PEDERSON & PEDERSON

[2013] FCCA 1165

FEDERAL CIRCUIT COURT OF AUSTRALIA

PEDERSON & PEDERSON [2013] FCCA 1165

Catchwords:
FAMILY LAW – Application for alteration of property interests – long marriage – assessment of contribution – assessment of s.75(2) considerations.

Legislation:
Family Law Act 1975, ss.72, 75, 79

Cases cited:
Hickey & Hickey & Attorney-General of the Commonwealth of Australia (Intervener) (2003) FLC 93-143
Norbis v Norbis (1986) 161 CLF 513
Pierce v Pierce (1998) FLC 92-844
Williams & Williams [2007] FamCA 313

Applicant: MS PEDERSON

Respondent: MR PEDERSON

File Number: SYC 538 of 2012

Judgment of: Judge Altobelli

Hearing dates: 22 – 24 July 2013

Date of Last Submission: 24 July 2013

Delivered at: Sydney

Delivered on: 28 August 2013

REPRESENTATION

Counsel for the Applicant: Ms Druitt

Solicitors for the Applicant: Antwan Lawyers

Counsel for the Respondent: Mr Gardiner

Solicitors for the Respondent: Cox West Lawyers

ORDERS

1. That the parties forthwith do all things and sign all documents necessary to cause the monies held in trust by Messrs Stoikovich Lawyers be released to the parties and disbursed in the following manner:-

   (a)The sum of $52,000 to be retained for the purpose of meeting  each parties’ Capital Gains Tax liability arising from the sale of the property at Property W.

   (b)The sum of $439,175 to be paid to the Applicant Wife.

   (c)The balance (if any) be divided as to 45% to the Wife and 55% to the Husband.

2. That within two (2) months of today’s date the Husband shall pay to the Wife $96,721.

3. Should the Husband fail to comply with Order 2 above then:

   (a)Interest on the said sum shall accrue in accordance with the Family Law Act 1975 and its Rules and Regulations.

   (b)The property at Property F is to be sold in accordance with these orders.

4. That the parties shall divide all furniture and household contents from the Property F property between them as agreed and failing agreement using a “pick a pile” method whereby the Respondent shall prepare two lists setting out all of the furniture and household contents and the Applicant shall choose one list being the items that she shall retain and the Respondent shall retain the items stated in the other list.  Notwithstanding this order, any property that is used exclusively by the children is not to be included in the lists referred to above, and is to be made available to the Applicant Wife.

5. That the Respondent be declared the legal and beneficial owner to the exclusion of the Applicant in the following:-

   (a)The property situate at and known as Property F, being (omitted) in (omitted) (“the Property F property”).

   (b)The Ford (omitted) motor vehicle being registration number (omitted).

   (c)The (omitted) and (omitted) shares held in the Respondent’s name.

   (d)The Respondent’s superannuation entitlements.

   (e)The balance of any funds held in any savings account held in the Respondent’s name.

   (f)All other property and assets which at the date of these Orders and subject to the preceding Orders, stand in the Respondent’s name and/or remain in the Respondent’s possession.

6. That the Applicant be declared the legal and beneficial owner to the exclusion of the Respondent in the following:-

   (a)All superannuation entitlements held in the Applicant’s name.

   (b)The balance of any funds held in any savings account held in the Applicant’s name.

   (c)All other property and assets which at the date of these Orders and subject to the preceding Orders, stand in the Applicant’s name and/or remain in the Applicant’s possession.

7. That consequential to the making of these orders, the Applicant shall vacate the Property F property within two (2) months.

8. That the Respondent shall indemnify the Applicant and hold the Applicant forever indemnified in respect of all loans and monies owed to his parents.

9. Should the Husband fail to comply with order 2 above the following orders shall apply:

   (a)No later than 3 months from the date of these orders the Husband is to do all things necessary to cause the home to be placed on the market for sale by private treaty at the best price reasonably obtainable;

   (b)The Husband is to consult with the Wife about appointment of a real estate agent, solicitor, the list price, offers received and offers accepted;

   (c)From the sale proceeds the Husband is to:

   (i)Pay all expense relating to the sale;

   (ii)Pay to the Wife $96,721 together with any interest that has accrued pursuant to these orders;

   (iii)Thereafter apply the remaining sale proceeds as he sees fit. 

   (d)The Husband is, at his own expense, to do all things necessary to cause to be lapsed or withdrawn caveat number (omitted) lodged by his parents.

10. The Husband and the Wife to all things necessary to close accounts of each of the children where the Husband is trustee with the closing balance to be divided equally between them and with the intent that each of them will establish separate trust accounts for the children.

11. That in the event that either party should fail, neglect or refuse to sign or execute any deed, document or instrument required by or to give effect to these Orders then pursuant to Section 106A of the Family Law Act 1975 the Registrar of the Federal Circuit Court of Australia shall be and is hereby authorised, empowered and directed to sign and execute such deed, document or instrument in the place and instead of such party and thereafter do all things and acts as are necessary to give validity and operation to same.

IT IS NOTED that publication of this judgment under the pseudonym Pederson & Pederson is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL CIRCUIT COURT OF AUSTRALIA

AT SYDNEY

SYC 538 of 2012

MS PEDERSON

Applicant

And

MR PEDERSON

Respondent

REASONS FOR JUDGMENT

Introduction

1. This is an application for alteration of property interest commonly known as a property settlement.  The applicant wife is 50 years old, describes herself as a (occupation omitted), and lives in the former matrimonial home in Property F, a (omitted) suburb of Sydney.  The respondent is 45 years old, describes himself as a (occupation omitted), and lives with his parents at (omitted), another (omitted) suburb of Sydney.  The parties married in 1992 and separated in 2011.  The period of cohabitation was thus about 19 years.  They have two children, X, who is 14, and Y, 13, both of whom live with the mother, but spend a substantial and significant time with their father, pursuant to consent orders that the parents entered into on 22 July 2013, the first day of the hearing.

Background

1. When the husband and wife married in 1992 the father already owned a property at Property C.  Both he, and the wife, had other assets.  In 1998 the parties purchased a home at Property W and in 2003 their first property (ie. Property C) was sold.  At the same time, the former matrimonial home at Property F was purchased.

2. As at the date of the separation the main assets of the parties consisted of the property at Property F and Property W together with the husband’s superannuation.  The parties agreed to sell the Property W property in June, 2013, and the sale proceeds of that property form part of the property pool.

3. A number of issues arise in the context of the property settlement.  The husband contends, but the wife disputes, that his parents provided valuable financial support to the parties through him by way of provision of cash gifts, as well as loans.  He asserts that, as a result of this, he has made a greater contribution in a financial sense to the marriage. 

4. The wife raised as a major issue in the case how moneys provided by the husband’s parents to him should be characterised, and in particular whether they should be treated as a loan (as contended by the husband and his parents) or as gifts, which she was an equal beneficiary.  In addition the wife contended that there should be $176,000 added back to the property pool as regards unexplained cash withdrawals by the husband.  As it turns out the add-back argument was only faintly pressed in final submissions, and this was for good reason – there was no evidence that would enable the court to make findings about an add back in the amount claimed, or at all.

5. There is a dispute between the parties about the assessment of any adjustment made pursuant to s.75(2) of the Act. In addition the wife pressed, but only faintly by the time of final submissions, that the husband should pay her spouse maintenance.

6. The orders sought by each of the parties is set out in the schedules to these reasons.  However, the focus of these reasons will be on the case as it was presented in final submissions. 

7. By the time of closing submissions counsel for the wife contended that the evidence did not establish that the husband owed his parents the sum of $91,303 as contended by him. In relation to the wife’s claim for an add back of $176,000 counsel contended that (somehow) this should be treated as a contribution factor in favour of the wife. Counsel submitted that the approach to alteration of property interests should be predicated on the basis of treating all of the assets as forming one pool, and divided on the basis that the husband would retain all of his superannuation entitlements to reflect the fact that the wife had a greater short-term need for accommodation for herself and the children, and a much lesser long-term need for retirement funds. In terms of assessment of contribution she said that, in all the circumstances, a finding that the husband had made a greater contribution to the extent of 53% was available on the evidence, but there should be an adjustment in the wife’s favour under s.75(2) of the Act for not less than 10% and possibly as high as 15%. The court records its firm impression that the wife’s case was conducted on the basis of achieving a certain final outcome – ie. securing to the wife sufficient funds so that she could reaccommodate herself in the area close to the former matrimonial home, so that the children would not have to change schools. The court formed the distinct impression that the final outcome was far more important to the wife than seeking to provide any justification at law for reaching that outcome.

8. By the time of closing submissions the husband’s counsel contended that there was evidence to justify a finding of a loan owed to his parents of about $90,000, that there was no evidence of an add back in the amount claimed by the wife, and that there was clear evidence of the very generous provision to the husband by his parents of financial assistance starting from the acquisition of the property the husband owned at the time of cohabitation. In the final analysis, the overwhelmingly greater financial contribution made by the husband would result in an assessment of contribution in his favour of 70%. However, the husband conceded a 10% adjustment in the wife’s favour under s.75(2). But, if that adjustment were made, there would be no basis whatsoever for an order for spouse maintenance. In the husband’s orders he proposes a super split as opposed to the cash adjustment sought by the wife.

9. There are no credit issues in this case.  The husband, his parents, and the wife gave evidence to the best of their ability.  There were times when each of the witnesses struggled with recollection of past events, but none of this goes to whether or not the court accepts their evidence.  From a credit perspective, the most contentious issues related to add-backs and the characterisation of the moneys provided by the husband’s parents as loans.  As it turns out counsel for the wife quite properly conceded in closing submission that no “smoking gun” was found and that ultimately her case at its best was that “it doesn’t look right or feel right”.  The fact is there is no evidence to establish any warrant for an add-back, and the reality is that much time and expense was incurred in tracing the add-back fox down its hole.  No credit issues arise in this regard.  As for the loans issue, any finding the court makes is not dependent on a credit finding, but rather a legal analysis of certain facts and circumstances that are largely not in dispute.

10. The documents relied on by each of the parties is set out in their counsel’s case outline documents, and it is unnecessary to recite those documents here. 

11. After setting out the applicable law, these reasons for judgment will deal with balance sheet issues, assess contribution, consider whether an adjustment should be made under s.75(2), have regard to justice and equity and then formulate the appropriate orders. There can, however, be no doubt on the facts of this case, as clearly conceded by the parties themselves, that it was just and equitable to make orders altering the existing interests of the parties in their property and assets.

Applicable law

1. The preferred approach to the determination of an application under s.79 of the Family Law Act is set out in a passage found in the Full Court’s decision in Hickey & Hickey & Attorney-General of the Commonwealth of Australia (Intervener) (2003) FLC 93-143 at 39.

2. The Full Court states that there are four inter-related steps:

   a)      Identify and value the property, liabilities and financial resources of the parties; and

   b)      Identify and assess the contributions of the parties and express them as a percentage of the net value of the property; and

   c) Identify and assess the other facts relevant under s.79(4)(d)-(g) including s.75(2) and determine the adjustment (if any) to be made to the contribution entitlements at step two; and

   d)      Consider the effect of the above and resolve what order is just and equitable in all the circumstances.

3. One of the legal issues that arises is whether I should adopt a global or asset-by-asset approach to contribution. The authority in this regard is, the High Court’s decision in Norbis v Norbis (1986) 161 CLR 513 per Wilson and Dawson JJ at 534-5. It is clear from this statement of the law that either approach is available to me, in part or in whole. My discretion in this regard should be exercised having regard to the facts of this case.

4. Another issue in this case is how, precisely, I should weigh and assess the initial contribution made by the husband in bringing property into the marriage. In this regard, I need to consider the decision of the Full Court in Pierce v Pierce (1998) FLC 92-844. A useful recent decision of the Full Court examines its earlier decision in Pierce v Pierce together with a later case. In Williams & Williams [2007] FamCA 313 the Full Court states as follows at paragraphs 26, 27, 28, 29 and 32:

   26. We think there is force in the proposition that a reference to the value of an item as at the date of the commencement of cohabitation without reference to its value to the parties at the time it was realised or its value to the parties at the time of trial, if still intact, may not give adequate recognition to the importance of its contribution to the pool of assets ultimately available for distribution between the parties Thus where the pool of assets available for distribution between the parties consists of say an investment portfolio or a block of land or a painting that has risen significantly in value as a result of market forces, it is appropriate to give recognition to its value at the time of hearing of the time it was realised rather than simply pay attention to its initial value at the time of commencement of cohabitation. But in doing so it is equally as important to give recognition to the myriad of other contributions that each of the parties has made during the course of their relationship.

   27. In Pierce v Pierce when speaking of the relevance to be paid to initial contributions the Full Court (Ellis, Baker and O’Ryan JJ) referred to Fogarty J in Money v Money (1994) FLC 92-485 at 81,054; (1994) 17 Fam LR 814 at 816:

   …respective contributions of the parties over a long period of marriage “offset” the significance which might otherwise be attached to a greater initial contribution by one party…ultimately, when it comes to the trial such a contribution is one of a number of factors to be considered.  The longer the marriage the more likely it is that there will be latter factors of significance and in the ultimate the exercise is to weigh the original contribution with all other, later, factors and those later factors, whether equal or not, may in the circumstances of the individual case reduce the significance of the original contribution.

   28. The Full Court (Ellis, Baker and O’Ryan JJ) then said at [28]:

   In our opinion it is … a question of what weight is to be attached, in all the circumstances, to the initial contributions.  It is necessary to weigh the initial contributions by a party with all other relevant contributions of both the husband and the wife.  In considering the weight to be attached to the initial contribution, in this case of the husband, regard must be had to the use made by the parties of that contribution.

   29. Pierce v Pierce was a case in which the husband brought in $200,000 cash into the relationship.  He applied that money towards the purchase of a matrimonial home.  He was employed throughout the marriage and supported the wife who, whilst in some paid employment primarily attended to domestic tasks and taking care of the children.  The Full Court assessed the parties’ respective contributions to a pool of $320,000 as 70 per cent in favour of the husband and 30 per cent in favour of the wife at the end of a 10 year relationship.

   32. In Hunt v Zuryn (2005) FLC 93-226; (2005) 34 Fam LR 169 the Full Court (Kay, May and Boland JJ) allowed an appeal in a property case where a pool of assets of $1.12million had been assessed for contribution purposes as 75 per cent in favour of the husband and 25 per cent in favour of the wife.  The Court in allowing the appeal indicated that an assessment of 75:25 fell outside the realms of an acceptable range saying at 79,730; 170:

   Such an assessment ought adequately recognise that much of the parties’ wealth can be attributed to the capital growth in the assets introduced by the husband at the commencement of the marriage but at the same time bringing into consideration a myriad of other contributions each made in the course of their relationship.

5. Accordingly, I must not only identify the contributions of each party, but also assess the weight to be attributed to these contributions having regard to many factors including what has occurred afterwards.

The balance sheet

1. At the commencement of the hearing both counsel provided almost identical balance sheets.  For ease of reference the table of assets and liabilities contained in the wife’s counsel’s outline is reproduced in these reasons:-

Assets:	held by	wife's asserted value	husband's asserted value
1	Property F (H)	H	$550,000.00	$550,000.00	agreed
2	Property W (H/W)	joint	$491,175.00	$491,175.00	agreed
3	(omitted) & (omitted) shares (H)	H	$24,000	$24,000	agreed
4	Honda motor vehicle (W)	W	$4,000.00	6000	in dispute
5	Ford motor vehicle	(H)	$2,000	$2,000	agreed
6	Jewellery	(W)	$3,000	$3,000	agreed
Total Assets	$1,074,175.00	$1,076,175.00
Liabilities:
7	Estimated CGT on sale of Property W (H/W)	joint	$52,000.00	$52,000.00	agreed
8	Loans from husband’s parents (H)	H	$91,303.00	in dispute
Total Liabilities	$52,000.00	$143,303.00
Net Assets	$1,022,175.00	$932,872.00
Superannuation:
9	(omitted) Superannuation	(W)	$9,000.00	9000	agreed
10	(omitted shares)	(H)	$122,329	$122,329	agreed
11	Commonwealth (H)	$72,933	$72,933	agreed
total Superannuation	$204,262.00	$204,262.00
Total Assets and superannuation	$1,226,437.00	$1,137,134.00
Add-backs:
12	Cash withdrawals by husband (H)	H	$176,000	0	in dispute
If add back allowed then total asset pool is	$1,402,437.00
Wife Currently holds
13	Honda motor vehicle (W)	W	$4,000.00	6000	in dispute
14	Jewellery	(W)	$3,000	$3,000	agreed
15	(omitted) Superannuation	(W)	$9,000.00	9000	agreed
Total of all assets currently held by wife	$16,000.00	$18,000.00

1. The first item in dispute is item 4, the wife’s Honda motor vehicle.  The court finds the value of this to be $4000, but only on the basis that it is an admission against interest.  There was no contrary expert evidence adduced by the husband in this regard. 

2. In relation to item 7, the estimated capital gains tax on the sale of Property W the court will treat this as an agreed fact, but it seems to have been acknowledged that the amount of capital gains tax might be less.

3. The first contentious issue is item 8, the loan from the husband’s parents.  There is no question that the husband, his mother and his father, all gave evidence to the effect that they considered the $91,300 that they provided to the husband to be a loan.  The court has no doubt that they genuinely perceived this to be the case.  Ultimately, however, the court accepts the wife’s counsel submission that objectively the evidence does not establish that there was an obligation to repay that would be enforceable at law, even though the parties might subjectively intend that to be the case.  In any event the court is not satisfied that, even if it were held to be a loan, that these are moneys that Mr A and Ms L would genuinely expect their son to repay to them in the circumstances of this case.  There may, in any event, have been issues under the Limitation Act of New South Wales that might have prevented an obstacle to recovery of the loan anyway.  That is not, however, the basis of the court’s decision.  Having regard to all of the evidence, the proper characterisation of the moneys generously provided by the husband’s parent is a gift to him.  The evidence certainly does not justify any finding, as faintly submitted on behalf of the wife, that the intention of the parents was to benefit both the husband and the wife.  That was not even put to the husband’s parents in cross-examination, let alone adverted to by the wife in her evidence.  Clearly the wife benefited from the generosity of the husband’s parents, but it could not be said that that would have occurred were it not for the fact that she married their son.

4. In any event, the court’s finding is that item 8 should be zero. 

5. The next major contentious issue, at least during the hearing itself, was item 12, the alleged cash withdrawals by the husband.  As previously noted by the time of final submissions counsel for the wife all but conceded that there was no evidence to suggest that the moneys withdrawn had somehow been improperly used.  Lest there be any doubt the court records that it would have found, in the clearest terms, even if counsel for the wife had not made the tacit acknowledgement, that there was no basis for the add back.  The fact is that over a long marriage the husband used cash to meet the family’s living expenses.  The husband was the principal earner of income.  He was the financial manager.  That the wife may have been excluded from this role seems more attributable, on the evidence before the court, to an agreement by the husband and the wife to so order their roles and responsibilities within their marriage, rather than to some nefarious scheme by the husband to systematically divert funds over a sustained period for his own benefit.  Regrettably in this case, involving modest income and modest assets, and whether as a result of histrionics or paranoia, litigation was conducted in respect of an issue that bore no fruit.  Whether this will have repercussions in terms of costs will remain to be seen.

6. Having regard to the court’s findings above, the asset pool will be as follows:-

Assets:	Held By	Value
1	Property F (H)	H	$550,000.00
2	Property W (H/W) sale proceeds	joint	$491,175.00
3	(omitted) & (omitted) shares (H)	H	$24,000
4	Honda motor vehicle (W)	W	$4,000.00
5	Ford motor vehicle	(H)	$2,000
6	Jewellery	(W)	$3,000
Total Assets	$1,074,175.00
Liabilities:
7	Estimated CGT on sale of Property W (H/W)	joint	$52,000.00
8	Loans from husband’s parents (H)	H
Total Liabilities	$52,000.00
Net Assets	$1,022,175.00
Superannuation:
9	(omitted) Superannuation	(W)	$9,000.00
10	(omitted) shares	(H)	$122,329
11	Commonwealth (H)	$72,933
total Superannuation	$204,262.00
Total Assets and superannuation	$1,226,437.00
Add-backs:	NIL
12	Cash withdrawals by husband (H)	H	NIL

1. The total asset pool is $1,226,437.  Of this $204,262 represents superannuation assets, or about one-sixth of the pool.  The vast majority of this is held by the husband.  Out of the total pool, the wife holds in her name assets totalling $16,000.

Assessment of contribution

1. If one excludes the greater contribution asserted by the husband through his parents’ generosity towards him, as well as recognising that in 1993 the wife was made redundant from (omitted) and received a payment of about $10,000 that was applied for joint purposes, the totality of the evidence would lead to a conclusion that all other contributions made by the husband and wife over what is a long marriage would be assessed to be equal.  They both worked hard in the roles that they adopted during the course of the marriage.  The husband consistently and diligently worked and applied his income for the benefit the family.  The wife worked for several years before children came along and then diligently applied herself to parenting roles.  The wife was primarily responsible for home-making, though not to the exclusion of the husband.  At the end of a long marriage, but for the matters referred to above, the different types of contribution that they each made would, ultimately, be assessed to have the same value.  The focus therefore turns to matters of financial contribution.

2. At the time of cohabitation the husband owned the property at Property C unencumbered.  This had been purchased with the generosity of his parents who gave him $40,000, originally characterising it as a loan but, having regard to the court’s findings, indeed not a loan.  Not only was this property unencumbered, but the parties immediately had the benefit of rental from the property, indeed, right up until it was sold 10 years later in 2003 for $460,000.  It was the sale proceeds of this property that enabled the parties to purchase the former matrimonial home at Property F.  These are undisputed facts.  It is not that the wife cannot be said to have made a contribution to the property at Property C but rather that such contribution as she made was indirect, and non-financial, particularly in circumstances where it was a rental-producing property for so long.  The only conclusion available on the evidence before the court is that the contribution attributable to the husband in relation to this property vastly exceeds that made by the wife.  Counsel for the husband contends that the husband’s ownership of Property C “began the marriage on a trajectory of wealth creation such that the balance sheet is what it is.”  It is hard to contend against that, on the evidence before the court.

3. The generosity of the husband’s parents extended to the acquisition of the property at Property W, in 1998.  This was a property originally owned by the husband’s father and grandfather, in equal shares.  Once the husband’s grandfather died in 1998 his half-share of the property was transmitted to the husband’s father and sister.  This meant that the husband’s father owned a three-quarter share in the property, and the husband’s aunty a one-quarter share.  The uncontested facts are that the husband and the wife purchased the Property W property from his father and aunt for $160,000 in circumstances where it was agreed that the property had a value of $200,000.  It cannot be said, on any interpretation of the evidence, that the wife contributed to this acquisition on very favourable terms.  The contribution does not stop here, however, because the evidence indicates that the husband’s father then provided to the husband and wife $51,303.86 to assist in the purchase price payable to the estate.  This is a further valuable contribution attributable to the husband.

4. Moreover, there is further unchallenged evidence about additional lump sums received by the husband, from his mother in 1998 ($19,000) and his father in 1997 ($10,000) and from both parents in 1995 ($7000).

5. In view of this evidence the court is quite at loss to understand the submission of counsel for the wife that contribution should only be assessed in favour of the husband at 53 per cent when the reality is that the husband’s financial contribution was overwhelmingly greater than that of the wife because of the generosity of his parents. 

6. In other cases the risk might be of minimising the contribution that the wife made and, indeed, the case law urges trial judges to take into account the very diverse and often non-financial contributions made by spouses over a long marriage, which must be taken into account in assessing the weight to be given to the party who has made the greater financial contribution.  If that is what the wife’s counsel was contending in making a submission the contribution should be assessed at 53:47, with great respect, she has taken it to a ludicrous extreme.  It would be social engineering of a massive scale to somehow reduce the impact of the husband’s greater financial contribution in this case to a mere 53 per cent.

7. Counsel for the husband contends the contribution should be assessed, overall, in his favour at no less than 70%.  In the circumstances of this case, and having regard to all of the evidence, the court agrees with this assessment. 

An adjustment under s.75(2) 

1. In short, on behalf of the wife it was contended that this adjustment should be as much as 15%, whereas the husband conceded it should be 10%.  There are no issues of age and health of the parties, but it is clear that the husband has a capacity for appropriate gainful employment that is substantially greater than that of the wife.  In addition, having regard to the assessment of contribution found above, he will also have access to more property and financial resources than her.  The fact is that the mother will have the primary responsibility for caring for X and Y, aged 14 and 11 respectively, and in circumstances where Y suffers certain vulnerabilities which will make providing care to her more arduous.  It is acknowledged that the husband is paying child support.  It is also acknowledged that he will have substantial and significant time with the children and will thus incur expense relating to their care on top of his child support obligations. 

2. The wife receives Family Tax Benefit, as well as a carer’s pension and allowance. Her counsel contended that, somehow, an adjustment of 15% was justified by reference to maintaining the standard of living that in all the circumstances of the case is reasonable. With great respect to counsel for the wife there are probably better arguments as to why the wife should get 15% on the facts of this case. There is nothing about the standard of living of this family that would attract the court’s attention to this particular consideration. Insofar as counsel was suggesting that the court needs to take into account the need for the wife and children to reaccommodate themselves in the local area, that is accepted. Even the husband wants this to occur. That is a proper consideration under s.75(2). The court accepts that the duration of the marriage has probably had an adverse impact on the wife’s earning capacity.

3. The court acknowledges that the wife has sought spouse maintenance and that if such order is not made it merely increases her needs. As it turns out, the court declines to make an order for spouse maintenance. The husband has a modest income. His capacity to pay was not tested in evidence. On the wife’s evidence she was reasonably confident of being able to return to the workforce, initially on a limited basis, and perhaps with the assistance of some further education or training. Her children are older and not entirely dependent on her, and even the special needs attributable to one of the children does not go to whether or not the wife can work. This is a case where s.72 is not established, but it means that the wife’s needs under s.75(2) need to be even more closely considered.

4. In all the circumstances the wife’s claim for an adjustment for 15% in her favour is appropriate. 

Just and equitable

1. Having regard to the court’s findings about contribution and s.75 consideration, then absent any further adjustment the wife would be entitled to 45% of the net asset pool, or $551,896, of which she already has $16,000. Her net entitlement would thus be $535,896.

2. Her need to reaccommodate the children and herself in the local area is one that is acknowledged by the husband, but this must inevitably result in a split as between superannuation and non-superannuation assets that leaves her more cash.  Most of her entitlement can be paid from the sale proceeds of the Property W property, and the court would be very surprised indeed if it became necessary for the husband to sell the property at Property F in order to pay the wife the balance.  It is just and equitable, therefore, to leave the husband with all of his superannuation, and to give to the wife all of the sale proceeds of the Property W property. 

3. Should there be some form of further adjustment in the wife’s favour so that she can reaccommodate herself in the local area?  Both parties tendered evidence of dubious weight relating to the listing of properties for sale in the Property F area.  Given what seems to have been the importance to the wife’s case of this issue, one wonders why her proposal for re-accommodation might not have been more explicitly set out in her evidence, and adduced in an appropriate form.  The court is left to do the best it can on the limited, and unsatisfactory, nature of the evidence before it.  All the court can conclude from the evidence is that there are many properties for sale in the Property F area for well under $500,000, which means that the wife could afford to purchase such a property, pay stamp duty, and still have some money leftover, subject only to legal fees pertaining to this case.  It may well be that her legal fees amount to over $50,000, as set out in her solicitor’s fees disclosure letter.  This court is not prepared to allow that to become a consideration that influences the ultimate outcome of this case, particularly in terms of a further adjustment to her.  Her financial circumstances, in the end result of this property settlement, may well be a reason for not visiting her with an order for costs should one application be made and be otherwise appropriate.  Those litigants who choose to pursue expensive, protracted exercises in chasing foxes down holes need to appreciate the consequence of their own actions.  The court is satisfied that a payment to the wife of $535,896 is just and equitable in the circumstances of this case and that there is no reason to further consider an adjustment in the wife’s favour.

4. In terms of the orders that will be made, there seems no reason why, subject to an appropriate allowance for retention of capital gains tax liability, the wife ought not have the benefit of the sale proceeds of Property W immediately.  The husband will have two (2) months from the date of the order to make up the balance to her, otherwise the property at Property F will need to be sold.

5. According to the balance sheet, the sale proceeds from the Property W property amounts to $491,175.  In reality this amount has probably increased due to the accrual of interest.  As it seems agreed that $52,000 should be set aside to meet any Capital Gains Tax liability arising from the sale, it is appropriate that the sale proceeds be used as the source of payment of this liability.  This leave available to distribute to the wife $439,175.  That amount should be paid to her within seven (7) days of the making of these orders.  The balance payable to her pursuant to these orders is, therefore, $96,721.  The court would be surprised if, having regard to the evidence, the husband could not pay this amount to her without selling the Property F property.  Nonetheless an order for sale will be made just in case.

6. The husband sought orders about the division of furniture and household contents in the Property F property.  No submissions were made about this.  The wife sought different orders.  No evidence was led about this.  Given this vacuum of evidence the best the court can do is to make an order in terms of order 10.

7. There seemed to be agreement about order 10 proposed by the wife in relation to the children’s trust accounts.  I will make an order in this regard.

I certify that the preceding forty-three (43) paragraphs are a true copy of the reasons for judgment of Judge Altobelli

Date:  28 August 2013

SCHEDULE A

Orders sought by the Wife

1. That within one month of the date hereof, the husband do all acts and things and sign all documents necessary in order to transfer to the wife all of his right title and interest in the real property known as Property F, being the land in folio identifier (omitted) (“Property F”).

2. That prior to the transfer referred to in Order 1, the husband do all acts and things and sign all documents necessary in order to withdraw caveat number (omitted) in favour of Mr A and Ms L.

3. That the husband vacate Property F on or prior to the transfer referred to in Order 1.

4. That the wife be declared solely entitled to her interest in the Honda motor vehicle registered number (omitted) registered in her name.

5. That the wife forthwith be declared solely entitled to possession of the chattels listed at Annexure “A to this Application.

6. That the husband and the wife forthwith do all acts and things and sign all such documents as may be required in order to effect a sale of the real property known as Property W by private treaty at the best price reasonably obtainable.

7. That on completion of the sale of Property W, the net proceeds of such sale be applied in the following manner and priority:

   (i)In payment of the costs and commissions and legal expenses of the said sale;

   (ii)In payment of such funds as required to discharge any mortgage or other encumbrance affecting the said property;

   (iii)In payment of any outstanding  land tax and capital gains tax liability of either party connected with the subject property;

   (iv)The net balance thereof be divided as to 65% to the husband and 35% to the wife.

1. In default of the parties or either of them doing all acts and things and executing all such documents as are necessary to give effect to these orders, a Registrar of the Court is appointed pursuant to section 106A to execute all such documents in the name of the party in default and to do all such acts and things necessary to give validity and operation to the said orders.

2. That the husband shall pay to the wife by way of spousal maintenance the sum of $350.00 per week.

3. That the parties do all acts and things and sign all necessary documents in order to close the accounts of each of the children with respect to which the husband is trustee and the closing balance be divided equally between the parties with the intent that each party set up separate trust accounts.

SCHEDULE B

Orders sought by the Husband

1. That the parties forthwith do all things and sign all documents necessary to cause the monies held in trust by Messrs Stoikovich Lawyers be released to the parties and disbursed in the following manner:-

Towards each parties’ Capital Gains Tax liability arising from the sale of the property at Property W.

The balance remaining:-

As to 40% to the Respondent.

As to 60% to the Applicant.

1. That the Respondent’s superannuation entitlement with (omitted) Super be dealt with as follows:-

(a)     That the following order has effect from the operative time.

(b) That in accordance with paragraph 90MT(1)(a) of the Family Law Act 1975, whenever a splittable payment becomes payable to MR PEDERSON from his interest in (omitted) Super (Member Number (omitted)), MS PEDERSON is entitled to be paid an amount calculated in accordance with Pt 6 of the Family Law (Superannuation) Regulations 2001, using a base amount of $73,000 and there is a corresponding reduction in the entitlement MR PEDERSON would have had but for these orders.

(c)       That having been accorded procedural fairness in relation to the making of this order, this order binds the trustee of (omitted) Super.

(d)       The operative time for this order is 7 days from service of this order upon the Trustee.

1. That the parties shall divide all furniture and household contents from the Property F property between them as agreed and failing agreement using a “pick a pile” method whereby the Respondent shall prepare two lists setting out all of the furniture and household contents and the Applicant shall choose one list being the items that she shall retain and the Respondent shall retain the items stated in the other list. 

1. That the Respondent be declared the legal and beneficial owner to the exclusion of the Applicant in the following:-

a)      The property situate at and known as Property F being (omitted) in (omitted) (“the Property F property”).

b)      The Ford (omitted) motor vehicle being registration number (omitted).

c)      The (omitted) and (omitted) shares held in the Respondent’s name.

d)      The balance of the Respondent’s superannuation entitlements following the splitting order made pursuant to Order 2.

e)      The balance of any funds held in any savings account held in the Respondent’s name.

1. All other property and assets which at the date of these Orders and subject to the preceding Orders, stand in the Respondent’s name and/or remain in the Respondent’s possession.

1. That the Applicant be declared the legal and beneficial owner to the exclusion of the Respondent in the following:-

All superannuation entitlements held in the Applicant’s name.

1. The balance of any funds held in any savings account held in the Applicant’s name.

1. All other property and assets which at the date of these Orders and subject to the preceding Orders, stand in the Applicant’s name and/or remain in the Applicant’s possession.

1. That consequential to the making of Order 4(a), the Applicant shall immediately vacate the Property F property.

1. That the Respondent shall indemnify the Applicant and hold the Applicant forever indemnified in respect of all loans and monies owed to his parents.

1. That in the event that either party should fail, neglect or refuse to sign or execute any deed, document or instrument required by or to give effect to these Orders then pursuant to Section 106A of the Family Law Act 1975 the Registrar of the Federal Circuit Court of Australia shall be and is hereby authorised, empowered and directed to sign and execute such deed, document or instrument in the place and instead of such party and thereafter do all things and acts as are necessary to give validity and operation to same.