. The evidence of both parties is that they presently reside with their respective parents.
As mentioned earlier in these reasons, the parties’ young children live in the sole care of the Wife and the Husband has not spent any time with them since mid-2022. Although he attempted to attribute responsibility for this to the Wife, the reality is that the Husband has not brought any application with respect to parenting matters or even made a request for any time through the parties’ respective solicitors. There is no evidence before the Court to indicate that he has taken any proactive steps to engage with the children in the period of approximately 16 months which has elapsed since he last saw them. I accept the evidence of the Wife that the Husband has not sought to spend time with the children in recent months. I accept the submission of Counsel for the Wife that the evidence suggests that it is likely that the Wife will continue to bear the sole responsibility for the children for the foreseeable future and potentially until they reach the age of majority.
The Wife presently earns a gross salary of a little under $30,000 per annum working two days per week and receives a single parent benefit from Centrelink. Her part-time work arrangements are reasonable in light of her care of the parties’ young children, one of whom remains below school age, and I did not understand the Husband to assert otherwise. I am satisfied that the duration of the parties’ 12-year marriage and the fact that it has produced two children have had an impact on the Wife’s earning capacity.
The Wife gave evidence that once the parties’ younger daughter commences school in 2026, she intends to increase her work arrangements to five days per week. It can be expected therefore that the Wife’s income will remain similar to her current rate for the next two years and will thereafter increase to approximately $75,000 per annum, being the equivalent full-time income, subject to any adjustment in accordance with the consumer price index. The Wife was cross-examined about the likelihood that she would be promoted from her current public service pay level of … to a higher bracket. She gave credible evidence that she did not know if or when that would occur in future. There is no evidence before the Court that would found a finding or inference to the effect that the Wife’s income will increase in future beyond the increase concomitant upon her anticipated increase to full time hours.
The Wife’s unchallenged evidence was that her current living arrangement with her parents was not tenable in the long-term as there was inadequate space in her parents’ home to properly house herself and the children, she is required to pay for storage as there is inadequate space to house their belongings, and their home is a considerable distance from her work and the child X’s school and activities. Whilst both parties are presently living with their parents and will ultimately need to rehouse themselves, I accept that the Wife has a particularly pressing need to rehouse not just herself but also the two young children of the marriage who are in her full-time care, and that unlike the Husband, who does not spend any time with the children, she will need to obtain housing suitable to accommodate a family of three.
The Husband’s evidence was that he consistently earned between $60,000 and $80,000 per annum during the parties’ relationship. This was not conceded by the Wife, but she acknowledged having had limited knowledge of the Husband’s financial circumstances during the marriage. The Husband acknowledged having previously rented (or otherwise funded) business premises in Adelaide and having maintained a virtual office in Sydney. His individual taxation return for the financial year ended 30 June 2021[9] indicates that he generated gross business income of $134,939.
[9] Exhibit W1.
Following separation, there has been a sharp decline in the Husband’s income. In early 2021, approximately a year prior to the parties’ separation, the Husband changed his career focus. He commenced operating a new business through the entity E Pty Ltd and ceased operating his previous business, F Business. The Husband’s evidence was that this business has declined to the point where it generated only $8,095.93 in income in the period late 2022 to late 2023, had ‘effectively been inactive’ for the nine months preceding the swearing of his trial affidavit in October 2023 and was no longer financially viable. By contrast to his 2021 taxation return, the Husband’s taxation return for the year ended 30 June 2023 disclosed gross business income of only $6,654.[10] The Husband deposed that he had no current income. Of course, I am required to have regard to the Husband’s earning capacity, not simply his current income.[11]
[10] Exhibit W1.
[11] Beck & Beck (No 2) [1983] FamCA 7; (1983) FLC ¶91-318.
The Husband gave evidence under cross-examination to the effect that his line of work had been impacted by the COVID-19 pandemic, which had caused clients to cut costs. While judicial notice[12] may well be able to be taken of the impact of the pandemic and its attendant restrictions on some aspects of the workforce, in my view this is not open in the the husband’s business, in which businesses might well have been expected to have benefited from the large-scale increase in online and remote working arrangements arising from the advent of the pandemic. As such, it was incumbent upon the Husband to adduce evidence to demonstrate his assertions in this regard. He did not do so. Furthermore, when it was put to him that the decline in his personal circumstances had occurred at a time well after the worst of the impact of the pandemic had occurred and after the community and economy had started to recover, he responded that the pandemic had been ‘delayed’ in his line of work. That evidence was unconvincing. I do not accept that the reduction in the Husband’s income from the time of the parties’ separation was caused or substantially caused by the COVID-19 pandemic.
[12] Evidence Act 1995 (Cth) s 144.
The Husband also sought to attribute the downturn in his business to an unparticularised allegation that the Wife had ‘denigrated’ him in the ‘local industry.’ He did not disclose how he had come to be in the possession of knowledge that the Wife had acted as alleged and adduced no evidence to demonstrate that this had occurred. No evidence was adduced by him that would support a finding to this effect. I note that it would have been self-defeating for the Wife to have acted as alleged, which renders the allegation improbable on its face.
The Wife alleged that the Husband had either deliberately run down his business or refrained from exercising his earning capacity in the post-separation period in order to cause her financial detriment. She gave unchallenged evidence that the Husband has closed his business website following separation and pointed to the coincidental timing of the Husband’s income having declined significantly at precisely the time of separation after what he acknowledged had been many years of stable earnings. Counsel for the Husband argued that his downturn had in fact begun well prior to the parties’ separation. Whilst it is certainly the case that he ceased meeting some of his obligations, particularly his taxation obligations, prior to the parties’ separation, the income tax returns referred to earlier in these reasons suggest that his financial decline did not commence in any significant way until the time of the parties’ separation.
The Husband deposed that he was actively seeking alternative employment through job search websites and that he received daily notifications about suitable job vacancies. He produced a screenshot demonstrating such notifications but no independent evidence of having applied for any jobs.[13] The Husband was cross-examined about the efforts he had made to obtain gainful employment in the post-separation period and claimed that he had made between 50 and 60 applications for jobs. By way of explanation for not having produced evidence of any job applications having been made, he said that some of his ‘applications’ had in fact been ‘word of mouth’ or ‘between friends’ but also asserted that he had made ‘quite a few’ formal applications. When asked if he had applied for any of the nine new jobs in different areas shown in the screenshot of notifications he relied upon, the Husband gave the non-responsive answer that he had applied for ‘a variety of jobs.’ He asserted that he was unable to recall whether he had applied for any of the jobs in communication shown in the screenshot.
[13] Husband’s trial affidavit filed 26 October 2023, annexure P-6.
In response to a call for production of documents demonstrating job applications having been made by him, the Husband produced a handwritten list of jobs he said he had applied for, which he asserted he had compiled by searching the emails on his phone during the time the Court was adjourned for lunch.[14] He did not produce any of the emails themselves despite indicating that he had been able to access them on his phone and provided no explanation for not having produced evidence of having made job applications earlier in circumstances in which he had known prior to the commencement of the trial that the Wife alleged that he was deliberately refraining from exercising his earning capacity. I was left with considerable doubt as to the genuineness of the Husband’s asserted efforts to obtain gainful employment in the post-separation period.
[14] Exhibit H1.
In my view, however, it matters little whether the present downturn in the Husband’s income occurred as a result of a deliberate scheme to cause detriment to the Wife as she alleged or an unfortunate series of events which happened to coincide with the parties’ separation as the Husband asserted. On either view, this can be expected to be only a temporary setback for the Husband and his career. The evidence reveals that he has a demonstrated capacity to consistently earn an annual income in the range of $60,000 to $80,000 per annum over an extended period and that he possesses marketable skills and expertise by virtue of which consistently generated income prior to changing his business focus.
Indeed, the Husband acknowledged in the witness box that he is ‘pretty good at what [he does]’ and it was submitted on his behalf that he has an ‘impressive past record as a self-employed businessman.’ The Husband does not have the care of the children and the evidence does not reveal that he has any other commitment or life circumstance which would prevent him from committing himself fully to obtaining and engaging in gainful full-time employment once these proceedings have concluded. I am comfortably satisfied that the Husband’s earning capacity is presently significantly greater than that of the Wife and that this will remain the case at least until their younger daughter commences school.
The circumstances surrounding the Husband’s present income have the consequence that the extent to which it can be expected that the Wife will receive any Child Support of significance, at least in the short-term future, is unknown. The amount currently assessed is nominal when compared with the expenses the Wife deposed to meeting for the children, both in her trial affidavit and in her financial statement. Although the Husband gave evidence of an intention to obtain employment, there is a risk that if he remains self-employed or returns to self-employment in future, even if his income increases, his history of recalcitrance with respect to the filing of taxation returns may impede the Wife’s ability to obtain adequate Child Support well into the future.
The risk that the Wife may not receive adequate Child Support in future is supported by the evidence that in late 2022, at which time the Husband had, according to a Financial Statement filed by him, a surplus of income over expenditure in the order of $357 per week, the Wife’s solicitors invited the Husband to make payments of Child Support to the Wife but he declined to do so despite having indicated to the Court that he was prepared to do so. It is also supported by the evidence suggesting that since there has been a Child Support Assessment in place, the Husband has made only two payments totalling $82.
The Husband was cross-examined about expenditure on his credit card and other activity such as rental of a post office box, which suggest that he spends significant time in the vicinity of Suburb H, which is a considerable distance from his parents’ residence in Town G, where he claims to reside. It was put to him that he was in a relationship with a Ms J, who lives close to Suburb H, and who had sworn an affidavit on his behalf earlier in the proceedings which demonstrated significant knowledge of his personal circumstances, alignment with his perspective and antipathy towards the Wife. The Husband denied that he was in a relationship with Ms J.
The Husband provided no credible explanation for habitually spending money or acquiring a post office box a significant distance from where he resides. His explanation with respect to the post office box was that the Wife has a key to his other post office box, which is in the CBD. This of course did not explain why he had not obtained the second post office box in a location proximate to the area in which he resides. He sought to attribute expenditure in the area to his presence there as a result of the location of the post office box, but this was itself unexplained and the explanation was therefore circular. His evidence in this regard was lacking in credibility. However, the evidence before the Court does not establish that the Husband cohabits with Ms J or that there are circumstances associated with such cohabitation which warrant consideration pursuant to section 75(2)(m).
Other considerations - section 75(2)(o)
The Wife attributed various forms of reduction in the value of the assets ultimately available for distribution between the parties to a range of reckless, negligent or otherwise wasteful conduct on behalf of the Husband. Although this was described on behalf of the Wife as ‘negative contributions,’ this is a concept which is not recognised by law,[15] and her allegations in this regard are more properly considered pursuant to section 75(2)(o) of the Act. There is ample authority to support the proposition that such conduct may be taken into account by way of adjustment pursuant to section 75(2)(o). The leading authority with respect to this issue is Kowaliw & Kowaliw,[16] in which Baker J said as follows:
10. 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.
11. 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.
[15] Antmann & Antmann [1980] FamCA 64; (1980) FLC ¶90-908; Watson & Ling [2013] FamCA 57; (2013) FLC ¶93-527.
[16] [1981] FamCA 70; (1981) FLC ¶91-092. See also Antmann & Antmann [1980] FamCA 64; (1980) FLC ¶90-908.
At the time of separation, the major asset of the parties was the Suburb D property. The Wife gave credible evidence that the Husband had maintained responsibility for the payment of the mortgage encumbering that property throughout the parties’ marriage, the statements had been in his name and addressed to him, and that prior to separation, she had been unaware of the status of the mortgage but had assumed that the mortgage payments were being made as they fell due and the Husband had not told her otherwise.
The Wife alleged that the Husband told her following their separation that all of their property was his and that she had no entitlement. She alleged that he had threatened that if she did not vacate the Suburb D property, he would cease paying the mortgage and the utilities and the bank would repossess the property. She deposed that as he had had the relevant mail redirected and the accounts were all in his name, she had no way of knowing whether the mortgage and utilities were being paid. When the Wife’s evidence of his threat to cause the mortgagee to force the sale of the property was put to the Husband in the witness box, he did not deny it, and instead facetiously asked Counsel ‘were you there?’. I accept the evidence of the Wife.
The Wife’s evidence was that in late 2022, she arrived home at the Suburb D property with the children to be met by a process server who informed her that the mortgage was in arrears and that he was there to serve the Husband with ‘paperwork.’ She subsequently learnt from an affidavit filed by the Husband in October 2022 that he had not paid the council rates since mid-2022 or the water account since early 2022. The Husband deposed in his trial affidavit to having entered into a payment arrangement with respect to the rates in late 2019 and to having made an arrangement to put the mortgage on hold from mid-2022.
The Suburb D property was ultimately sold pursuant to orders made on 18 November 2022. The sale price was $850,000. Settlement occurred in mid-2023. The Wife’s unchallenged evidence was that a total of $11,414.64 was required to be paid from the sale proceeds as a result of the Husband’s failure to keep the rates and other outgoings up to date. A further $4,093.72 for the payment of outstanding utilities was subsequently released from those funds. The extent to which the mortgage balance required to be paid out at settlement was higher than it would have been had the payments been kept up to date was not made clear on the evidence before the Court, but the evidence of both parties established that it had been in arrears.
Compounding these losses, following settlement of the sale of the Suburb D property, the Husband refused to agree to an entirely sensible proposal made on behalf of the Wife that the proceeds of sale be invested in an interest-bearing account. As a result, the parties were deprived of the benefit of interest that could have been earned on the substantial sum that was held on their behalf over the period of more than seven months between the settlement of the sale and the trial. Under cross-examination, the Husband sought to explain his conduct by saying that he ‘didn’t trust [the Wife]’ and had been advised to leave the funds in the conveyancers’ trust account. This explanation was nonsensical in circumstances in which the alternative would have been for the funds to be invested by solicitors on trust in an interest-bearing account which would have provided no less protection but which would have enabled the funds to generate interest for the benefit of parties.
The Wife attributed further diminution of the assets and liabilities of the parties to the Husband’s conduct in failing to lodge his taxation returns and pay the associated tax from 2016 to 2023. The Wife’s evidence was that she had understood that the Husband had been lodging tax returns and paying tax as required until she learnt otherwise from an affidavit filed by him in October 2022. Not only has the Husband’s conduct in failing to do so led to the inclusion of liabilities totalling $55,579 representing the Husband’s personal and business taxation debts being included in the assets and liabilities available for distribution between the parties, the sum of $16,767 was also released from the funds held by the conveyancers to enable the Husband’s accountants to bring his financial affairs up to date.
The use that was made of that part of the Husband’s income of $60,000-$80,000 per annum which ought to have been applied to his taxation obligations and the expenses associated with maintaining his taxation affairs in the years prior the decline in his income was unexplained by him. In circumstances in which the parties maintained separate finances and the Husband allowed the mortgage and utilities to fall into arrears, it is difficult to see how it could be said that the Wife shared in any of the benefit of the funds that should have been applied towards the Husband’s taxation obligations.
The Wife alleged that the Husband had engaged in frivolous and wasteful expenditure on items such as streaming service subscriptions, unnecessary telephone numbers, meal delivery services, an expensive hotel stay and expenditure at a gymnasium during the period where he was not paying the mortgage, utilities, his taxation or Child Support. Whilst the expenditure by the Husband is not objectively excessive, and I accept the submission made on his behalf that the evidence does not reveal that he has been living the ‘high life,’ it is clear that he prioritised those lifestyle expenses over his obligation to pay his necessary expenses, to the detriment of the Wife.
I am satisfied that the Husband’s conduct as outlined above was reckless and negligent in the relevant sense and ought to be taken into account in the Wife’s favour pursuant to section 75(2)(o) of the Act.
The Wife also adduced evidence demonstrating that the Husband had engaged in conduct which had caused the proceedings and her efforts to achieve a resolution of the dispute between the parties to be more difficult and therefore more costly for her than they would otherwise have been. Conduct on the part of the Husband with this effect included his failure to comply with his obligation of disclosure, undue hostility towards the Wife’s legal representatives, resistance to her efforts to arrange dispute resolution events, and evasive and difficult conduct towards the valuer appointed to value his business interests. Email correspondence relied upon by the Wife[17] demonstrated that the Husband had failed to provide the appointed business valuer with sufficient information to undertake a valuation to the point where the valuer had simply given up in frustration. The Husband falsely asserted under cross-examination that the valuer had given up ‘because he realised there was nothing in the business.’
[17] Wife’s affidavit in reply filed 9 November 2023, annexure P1.
The Husband admitted to having failed to provide updated disclosure with respect to a number of bank accounts despite being aware of his ongoing obligation of disclosure. He sought to justify this by saying that there had been no activity on the relevant accounts. I accept the submission of Counsel for the Wife that this is an inadequate explanation for non-compliance with his duty of disclosure. The Husband provided no satisfactory explanation for his obstructive conduct with respect to his disclosure obligations and the conduct of the proceedings.
Counsel for the Wife sought that the Court draw an inference of the type referred to in Weir & Weir,[18] in which the Full Court held that once it has been established that there has been a deliberate non-disclosure, then the Court should not be unduly cautious about making findings in favour of the innocent party. Counsel did not seek a finding that the Husband likely had hidden assets, but rather sought that his conduct be taken into account pursuant to section 75(2)(o) of the Act. The Husband’s conduct in this regard was contrary to the overarching purpose set out in section 190 of the Federal Circuit and Family Court of Australia Act 2021 (Cth) and the Husband’s related obligations in section 191 thereof. I have regard to the Husband’s conduct in this regard pursuant to section 75(2)(o) of the Act.
[18] [1992] FamCA 69; (1993) FLC ¶92-338.
Assessment of section 75(2) adjustment
The Wife sought that there be an adjustment of 20 to 30 percent in her favour on account of section 75(2) factors. The Husband conceded that there should be a 5 percent adjustment in favour of the Wife to account for her care of the children.
Counsel for the Wife referred the Court to a number of cases which he submitted were comparable in which substantial adjustments were made with respect to small assets pools in circumstances similar to those of the present case.[19] The Full Court has recognised the potential utility of comparable cases in decision making under Part VIII of the Act.[20] I am mindful, however, that each of the cases relied upon by Counsel for the Wife involved factual circumstances that were sufficiently different from those in the present case to warrant caution in assessing their utility as guidance in the exercise of my discretion.
[19] Tomlin & Nilsen [2011] FMCAfam 166; I & I [2005] FamCA 432; (2005) FLC ¶93-221; R & R [2003] FMCAfam 234; SJS & NS [2005] FamCA 66.
[20] Wallis & Manning [2017] FamCAFC 14; (2017) FLC ¶93-759.
I have regard to the modest size of the pool of assets available for distribution between the parties and note that this weighs in favour of a more significant adjustment in favour of the Wife than might otherwise have been appropriate.[21]
[21] Best & Best (1993) FLC ¶92-418.
Having regard to all of the considerations outlined above, I conclude that an adjustment of 20 percent in favour of the Wife on account of section 75(2) factors would be just and equitable. Such an adjustment would result in an overall distribution of the parties’ non-superannuation assets and liabilities in proportions of 75 percent to the Wife and 25 percent to the Husband.
SUPERANNUATION
Both parties approached the trial on the basis that their superannuation interests should be treated as a separate pool from their non-superannuation assets. This approach is consistent with authority including, in particular, the Full Court’s decision in C & C,[22] and I agree with the assessment of the parties that such an approach is just and equitable in the circumstances of this case.
[22] [2005] FamCA 429; (2005) FLC ¶93-220.
The overwhelming majority of the existing superannuation interests are held by the Wife, largely as a result of the Husband’s long term self-employed status.
The Husband proposed that there be an equal division of so much of the Wife’s superannuation interest as had been accumulated since the parties commenced cohabitation, though his calculation appears to have been based on a slightly outdated figure for the Wife’s superannuation interest.
As stated earlier, at the time of the parties’ cohabitation, the Wife held superannuation with an approximate value of $45,000. The Wife relied (without opposition) on a report of Mr K, superannuation actuary, who calculated that the balance would have increased to $123,553 by mid-2023 had no contributions been made over that period. The Wife sought that the sum of $123,553, being her initial contribution together with the amount of growth that was not attributable to contributions made during the relationship, be quarantined from the superannuation considered for distribution.
The Wife also sought that the value of her superannuation be assessed as at 30 June 2022, being a date proximate to the date of the parties’ separation, rather than the present date. Its value as at that date was $212,141.42. It was submitted on her behalf that in circumstances in which the Husband has not been in gainful employment, has not paid any Child Support of significance and has not played any role in the care of the children following separation, it cannot be said that he has made any direct or indirect contribution to the increase in the value of the Wife’s superannuation during the post-separation period. I accept that submission.
In my view, however, the strict mathematical assessment and approach of quarantining portions of the Wife’s superannuation as promoted by both parties and particularly by the Wife is contrary to authorities which caution against reliance on a strict mathematical approach to the assessment of contributions[23] and on approaches involving quarantining of particular assets[24] and urge instead a holistic assessment of contributions.[25] Furthermore, whilst I accept that there are circumstances in which the Court may depart from the general approach of valuing assets at the date of trial,[26] in my view, the more appropriate course in the circumstances of the present case, and that most consistent with the relevant authorities[27] is to undertake a holistic assessment of the parties’ respective contributions and have regard to the relevant section 75(2) factors with respect to the superannuation pool.
[23] For example, Norbis & Norbis [1986] HCA 17; (1986) 161 CLR 513; Z & Z [2005] FamCA 996; (2005) FLC ¶93-241; Singerson & Joans [2014] FamCAFC 238.
[24] For example, Holland & Holland [2017] FamCAFC 166; (2017) FLC ¶93-798; Anson & Meek [2017] FamCAFC 257; (2017) FLC ¶93-816.
[25] For example, Hurst & Hurst [2018] FamCAFC 146; (2018) FLC ¶93-851; Jabour & Jabour [2019] FamCAFC 78; (2019) FLC ¶93–898; Barnell & Barnell [2020] FamCAFC 102; (2020) FLC ¶93-961.
[26] AJO & GRO [2005] FamCA 195; (2005) FLC ¶93-218.
[27] Including C & C (2005) FLC ¶93-220; [2005] FamCA 429.
This is particularly so in light of the fact that there is no corresponding assessment, from Mr K or otherwise, as to the extent to which the Wife’s superannuation interest would have increased between the date of separation and the date of trial in the absence of any contributions as distinct from the extent to which it increased by virtue of the Wife’s unmatched post-separation contributions, and taking the approach promoted by the Wife in respect of one period and not another would risk failing to do justice as between the parties.
In this respect, I have regard to the fact that the overwhelming contribution to the parties’ superannuation interests was made by the Wife. This includes her contribution of approximately $45,000 at the commencement of the parties’ relationship, the extent to which that superannuation would have increased in value in the absence of any further contributions made by either party as assessed by Mr K, her contributions made towards her superannuation during the parties’ relationship in circumstances in which she was also performing the role of primary carer for the parties’ young children, and the increase in the value of her superannuation following separation. Having regard to these considerations, I assess the parties’ contributions to the parties’ superannuation pool (which includes the limited superannuation held by the Husband) as having been 75 percent by the Wife and 25 percent by the Husband.
I have regard to the same factors with respect to section 75(2) of the Act as outlined above with respect to the superannuation pool, but note that the most significant of those factors, being the Wife’s full time care of the children and her need to rehouse them are of more limited significance to the assessment of the superannuation pool in circumstances in which the Wife will not be able to access her superannuation until or unless she retires or otherwise meets a condition of release and superannuation will not, therefore, assist her to meet those needs. I have regard also to the fact that although the Husband has historically accumulated minimal superannuation, his evidence was of an intention to obtain employment rather than to continue to be self-employed, and as such, it would appear likely that this circumstance will not continue. I do not consider that any adjustment pursuant to section 75(2) is warranted with respect to the superannuation pool.
This assessment would lead to a distribution of the parties’ superannuation interests in proportions of 75 percent to the Wife and 25 percent to the Husband. Such a distribution would be achieved by way of a superannuation split using a base amount of $56,722.97 from the Wife’s superannuation interest in favour of the Husband.
JUSTICE AND EQUITY AND THE TERMS OF THE ORDERS TO BE MADE
The requirement that the Court shall not make an order unless it is satisfied that, in all the circumstances, it is just and equitable to make the order is the ‘overriding requirement’ of the section 79 process.[28] This requirement includes consideration of the type of order, including the form and structure of the order, to be made. The Court is required to be satisfied that the actual order made (and not just the underlying percentage division) is just and equitable.[29]
[28] Mallet & Mallet [1984] HCA 21; (1984) 156 CLR 605 per Dawson J at [10].
[29] Russell & Russell [1999] FamCA 1875; (1999) FLC ¶92-877; Clauson & Clauson [1995] FamCA 10; (1995) FLC ¶92-595.
In the present case, the parties agreed that they would each retain all assets in their respective possession (which in the case of the Husband includes his interest in E Pty Ltd), that they would each retain sole responsibility for the liabilities in their respective names (which include, in the case of the Wife, her MasterCard and in the case of the Husband, his personal taxation liabilities and those of E Pty Ltd). The Court was therefore required to determine only the distribution of the proceeds of sale of the Suburb D property and the quantum of the superannuation splitting order with respect to the Wife’s superannuation.
The analysis above tends towards a distribution of the parties’ non-superannuation assets in proportions of 75 percent to the Wife and 25 percent to the Husband and a distribution of their superannuation assets in the same proportions, but for different reasons.
The resulting orders would provide for the funds held by the conveyancers to be distributed by way of a payment of $269,768.16 to the Wife and $143,838.37 to the Husband. Having regard to the other assets and liabilities in their respective possession, this would leave the Wife with net non-superannuation assets of $266,278.10 and the Husband with net non-superannuation assets of $143,838.37. The parties’ total superannuation interests would be divided $175,414.63 to the Wife and $58,471.54 to the Husband.
In all of the circumstances and having regard to all of the considerations outlined above, I am satisfied that both the percentage-based outcome and the underlying outcome in dollar terms is just and equitable.
OTHER MATTERS
The Husband sought an order providing that the Wife return to him a ‘box of hard drives.’ He adduced no evidence in support of that order. The Wife deposed that she had no knowledge of what the Husband was referring to and her evidence in this regard was not challenged. The Husband has not made out his case with respect to that order.
The Wife sought an order that the Husband pay her costs. That application was not particularised and was not expressly pressed at trial. In my view, it would not, in any event, be appropriate to consider any application for costs prior to the parties having had the opportunity to have regard to these reasons and to adduce evidence of any offers which may have passed between them. Each of the parties will retain their rights to make an application for costs pursuant to rule 12.13(3)(b) of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) should they consider it appropriate to do so notwithstanding the dismissal of all extant applications.
For the reasons outlined above, I make the orders as set out at the commencement of these reasons.
I certify that the preceding ninety-five (95) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Parker. Associate:
Dated: 22 December 2023
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