PETERS & JENSEN - [2013] FamCA 816

FAMILY COURT OF AUSTRALIA

PETERS & JENSEN

[2013] FamCA 816

FAMILY LAW – DE FACTO RELATIONSHIPS – Applicability of Stanford & Stanford to the law relating to property settlement of de facto relationships

FAMILY LAW – PROPERTY SETTLEMENT – Just and equitable – whether it is just and equitable to make an order altering the parties legal and equitable interests – Is there a threshold step?

FAMILY LAW – PROPERTY SETTLEMENT – Contributions – What weight to be given to varying and disparate financial and non-financial contributions across a long-term relationship – Where one partner received a large inheritance late in the relationship – Where a final analysis of the parties’ contributions requires a comparison of unalike factors.

FAMILY LAW – PROPERTY SETTLEMENT – No add-backs- application of s 90SF(3) (s 75(2)) equivalent – Balancing of factors – matters to be included in consideration including paid legal costs and pre-emptive property distributions – also property or possible rights to property not adequately disclosed..

Family Law Act 1975 (Cth)

Bevan & Bevan [2013] FamCAFC 116
Bremner & Bremner(1995) FLC ¶ 92-560
Dickson & Dickson (1999) FLC ¶ 92-843
Hickey & Hickey & the Attorney General of the Commonwealth of Australia (Intervener) (2003) FLC ¶93-143
Kennon & Kennon(1997) FLC ¶ 92-757
Money & Money(1994) FLC ¶ 92-485
Pierce & Pierce (1999) FLC ¶ 92-844
Stanford & Stanford (2012) 293 ALR 70
Walker & Walker (cited in Dickson & Dickson (above)

APPLICANT:

Mr Peters

RESPONDENT:

Ms Jensen

FILE NUMBER:

CAC

1384

2011

DATE DELIVERED:

23 October 2013

PLACE DELIVERED:

Canberra

PLACE HEARD:

Canberra

JUDGMENT OF:

Faulks DCJ

HEARING DATE:

24 & 25 May 2012, 9 August 2013 and 24 September 2013

REPRESENTATION

COUNSEL FOR THE APPLICANT:

Mr Kearney

SOLICITOR FOR THE APPLICANT:

Farrar Gesini Dunn

COUNSEL FOR THE RESPONDENT:

Mr Hodgson

SOLICITOR FOR THE RESPONDENT:

Nicholl & Co Lawyers

Orders

Ms Jensen (the wife), shall, within 60 days of these orders, or such further time as the parties may agree, either:
(a)Do all acts and things as may be necessary to transfer to Mr Peters (the husband) all of her right, title and interest to C Street, Suburb D, ACT; or
(b)Pay to the husband $800,000.
(c)If at the end of 60 days the wife has not chosen to transfer $800,000 to the husband, then, unless the parties otherwise agree, she must do all acts and things as may be necessary to transfer to the husband all of her right, title and interest to C Street, Suburb D, ACT.
(d)If the wife transfers her right, title and interest to C Street, Suburb, D ACT to the husband, the husband will indemnify the wife, and keep her indemnified from and against all claims, actions, suits, demands and charges with respect to C Street, Suburb D, ACT.
(e)The husband will pay the costs and charges of the transfer to him of C Street, Suburb D, ACT.
The wife shall, within 60 days of these orders, or as otherwise agreed between the parties, pay to the husband a further $321,743.
The wife shall do all acts and things as may be necessary, if she is requested to do so, to transfer any right, title or interest as she may have in the Aircraft; the Sail Boat “B”; all the contents of C Street, Suburb D, ACT; the motor vehicle; and the Husband’s CSS Pension to the husband.
The wife is declared to be the owner at law and in equity of all property in her possession and control.
The husband is declared to be the owner at law and in equity of all property in his possession and control.
The wife will indemnify the husband, and keep him indemnified from and against all claims, actions, suits, demands and charges with respect to all of her property.
The husband will indemnify the wife, and keep her indemnified from and against all claims, actions, suits, demands and charges with respect to all of his property.
All material produced subpoena which did not become the subject of exhibits will be returned by the Court to the persons producing it as soon as practicable.
Any material produced subpoena which became an exhibit will be returned by the Court at the expiration of the appeal period to the person producing it. Any material produced by a party which became the subject of an exhibit will be returned by the Court to the party at the expiration of the appeal period.
This matter is removed from the pending cases list

IT IS NOTED that publication of this judgment by this Court under the pseudonym Peters & Jensen has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT CANBERRA

FILE NUMBER: CAC 1384 of 2011

Mr Peters

Applicant

And

Ms Jensen

Respondent

REASONS FOR JUDGMENT

Foreword

Proceedings began in this matter when the husband, Mr Peters,[1] filed an Application in September 2011. The Application succinctly sought that he be paid 50 per cent of the value of the assets or that there be a property settlement awarding him 50 per cent of the assets of the parties. He also sought an interim property settlement of $300,000.
[1] whom I shall refer to inaccurately but conveniently for the purposes of this judgment as the “husband”
An order was made by consent, on 22 December 2011 for an interim property order as sought.
The wife, Ms Jensen,[2] filed a response on 17 May 2012 in which she sought to pay by way of property settlement to the husband $200,000 with his retaining the boat, the plane, his car, his superannuation and the $300,000 already paid.
[2] whom I again inaccurately but conveniently I shall refer to as the “wife”

Background

Most of the background facts are not seriously in dispute although some elements are the subject of disagreement between the parties.
The parties began to live together in November 1979 when they were both in Country E. The wife was in Country E teaching English as a Second Language. Shortly after the parties began their relationship they determined that they would go sailing together. What they each described from time to time as an “odyssey” began in 1980 when (and I accept that this is the case) the husband sold his sports motor vehicle for about £2,450. Those proceeds in combination with an advance from the wife’s mother of £$11,000 enabled them to buy a sailing boat in which they then sailed around the world for about five and a half years. They arrived in Australia (although not together) in 1986. The husband stayed behind to ready the boat for sale - and indeed did sell the boat, at a substantial profit, for about $109,000.
Upon her return to Australia the wife obtained employment initially with the New Parliament House Authority and subsequently at F House. She had other employment until the birth of their son in 1989. When he returned to Australia the husband began to build a new boat “B” in G Town, New South Wales. He spent about two years doing this. It necessarily took him away from home for relatively long periods. Otherwise it appears his main employment was his involvement with international motorcycle racing. This appears to have paid him (only) a daily allowance of $100 plus his travel and accommodation expenses. This would not have contributed much to the parties’ coffers.
At all relevant times during the relationship the husband was in receipt of either a Commonwealth Superannuation Scheme (CSS) pension (as a result of the termination of his employment with the public service because of ill-health) or for a period, a Comcare payment. The precise payment to him is irrelevant to some extent. It was about $30,000 a year - or as calculated on his behalf by his counsel about $1,000,000 in total. Whether that was gross or net was not the subject of particular submission.
An area of contention between the parties is how they maintained themselves financially when they were on their “odyssey”. The wife contends that she contributed to those expenses with money from her father’s estate. However the details about that were vague and were denied by the husband who said he was the sole financial provider. The evidence of the wife about this was brief and vague and with some qualifications (to the extent that I find it was more likely than not that the wife contributed something from time to time) I prefer the husband’s evidence on this point.

A digression about credit

I digress to say that it was urged upon me by counsel for the husband that I should make a general adverse credit finding against the wife. I decline to make such finding.
I accept that in some respects her evidence was not as accurate as it might be. I accept also that she failed, notwithstanding a number of opportunities to do so, to provide information about the Ms M Endowment Fund. However these matters do not qualify her for a general adverse finding about credit.
Indeed it might be said that some of the evidence of the husband was equally vague, general and in some cases exaggerated. In this regard for example, I prefer generally, the evidence of the wife about the nature of the husband’s participation in household chores. That is not to say (in relation to the husband as well) that I found his evidence generally unsatisfactory. To the contrary I found that he did his best to set out the information he thought was relevant to the Court; even though this involved from time to time an emphasis of his contributions to an unwarranted extent.

More Background

In the year in which they arrived back in Australia the wife purchased the property in H Street in Suburb D, in the Australian Capital Territory as a home for the parties, for the sum of $86,000. It is common ground that this money was provided by the wife’s mother.
This property itself was sold in 1990 for $110,000 and I accept that the proceeds of that sale were applied to the wife’s “investment fund”[3].
[3] The wife’s affidavit 3 November 2011
The husband began his construction of the boat in G Town in 1988 and apparently finished it in 1990. That was his evidence and I have no reason to doubt it. The construction of the boat (I accept that it was substantially his design and his labour) was financed in part by a back payment to him from Comcare of $70,000 and I also accept that it was in part financed by $50,000 from the wife.
It does seem extraordinary, although I accept that it is so, that the boat is now valued at $45,000 when so much money and so much effort was put into its construction.[4]
[4] There was a further $30,000 as appears later from the residue of the husband’s superannuation fund created or fed with money from the wife. This fund suffered severely from the GFC and the remainder of about $30,000 was used (so he said and I accept) by the husband for B.
In 1989 the wife received $250,000 by way of inheritance from her late aunt Ms J. This was used to purchase the property at C Street Street in Suburb D, in the Australian Capital Territory, for $240,000. I accept that the sale was effected, and incidentals to the sale, were paid for by the wife.
The amount is substantially irrelevant, but the wife, I accept, did transfer to the husband the sum of $6,500 in 1998.
I accept further that since January 2000 the wife has had nothing to do with the boat and has regarded it as the husband’s alone.
In the year 2000 the husband bought an Aircraft for $50,000 to which the wife asserts she contributed $20,000 and the husband agrees that she contributed this but maintains and I accept he also paid the balance of the money from the sale of various motorcycles.
I pause to note again that during the period of his time in Australia the respondent had bought motorcycles frequently, cheaply, and had done them up. The most outstanding example of a profit from this was a British motorcycle which he sold for $50,000.
The wife’s health disintegrated in September 2000 and her capacity to work was accordingly reduced.
In March 2006 the wife’s mother died leaving approximately $1.4 million to the wife. With these funds the wife purchased the property at K Street, Suburb L, in the Australian Capital Territory, for $700,000 and established a diversified portfolio with Perpetual Trustees (now Perpetual) and later the same year her aunt Ms M passed away leaving her approximately $5,354,030.
The wife asserts, and I accept that a little over one million dollars was transferred to her superannuation fund and further contributions were made to that fund from time to time in accordance with the appropriate contribution amounts permitted by the Australian Taxation Office. The wife also created the endowment fund which was the subject of earlier comment, with a sum of $180,000.
She also at the same time gave to the husband $100,000 for his own personal use. This sum was applied by the husband to discharge his overdraft with the N Credit Union of $10,000. He asserts that this was in part ($5,000) in payment for money he had previously given to the wife. A further $28,000 was applied in relation to debts relating to the plane and the balance was put into a superannuation fund which crashed disastrously during the Global Financial Crisis and the remnant of $30,000 from this, in early 2010, was applied to the boat, according to the husband.
It is also the wife’s contention that up to the time of the hearing various sums had been withdrawn by her and applied towards the renovation and improvement of the properties in Canberra. This included some $178,283 towards construction works on the Suburb L property.
I accept that the parties both contributed to the support of O, their son, although I accept (and it appears that it is conceded by the husband) that more of the expenses were met by the wife.
There were disputes about a number of pieces of property but these were substantially resolved by the time financial submissions were made in this matter in September 2013.
The list of the property of the parties with designations as to their legal owners became Exhibit J5 and is annexed to this judgment. With such qualifications as I set out hereafter, I accept that the property of the parties and their legal and equitable interests are therein accurately identified. I understand that to be the agreed position even if there are or were differences about issues such as add-backs which in my opinion do not constitute property as that term should now be understood.
After the completion of the substantive hearing between the parties judgment was reserved and before its delivery the decisions of the High Court in Stanford v Stanford[5] and of the Full Court in Bevan & Bevan[6] were handed down.
[5] (2012) 293 ALR 70
[6] [2013] FamCAFC 116
The parties requested that the proceedings be reopened and further evidence was taken on 24 September 2013. Then and subsequently, written submissions were made and those submissions helpfully and comprehensively dealt with the competing claims of the parties and with the effect that the High Court and Full Court decisions referred to above might have on the matters before the Court.

Possible Changes to the law as a result of Stanford v Stanford and Bevan & Bevan and their application to this matter

It should be said of course that the two cases referred to, related to proceedings between married people under the Family Law Act 1975 whereas these proceedings were brought under the de facto relationship provisions of the Family Law Act 1975, (Part VIIIB). For all practical purposes it was acknowledged by counsel for both parties and I agree, that there is no substantive difference between those provisions of the Act relating to the division of the parties’ property to de facto relationships at the conclusion of such a relationship and those relating to the division of property of married people at the termination of their marriage. For these purposes, s 79 is reasonably equatable with s 90SM and in particular, s 90SM(3) has the same substantive effect as s 79(2) and s 90SM(4) has the same effect as s 79(4) of the Family Law Act 1975 (incorporating as it does the provisions of s 90SF(3) which is relevantly equivalent to s 75(2)).
It would be fair to say that the original submissions made by the parties in this matter, and the way in which the trial had been conducted, was substantially in accordance with the three (or four) step approach most commonly referred to as being the “Hickey approach”.[7]
[7] Hickey & Hickey & the Attorney General of the Commonwealth of Australia (Intervener) (2003) FLC ¶93-143
This approach commonly involved a determination of what was referred to as the pool of assets and liabilities of the parties. The court then evaluated the contributions made by each of the parties in the various forms set out under s 79(4) before turning to a consideration of factors under s 75(2) (to the extent that they were relevant).
Finally, either as a formal step, or perhaps more correctly, as an internal review, a determination was required as to whether any orders made as a result of the preceding three steps could properly be regarded as just and equitable.
The decision of the High Court in Stanford v Stanford[8] pointed out [35] that the provisions of the Act require that there should be a determination that an alteration of the property of the parties would be just and equitable before an order is made. This is not to say that this is necessarily a threshold issue but their Honours in the majority in the High Court were concerned to point out that the process of a determination that it would be just and equitable to alter the property interests of the parties should not be “conflated” with the determination of the contributions and other financial resources of the parties.
[8] (2012) 293 ALR 70
The circumstances of the parties in Stanford were unusual and it has been suggested that one (narrow) interpretation of the judgment of their Honours in the majority in Stanford v Stanford is that if at least one of the parties to a marriage voluntarily brings that marriage to an end, then it would ordinarily be just and equitable to alter the interests of the parties. This would be so particularly if the parties had conducted their relationship over a number of years in either a formal agreement or an informal agreement or implicit agreement about the use and ownership and beneficial ownership of assets owned by one or other of them.[9]
[9] Stanford & Stanford [42]
In this matter both counsel conceded that it was appropriate (just and equitable) that there should be an order altering the interests of the parties to the marriage. The original orders sought by each of the parties (and subsequent versions thereof) reflect this.
Perhaps the most appropriate summary of this aspect of the proceedings in Stanford v Stanford is that the “just and equitable” requirement was a determination about whether it was just and equitable to make an order and the consideration of matters pursuant to s 79(4) and s 75(2) related to what order might be made - if an order is to be made.[10]
[10] PaceBevan & Bevan [2013] FamCAFC 116 [89] and Stanford [42]
It could appear that there is a degree of circularity. It would seem fair that, where the parties, as in this case, were together for some 32 years, in considering the property owned by each of them (in this case skewed in favour of the wife by some $7 million to about $200,000 by the husband) to look at the contributions that the parties had made individually or which had been made on their behalf over the period of their relationship together with the provenance of the various assets and the nature of the relationship between the parties over the 32 years. These are factors which broadly might fall within s 90SM but that would not disqualify their consideration in the boarder sense of whether an order should be made.
Moreover, the partial property settlement (orders dated 22 December 2011) which has substantially been dissipated by the husband[11] would seem properly a factor to take into account under s 90SF(3). Doing justice between the parties would not be able to be done without this being taken into account - as indeed each of the parties impliedly seeks in the orders they ask that I make.
[11] This comment is not intended pejoratively.

In addition, in this matter the failure on the part of the wife to make a more adequate disclosure about the Endowment Fund in my opinion should also properly be taken into account in determining what would be just and equitable between the parties.
The provenance of the fund is not in dispute. The funds transferred to the Endowment Fund came from an inheritance of the wife. It is not suggested or claimed that the husband made any contribution either to the inheritance or to the application of those funds to the Endowment Fund. Whether or not the wife has (unfettered) access to those funds (and this is a matter in dispute) is possibly irrelevant. It is reasonable for me to take into account in determining what would be just and equitable that it is probable that the wife has some access to or control over those funds. This is in part because it was within her power to demonstrate that the funds were beyond her control both during the original trial and in the course of the supplementary evidence that I permitted to be adduced upon the matter being reopened. She chose not to do so when she was obligated to do so in fulfilment of her duty of full and frank disclosure.
For the purposes of this hearing, the high point of the husband’s case would be that this sum should be (in the terms used previously - but seemingly erroneously) added back to the ‘pool’ of property. However, whatever may be the correct situation about the wife’s entitlement either conditionally or absolutely to some or all of the funds in the Endowment Fund, in the overall context of the property of the parties in this matter it is appropriate in my opinion to deal with it as a factor to be taken into account under s 90SF(3).

Perhaps a broader approach

In any event, irrespective of whether there is some possible ‘threshold’ issue about whether it would be just and equitable to alter the interests of the parties I note that neither party has suggested that it would not be so.
Moreover, in conformity with at least some parts of Bevan & Bevan [70, 85, 89] it is not necessary to deal with the issue as a preliminary question as long as I do not merge the consideration of whether an order altering the interests of the property of the parties would be just and equitable with the process of the consideration of the form of such order by reference to ss 90SM and 90SF.
In the final submissions Mr Kearney contended that, on a proper consideration of all relevant matters, the contributions (which he suggests should be dealt with in a global way) from the husband be regarded as being 30 per cent with 70 per cent from the respondent. As he comments[12] this would bring about a differential (on contributions) between the parties of some $3.1 million.
[12] Submission 6.33 dated 23 September 2013
He also suggested that there should be a further adjustment by reference to the factors under s 90SF(3) of 10 per cent[13]. This would produce[14] a division of 60 per cent to the respondent and 40 per cent to the applicant.
[13] Submission 7.20
[14] Submission 8.3
For her part, the wife’s counsel, Mr Hodgson submitted that in large measure the property of the parties should not be altered from its present ownership and that it was not appropriate to deal with the matter on a “global” basis.[15] Each of the parties should keep his or her own assets but the boat ‘B” should be transferred by the wife to the husband. This in itself represents an alteration of the interests of the property which the wife considers to be just and equitable. This process was described by Mr Kearney, on behalf of the husband, as quarantining the assets which he said was inappropriate and in this instance invalid.
[15] P 14 wife’s submissions dated 1 October 2013
However, Mr Hodgson in the final paragraph of his submissions suggests that if a global approach is undertaken, then the contributions (and other factors) should be regarded as being in the range of 5-10 per cent by the husband. It was suggested that the parties’ paid legal fees and the Ms M settlement should be removed and that this would leave an asset pool of $7,623,220. This means according to the wife’s submissions that the settlement range for the husband would be in the order of $381,000 to about $762,000.[16] This in turn would mean that as he retains assets of $212,322 the adjustment to be made in his favour will be a further payment to him in the range of $168,841 to $550,002.
[16] (in addition to the part property settlement and the boat and the plane and the other assets in the husband’s name)

Contributions

As was stated in Bevan & Bevan[17] it is not yet clear whether the High Court was either suggesting or mandating an approach different from the traditional Hickey & Hickey approach. It seems it might reasonably be said that the so called fourth step is misplaced, at least so far as a formal stage in the process is concerned. Justice and equity, it seems, must permeate the process of adjustment (if any) but not be conflated with it.[18]
[17] [2013] FAMCAFC 116
[18] Stanford [40]
Still less is there any direct indication from their Honours in the High Court that an asset by asset approach must necessarily be preferred to a global approach.
The requirement to consider the contributions of the parties in various forms (s 90SM(4)(a), (b) and (c)) must mean to some extent (once it has been determined that it would be just and equitable to make an order) that there must be some over-view of the property which bears reference to the contributions made by the parties generally rather than to a specific piece of property or to a property interest. For example, a contribution made as home-maker and parent would not ordinarily be referable to any particular piece of property or to the superannuation of the parties.
It is perhaps reasonable to say that the starting position should be that the existing interests of property should only be altered if it is just and equitable to do so. In some (perhaps many) cases that would seem to be relatively straightforward because any “adjustment” to be made can be made with minimum disruption to the legal interests of the parties or at least to a limited number of the assets.
That being said, it seems that the emphasis of their Honours in the High Court on the early precise identification of the rights of the parties would suggest that in a number of cases what has previously been referred to as an asset by asset approach may be preferable.

The advantages of division by percentage of a pool

The traditional approach of ascertaining a pool, determining a percentage of contributions as between the parties and adjusting that percentage by reference to factors under s 75(2) has had the advantage of a well-worn path for litigants and lawyers (and judges) and in some measure, probably contributed to predictability of results.
Some of the difficulties in taking a different approach are illustrated by this matter.
Senior Counsel for the husband submitted that an overall[19] approach was necessary and in his submissions (23 September 2013) he outlined by reference to the filed material (particularly) under a heading of “contributions” the financial and other contributions made by his client over the period of the relationship. Some of the contentions were controversial. For example, the parties did not agree whether the wife had made contributions during the period of the “odyssey”. She certainly did not produce any corroborative evidence that she did and it is fair to say that the husband’s contention that he applied his pension towards the support of the parties together with his efforts from time to time in odd jobs in different harbours is substantially uncontested. The wife’s lack of corroboration however, does not mean that I necessarily do, or must accept that the only contributions made by her during this period were as indicated by the husband. In particular, I am inclined to the view that her contributions on board certainly as the voyage unfolded were likely to be far more significant than her designation as a passenger by the husband would suggest[20]. I also think it is more likely than not that there was some (but limited) financial contributions from her during that period.
[19] (skilfully avoiding the use of the word “global”)
[20] Husband’s affidavit 10 April 2012 [11]
However, these are relatively minor matters in the overall scheme of things. The submissions by Senior Counsel for the husband suggested somewhat over-simplistically that for the first period (the “odyssey”) the husband provided the income for the family; in the second period of the relationship, both parties provided an income for the family (when the wife was working in various Public Service or related jobs in Canberra and the husband was providing his pension or Comcare payments) and that for other parts of the relationship, money was provided to the family by the wife from her inheritances and from the husband through his efforts renovating motorcycles and attending motorcycle events around the world.
Such an analysis is unreasonably simplistic of the affairs of these parties. For example, I accept that the wife’s mother provided by far the bulk of the funds for the purchase of the parties’ first boat. This can properly be regarded as a contribution made by or on behalf of the wife.
Equally, while the husband was exclusively responsible through his labour for the building of the boat “B” and for that matter the preparation of the first boat for sale, without capital injections from the wife, it is unlikely that the boat “B” would ever have been built.[21]
[21] And for that matter without the financial intervention of the wife’s mother the first boat would not have been acquired.

Contributed “as much as he could”

Although it is tempting on occasions to summarise contributions by saying that each contributed as much as he or she was able to do, that is a gloss on the terms of sub-ss 79(4)(a), (b) and (c) which require the Court to look at the financial contributions of the parties - not whether each party contributed as much as he or she was able.
However, contributions of an intangible kind are not capable of precise assessment and it might, in a suitable case, be appropriate to construe the different but significant physical efforts of both parties in homemaking or parenting as being equivalent.
But it is not the case as was pointed out in Dickson & Dickson[22] referring with approval to Walker & Walker[23] where their Honours said as follows:
… such findings in our opinion misunderstand the obligation which trial judges have to weigh and assess each party’s contribution under s 79(4)(a), (b) and (c) and to take a proper account of the relevant s 75(2) factors to produce a just and equitable outcome with regards to their property. The balancing process is not to be undertaken in the same way as the preparation of a balance sheet in which there are a series of debts, credits, set off and contras. [emphasis added]
[22] (1999) FLC ¶ 92-843(to which I was referred by Senior Counsel for the husband)
[23] A decision of the Full Court 27 February 1996 (Baker, Lindenmayer and Smithers JJ) delivered 28 January 1997
In the overall exercise of discretion, it is difficult to evaluate and compare, the value of intangible contributions or physical contributions with the value of financial contributions. For that matter it is difficult to evaluate different financial contributions made at different points in a long relationship.
For a time it appeared that there was a doctrine which asserted that over a long period the value of early contributions might effectively be eroded.[24] However Pierce & Pierce suggests (in my opinion, with respect, correctly) that it is not so much a question of erosion of contributions but of what weight is to be attached in all the circumstances, to the initial contributions. That of course does not make the task of comparison and evaluation any easier or more precise.
[24] Money (1994) FLC ¶ 92-485 and Bremner (1995) FLC ¶ 92-560 and the much quoted passage in Pierce (1999) FLC ¶ 92-844
What is clear is that the vast preponderance of financial contributions, especially in the later stages of the relationship, came from the wife (more particularly from her inheritances).
In this matter if I were to adopt a global approach, Senior Counsel for the husband submits that I should assess the contributions of the parties as to 70 per cent to the respondent and 30 per cent to the applicant.[25]
[25] Submission 6.26
On the other hand counsel for the wife while urging that I should adopt an asset by asset approach suggests that if I did adopt a global approach “any entitlement of the applicant by way of property settlement should be determined to be in a range of 5-10 per cent of the net assets available for distribution between the parties”.[26] Counsel for the wife did not clearly differentiate between contributions and other financial adjustments but the level of contributions suggested by him as being referable to the husband appears on page 9 of his submissions accordingly, even if one credited the applicant with making the total contributions to these assets this would equate to 1.5 per cent of the total value of all of these assets.
[26] Submissions 1 October 2013 p. 15
For the reasons I have outlined above it is not appropriate that I should engage in some sort of purely mechanical mathematical exercise in determining what amounts of money were contributed to the various assets of the parties from time to time. To do so would not be to give full faith and credit to the physical and non-financial contributions of each of the parties. Necessarily therefore, my determination of the contributions (if I were adopting the global approach) would have to take account of the different forms of contributions, the stage in the relationship in which those contributions were injected, the source of the contributions and the application of the contributions in so far as they established assets for the parties or maintained or conserved them.
I note in this regard (without being critical at all of the husband) that notwithstanding his having spent something in the order of $140,000 in the construction of “B” the boat is valued at only $45,000. Similarly, the money the husband was given by the wife and which he applied to his superannuation diminished in value dramatically during the Global Financial Crises and it appears that the balance of money (about $30,000) also went into “B” (as part of the sum mentioned above).
By the same token, as was pointed out by Senior Counsel on behalf of the husband, the investments of the wife over the last year have appreciated by some $1 million. It would seem the credit must at least be given to the wife for the choosing of a wise financial adviser.
This is not to suggest that the contributions of the husband should be downgraded in any way but rather it suggests that the value of contributions might be different because of factors beyond the control of either party.
These matters inevitably lead to the conclusion that it is impossible to provide a precise reason why any particular percentage might be chosen (if a global approach is to be used) by a judge. It must at best be an intuitive synthesis.
In this matter, taking account of the contributions (most of which it is noted from the submissions, are not controversial) it seems to me that the position about contributions taken by Senior Counsel for the father is predictably (but unreasonably) generous to him - bearing in mind at the very least, the massive (and acknowledgedly massive) contributions by the wife from her inheritances. By the same token the ungenerous approach of counsel for the wife is to diminish in value, unacceptably, the contributions made physically and in non financial ways by the husband over the years. Taking account of both of those factors it seems to me that the appropriate allocation of contributions on a global basis would be that the wife contributed 90 per cent and the husband 10 per cent.

Other financial matters

Again continuing to look at the matter on a global basis the factors which might reasonably cause an alteration to the division of property by reference to contributions were summarised so far as the husband were concerned in submission 7 of the submissions filed on 23 September 2013.
These submissions referred to the health of the parties, the financial resources left to the parties and their capacity to earn money from investments while preserving the capital; and the important resources in the hands of the husband of his life pension resulted in a conclusion (submissions 7.20) that there should be an adjustment of 10 per cent. Based on all the submissions of the husband, such an adjustment would ultimately result in a differential of 20 per cent. A combination of those factors would lead to an outcome[27] of 60 per cent of the assets to the respondent and 40 per cent to the applicant.[28]
[27] ¶ 8.3
[28] It is fair to say that submission 8.4 provided a qualification relating to the way in which the assets of the parties were to be considered.
For his part, counsel for the wife asserted that the final position after adjustments should be ‘in the range of 5-10 per cent of the net assets available for distribution between the parties’.[29]
[29] P 15
However, noting the qualification referred to in footnote 28, it is probably important to record the rest of the final paragraph of the submissions on behalf of the wife.
Upon the basis that the total net assets including superannuation are $7,931,452 as per exhibit “J5” removing the parties paid legal fees and the [Ms M] settlement which is a total of $308,230 the adjusted net asset pool would be $7,623,220. Accordingly the applicant’s overall entitlement would be in the range of $381,161 to $762,322. As the applicant retains assets to the value of $212,320 (being $360,370 less paid legal fees of $148,050 as per exhibit “J5”, the adjustment to be made in his favour would be a payment to him by the respondent in the range of $168,841 to $550,002.
It appears from those submissions, that the husband would keep in addition to those sums the balance (now dissipated) of the $300,000 interim property settlement. Some of the assets included as retained by the husband were effectively acquired through that $300,000 and it would be important not to double count some of those matters.
Other factors which in my opinion are properly to be adjusted under the provisions of s 90SF(3) are as follows. Any capital value of the husband’s superannuation fund (bearing in mind that it has already been taken into account as a source of income), the legal fees for the parties which have been paid and are no longer assets and in my opinion should not be “added-back”, and in this context the money already paid to the husband by way of interim property settlement. In addition, in my opinion, the Endowment Fund given that it was not established that the wife had an entitlement to it but equally it was not established by the wife that she did not, should be taken into account as a possible resource for the wife and certainly one over which she appeared to have some control.
In summary, of the factors under s 90SF(3) I accept the admonition of the Full Court in Kennon[30] that
Section 79 is not a source of social engineering or, as a means of evening up the financial positions of the parties to a marriage…
[30] (1997) FLC ¶ 92-757 p 84,303
It is nevertheless appropriate to note that the financial circumstances and resources of the parties, no matter what adjustment might be made within the parameters suggested by their respective counsel, will remain disparately in favour of the wife. Taking account of the other factors set out above it seems to me that a further adjustment in favour of the husband is warranted but such an adjustment should not be as high as that for which the husband contends. Seven and a half per cent in my opinion, representing as it does in the order of $570,000 (or $1.14 million as a differential between the parties), would be appropriate.

Summary of the consideration of the matter on the “overall” approach

Accordingly, my determination about the percentage of the property to be divided is that the husband should receive 17.5 per cent and the wife should receive 82.5 per cent.

An examination of individual properties and interests

However, if conscious of the overriding requirement for an order altering the interests of the property of the parties only to be made if it is just and equitable, I were to consider the assets more particularly as they are presently distributed between the parties and then accordingly determine what sort of order would be just and equitable,[31] the exercise of examining contributions in relation to the individual assets was undertaken on behalf of the mother by her counsel at pages 7 and following of his submissions of 1 October 2013.
[31] Acknowledging that both parties concede that it would be just and equitable to alter the interests of the parties in their respective property.

K Street, Suburb L in the Australian Capital Territory

This property was purchased in the respondent’s sole name and was purchased from money received from her inheritance from her mother. The husband’s contribution to that property related to physical effort, to homemaking and parenting to some extent, and to some (minor) contributions from his income for running expenses of the family.

C Street Suburb D in the Australian Capital Territory

Again this is a property in the respondent’s sole name. This was substantially purchased with an inheritance she received from her Ms M. This is the property in which the husband lives and has occupied since separation. That has been an advantage to him although I would not be prepared to hold that constituted a contribution to the property on the part of the wife. It seems common ground that the husband had paid the outgoings on the property since he occupied it alone. The husband also made physical contributions to this property although these could not be in any way equated with the wife’s financial contributions.

Perpetual Trustees Investment Portfolio

This investment derived exclusively from the wife’s inheritance she received from her Ms M. It would be fair to say that there was no direct contribution made by the applicant husband to this investment at all.

Ms M Settlement

This relatively small amount, in the overall scheme of things, again was derived from the inheritance from Ms M and the applicant made no direct financial contribution to it.

Sail Boat “B”

The springboard for the acquisition of the first boat was as I have set out above substantially the money from the applicant’s mother and I have indicated that I find that that contribution was made by the applicant’s mother. That sum was parleyed into $109,000 (AUD) through the physical work and investment of the applicant and the sales proceeds also provided funds for the construction of “B” together with $50,000 contributed by the wife (which contribution I accept she made), and $70,000 by way of a lump sum contributed by the husband from his Comcare settlement. Whether his Comcare settlement should be regarded as exclusively a contribution from the husband or something to which the wife indirectly contributed is probably not a serious issue between the parties.[32] The accident giving rise to the claim occurred before the parties were together and the injury did not appear to significantly inhibit the husband from such activities as he undertook during the time the parties were together.
[32] and was not raised as such.
It might be noted however, that “B’s” present value bears no reference to the amount of money that has been put into it.

The Aircraft

Again more money has been spent on this asset then it is now worth. There was a contribution (small) from the respondent of $6,800 and the balance of nearly $44,000 was contributed (it seems to be agreed) by the husband from the sale of motorcycles he had repaired and renovated. The respondent also contends that she contributed a further $20,000 towards the purchase of this plane and in 2005 after the sale of the British motorcycle for $50,000 by the husband, a new engine was bought for the plane.
The boat “B” is agreed as being beneficially owned by the husband as the wife has indicated she would transfer her interest to the husband. The aircraft is owned by the husband.

The contents of the Suburb L home

The contents were valued after the parties had disputed valuations for a time at $71,500. It is asserted that the respondent had been primarily responsible for purchasing the contents and art work. Given the sources of income available to the applicant husband this seems to be a reasonable conclusion to be drawn.

The N bank term deposit

The deposit is part of the $300,000 which I have otherwise indicated should not be taken into account except under s 90SF(3) but the result of it of course needs to be taken into account. That is the husband’s.

Perpetual Trustees Self Managed Superannuation Fund

Again, this was derived from the inheritances of the wife and no direct contribution was made by the husband.

Indirect contributions or contributions made otherwise than directly to any specific asset

In addition to those specific contributions to each of those properties each of the parties made the indirect contributions which I have already canvassed above generally both as home-makers and parents and by way of physical effort as has been suggested by each litigant.
These contributions have been separately catalogued in the submissions of each of the parties and while there are differences between them, and different weight to be applied to different contributions in different ways the effect is that each of the parties must be regarded as having contributed to each of the assets in some way. However, it goes without saying that in relation to those assets, particularly those financial assets owned by the wife the husband’s contribution has been significantly less than the wife’s.

S 90SF(3) factors

Applying the reasoning set out above in relation to s 90SF(3) factors I would regard any adjustment to be made to the overall division of property between the parties as being in the order of 7.5 per cent to the husband. The reasons set out above more comprehensively explain how I arrived at that figure.

Summarising the considerations from this perspective

Summarising the matter from this approach it would seem that the appropriate way of looking at this matter more particularly by reference to each of the assets rather than the whole would be to say that there should be an alteration of the assets to the extent that the wife should pay to the husband an amount which would recognise his contributions to the various assets and the adjustment for the other factors that I have set out above.
Given that the parties have conceded that an adjustment of assets between the parties is necessary, I nevertheless consider that it would be just and equitable taking account of the length of time the parties were together and the nature of the assets and the parties contributions to them that there should be a payment by the wife to the husband of $1,121,743.50 (however such a sum includes the value of the Suburb D property in which the husband lives). I shall make orders which will permit the wife either to transfer that property to him or to pay its value as it appeared in F5.
Such an amount would leave the husband with either a sum sufficient to accommodate himself if he chooses to do so, or with the consent of the wife, the Suburb D property in which he is currently living. He retains an income (his pension) and some further capital but nothing such as would provide for some evening out or equalisation of the assets of the parties. Such an objective in a matter such as this would be, in my opinion, totally inequitable and unjust.
The sum to be paid by the wife is calculated as follows:
Net assets of the parties (list in F5 minus Ms M Endowment and minus the paid legal fees of both parties[33]) = $7,623,222
17.5 per cent of the net total assets =                    $1,334,063
Less the Suburb D house  $800.000
Less B  $45,000
Less the plane  $70,000
Less contents Suburb D  $8,430
Les N Credit union  $7,390
Less N Credit union term deposit                         $70,000
Less motor bike  $8,500
Less motor vehicle     $3,000
[33] As explained above these amounts were excised from the list of assets but dealt with under s90SF(3)
Payment to husband by wife =   $321,743

I certify that the preceding one-hundred and two (102) paragraphs are a true copy of the reasons for judgment of the Honourable Deputy Chief Justice Faulks delivered on 23 October 2013.

Associate:

Date: 23 October 2013