Pinney & Pinney (No 3)
[2023] FedCFamC1F 391
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Pinney & Pinney (No 3) [2023] FedCFamC1F 391
File number(s): SYC 792 of 2022 Judgment of: MCCLELLAND DCJ Date of judgment: 19 May 2023 Catchwords: FAMILY LAW – PROPERTY – Application for an adjustment under s 79 of the Family Law Act 1975 (Cth) – Where the parties agree that their contributions during the relationship are equal – Husband’s earning capacity considerably greater than that of the wife – Where the wife is primary caregiver for the parties’ four children – Renovation of the former matrimonial home continuing since 2021 – Where the parties have been unable to cooperate in finalising the renovations to place the home on the market – It is not the role of the Court to become a de facto building project manager – Where wife is entitled to an adjustment of four per cent in respect to financial and non-financial contributions and an additional eight per cent in respect of future needs – Where the matrimonial home will forthwith be placed on the market.
FAMILY LAW – CHILD SUPPORT DEPARTURE – Where both parties have agreed that it is appropriate for child support departure orders to be made requiring the husband to be responsible for the children’s education costs, certain extracurricular expenses and medical expenses – Where the circumstances satisfy a departure order pursuant to ss 116 and 117 of the Child Support (Assessment) Act 1989 (Cth) – Child support departure orders made.
Legislation: Child Support (Assessment) Act 1989 (Cth) ss 116, 117 Family Law Act 1975 (Cth) ss 75(2), 79, 117 Cases cited: Best & Best (1993) FLC 92-418; [1993] FamCA 107
Blatch v Archer (1774) 1 Cowp 63
Candle & Falkner (2021) FLC 94-069; [2021] FedCFamC1A 102
Clauson and Clauson (1995) FLC 92-595; [1995] FamCA 10
Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225; [1993] FCA 801
Dickons v Dickons (2012) Fam LR 244; [2012] FamCAFC 154
Hickey and Hickey and Attorney-General (Cth) (2003) FLC 93-143; [2003] FamCA 395
Halstron & Halstron [2022] FedCFamC1A 65
Horrigan & Horrigan [2020] FamCAFC 25
Mee and Ferguson (1986) FLC 91-716; [1986] FamCA 3
Jabour & Jabour (2019) FLC 93-898; [2019] FamCAFC 78
Kowaliw and Kowaliw (1981) FLC 91-092; [1981] FamCA 70
Lovine & Connor (2012) FLC 93-515; [2012] FamCAFC 168
Moy & Pao (2022) FLC 94-073; [2022] FedCFamC1A 17
Pinney & Pinney [2023] FedCFamC1F 206
Pinney & Pinney (No 2) [2023] FedCFamC1F 338
Perlman v Perlman (1984) 155 CLR 474; [1984] HCA 4
Petruski & Balewa (2013) 49 Fam LR 116; [2013] FamCAFC 15
Plaintiff M47/2018 v Minister for Home Affairs (2019) 265 CLR 285; [2019] HCA 17
Stanford v Stanford (2012) 247 CLR 108; [2012] HCA 52
Stasiuk & Guild [2021] FamCAFC 62
Tomasetti and Tomasetti (2000) FLC 93-023; [2000] FamCA 314
Trevi & Trevi (2018) FLC 93-858; [2018] FamCAFC 173
Trevi & Trevi (Re-Exercise) [2019] FamCAFC 51
Zao & Lee [2019] FamCAFC 169
Division: Division 1 First Instance Number of paragraphs: 250 Date of last submission/s: 17 February 2023 Date of hearing: 31 January – 3 February 2023 Place: Sydney Counsel for the Applicant: Mr Dura Solicitor for the Applicant: Lander & Rogers Counsel for the Respondent: Mr Todd Solicitor for the Respondent: Broun Abrahams Burreket ORDERS
SYC 792 of 2022 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS PINNEY
Applicant
AND: MR PINNEY
Respondent
order made by:
MCCLELLAND DCJ
DATE OF ORDER:
19 may 2023
THE COURT ORDERS THAT:
1.All previous orders are hereby discharged.
2.The wife shall pay the costs of the husband of and in connection with the proceedings heard on 27 March 2023 in the fixed sum of $20,590 (“the legal costs amount”), with such sum to be deducted from monies that would otherwise be payable to the wife from the net proceeds of the sale of the property known as and situated at C Street, Suburb D NSW, being the whole of the land comprised in Certificate of Title Folio Identifier … (“the property”).
3.Unless otherwise agreed between the parties in writing, within five (5) business days of the date of these orders, the parties shall direct all building work on the property to immediately cease as and from that date.
4.Unless otherwise agreed between the parties in writing within seven (7) business days of the date of these orders, each party will do all acts and things and sign all documents necessary to forthwith place the property on the market for sale and, in particular, will:
(a)remove any caveat(s) that may be on the property;
(b)list the property for sale with an agent to be agreed and, failing agreement:
(i)The wife nominate three agents (“nominated list”) within seven (7) days of receiving confirmation that the final occupancy certificate has been issued by Suburb H Council;
(ii)The husband select one of the agents from the nominated list with seven (7) days of receiving the nominated list; and
(iii)Thereafter, the parties do all acts and things to engage the agent.
(c)execute all documents requested by the agent for the sale of the property and, in the event that the husband and the wife cannot agree on the terms of the agent’s contract, within seven (7) days of the agent being selected, the contract is to be in the agent’s standard terms with the agent’s standard fees;
(d)give such instructions as are necessary to a legal practitioner or conveyancer, agreed upon by the husband and the wife within seven (7) days of the date of this Order and, failing agreement, the husband shall forthwith in writing nominate two solicitors/conveyancers from which the wife shall, within a further seven (7) days, select one and failing which the husband will select one who shall be the legal practitioner appointed (“the legal practitioner”).
(e)market the property for sale by public auction on a date within six weeks of the date of the selection of the agent at a reserve price agreed between the husband and the wife and, failing agreement and/or the agreed reserve price not being obtained, at the price of the maximum bid obtained at the auction;
(f)execute the contract for sale and, in the event that the husband and the wife fail to agree on the terms of the contract for sale, the terms recommended by the legal practitioner will be adopted;
(g)co-operate in every way with the agent in relation to the sale of the property at all times requested by the agent and ensure that the property is in a neat and clean condition;
(h)do all things and execute all other documents necessary to complete the sale within the time required by the contract for sale to ensure that the purchasers do not have a right to terminate or rescind due to failure to do so.
5.On settlement of the sale of the property, the husband and the wife shall do all acts and things necessary to distribute the proceeds of sale in the following manner and priority:
(i)payment of the agent’s commission, auctioneer’s commission and any other expense properly incurred in respect of the sale of the property;
(ii)payment of the legal costs of the sale;
(iii)payment of any amount outstanding to any water authority or local council in respect of the property not otherwise taken up as a credit in favour of the vendor;
(iv)payment of the amount required to effect a discharge of the L Bank registered mortgage (Loan account Number: …25) secured on the title to the property;
(v)In payment of the parties’ joint liabilities as agreed by the parties during the proceedings, being:
A.Money owed in respect to air-conditioning – $1,800;
B.Money owed in respect to joinery – $4,327;
C.Money owed to an engineering company – $3,100.
6.The balance then remaining is to be paid in the proportions of 62 per cent to the wife (“her share”) less the legal costs amount and 38 per cent to the husband (“his share”) plus the legal costs amount.
7.Within seven (7) days of the settlement of the sale of the property, the parties shall do all acts and things necessary to cause the funds (if any) standing to the credit of the parties in any joint accounts to be divided equally between the parties, and the parties shall forthwith thereafter do all such things as required to close those accounts.
8.Within 14 days of the date of these orders:
(a)The parties obtain an updated member benefit balance for the wife in the Pinney Super Pty Ltd ATF Pinney Super Fund (“the Fund”) from the Fund's accountants; and
(b)The wife thereafter shall make an application to roll out her member benefit entitlement by way of cleared funds to a complying superannuation fund nominated by the wife, and the parties in their capacity as directors of the trustee company shall forthwith do all acts and things necessary to approve and give effect to that request.
9.Following the roll out of the wife's entitlement pursuant to Order 8, the parties in their capacities as directors of the trustee company shall cause a meeting of the Fund to be held in accordance with the governing rules of the Fund, the purpose of the meeting being for the wife to do all acts and things and sign all documents as may be necessary to:
(a)resign her membership from the Fund;
(b)resign as a director of the trustee company;
(c)transfer to the husband or his nominee 100 per cent of her shareholding in the trustee company; and
(d)vote in favour of any resolution that the husband may propose prior to her resignation which may have the effect of appointing an additional or new director of the trustee company, and vote to appoint another trustee if the husband may so direct.
10.In the event there is any net tax payable by the Fund arising as a consequence of the rolling over of the wife's entitlement by the trustee company to the wife's new superannuation fund, the Fund shall pay 100 per cent of such liability upon receipt of any Notice of Assessment issued by the Australian Taxation Office.
11.Upon compliance with Order 9, the husband indemnify and keep indemnified the wife in respect of her previous involvement with Fund in any capacity, whether as a member of said Fund and/or in respect of the trustee of said Fund.
12.Pending the transfer of the wife's member benefit entitlement to the wife's new superannuation fund, each party is restrained from dealing with or disposing of any of the assets of the Fund other than in accordance with the terms of these reasons or with the joint written consent of the parties as directors of the trustee company (which consent will not be unreasonably withheld), and each party shall immediately revoke any binding death benefit nomination already made and each party be and is hereby restrained from:
(a)making any binding death benefit nomination in favour of a child described in reg 13 of the Family Law (Superannuation) Regulations 2001 (Cth);
(b)making any other nomination where the effect of such nomination would be to render any splittable payment not splittable; and
(c)doing any such act or thing which would defeat, extinguish or reduce the entitlement of either party under this agreement.
13.Pending settlement of the sale of the property or for 6 months following the date of these orders (whichever occurs first), the husband shall pay, or cause to be paid to the wife as she may direct, the sum of $1,000 per week by way of cleared funds, directly into a bank account nominated by the Wife.
14.Pursuant to ss 123(1)(a) and 124 of the Child Support (Assessment) Act 1989 (Cth), there be a departure from the administrative assessment of child support payable by the husband to the wife, such that the husband shall pay:
(a)100 per cent of the tuition fees at such independent school as the children are agreed between the parties in writing to attend commencing Term 1 2024;
(b)100 per cent of all costs of extracurricular activities for the children that have been agreed to in writing between the parties in advance of enrolment;
(c)Private health insurance premiums for the children at the current level of cover; and
(d)100 per cent of the gap medical costs not able to be recovered (or the portion not able to be recovered) from the private health insurance for each child, excluding elective procedures or treatments unless they are agreed in writing by the parties prior to incurring the expenses, and subject to any insurance refund being paid to the husband.
15.The payments referred to in Order 14 are not to be credited against any administrative assessment for child support for which the husband is responsible for payment and, for the purposes of s 125 of the Child Support (Assessment) Act 1989 (Cth), such payments will not reduce the administrative assessment for child support.
16.The wife shall retain all interest in and entitlement to:
(a)her shares in M Pty Ltd;
(b)all personal and real property now in her possession;
(c)the Motor Vehicle 1;
(d)all superannuation interests in her possession or control; and
(e)all shares, debentures, units in unit trusts, bank, building society or credit union accounts standing in her sole name respectively and all interests in life insurance policies and superannuation funds standing in her sole name respectively.
17.The husband shall retain all interest in and entitlement to:
(a)all personal and real property now in his possession or control;
(b)all superannuation interests in his possession or control; and
(c)all shares, debentures, units in unit trusts, bank, building society or credit union accounts standing in his sole name respectively and all interests in life insurance policies and superannuation funds standing in his sole name respectively.
18.Each party is hereby declared solely liable for all liabilities in his/her sole name respectively and shall indemnify and keep indemnified the other party in respect of same.
19.Both the husband and the wife hereby release the other from all actions, proceedings, claims, demands, costs and expenses whatsoever and howsoever arising which either of them had or may have against the other for or by reason of or in respect of any act, cause, matter or thing.
20.Pursuant to s 81 of the Family Law Act 1975 (Cth), the parties intend these orders to finally determine all financial relations and issues between them and to avoid further proceedings between them.
21.Each party shall do all things necessary, including providing all consents, to give effect to these orders in the time periods prescribed in these orders.
22.In the event either party refuses or neglects to execute any deed, document or instrument necessary to give effect to all or any of these orders, then the Registrar of the Court shall be appointed pursuant to s 106A of the Family Law Act 1975 (Cth) to execute such deed, document or instrument in the name of the said party and do all acts and things necessary to give validity and operation to the deed, document or instrument upon the Registrar being provided with verification of such refusal or failure by way of affidavit.
THE COURT NOTES THAT:
A.Pursuant to orders made on 3 May 2023, the matter remains listed on 23 May 2023 to consider whether orders should be made requiring the wife to vacate the property pending sale and/or settlement.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Pinney & Pinney has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
MCCLELLAND DCJ:
INTRODUCTION
This matter concerns competing applications for property adjustment brought by the applicant wife, Ms Pinney (“the wife”) and the respondent husband, Mr Pinney (“the husband”) following the breakdown of the parties’ 11 year marriage and 13 year relationship. The parties have four children together, who currently reside with the wife. Save in respect to a limited issue, the parties have agreed to orders in respect to child support.
I have determined that the wife is entitled to an adjustment of four per cent in respect to financial and non-financial contributions and an additional eight per cent in respect of future needs. While I have found that the parties’ respective individual contributions during the period of their intact relationship were broadly similar, I have made an adjustment in favour of the wife in respect to contributions, having regard to her superior initial contributions as well as additional direct and indirect contributions that she received from her family. I have also had regard to what I have determined to be superior contributions made by the wife in the period subsequent to the parties’ separation, including taking on effectively sole parental responsibility in circumstances where she and the parties’ four children have been living in insecure accommodation since October 2021.
In determining that the wife is entitled to an additional adjustment in respect to future needs, I have had regard to the significant differential in the parties’ respective earning capacity and the fact that the wife has ongoing primary responsibility for the care of the parties’ children. I have slightly reduced what otherwise would have been a greater adjustment in favour the wife in circumstances where the parties have agreed to enrol their children in private education and the husband has agreed to take on considerable expense to enable that to occur.
BACKGROUND
The parties
The wife was born in 1978 and is currently 44 years of age. The husband was born in 1977 and is currently 45 years of age.
Period of relationship
The parties commenced cohabitation in or about 2008 or 2009 after meeting in City N and were married in 2010. The wife contends that the parties separated on or about 30 October 2021 when she vacated the former matrimonial home at C Street, Suburb D (“the Suburb D property”). The husband contends that the parties formally separated on 16 January 2022. The actual date of separation is not material to these reasons for judgment, save to the extent that I acknowledge the parties have lived separately and apart since the end of October 2021. A divorce order was granted on 26 April 2023, with the effective date being 27 May 2023. From around mid-2022, the husband has re-partnered while the wife has not re-partnered.
The parties’ children
The parties have four children from the relationship: W born 2011 and currently aged 12, X born 2013 and currently aged 10, Y born 2015 and currently aged eight and Z born 2019 and currently aged three. Since separation, the children have resided with the wife and have spent limited time with the father.
The parties’ employment
The husband currently works as a senior manager at J Company, while the wife primarily engages in homemaking duties. The wife also owns a small business.
At the commencement of the parties’ relationship, the wife was working as a manager earning $120,000 per annum and the husband was working for P Company, earning approximately $360,000 per year. The husband had approximately $140,000[1] in savings from his sign on bonus with P Company and approximately $180,000 following the sale of a property in Suburb Q.
[1] Transcript 2 February 2023, p.137 lines 40–42.
Relevant history in respect to contributions to property
Upon the parties’ return to Australia from City N in 2009, the parties moved into the wife’s Suburb R property for three months until it was sold, at which time the parties rented a property in Suburb S, with the lease being secured in the wife’s sole name. The wife remained working in her manager job and the husband commenced investing at home. The Suburb R property was sold in 2009 for over $800,000.
In 2010, the husband commenced working for J Company, earning approximately $500,000 per annum. Shortly after, the parties learned the wife was pregnant with W and the wife resigned from her manager role shortly before W’s birth in 2011. The wife remained primarily responsible for the management of the family’s finances, with the husband’s salary being deposited into the parties’ joint account.
It is not in dispute that, following the birth of the parties’ first child in 2011, the wife became the primary carer for the children following their subsequent births in 2013, 2015 and 2019, while the husband then became the primary breadwinner. The wife continued to be the children’s primary carer at the time of final hearing.
In 2011, the parties lived with the wife’s parents in their home for a period of four to six weeks. In 2011, using the sale proceeds of the Suburb R property together with other funds, the parties purchased a property at T Street, Suburb S (“the Suburb S property”) for nearly $1.5 million and renovated the property soon after it was purchased. While precise figures were not produced to the Court, the evidence of the parties was that the renovations cost somewhere between $60,000 and $85,000. The property was sold in 2013 for over $1.8 million.
In 2014, the parties purchased the Suburb D property for over $3 million with the deposit paid from the proceeds of sale of the Suburb S property and a mortgage from L Bank. During 2014 and 2015, the parties carried out initial renovations on the Suburb D property that cost approximately $200,000. From early to mid-2014, the parties lived with the wife’s parents at no expense to the parties.
In 2014, the wife established her small business called M Pty Ltd.
In 2014 or 2015, the parties also established a self-managed superannuation fund called Pinney Super Investments (“the fund”) with each party rolling over their respective superannuation entitlements into the fund. The fund purchased a property at U Street, Suburb V (“the Suburb V property”) for over $700,000 in 2015 with a mortgage from AA Bank of approximately $400,000. The parties completed renovations on the property soon after purchasing the property. In mid-2015, the husband’s mother, Ms BB, moved into the Suburb V property.
In early 2019, the parties decided to commence new renovation work on the Suburb D property. The wife’s father, Mr CC, who has relevant work experience, drew up plans for the renovations. Initially, the wife became the effective project manager of the renovations including sourcing builders, materials and generally overseeing and managing the renovations.
In early 2021, the parties entered into a contract with DD Pty Ltd, with construction work commencing the following month. The parties remained living in the property whilst construction commenced. There has been continuing tension and disputation between the parties throughout the renovation process.
The next month, the husband moved out of the Suburb D property and commenced residing in various rental properties with family and friends over the following months, including engaging in a lease for an apartment in Suburb EE from late 2021 until early 2022.
The wife and children lived in the Suburb D property until October 2021, when it was unable to be occupied due to the renovation of the kitchen commencing. Since moving out of the Suburb D property, the wife and children have lived in several different locations.
Due to the COVID-19 pandemic and general delays in the building works, the Suburb D property remained under construction at the time of the hearing and is yet to receive an occupancy certificate. In their evidentiary material, each party has made extensive criticism of the other regarding the role they have played in respect to the renovations, however, during the course of the proceedings, each party acknowledged that the delay in the renovations being completed is not solely due to the conduct of either party. In those circumstances, I have found it unnecessary to divulge into the minutiae of the parties’ respective contentions regarding the various events that have occurred throughout the renovation period, save to the extent that I have focused on several incidents that have given rise to what I have found to be a complete breakdown in trust between the parties that would have otherwise enabled those renovations to be completed with any degree of alacrity.
The wife contends that since moving from the Suburb D property, she and the children have resided at 12 separate addresses. The husband acknowledges that they have resided in at least 10 properties. The circumstances in which the wife has changed addresses on at least 10 separate occasions, is, for reasons which I set out, a matter that I have taken into consideration in respect to my assessment of the contributions made by the wife in the period subsequent to separation.
In or about early 2022, the husband moved into the Suburb D property and occupied limited space whilst the renovations were being undertaken. This afforded him the opportunity of having regular contact with representatives of DD Pty Ltd, which has given rise to additional tension between the parties. The husband remained living in the Suburb D property until consent orders were made for him to vacate the property on the last day of the final hearing, being 3 February 2023.
During the course of the parties’ relationship, they each received funds contributed by their respective parents. The circumstances in which those funds were contributed will be further considered in my discussion of the parties’ respective contributions.
On 11 February 2022, the wife filed an Initiating Application seeking both interim and final orders in Division 2 of the Federal Circuit and Family Court of Australia. This included an application for urgent interim orders in relation to seeking sole and exclusive occupation of the Suburb D property, interim spousal maintenance for $1,902 per week and a payment of $100,000 from the husband to the wife by way of partial property settlement.
On 22 February 2022, the husband filed his Response including his interim application for the Suburb D property to be sold upon completion of the renovations, for the parties to obtain a new loan for the property and for the husband to have exclusive occupation of the Suburb D property pending the sale.
Also on 22 February 2022, interim orders were made by consent, providing that the husband continue to pay the mortgage and other outgoings on the Suburb D property, pay the wife’s private health insurance premiums and pay a sum of $12,520 (to be characterised by the Court) to the wife.
In March 2022, the wife engaged Mr FF to assist in progressing the renovation to completion. However, due to tension between Mr FF and representatives of DD Pty Ltd, his role was subsequently terminated by the husband in September 2022.
On 22 March 2022, the matter was listed for an interim hearing before a senior judicial registrar. Orders were made by consent for the husband to pay the wife the sum of $10,000.
On 13 April 2022, a senior judicial registrar delivered ex tempore reasons and made interim orders granting exclusive sole occupancy of the Suburb D property to the husband, pending the issue of the partial occupancy certificate, and for the wife to become the sole point of communication with any builders working on the property. The senior judicial registrar also ordered that, in the event that the partial occupancy certificate was issued and the husband defaulted on the payments, the wife may have exclusive occupation of the property. The husband was ordered to sell his shares to make a payment of $75,000 to the wife, with that amount to be characterised at the final hearing, and for the husband to pay for the wife’s bond and rent of $1,500 per week for a new rental property for her and the children to live in.
The circumstances in which the husband obtained evidence from DD Pty Ltd, upon which he relied at the interim hearing, was the subject of cross-examination during the course of the proceedings and, for reasons which I subsequently explain, is an additional reason for the breakdown in trust between the parties.
The wife filed an Application for Review of the senior judicial registrar’s orders dated 13 April 2022, however this was ultimately dismissed by a judge of Division 2 of this Court in May 2022.
In mid-2022, the wife secured a rental property in Suburb GG, a suburb of Sydney, on a six month lease.
On 26 August 2022, the wife filed an Application in a Proceeding seeking that the 13 April 2022 orders be discharged, for the parties to execute a new loan agreement and for the wife to have sole and exclusive occupation of the Suburb D property upon the partial occupancy certificate being issued. Further, she sought to be the sole point of communication with the builders at the Suburb D property and for the property to be sold upon the receipt of a final occupancy certificate. She also sought orders for spousal maintenance of $1,000 per week, for the Suburb V property to be sold and for the husband to sell his share in a recreational vehicle.
In September 2022, the parties attended a mediation in an attempt to resolve the matter. Following the non-resolution of the matter, the matter was listed before a judicial registrar on 5 October 2022. The registrar listed the matter for a compliance and readiness hearing before me on 11 November 2022, sitting as a judge in Division 2.
On 11 November 2022, I transferred the matter to Division 1 of this Court and set down the matter before me sitting as a judge in Division 1 for final hearing, commencing 31 January 2023 for four days. I also listed the wife’s Application in a Proceeding filed 26 August 2022 to be heard concurrently with the final hearing. I allowed for the wife to engage an adversarial expert in relation to the valuation of the Suburb D property and for the husband to file an adversarial expert valuation in reply. Formal orders were also made, by consent, for the Suburb D property to be sold within 42 days of receiving the final occupancy certificate and for the Suburb V property to be sold.
The Suburb V property was listed for auction in late 2022 but was passed in with no registered bidders. At the time of the final hearing, the Suburb V property had been sold for nearly $900,000.
Following the expiration of the wife’s lease in Suburb GG in early 2023, the wife took the children on a road trip to HH Town, JJ Region and Suburb KK, and lived with her parents for a few nights upon their return to Sydney before commencing living in temporary accommodation in Suburb S from early 2023. The husband remained living between the Suburb D property and his new partner’s home at the time of final hearing.
The parties’ eldest child, W, commenced year seven at LL School during the course of the final hearing. The husband has paid $60,000 upfront for W’s school fees for 2023.
At the final hearing, the wife, the husband and Mr FF were cross-examined.
At the conclusion of evidence on 3 February 2023, counsel for the wife sought to provide an updated calculation in respect to the superannuation on the balance sheet. I granted leave for the wife’s counsel to file updated superannuation figures, to be reflected in the balance sheet, within seven days and for the husband to reply within a further seven days.
The parties also provided a short proposed minute of interim orders in an attempt to provide a solution to the wife’s Application in a Proceeding filed 26 August 2023, representing the “lowest common denominator”.[2] Following receipt of submissions by counsel for the parties, I made orders in accordance with the proposed minute as amended by the parties by consent on a without admissions or concessions basis on 3 February 2023.
[2] Transcript 3 February 2023, p.250 lines 7–13, 38–39.
On 16 February 2023, pursuant to leave given at the trial, my chambers received confirmation via email from counsel for the wife as to a consent position reached by the parties regarding their respective superannuation figures for the balance sheet. Following the receipt of this submission, judgment stood reserved.
There has been further disputation between the parties in the period subsequent to the making of the orders on 3 February 2023.
By orders made on 3 May 2023, I directed the parties to file submissions as to whether and to what extent the Court should have regard to evidentiary material filed by the parties in the period subsequent to the conclusion of the hearing. In circumstances where neither party has been cross-examined on their respective affidavits, I have decided to limit my consideration to the fact of the respective applications being made, the reasons that I have separately given for the orders that I made in respect to those applications, as well as the undisputed event that gave rise to those applications, which was the action of the wife in resuming occupancy of the Suburb D property in March 2023.
In that context, on 16 February 2023, my chambers received correspondence from the solicitors for the husband regarding the interpretation of the interim orders, where it was argued that the husband did not consent to Orders 1 and 2.5 of the proposed minute of interim orders. Following receipt of correspondence in reply from the solicitors for the wife objecting to the re-listing, noting that Order 11 of the proposed minute of interim order made on 3 February 2023 provided that “[e]ach party have liberty to apply on 48 hours’ notice in relation to the implementation of these Orders”, I listed the matter once more for mention on 2 March 2023.
At the mention on 2 March 2023, the parties came to a sensible resolution and resolved the issue of the interpretation of the interim orders, with orders being published that day reflecting the continued interim orders on a without admissions or concessions basis.
On 9 March 2023, the husband filed an Application in a Proceeding with a supporting affidavit deposing that, following the listing on 2 March 2023, the wife moved into the Suburb D property with the parties’ children. The husband sought a mandatory injunction requiring the wife to vacate the property, noting that the wife re-occupying the property was contrary to the intention of the parties as reflected in the consent orders made 3 February 2023 and affirmed on 2 March 2023.
On 10 March 2023, the wife’s solicitors filed a Notice of Ceasing to Act.
The husband’s Application in a Proceeding was listed for interim defended hearing on 27 March 2023, with ex tempore reasons for judgment being delivered on that day: Pinney & Pinney [2023] FedCFamC1F 206. The wife was ordered to vacate the Suburb D property within seven days of the date of the orders, with the husband to assist the wife in securing appropriate rental accommodation for the wife and the children whilst the Suburb D property remains under construction.
Despite the orders made on 27 March 2023, the wife failed to vacate the Suburb D property. This resulted in yet a further application by the husband, which was filed on 21 April 2023, seeking a modification of the 27 March 2023 orders such that, rather than himself selecting a suitable rental property for the wife and children, that task would be allocated to the wife. Significantly, the husband also sought an order for a warrant of possession to be issued in the event of the wife failing to vacate the property.
Prior to that application being heard before me on 3 May 2023, the wife sought to file a Notice of Appeal against the orders I made on 27 March 2023. As a result of the wife seeking to file the Notice of Appeal slightly out of time, it has been necessary for the wife to apply for an extension of time within which to file that Notice of Appeal. In those circumstances, the wife met the husband’s Application in a Proceeding filed on 21 April 2023 with an application for a stay of the orders I made on 27 March 2023. For reasons which I explained in my ex tempore reasons for judgment delivered on 3 May 2023 (Pinney & Pinney (No 2) [2023] FedCFamC1F 338), I granted the wife a stay of those orders up until 4.00 pm on the day that her application for an extension of time was to be heard.
The husband’s Application in a Proceeding was also adjourned for hearing to 23 May 2023, being a date subsequent to the hearing of the wife’s Application in an Appeal for an extension of time to file her appeal and, also, after the date that I anticipated being in a position to deliver these reasons for judgment.
DOCUMENTS RELIED UPON
The wife relied upon the following documents:
·Case Outline filed 27 January 2023;
·Further Amended Initiating Application filed 9 November 2022;
·Application in a Proceeding filed 25 August 2022;
·Affidavit of the wife filed 21 December 2022;
·Financial statement of the wife filed 21 December 2022;
·Affidavit of Mr CC filed 21 December 2022;
·Affidavit of Mr FF filed 25 August 2022;
·Affidavit of Mr B filed 31 January 2023;
·Costs Notice filed 31 January 2023; and
·Written submissions filed 12 May 2023.
The husband relied upon the following documents:
·Minute of order contained within Case Outline filed 27 January 2023;
·Affidavit of the husband filed 21 December 2022;
·Financial statement of the husband filed 21 December 2022;
·Affidavit of Ms BB filed 21 December 2022; and
·Written submissions filed 12 May 2023.
APPLICATIONS
By her Case Outline filed 27 January 2023 and marked Exhibit “3” in the proceedings, the wife sought the following orders:
1.That an order by way of alteration of property interests pursuant to section 79 of the Family Law Act 1975 (Cth) (the Act) be made in order to address the consequences of the breakdown of the relationship and the injustice that would otherwise occur given the circumstances of the relationship if legal and equitable title were not altered.
2.Order 15 of Orders made on 11 November 2022 in relation to sale of the property at [C Street, Suburb D] ([Suburb D] property) be varied such that Order 15.1 reads:
list the [Suburb D] property for sale with an Agent to be agreed, and failing agreement:
2.1The Wife nominate three Agents ("nominated list") within 7 days of receiving confirmation that the final occupancy certificate has been issued by [Suburb H] Council;
2.2The Husband select one of the Agents with 7 days of receiving the nominated list; and
2.3 Thereafter, the parties do all acts and things to engage the Agent.
3.Order 16 of Orders made on 11 November 2022 be discharged, and the following Order shall apply:
4.That upon settlement of the sale of the [Suburb D] property, the Husband and the Wife shall do all acts and things necessary to distribute the proceeds of sale in the following manner and priority:
4.1Discharge of all mortgages secured on title of the [Suburb D] property;
4.2In payment of the agent’s commission and advertising expenses, legal expenses and disbursements, and any costs associated with the auction process;
4.3 In payment of the sum of $380,000 to [Ms and Mr CC];
4.4In payment of the sum necessary to discharge the lease over [Motor Vehicle 1];
4.5In payment to the Wife of an amount necessary to effect an overall division of the known assets (less liabilities), superannuation interests and financial resources of the parties as to 70% to the Wife; and
4.6In payment of the balance to the Husband less any unpaid mortgage, water, gas, electricity and council rates for the [Suburb D] property as at the date of settlement pursuant.
5.Within 7 days of the settlement of the sale of the [Suburb D] property, the parties shall do all acts and things necessary to cause the funds (if any) standing to the credit of the parties in any joint accounts to be divided equally between the parties, and the parties shall forthwith thereafter do all such things as required to close those accounts.
[Pinney Super Fund] ('the Fund')
6.Upon completion of the sale of the property at [U Street, Suburb V] ([Suburb V] property settlement), the proceeds of sale be disbursed as follows and in that priority:-
6.1 Discharge of all mortgages secured on title of the [Suburb V] property;
6.2 In payment of any rate adjustments;
6.3In payment of the agent’s commission, costs associated with the auction process, advertising expenses, legal expenses and disbursements, and any costs associated with the auction process;
6.4The balance to be deposited into a bank account held in the Fund's name.
7. Within 14 days of the [Suburb V] property settlement:
7.1The parties obtain an updated member benefit balance for the Wife in the Fund from the Fund's accountants; and
7.2The Wife thereafter shall make application to roll out her member benefit entitlement by way of cleared funds to a complying superannuation fund nominated by the Wife, and the parties in their capacity as directors of the Trustee Company shall forthwith do all acts and things necessary to approve and give effect to that request.
8.That following the roll out of the Wife's entitlement pursuant to Order 7.2, the parties in their capacities as directors of the Trustee Company shall cause a meeting of the Fund to be held in accordance with the Governing Rules of the Fund, the purpose of the meeting being for the Wife to do all acts and things and sign all documents as may be necessary to:
8.1 resign her membership from the Fund;
8.2 resign as a director of the Trustee Company;
8.3transfer to the Husband or his nominee 100% of her shareholding in the Trustee Company; and
8.4vote in favour of any resolution that the Husband may propose prior to her resignation which may have the effect of appointing an additional or new director of the Trustee Company, and vote to appoint another trustee if the Husband may so direct.
9.That in the event there is any net tax payable by the Fund arising as a consequence of the rolling over of the Wife's entitlement by the Trustee Company to the Wife's new superannuation fund, the Fund shall pay 100% of such liability upon receipt of any Notice of Assessment issued by the Australian Taxation Office.
10.That upon compliance with Order 8, the Husband indemnify and keep indemnified the Wife in respect of her previous involvement with Fund in any capacity whether as a member of said Fund and/or in respect of the Trustee of said Fund.
11.That pending the transfer of the Wife's member benefit entitlement to the Wife's new superannuation fund, each party is restrained from dealing with or disposing of any of the assets of the Fund other than in accordance with the terms of this Agreement or with the joint written consent of the parties as directors of the Trustee Company (which consent will not be unreasonably withheld), and each party shall immediately revoke any binding death benefit nomination already made and each party be and is hereby restrained from:
11.1 making any binding death benefit nomination in favour of a child described in regulation 13 of the Family Law (Superannuation) Regulations 2001 (Cth);
11.2making any other nomination where the effect of such nomination would be to render any splittable payment not splittable; and
11.3doing any such act or thing which would defeat, extinguish or reduce the entitlement of either party under this agreement.
Other Orders
12.Within 7 days of the Husband's unvested [J Company] share units vesting on 20 January 2024, 20 January 2025 and 20 January 2026 vesting:
12.1The Husband will forthwith advise the Wife of such vesting having occurred;
12.2Within 30 days of the date of vesting (unless otherwise agreed in writing between the parties and provided there are no trading or other restrictions on the Husband which would prevent him from doing so) the Husband do all acts and things and sign all documents necessary to sell 100% of the total value of the shares; and
12.3The Husband will apply the proceeds of sale(s) as follows:
12.3.1First, to pay the costs, commissions and expenses of the sale including reimbursement to the Husband for payment of such costs, commissions and expenses paid by him in the first instance;
12.3.2 Second, to withhold any tax payable as a result of the sale of the shares (including but not limited to Capital Gains Tax);
12.3.3Thirdly, to pay 50% of the net balance to the Wife; and
12.3.4Finally, the Husband will retain the balance.
13. The Wife shall retain all interest in, and entitlement to:
13.1 her shares in the [M Pty Ltd];
13.2 all personal and real property now in her possession;
13.3 [Motor Vehicle 1];
13.4all superannuation interests in her possession or control; and
13.5all shares, debentures, units in unit trusts, bank, building society or credit union accounts standing in her sole name respectively and all interests in life insurance policies and superannuation funds standing in her sole name respectively.
14. The Husband shall retain all interest in, and entitlement to:
14.1 all personal and real property now in his possession or control;
14.2 all superannuation interests in his possession or control; and
14.3subject to Order 12, all shares, debentures, units in unit trusts, bank, building society or credit union accounts standing in his sole name respectively and all interests in life insurance policies and superannuation funds standing in his sole name respectively.
15.That each party is hereby declared solely liable for all liabilities in his/her sole name respectively and shall indemnify and keep indemnified the other party in respect of same.
16.That both the Husband and the Wife hereby release the other from all actions, proceedings, claims, demands, costs and expenses whatsoever and howsoever arising which either of them had or may have against the other for or by reason of or in respect of any act, cause, matter or thing.
17.Pursuant to section 81 of the Family Law Act the parties intend these orders to finally determine all financial relations and issued between them and avoid further proceedings between them.
18.That each party shall do all things necessary including providing all consents to give effect to these orders in the time periods prescribed in these orders.
19.That in the event either party refuses or neglects to execute any deed, document or instrument necessary to give effect to all or any of these orders, then the Registrar of the Court shall be appointed pursuant to section 106A of the Family Law Act to execute such deed, document or instrument in the name of the said party and do all acts and things necessary to give validity and operation to the deed, document or instrument upon the Registrar being provided with verification of such refusal or failure by way of Affidavit.
Non-periodic child support
20.Pursuant to section 123(1)(a) and 124 of the Child Support (Assessment) Act 1989 the Husband shall pay 100% of the following non-periodic expenses for the Children as and when they fall due:
20.1Education expenses, including tuition fees at such independent school as the Children may each attend;
20.2 Extracurricular expenses;
20.3Health insurance premiums; and
20.4Medical, dental, orthodontic, physiotherapy, psychology and other health related expenses including gap payments for the Children.
21.That wherever possible, the parties arrange for the Husband to pay his share of the non-periodic expenses referred to in Order 20 directly to the relevant institution, and the parties be at liberty to provide a copy of this Order to the schools in support of the pay arrangements.
22.That in the event that any of the costs referred to in Order 20 are paid by the Wife in the first instance, the Wife shall provide an invoice and receipt of payment of such invoice to the Husband, and the Husband shall reimburse the Wife within fourteen days of receipt of same into a bank account nominated by the Wife from time to time.
23.The payments referred to at Order 22 not be credited against any administrative assessment of child support for which the Father is responsible for payment, and for the purposes of section 125 of the Assessment Act shall count for nil towards said assessments.
24. That the Husband pay the Wife's costs of and incidental to this Application.
(As per the original)
By the document tendered and marked as Exhibit “2” titled “Final Orders sought by the Husband dated 1 February 2023”, the husband sought the following orders:
1.That an order by way of alternation of property interests pursuant to section 79 of the Family Law Act 1975 (Cth) (the Act) be made in order to address the consequence of the breakdown of the relationship and the injustice that would otherwise occur given the circumstances of the relationship if legal and equitable title were note altered.
2.That the Husband and the Wife from the date of these Orders do all acts and things to cause to be provided to [Mr E] of [NN Company] (the Certifier), all documents and certificates of any subcontractor engaged by the parties /or on their behalf in respect to the renovation of [C Street, Suburb D] NSW, as may be required by the Certifier to provide the Occupation Certificate of [C Street, Suburb D] NSW; and
2.1Within 7 days of the date of these orders , the Wife will do all acts and things to attend to the following:
2.1.1 provide the engineering certificates prepared by [OO Engineers] to the certifier ([Mr E]) and copies of same to the Husband; and
2.1.2provide the Husband with a completed and signed Building Certificate Application and a completed and signed Occupation Certificate Application.
2.1.3 lodge on [Suburb H] Council portal the applications identified by [Mr E] in his email to the parties dated 16 January 2023 to obtain the Occupation Certificate.
2.1.4 if required, the Wife will obtain the written authority and direction of [Mr CC] addressed to [OO Engineers] to release the engineering certificates as requested by the Certifier.
2.2Upon confirmation of compliance from the Certifier lodge an application for the Occupation Certificate with [Suburb H] Council.
3.That within 7 days of receiving a final occupancy certificate for the [Suburb D] property, each party will do all acts and things and sign all documents necessary to market for sale and sell the property known as and situate at [C Street, Suburb D] NSW being the whole of the land comprised in Certificate of Title Folio Identifier […] (the Property) and in particular will:
3.1list the Property for sale with a real estate agent selected by the parties
[Mr PP] of [Suburb EE](the Agent);3.2execute all documents requested by the Agent for the sale of the Property and in the event that the husband and the wife cannot agree on the terms of the Agent’s contract within seven days of the agent being selected, the contract is to be in the agent’s standard terms and with the agent’s standard fees and to include expenses the agent will pay in advance of settlement of the sale to prepare and market the Property;
3.3give such instructions as are necessary to a legal practitioner agreed upon by the husband and the wife within seven days of the date of this Order and failing agreement the husband shall forthwith in writing nominate two solicitors from which the wife shall within a further seven days select one and failing which the husband will select one who shall be the legal practitioner appointed (the Legal Practitioner).
3.4market the Property for sale by public auction on a date within six weeks of the date of the selection of the Agent (the First Auction) at a reserve price agreed between the husband and the wife and failing agreement in the sum of $12,500,000;
3.5in the event that the Property does not sell at the First Auction, market the property for sale with the Agent by way of private treaty for a period of 12 weeks during which time the husband and the wife will accept any offer made to purchase the Property within 3% of the reserve price of the First Auction unless the husband and wife otherwise agree;
3.6in the event that the Property is not sold at the First Auction and is not sold in the period provided for sale by private treaty, market the Property for sale by public auction with the Agent on a date within six weeks of the date of the conclusion of the period of sale by private treaty at a reserve price agreed between the husband and the wife and failing agreement 3% below the reserve price at the First Auction;
3.7each attend any auction pursuant to this Order and in the event that the reserve price set for that auction is not reached will negotiate with the highest bidder and the second highest bidder and will accept the highest offer to purchase made within 2.5% of the reserve price set for that auction unless the husband and wife otherwise agree;
3.8execute the contract for sale and in the event that the husband and the wife fail to agree on the terms of the contract for sale the terms recommended by the Legal Practitioner will be adopted;
3.9co-operate in every way with the Agent in relation to the sale of the Property at all times requested by the agent and ensure that the Property is in a neat and clean condition; and
3.10 execute all other documents necessary to complete the sale within the time required by the contract for sale to ensure that the purchasers do not have a right to terminate or rescind due to failure to do so.
3.11In the event the parties are unable to agree on an with a real-estate agent:
3.11.1The Husband will provide the Wife with the names of three real estate agents to be appointed on behalf of the parties to sell the Property, where such agent confirms in writing the external painting and rendering expenses and staging of the Property (approximately $45,000) will be paid by the agent in the first instance and the agent will agree to be reimbursed from the proceeds of sale of the Property on settlement of the sale of the Property; and
3.11.2 Within 3 days of the Husband providing the Wife with the list of agents in accordance with Order 3.11.1, the Wife will nominate an agent from that list and advise the Husband of same in writing.
4.That on settlement of the sale of the Property the Husband and the Wife shall do all acts and things necessary to distribute the proceeds of sale in the following manner and priority:
4.1payment of the agent’s commission, auctioneer’s commission and any other expense properly incurred in respect of the sale of the property;
4.2payment to the agent for reimbursement for agreed expenses incurred in the staging, marketing, and preparation of the property for sale;
4.3 payment of the legal costs of sale;
4.4payment of any amount outstanding to any water authority or local council in respect of the Property not otherwise taken up as a credit in favour of the vendor;
4.5payment of the amount required to effect a discharge of the [L Bank] registered mortgage (Loan account Number: […25]) secured on the title to the Property;
4.6The amount required to discharge the car loan for the wife’s car with [QQ Bank];
4.7The amounts required to reimburse the Husband and the Wife for costs agreed to prepare the Property
housefor sale;4.8Amount owing to [DD Pty Ltd] for outstanding invoices as agreed by the Husband and Wife;
4.9Amount owing to contractors for outstanding invoices as agreed by the Husband and Wife;
4.10$28,137 to the Husband to pay the Husband’s debt with the Australian Tax Office;
4.11The amounts required to discharge the [RR Finance] Loan (Application Number: […22] and entered into for $52,174) and the [SS Finance] Loan in the Husband’s name (entered into for $81,500);
4.12$37,000 to the Husband to pay the Husband’s tax liability arising from the sale of shares in February 2023;
4.13
$60,000 to [LL School] for [W’s] tuition fees on the condition that [W] remains enrolled in [LL School];4.14 The amount necessary to discharge the Wife’s loan with [TT Finance] (Account Number: TBA);4.15The amount necessary to discharge the Husband’s loan with [RR Finance] for legal fees (Application Number: […36]);4.16The balance then remaining to be paid in the proportions 57.5% 52.5% to the Wife (her share) and 47.5% 42.5% to the Husband (his share), subject to 4.17
4.17On settlement of the property and contemporaneously with the disbursement of the proceeds of sale of the Property:
4.17.1the Wife from her share of the proceeds of sale will pay all amounts required to discharge the Wife’s loan with [TT Finance]; and
4.17.2the Husband from his share of the proceeds of sale will pay the amount required to discharge the Husband’s loan with [RR Finance] Application number […36].
5.Contemporaneously with the settlement of the sale of the [Suburb D] property:
5.1The wife at her expense will do all things and sign all documents as may be required to cause the removal of the caveat number […69] lodged by [TT Finance] against the title of the [Suburb D] property; and
5.2The Husband at his expense will make all payments and do all things and sign all documents as may be required to cause the removal of the caveat number […28] lodged by [UU Trust Limited
RR Finance]against the title of the [Suburb D] property6.Pending settlement of the sale of the [Suburb D] property the Husband will have sole occupancy of the [Suburb D] property.
7.Within 7 days of
the issuance ofthe occupancy certificate for the [Suburb D] property being available, the parties will sign all documents necessary to assign the deposit paid to [Suburb H] Council (in the sum of $23,257$20,000) to the Wife.[Pinney Super Fund]
8.That within 42 days of the Australian Tax Office finally determining and assessing a penalty or fine of the Super Fund up until FY23 date of these Orders the Husband and the Wife will in their capacity as Directors of the [Pinney Super Pty Ltd] “Super Trustee” of the [Pinney Super Fund] (the Superfund) cause the Super Trustee to do all things as may be required to:
8.1 Liquidate all assets of the Superfund;
8.2Pay and discharge all liabilities of the Superfund including any penalty amounts incurred in the administration of the Superfund;
8.3Prepare Financial Statements for the Superfund as at 30 June 2023; and
8.4 Request the Super Trustee to transfer or rollover the member benefits of the Wife in the Superfund to a complying superannuation fund the wife nominates.
9.That within 42 days from the date of the making of this Order the Wife will issue a written request to the Directors of the [Pinney Super Pty Ltd] (the Super Trustee) pursuant to Regulation 6.33 of the Superannuation Industry (Supervision) Regulations 1994 (Cth) to roll over the whole of her member benefit in the [Pinney Super Fund] (the Super Fund) to a new complying superannuation fund nominated by the Wife.
9.1For the purpose of giving effect to this Order the Husband and Wife will jointly instruct [VV Accountants
Mr WW]or such other agreed accountant between the parties (the Super Fund Accountant) to do all acts and things to prepare all documents required to implement this Order;9.2That following the receipt of the request made by the Wife as required pursuant to 8.4
7.4,the Husband and Wife in their capacities as Directors of the Super Trustee will cause a meeting of the Super Trustee to be held in accordance with Rules of the Super Fund, to:9.2.1note receipt of the request by the Wife to transfer her total benefit to a new complying superannuation fund; and
9.2.2authorise roll over to the new complying superannuation fund nominated by the Wife, the value of her member benefit taking into account in relation to the calculation of that benefit:
(a) the notional calculation of tax that would be payable by the Super Fund in that financial year if the end of the financial year arose at the date of the roll over;
(b) an amount equal to the calculation of the tax due or that will become due referrable to the last complete financial year;
(c)an amount equal to the costs of complying with any obligations of the Trustee to the date of the roll-over in that financial year including but not limited to the costs of implementing the super split and roll over.
10.That contemporaneously with the rollover being effected in accordance with Order 8 the Wife will do all acts and things and sign all documents as may be necessary to:
10.1 resign as a member of the Super Fund.
10.2transfer to the Husband the whole of the Wife’s right title and interest in any shareholding of the Super Trustee;
10.3resign as Director of the Super Trustee;
10.4resign as Secretary of the Super Trustee; if necessary; and
10.5if required by the Husband, attend a meeting, call for a resolution, vote on a resolution and sign a minute of a shareholder meeting amending the Articles of the Super Trustee to permit it to be a one shareholder and one director company.
Spousal maintenance
11. That pursuant to section 74 of the Act:
11.1The Husband will pay the Wife the lump sum amount of $70,000 provided for in Interim Order 21.1.
11.2IN THE ALTERNATIVE TO ORDER 11.1, and without concession and pending settlement of the sale of the
[Suburb D]Property or for 6 months following the date of these Orders whicheverwhateveroccurs first, the Husband shall pay, or cause to be paid to the Wife, as she may direct the sum of $1,000 per week by way of cleared funds, directly into a bank account nominated by the Wife.Child Support Departure
12.That Pursuant to section 123(1)(a) and 124 of the Child Support (Assessment) Act 1989 there be a departure from the administrative assessment of child support payable by the Husband to the Wife such that the Husband shall pay:
12.1100% of the tuition fees at such independent school as the Children are agreed between the parties in writing to attend commencing Term 1 2024;
12.2
100%all costs of extracurricular activities for the Children that have been agreed to in writing between the parties in advance of enrolmentas agreed between the parties in writing; and12.3Private health insurance premiums for the children at the current level of cover; and
12.4100% of the gap medical costs not able to be recovered (or the portion not able to be recovered) from the Private Health Insurance for each child, excluding elective procedures or treatments unless they are agreed in writing by the parties prior to the incurring expenses, and subject to any Insurance refund being paid to the Husband .
13.The payments referred to in Order 12
11are not to be credited against any administrative assessment for child support for which the Husband is responsible for payment, and for the purposes of section 125 of the Child Support (Assessment) Act 1989shallsuch payments count for nil towards said assessments.Other
14.The Wife will otherwise retain to the exclusion of the Husband:
14.1Interim property distributions received during the proceedings;
14.2Her jewellery;
14.3Her car;
14.4Her bank accounts;
14.5Her interest in the [M Pty Ltd]
14.6Furniture in her possession and control;
14.7Her interest in the [CC Family Trust]; and
14.8Her interest in the [CC Property Trust].
15. The Husband will otherwise retain to the exclusion of the Wife:
15.1 His car;
15.2 His interest in the [recreational vehicle]
15.3 His Bank accounts;
15.4 Any shares arising from his employment;
15.5 His interest in the [recreational vehicle];
15.6 His furniture; and
15.7 His watch.
16. That other than provided for above:
16.1the Husband hereby indemnifies the Wife from and in respect of all actions, claims, suits and demands as may be made against the Wife in relation to all liabilities in the name of the Husband;
16.2the Wife hereby indemnifies the Husband from and in respect of all actions, claims, suits and demands as may be made against the Husband in relation to all liabilities in the name of the wife including all loans she may have with her parents and any other entity or Trust. and
16.3the Husband and Wife shall be solely entitled to the exclusion of the other to all property and chattels of whatsoever nature and kind in the possession, ownership or control of each party as at the date of this Order including but not limited to superannuation entitlements.
Discharge of Orders
17.That
all orders be dischargedOrder 10 made 13 April 2022 is discharged on the date of the settlement of the sale of the Property.18.THE COURT NOTES Order 10 made on 13 April 2022 provides the Husband to pay or cause to be paid, to the issuer of such accounts the following:
18.1In respect of the Property, all mortgage repayments, utilities, pool cleaning and gardening services;
18.2All insurance comprising home building insurance for the Property to its current market value at the time of effecting or renewing such insurance; and
18.3The motor vehicle insurance premiums, registration costs, and all other costs, including loan repayments and maintenance costs in relation to the motor vehicle driven by the Wife.
Section 106A
19.Pursuant to Section 106A of the Act, in the event either party refuses or neglects to execute any deed or instrument necessary to give effect to these Orders the Registrar of a Court of competent jurisdiction in relation to the Act is appointed to execute such deed or instrument in the name of the defaulting party and do all acts and things necessary to give validity and operation to the deed or instrument.
20.That the Wife shall pay the Husband’s costs of and incidental to these proceedings.
(As per the original)
LEGAL PRINCIPLES
In circumstances where both parties contend that orders should be made for the adjustment of their property upon the breakdown of their marital relationship, the task before the Court is to make such orders as are appropriate, just and equitable, having regard to the language of both ss 79(1) and 79(2) of the Family Law Act 1975 (Cth) (“the Act”).[3]
[3] Zao & Lee [2019] FamCAFC 169 at [48].
In exercising its discretion, the Court is required to take into account the matters set out in s 79(4) of the Act. Section 79(4) is divided into two limbs. The first limb is in respect to those matters set out in subsections (a) to (c), which deal with what are commonly known as the “contribution” factors. Contributions can be direct or indirect, financial or non-financial contributions to the matrimonial property. The second limb of s 79(4) is in respect to those matters set out in subsections (d) to (g), which primarily relate to the future needs of the parties but can include any fact or circumstance which, in the opinion of the Court, the justice of the case requires to be taken into account.
As both parties are seeking orders for the adjustment of their property upon the breakdown of their marital relationship with a view to moving on with their lives free of financial commitment to the other, the just and equitable requirement set out in s 79(2) is readily satisfied.[4]
[4] Stanford v Stanford (2012) 247 CLR 108 at [42] (French CJ, Hayne, Kiefel and Bell JJ) (“Stanford”).
The broad discretion conferred by s 79 of the Act is not, however, to be exercised “according to an unguided judicial discretion”.[5] The leading case of Hickey and Hickey and Attorney-General (Cth) (2003) FLC 93-143 (“Hickey”), at [39], provided useful guidance in that respect, recommending that, in determining what orders are appropriate, just and equitable, the preferred approach is to adhere to the following four steps:
(1)identify and determine the asset pool of the parties as at the date of the hearing (this necessarily involves identifying both assets and liabilities);
(2)identify and determine each of the parties’ financial and other contributions up to the date of the hearing (this can include the financial contributions made before, during and after the marriage);
(3)assess how future and other events may have a financial impact on either of the parties, such as their age, state of health, income and property or financial resources (known as the s 75(2) factors); and
(4)step back and examine this formula-based reasoning against the history of the marriage, intangible considerations and other contingencies so as to consider whether the outcome represents a just and equitable result.
[5] Stanford at [38].
In identifying the parties’ asset pool, the Court is greatly assisted by the cooperative approach taken by both counsel. There are, however, several items that remain in dispute and my reasons will focus upon those items.
In weighing the parties’ respective contributions, I am required to take into consideration the myriad of contributions, including both parties’ initial contributions, in a holistic fashion.[6] All contributions must be weighed collectively, rather than being segmented, compartmentalised, or weighing one contribution against the remainder.[7]
[6] Dickons v Dickons (2012) Fam LR 244 at [24] and [26]. See also Jabour & Jabour (2019) FLC 93-898 at [86].
[7] Jabour & Jabour (2019) FLC 93-898 at [73]–[87]; Horrigan & Horrigan [2020] FamCAFC 25 at [42]–[48].
In undertaking the task of assessing the future needs of the parties, the Full Court has cautioned against a tendency “to assess s 75(2) factors in percentage terms without considering its real impact”, continuing on to state that it “is the real impact in money terms which is ultimately the critical issue”.[8]
[8] Clauson and Clauson (1995) FLC 92-595 at 81,911 and see Trevi & Trevi (Re-Exercise) [2019] FamCAFC 51 at [48].
As will be discussed, on the facts of this case, an important consideration in assessing the relevant s 75(2) factors is the significant disparity in the parties’ respective earning capacities, with the husband earning a substantially greater income than the wife. At the same time, that disparity needs to be balanced against ongoing obligations imposed upon the husband pursuant to existing orders that have been made, by consent, which require him to pay a substantial amount in ongoing child support, including providing for the children’s private school education. In assessing the impact of that obligation, it is relevant to note that the child support payments will be made from his after-tax income.[9]
[9] Tomasetti and Tomasetti (2000) FLC 93-023 at [122] (“Tomasetti”).
In undertaking the fourth step referred to in Hickey, it has been said that “the whole is not necessarily the sum of its component parts, and at the very least one has to stand back, at the end, and look at the final result, to ensure that the cumulative process has not produced a manifestly unjust result”.[10]
[10] Tomasetti at [114].
It is to be appreciated that the exercise of the broad discretion bestowed upon the Court pursuant to s 79 of the Act “‘inevitably involves value judgments and matters of impression’, and accordingly it cannot be treated as ‘a mathematical exercise’”.[11]
CONSIDERATION
[11] Petruski & Balewa (2013) 49 Fam LR 116 at [49] citing Lovine & Connor (2012) FLC 93-515 at [40]–[41].
The balance sheet
The parties have prepared a joint balance sheet (marked Exhibit “1” in the proceedings) with their respective contentions in respect to the matrimonial property pool, which is set out as per the original, save for the underlining of disputed items.[12] As the parties did not make submissions as to how payments previously received by them should be characterised, I have not addressed that issue.
[12] The parties agree that where no monetary value has been attached to the specified item, that item should not be included in the assessment of the parties’ assets and liabilities.
ASSETS Ownership Description Applicant wife Respondent husband 1 Joint C Street, Suburb D $12,000,000 $12,500,000 2 Joint ANZ Account #...68 ($10) $10 3 Joint L Bank Account #...25 $87 $87 4 Joint Household Contents Excluded Excluded 5 Joint Property damage deposit paid to Suburb H Council potentially released to the parties upon issue of [occupancy certificate] $18,257 $18,257 6 Joint Tree damage security deposit paid to Suburb H Council potentially release to the parties upon issue of [occupancy certificate] $5,000 $5,000 7 Wife CBA Account #...69 $519 $519 8 Wife CBA Account #...12 $6,789 $6,789 9 Wife M Pty Ltd $8,302 $8,302 10 Wife Jewellery - - 11 Husband Watches - - 12 Husband CBA Account #...74 (as at 30 January 2023) $141,180 $141,180 13 Husband CBA USD Foreign Currency Account (USD 27.89 as at 27 January 2023) $40 $40 14 Husband Loan to Mr XX $10,000 NIL 15 Husband Motor Vehicle 2 $7,500 $7,500 16 Husband Motor Vehicle 1 $23,750 $23,750 17 Husband Recreational vehicle - 50% interest $22,500 $22,500 18 Husband Household contents Excluded Excluded 19 Husband Bond for the Suburb GG property retained by Wife 20 Husband J Company shares vested 20 January 2023 net after tax - Estimated $38,802 $38,302 Total $12,282,716 $12,772,236 ADDBACKS Ownership Description Applicant wife Respondent husband 21 Wife Legal fees 22 Wife Legal Fees 23 Husband Legal fees 24 Husband Money paid to DD Pty Ltd since January 2022 for unapproved variations $100,000 N/A 25 Husband Money paid to DD Pty Ltd since January 2022 without invoices verifying the purpose of the payments $152,368 N/A 26 Wife Lump sum to be characterised 27 Wife Lump sum to be characterised 28 Wife Lump sum to be characterised Total $252,368 LIABILITIES Ownership Description Applicant wife Respondent husband 29 Joint L Bank loan account $2,118,976 $2,118,976 30 Joint Loan to Ms & Mr CC 31 Joint Money owed to DD Pty Ltd to complete renovation of the Suburb D property NK 32 Joint Funds required to complete property for market (painting $15,000 rendering $9,000 as per email from Mr PP, Agent) NK 33 Joint Money owed to YY Company $1,800 $1,800 34 Joint Money Owed to ZZ Company $4,327 $4,327 35 Joint School fees to LL School 36 Joint Engineering company $3,100 $3,100 37 Wife CBA Mastercard Account #...39 $4,290 38 Wife Money owed to Ms & Mr CC for legal fees 39 Wife Money owed to TT Finance for legal fees including additional amount for expenses 40 Husband Unpaid income tax $28,137 $28,137 41 Husband QQ Bank car loan (for Motor Vehicle 1) $19,000 $19,000 42 Husband RR Finance loan $52,174 $52,174 43 Husband SS Finance loan $82,000 $82,500 44 Husband Money owed to mother for loans and expenses $- 45 Husband RR Finance loan for litigation funding including $50,000 for expenses (renovations) 46 Husband Money owed to Wife pursuant to Orders made on 13 April 2022 for payment of rent Total $2,313,804 $2,310,014 SUPERANNUATION Member Name of Fund Applicant wife Respondent husband 47 Wife Pinney Super Pty Ltd ATF Pinney Super Fund $113,622 $113,622 48 Husband Pinney Super Pty Ltd ATF Pinney Super Fund $340,866 $340,866 Total $454,488 $454,488 FINANCIAL RESOURCES Ownership Description Applicant wife Respondent husband 49 Wife Interest in the CC Property Trust NK 50 Wife Interest in the CC Family Trust NK 51 Husband J Company shares (to vest 20 January 2024, 2025 and 2026) NK NK NETT TOTAL ASSETS (including Superannuation) $10,675,768 $10,916,710 Consideration of disputed items
Item 14
In respect to item 14, it was contended by counsel for the wife that the sum of $10,000 should be included on the balance sheet as an asset of the husband in circumstances where it was not in dispute that the amount had been advanced by the husband to his friend Mr XX. Other than the husband’s expressed pessimism of the prospect of successful recovery, no evidence has been presented as to why Mr XX is not in a position to repay the monies. In that respect, at paragraph 16 of his affidavit filed 21 December 2022, the husband stated that prior to separation, in or about April 2020, he “loaned” $10,000 to the parties’ mutual friend Mr XX in circumstances where Mr XX was experiencing financial difficulty. The father stated that he did not “expect” that he would be repaid those monies. He therefore sought to characterise the loan as a financial loss.
In considering the parties’ competing arguments, I have had regard to what the High Court has noted to be the “considerations of common sense underlying the maxim stated by Lord Mansfield in Blatch v Archer that ‘all evidence is to be weighed according to the proof which it was in the power of one side to have produced, and in the power of the other to have contradicted’”[13]. I am satisfied that, in this case, it is the husband, not the wife, who could reasonably have been expected to provide information on the facts relating to the incapacity of Mr XX to repay the loan. In those circumstances and in circumstances where it has not been contended that the claim for repayment of those monies is statute barred, I will include the monies advanced by the husband to Mr XX as an asset of the husband on the balance sheet.
[13] Plaintiff M47/2018 v Minister for Home Affairs (2019) 265 CLR 285 at [40], citing Blatch v Archer (1774) 1 Cowp 63 at [65].
Items 24 and 25
As noted by counsel for the wife, these items relate to payments that the husband has made to DD Pty Ltd of $100,000, and then two further sums totalling $152,368.[14] The fact that the payments were made was not in dispute. The evidence of the wife in respect to the circumstances in which those payments were made is set out in paragraphs 83, 96 and 99 of her affidavit filed 21 December 2022, being that the first payment of $100,000 was made by the husband in January 2022, a second payment of $53,035 was made on 10 February 2022 and a third payment of $90,000 was made on 6 April 2022.
[14] It is not entirely clear from the evidence where this amount is identified, save for the joint balance sheet. In that respect, the sum of the amounts in the wife’s affidavit is $143,035. Nevertheless, as the amounts have not been included, it has been unnecessary to address that evidentiary lacuna.
The wife contends that the total amount should be added back onto the parties’ balance sheet in circumstances where she contends DD Pty Ltd had not yet completed the work at the time and had not rendered any invoices for the work.[15] The wife nonetheless conceded that the payments had been made by the husband to DD Pty Ltd.[16]
[15] Transcript 1 February 2023, p.75 lines 3–11.
[16] Transcript 1 February 2023, p.75 lines 3–11.
In Candle & Falkner (2021) FLC 94-069, the Full Court noted at [52]:
The treatment of property already distributed and exhausted prior to trial, usually called “add backs”, has been the subject of many authorities in this Court. In Omacini & Omacini (2005) FLC 93-218 at [30] (“Omacini”), following Kowaliw & Kowaliw (1981) FLC 91-092 and Townsend & Townsend (1995) FLC 92-569 (“Townsend”), the Full Court held that addbacks fall into “three clear categories”: where the parties have expended money on legal fees, where there has been a premature distribution of matrimonial assets, and “waste” or wanton, negligent, or reckless dissipation of assets. This latter category indicates that the nature of the expenditure of post-separation or premature distributions can be relevant to the exercise of discretion to add back.
It has been made clear in a number of authorities that the practice of “adding back” notional assets on the balance sheet is an exceptional course of action to take where, “in the particular circumstances of the case, justice and equity requires it”.[17] In that respect, the wife has failed to persuade me that the amounts included in items 24 and 25 on the joint balance sheet should be added back as notional assets to be credited against assets in the possession of the husband. While it was perhaps imprudent of the husband to pay the relevant amounts to the builder in circumstances where it appears that there had been no itemisation of the relevant work through the provision of invoices, the payments do not, in my opinion, fall into the category of unreasonable, reckless or wanton expenditure as referred to in Kowaliw and Kowaliw (1981) FLC 91-092 as contended by counsel for the wife.[18] In that respect, it was not suggested that the money had been applied by DD Pty Ltd for purposes that were unrelated to the renovations, which are ultimately to the benefit of both parties insofar as they improve the value of their property.
[17] Trevi & Trevi (2018) FLC 93-858 at [28]–[30].
[18] Transcript 3 February 2023, p.197 lines 31–39.
Accordingly, items 24 and 25 will not be included on the balance sheet.
Item 37 – wife’s Mastercard debt
The husband contended that the wife’s Mastercard debt of $4,290, as reflected in item 37 of the joint balance sheet, should not be included on the balance sheet as it relates to personal expenditure incurred by the wife in the period subsequent to separation.
In considering whether to include this item on the balance sheet, I have had regard to the unchallenged evidence of the wife, as set out in her Financial Statement filed 21 December 2022, that her expenses exceeded the funds that came into her possession either by way of lump sum amounts that she has received for child support or the orders previously made by the Court requiring the husband to meet her rental expenses.
As has been noted by the Full Court, parties do not “go into a state of suspended economic animation”[19] after separation. The evidence presented by the wife satisfies me that the Mastercard debt that she has incurred has been the result of necessary expenses incurred over and above payments received from the husband and applied in order to meet her day-to-day living expenses and those of the parties’ children. Accordingly, item 37 will be included on the balance sheet.
[19] Trevi & Trevi (2018) FLC 93-858 at [29].
Item 40 – unpaid income tax
While the wife initially contested whether the amount of $28,137 should be included as a liability in respect to unpaid income tax payable by the husband, counsel for the wife acknowledged that, in circumstances where he had been provided with evidence of the taxation as being payable and it was payable in respect to income earned by the husband that has gone to the benefit of the parties, there was little he could say in opposition to item 40 being included on the balance sheet.
In light of that appropriate concession, I will include item 40 on the balance sheet.
Items 47 and 48 – superannuation
The parties were in agreement that, in the circumstances of this case, it is appropriate for the parties’ property to be assessed as one pool, with the parties’ respective interests in superannuation to be categorised as property already in the possession of that party. The parties noted, however, that as at the date of hearing, the valuation of monies held in the parties’ self‑managed superannuation fund had not been updated to include final accounting relating to the sale of the property owned by the superannuation fund. Pursuant to leave granted at the final hearing, by email dated 17 February 2023, counsel for the wife presented to the Court the relevant amounts as agreed by the parties. Those amounts, being $113,622 held on behalf of the wife and $340,866 held on behalf of the husband, have now been included at items 47 and 48 of the balance sheet.
Final balance sheet
The wife contends that the value of the property is $12 million, while the husband asserts the value of the property is $12.5 million. There was no challenge to the validity of the assessment of the single expert valuer, who assessed the market value of the property on an ‘as-is’ basis at $12.2 million and, with completed renovations, at $12.5 million. For the purpose of preparing the balance sheet, I have included the higher valuation figure on the basis that the trial was conducted on the assumption that the building works would be completed prior to the property being sold.[20]
[20] Page 191 of the husband’s tender bundle.
Accordingly, my findings in respect to the parties’ property, including assets, liabilities and superannuation are as follows:
ASSETS Ownership Description Value 1 Joint C Street, Suburb D $12,200,000/$12,500,000 2 Joint ANZ Account #...68 ($10)[21] 3 Joint L Bank Account #...25 $87 4 Joint Household Contents Excluded 5 Joint Property damage deposit paid to Suburb H Council potentially released to the parties upon issue of occupancy certificate $18,257 6 Joint Tree damage security deposit paid to Suburb H Council potentially release to the parties upon issue of occupancy certificate $5,000 7 Wife CBA Account #...69 $519 8 Wife CBA Account #...12 $6,789 9 Wife M Pty Ltd $8,302 10 Wife Jewellery Excluded 11 Husband Watches Excluded 12 Husband CBA Account #...74 (as at 30 January 2023) $141,180 13 Husband CBA USD Foreign Currency Account (USD 27.89 as at 27 January 2023) $40 14 Husband Loan to Mr XX $10,000 15 Husband Motor Vehicle 2 $7,500 16 Husband Motor Vehicle 1 $23,750 17 Husband Recreational vehicle - 50% interest $22,500 18 Husband Household contents Excluded 19 Husband Bond for the Suburb GG property retained by Wife Excluded 20 Husband J Company shares (1,158.71) vested 20 January 2023 net after tax - Estimated $38,802 Total $12,782,716 ADDBACKS Total NIL LIABILITIES Ownership Description Value 21 Joint L Bank loan account $2,118,976 22 Joint Loan to Ms & Mr CC Excluded 23 Joint Money owed to DD Pty Ltd to complete renovation of the Suburb D property Excluded 24 Joint Funds required to complete property for market (painting $15,000 rendering $9,000 as per email from Mr PP, Agent) Excluded 25 Joint Money owed to YY Company $1,800 26 Joint Money Owed to ZZ Company $4,327 27 Joint School fees to L School Excluded 28 Joint Engineering company $3,100 29 Wife CBA Mastercard Account #...39 $4,290 30 Wife Money owed to Ms & Mr CC for legal fees Excluded 31 Wife Money owed to TT Finance for legal fees including additional amount for expenses Excluded 32 Husband Unpaid income tax $28,137 33 Husband QQ Bank car loan (for Motor Vehicle 1) $19,000 34 Husband RR Finance loan $52,174 35 Husband SS Finance loan $82,000 36 Husband Money owed to mother for loans and expenses Excluded 37 Husband RR Finance loan for litigation funding including $50,000 for expenses (renovations) Excluded 38 Husband Money owed to Wife pursuant to Orders made on 13 April 2022 for payment of rent Excluded Total $2,313,804 SUPERANNUATION Member Name of Fund Value 39 Wife Pinney Super Pty Ltd ATF Pinney Super Fund $113,622 40 Husband Pinney Super Pty Ltd ATF Pinney Super Fund $340,866 Total $454,488 NETT TOTAL ASSETS (including superannuation) $10,923,400 [21] This amount is de minimis. I have, however, accepted the wife’s value in circumstances where the parties have agreed that the proceeds of funds held in joint accounts will, in any event, be distributed to the parties according to the percentage adjustment determined in this judgment.
Contributions
Summary of the parties’ contentions
There was relatively little difference between the parties’ contentions regarding their respective contributions. By and large, the parties acknowledge that each made their respective contributions which, in the case of the husband was as the primary income earner and, in the case of the wife as the parent who was primarily responsible for the care and support of the children and for homemaking. Both acknowledge that the other party also made supplementary contributions in that the wife generated income to support the family and, in the husband’s case, providing support for the wife’s primary roles in homemaking and parenting.
The orders that I make in these proceedings will provide that the parties’ net assets, including superannuation, will be adjusted such that the wife receives 62 per cent and the husband 48 per cent, being a 24 per cent differential. This translates to a significant amount of money given the size of the parties’ property pool, with the monetary equivalent of that differential being in the order of approximately $2,620,000.
However, in determining that to be an appropriate adjustment amount, I have had regard to the evidence in these proceedings that establishes that, over the past five years, the husband has had a taxable income of approximately $1 million per year. I have recognised that from this net income, the husband will have significant expenses, primarily in respect to his ongoing obligation to pay the children’s private school fees and weekly payments of periodic child support which, in itself, has been assessed at a high level given the magnitude of the husband’s income.
Nonetheless, the husband will be relieved of the obligation to pay ongoing spousal maintenance, including paying rent for the wife and the children.
While the distribution of the parties’ property that will be allocated to him will be significantly less than that which will be allocated to the wife, it is nonetheless a substantial amount of money, some or all of which he will be able to apply as a deposit on another property in circumstances where his level of income is such that it can reasonably be inferred that he has substantial borrowing capacity.
In short, the outcome is such that it will enable both parties to obtain very comfortable housing and to enjoy what, by community standards, will be a high standard of living.
Having regard to the totality of matters to which I have referred, I am satisfied that a total adjustment of 12 per cent in favour of the wife represents an appropriate, just and equitable outcome.
OTHER MATTERS
Child support
Both parties seek similar child-support departure orders.[36] Specifically, both parties have agreed that it is appropriate for child support departure orders to be made which will require the husband to be responsible for the children’s education costs, certain extracurricular expenses and medical expenses. The essential point of difference between the parties is that the orders sought by the wife would impose the obligation to meet the children’s education expenses as and from the date of the orders, whereas the orders proposed by the husband would establish such an obligation to exist as and from the commencement of term one in 2024.[37]
[36] Orders sought by wife within Case Outline filed 27 January 2023 at paragraphs 20–23; Husband's minute of order dated 1 February 2023, paragraphs 12 and 13.
[37] Husband's minute of order dated 1 February 2023, paragraph 12.1.
It was appropriately acknowledged by counsel for the wife that the area of dispute between the parties has effectively been addressed as a result of the husband attending to the payment of the sum of $60,000 to LL School, which covers W’s tuition fees for the current school year.[38]
[38] Transcript 1 February 2023, p.20, lines 21–22.
In circumstances where both parties have sought similar child-support departure orders, I am satisfied that the jurisdictional requirements set out in ss 116 and 117 of the Child Support (Assessment) Act 1989 (Cth) are satisfied. I am also satisfied that, in circumstances where both parties are in agreement for the children to attend a private school and the husband has a reasonable financial capacity to enable this, it is appropriate for child support departure orders to be made confirming that position.[39]
[39] Mee and Ferguson (1986) FLC 91-716.
Similarly, the parties are in agreement that the husband should meet the cost of agreed extracurricular activities engaged in by the parties’ children and also private health insurance and any gap fees that are not recoverable by Medicare. In circumstances where it was not disputed that the husband has reasonable financial capacity to meet those expenses, I am satisfied that it is also appropriate to make those orders.
In circumstances where it is to the husband’s credit that he agrees to assume responsibility for making those payments and, effectively, the issue of dispute between the parties has been resolved, I propose making orders in accordance with those proposed in paragraphs 12 and 13 of the husband’s minute of order.
Spousal maintenance
During the course of the hearing the husband proposed, as an alternative to paying spousal maintenance to the wife pending settlement of the sale of the Suburb D property, that he pay a lump sum amount of $70,000 towards the wife. In circumstances where there has, however, now been a period of approximately three months since the final hearing and where I have directed that the sale of the property is to take place within 42 days, this would, in my view, be unfair to the husband.
I have therefore taken the alternative course proposed by the husband of making orders providing for him to pay spousal maintenance to the wife in the sum determined by the April 2022 orders and confirmed in the 3 February 2023 orders up until the date of settlement of the Suburb D property sale.
Machinery orders
Both parties are in agreement that, in order to effect a just and equitable adjustment of the parties’ property, it will be necessary to sell their major asset, which is the former matrimonial home.
The complication that has arisen is that, prior to the parties’ separation, they commenced extensive renovations on the Suburb D property, which are yet to be completed. As noted, this issue has given rise to considerable disputation.
In determining that the property must be sold in its current condition, I have had regard to the supplementary submissions filed by the parties pursuant to the orders I made on 3 May 2023.
To explain why I have formed the view that the time for further delay in the sale of the property is untenable, it is necessary to set out, in broad terms, some of the relevant background to the parties’ dispute concerning the renovations and planned sale of the property.
In early 2021, the parties entered into a contract with DD Pty Ltd (or “the builders”) whereby that company was engaged to undertake the renovation works in accordance with plans prepared by the wife’s father.
The works commenced in February 2021. It was originally contemplated that the works would be completed within 26 weeks. Both parties accept that was an unrealistic expectation.
Until January 2022, the wife assumed primary responsibility for liaising with the builders, at which time the husband moved back into the Suburb D property and had day-to-day interaction with the builders. The history of difficulties associated with the building work is set out in considerable detail in the wife’s affidavit from paragraphs 38 through to 104. As a result of difficulties experienced in interacting with the builders, the wife engaged her own consultants, initially Mr AB and subsequently Mr FF, the latter of whom gave evidence in the proceedings. The disputation was such that the wife approached the New South Wales Department of Fair Trading in respect to what she regarded as the unsatisfactory manner in which the builders had conducted themselves and the undertaking of the work.
The wife contends that much of the poor workmanship was due to poor supervision of the building works undertaken by the husband, who she alleges had an inappropriately close and friendly relationship with Mr AC of DD Pty Ltd. In that respect, at paragraph 154(a) of her affidavit, the wife contends that the husband directed the builders to dispose of certain items required to complete the building works. At paragraph 154(d), the wife contends that the husband directed the builders to remove the requirement to undertake external painting works from the building contract. At paragraph 154(e), the wife contends that the husband inappropriately assumed the cost of removing a demolished fence on the property. At paragraph 154(f), the wife contends that the husband inappropriately directed the builders to remove rendering from the building contract. More generally at paragraph 154(g), the wife contends that during the period that the building works were overseen by the husband:
There has been no defined builders' program and no milestone review since September 2021, so the only attempt to establish a defined program process for trades to coordinate and implement works in a practical manner has been initiated by me since September 2021.
Comparatively, the husband contends that the delay which has occurred was as a result of events outside the parties’ control or has resulted from conduct by the wife and/or her father or persons engaged by the wife, including Mr FF, to supervise the building works.
This included the fact that two project managers engaged by DD Pty Ltd to oversee the building work left that company’s employ within the first four weeks of the project. Both parties acknowledge that neither can be held responsible for that occurring.
The parties also accept that additional delays occurred during the course of 2021 as a result of public health measures implemented during the acute period of the COVID-19 pandemic. There was also a further closure of the building site as a result of a work safe site inspection.[40]
[40] Wife’s affidavit filed 21 December 2022, paragraphs 56 and 57; Transcript 1 February 2023, p.67 line 45.
In addition to those matters that were beyond the parties’ control, the husband contends that delays occurred because of the following conduct on behalf of the wife and/or her father.
As previously noted, the wife’s father, who had created the plans for the renovations, provided assistance in overseeing the renovations during the initial stages. The wife’s father’s involvement was, however, a source of tension. For example, following a dispute in late 2021 between tradesmen on-site which involved heated language, the wife’s father was asked to leave the building site.
The wife acknowledges that instructions that she or her father had provided to the builders in respect to variations was an issue that had caused tensions with the builders. The wife also accepted that further delays occurred in late 2021 and early 2022 regarding a dispute as to whether the builders or the parties were responsible for undertaking work relating to the setting down of the floors and undertaking certain joinery work.[41]
[41] Transcript 1 February 2023, p.72 lines 15–18.
The wife denied delaying payment to the builders during December and January 2022 as result of the dispute she was having with the builders. However the wife accepts that, in early 2022, the husband made a number of payments to the builders, which have been referred to earlier in this decision. The wife acknowledged that after the receipt of those payments, the making of which she criticised, the builders recommenced work on the property.
As a result of the wife’s concerns with the progress and quality of the building works, she engaged consultants, initially Mr AB and subsequently a further consultant Mr FF, to provide advice as to how the building works might be more effectively undertaken. The engagement of Mr FF, in particular, appears to have exacerbated the tension between the wife and the builders.
Throughout the project, there have been other issues that have given rise to delay, including delays in ordering equipment required for work scheduled to be undertaken in late 2022.
The husband further contends that there was delay as a result of conduct on the part of the wife in failing to provide a building supervisor engaged by the parties, Mr E, with a structural certificate, that was due to be provided in September 2022. The wife acknowledged that the certificate was subsequently provided in November 2022.
Subsequent to an interim hearing that occurred in November 2022, it appears that the parties gave greater focus to undertaking work necessary to obtain an occupation certificate for the property. Specifically, the parties requested the building supervisor, Mr E, to provide advice as to what steps were required in order to obtain an occupation certificate. On 16 January 2023, Mr E provided an email to the parties setting out what work needed to be done to obtain the occupation certificate. That work had not been undertaken or, more accurately, had not been completed, as at the date of the hearing.
In addition to the wife taking the dispute with the builders to tribunal, this issue has been the subject of consideration on a number of occasions before, initially, the Federal Circuit Court of Australia (Division 2) and, subsequent to transfer, Division 1 of this Court.
Orders made relating to the building works include the following:
·22 February 2022: orders requiring the parties to enliven the dispute resolution clause with DD Pty Ltd by engaging a building consultant or other professional recommended by the building certifier to oversee the building works.
·13 April 2022: orders providing that, pending the issue of a partial occupancy certificate, the husband exclusively occupy the property pending completion of the required building work and subject to certain conditions including, most relevantly, that “the wife be the sole point of communication with any builders working at the property.” The orders further provided for the wife to resume occupancy of the property after the partial occupancy certificate is issued if the husband defaults on the payments referred to in the orders.
·11 November 2022: orders which provided for the husband to provide to the building supervisor, Mr E, copies of documents necessary for an application to be made to the Suburb H Council for a partial occupancy certificate. The orders also provided for the sale of the property held by the parties’ self-managed superannuation fund. Further, the orders provided for the sale of the Suburb D property within 42 days of receiving the final occupancy certificate.
Additionally, as previously noted, a considerable amount of time at the hearing of this matter in late January and early February 2023 related to the sale of the Suburb D property and steps required for building works necessary to obtain the occupancy certificate to be completed prior to the sale. Relevantly, while each party proposed a broader suite of orders, to their credit and with the assistance of competent counsel, at the hearing, the parties agreed to the making of orders that would progress the building works subsequent to the conclusion of the hearing and prior to my delivering final judgment. Those orders essentially provided for the property to be vacated to ensure the orderly and timely completion of the renovations up to the point where an occupancy certificate was to be obtained and the expeditious sale of the property following completion of those renovations. Relevantly, those orders also included a liberty to apply provision in the event of the parties experiencing difficulty in respect to the implementation of those orders. Those difficulties have continued to occur, with the matter being listed on three further occasions pursuant to the liberty to apply provision since the completion of the hearing. As earlier noted, in considering this issue, in addition to the evidence presented in the proceedings I have had regard to the fact of those applications being made, the consequent orders and the undisputed conduct of the wife in re-entering and remaining in the property in the period subsequent to the conclusion of the substantive hearing.
In that respect, as previously noted, the wife resumed occupancy of the Suburb D property on 3 March 2023. I found her conduct in doing so to be contrary to what I found to have been the intention of the parties as reflected in the consent orders made on 3 February 2023 and confirmed in orders made on 2 March 2023. Accordingly, when the matter came before me on 27 March 2023, pursuant to the liberty to apply provision, I made further orders requiring the wife to vacate the property with the parties’ children, subject to the husband identifying three potentially suitable rental properties from which the wife could reside, at the husband’s expense, pending the completion of the building works and sale of the Suburb D property.
In circumstances where the wife failed to vacate the property, the husband made a further application in which the husband pressed for orders again requiring the wife to vacate the property, albeit in circumstances where the responsibility for selecting the appropriate rental property would now be placed upon the wife. Significantly, as I have earlier noted, the husband also sought orders for an enforcement warrant to be issued requiring the wife to vacate the property. At the mention on 3 May 2023, I stayed the operation of the orders made on 27 March 2023 pending the wife having the opportunity to seek an extension of time within which to appeal the orders I made on 27 March 2023 and made further orders, earlier referred to, which directed the parties to file further submissions in respect to the operation of the machinery orders in respect to the renovations and sale of the property.
Self-evidently, there has been a breakdown in trust between the parties and a breakdown in trust between the wife and the relevant officers and staff of DD Pty Ltd. That breakdown in trust has been a significant factor in the delay of the completion of the building works necessary to obtain an occupation certificate for the Suburb D property.
The loss of trust is reflected in the direct interactions between the parties. There is no doubt that it has been exacerbated by the parties’ conduct which, in the case of the husband, includes:
·Directly liaising with Mr AC of DD Pty Ltd for the purpose of obtaining a letter dated 16 March 2022,[42] which was substantially expressed in the language of the husband, recommending that the wife and children vacate the Suburb D property to facilitate the building works being undertaken. Significantly, that letter was relied upon by the husband in obtaining the orders of 13 April 2022 to which I have earlier referred, which required that the wife remain absent from the property with the children until the partial building certificate was obtained.
·By text message sent to the wife on 16 March 2022 advising the wife that he has a new partner and intended to move into the Suburb D property with her pending completion to renovations on the new partner’s property, which were to be also undertaken by DD Pty Ltd. Significantly, the husband frankly acknowledged that an “element” of his intention in sending that text message to the wife was to “inflame” her.[43]
·In responding to a notice to produce documents issued by the wife for the purpose of these proceedings, the husband failed to produce a document evidencing assignment of his lease on a motor vehicle to his new partner. The husband acknowledged that his conduct in failing to do so was “less than transparent”.[44]
[42] Marked Exhibit “19” in the proceedings.
[43] Transcript 3 February 2023, p.179 lines 44–45.
[44] Transcript 2 February 2023, p.140 lines 27–34.
From the husband’s perspective, he doubts the commitment of the wife to facilitate the expeditious completion of the building works required to obtain an occupation certificate. By way of written submissions he has, justifiably in my view, expressed concern that the wife has failed to comply with orders, to which she had agreed and which were made by consent on 3 February 2023 and confirmed on 2 March 2023. As noted, those orders required the parties to vacate the property and remain away from the property to facilitate the building works being conducted in an efficient and timely way.
As a result of the breakdown in trust between the parties, I have no confidence that the parties have the capability to cooperate to the extent necessary to achieve the completion of the building works required in order to obtain the occupation certificate for the property.
Additionally, I note that it was accepted during the course of the proceedings that completion of the defective building works would cost approximately $118,000, with the incomplete building works included within that sum costing approximately $73,000.[45]
[45] Transcript 2 February 2023, p.154 lines 15–18; Transcript 3 February 2023 p.181 lines 18–20.
In circumstances where the orders made on 3 February 2023 reflected the lowest common denominator of that which was agreed between the parties, those orders provide for the husband to provide funding to complete the building works to the amount of $40,000 (Order 6.1).
In recognition that the amount specified in Order 6.1 of the orders of 3 February 2023 would likely be insufficient to cover the cost of building works required to achieve the occupation certificate, to their credit and with the assistance of counsel, the parties agreed to an additional clause 7 which required the parties, through their legal representatives, to confer with the building supervisor and an expert engaged by the parties, Mr B, with a view to determining the scope of work that is actually necessary in order to obtain the occupation certificate.
As earlier noted, the wife moved into the Suburb D property on 3 March 2023, the day after her then lawyers had appeared before me on 2 March 2023 where the parties confirmed the intention for the property to be vacated to facilitate the completion of the building works. Subsequent to the conduct of the wife in resuming occupancy of the property on 3 March 2023, her then lawyers withdrew from the proceedings. I make no presumptions as to why that occurred. The relevancy of the withdrawal of the wife’s lawyers from the proceedings is, however, that the wife is not in a position to consult, through legal advisers, with Mr B, the building certifier and the husband’s lawyers with a view to determining precisely what work is required in order to obtain the occupation certificate pursuant to clause 7.
The inability of the parties to narrow the scope of work to that which is actually required to obtain the occupation certificate is of great importance because the un-contradicted evidence of the husband is that he has exhausted his capacity to obtain any additional finance to complete the building works.[46]
[46] Transcript 3 February 2023, pp.180–183.
In circumstances where the wife attests to exhausting her supply of savings during the course of these proceedings, unless and until the scope of works can be narrowed to such an extent that it can be determined that the husband has the capacity to raise sufficient funds, the simple fact is that the building works will not be completed because neither party has funds available to complete it.
In summary, for these reasons, that is, the complete breakdown in trust between the parties, the inability of the parties to realistically narrow the scope of work required in order to obtain an occupancy certificate and, additionally, the lack of evidence regarding the availability of a source of funds to meet the necessary costs of obtaining that certificate, I am not satisfied that the necessary building works will be completed by these parties. Expressed in the reverse, for the reasons which I have given, I am satisfied that a stalemate now exists between the parties and to now make an order for the building works to be completed, even to the stage of obtaining an occupation certificate, would be a futility.
In those circumstances, I find that the only practical course of action is for the property to be sold in its current state of repair and, unless otherwise agreed by the parties, at the maximum price obtained at the auction. In so finding, I note by reference to the unchallenged evidence of the single expert valuers, AD Company,[47] that such a course will result in an outcome where the parties will be unable to maximise the potential sale price of the property. The consequence for that occurring, with respect, lays at the feet of the parties. It is not the role of the Court to become a de facto building project manager in circumstances where the parties are unable to cooperate to the extent necessary to achieve a sensible outcome that is in their mutual interest.
[47] Page 184 of the husband’s tender bundle.
Accordingly, the machinery orders I make will require the parties to take such steps as are necessary to place the property on the market to be sold at auction within a period of 42 days of these orders at the maximum price obtained at the auction. The orders will nonetheless leave open an opportunity for the possibility of the parties having a transformation of their attitudes and the manner in which they have engaged with each other by agreeing to alternative arrangements, reduced to writing, providing that occurs within seven days of the orders.
To facilitate the sale occurring, I will also direct that, again, unless specifically agreed to in writing within five days, the parties take all such steps as are necessary to cease all building work on the Suburb D property and instruct any building contractors to remove items of equipment and supply from the property.
As previously noted, an issue of considerable controversy between the parties has been whether or not the property will be occupied pending the sale occurring. To avail the parties of the benefit of considering these reasons for judgment, I have listed this matter before me on 23 May 2023 for the purpose of hearing further argument from the parties regarding the issue as to whether orders should be made requiring the wife to vacate the property in circumstances where, as a result of the orders that I make in these proceedings, building work on the property will cease and the property will proceed to market in its present condition of repair.
COSTS OF THE PROCEEDINGS ON 27 MARCH 2023
On 27 March 2023, I delivered ex tempore reasons for making orders requiring the wife to vacate the Suburb D property to give effect to the intention of the parties as reflected in the orders made, by consent, on 3 February 2023 and modified, by consent, on 2 March 2023. On that day, I reserved the question of costs in respect to the husband’s application that gave rise to those proceedings.
The power for the Court to award costs in favour of a party is set out in s 117 of the Act.
In the circumstances of the matter, the husband sought costs in respect to those proceedings on an indemnity basis. The Full Court has consistently made clear that, unremarkably, indemnity costs should only be ordered in exceptional circumstances.[48]
[48] See for instance Stasiuk & Guild [2021] FamCAFC 62 at [8].
In determining whether to make an order for costs and, if so, on what basis, I am required to have regard to the matters set out in s 117(2A), which are as follows:
(a)the financial circumstances of each of the parties to the proceedings;
(b)whether any party to the proceedings is in receipt of assistance by way of legal aid and, if so, the terms of the grant of that assistance to that party;
(c)the conduct of the parties to the proceedings in relation to the proceedings including, without limiting the generality of the foregoing, the conduct of the parties in relation to pleadings, particulars, discovery, inspection, directions to answer questions, admissions of facts, production of documents and similar matters;
(d)whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the court;
(e)whether any party to the proceedings has been wholly unsuccessful in the proceedings;
(f)whether either party to the proceedings has made an offer in writing to the other party to the proceedings to settle the proceedings and the terms of any such offer; and
(g)such other matters as the court considers relevant.
The wife will, as a result of the orders that I make in these proceedings, receive a substantial lump sum of money (s 117(2A)(a)).
The wife was wholly unsuccessful in the proceedings on 27 March 2023 (s 117(2A)(e)).
The proceedings were necessitated as a result of the wife’s failure to comply with the orders of the Court made by consent on 3 February 2023 and re-affirmed by consent on 2 March 2023 (s 117(2A)(d)).
It is the wife’s conduct in terms of this last relevant consideration that, in my view, justifies and order for indemnity costs. The wife’s conduct in moving into the Suburb D property on 3 March 2023 was entirely contrary to the purpose and intention of the orders of the Court, which were made by consent on 3 February 2023 and reaffirmed by the parties, through their legal advisers, in proceedings that occurred on 2 March 2023, the day immediately before the wife moved back into the property.
The wife’s blatant disregard for those orders is clear misconduct, causing loss of time to the Court and other parties, and hence sufficient to justify an order for costs to be paid on an indemnity basis.[49]
[49] Moy & Pao (2022) FLC 94-073 at [32], referring to Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225.
The effective functioning of the rule of law that underpins the fair and orderly functioning of our democracy is substantially dependent upon citizens fulfilling their civic responsibility to comply with orders of a Court, even where they disagree with them or compliance causes inconvenience. The alternative is a situation where Court orders are enforced by coercive action by the state. That is an anathema to the values that underpin the effective functioning of our legal system, particularly in an area of law as sensitive and complex as family law.
Accordingly, I am satisfied that an order for indemnity costs against the wife is justified and produces a just outcome in the circumstances that I have outlined.
I will therefore order the wife to pay the husband’s costs of and in connection with the proceedings heard on 27 March 2023 on an indemnity basis, as particularised by the costs notice filed by the husband’s lawyers on 23 March 2023, in the sum of $20,590. Such sum is to be paid to the husband from the net sale proceeds of the Suburb D property, specifically from the funds that would otherwise have been paid to the wife.
ORDERS
The first order I make, in light of final orders now being made, is an order revoking all previous orders.
The second order I make will be an order providing that, unless otherwise specifically agreed between the parties in writing within seven days of these orders, the parties are to do all things and sign all documents necessary to facilitate the sale of the Suburb D property within 42 days of the date of these orders. In that respect, there is little difference between the proposals of each of the parties, save to the extent that the wife proposes that she nominate three potential agents of whom one will be selected by the husband and the husband proposes the reverse. Additionally, the husband proposes that the arrangement with the estate agent be such that the agent facilitates certain repairs and cosmetic building works to enhance the marketability of the property.
For reasons which I have explained, I am not satisfied that the parties have the capability of engaging with each other in good faith to facilitate any additional renovation works and, on that basis, I do not accept the proposal of the husband for the arrangement requiring the real estate agent to facilitate that work. Additionally, I have some concerns in the context of the husband’s unilateral communication with DD Pty Ltd, as evidenced by numerous text messages which are extracted in the mother’s tender bundle, most relevantly the email of 16 March 2022 through which the husband obtained a self-serving letter for the purpose of the husband’s use in proceedings before the Court. I can understand why the wife may well have some concerns that the husband will engage in similar unilateral communication with an agent, who is proposed by him, in a manner that advances his interests and not necessarily hers. Accordingly, for those reasons, I will make orders broadly consistent with those orders proposed by the wife for the sale of the property. Although, as noted, the occurrence of that sale will not be subject to the precondition of the occupation certificate being obtained.
The orders will provide for certain deductions from the net proceeds of sale. Those items will include the expenses and legal fees associated with the sale, the outstanding mortgage, outstanding utility bills and amounts owing as joint liabilities of the parties. The orders will then provide for the balance thereafter remaining to be paid in proportions of 62 per cent to the wife and 38 per cent to the husband, having regard to property (including superannuation) that will remain in their possession. There will, however, be a deduction of $20,590 from those monies that would otherwise be payable to the wife in respect to the proceedings which occurred on 27 March 2023.
The orders will provide for the payment of joint liabilities agreed to in the proceedings and both parties propose orders that they will each be responsible for liabilities in their sole name.[50]
[50] Orders sought by wife within Case Outline filed 27 January 2023 at paragraph 15; husband’s minute of order dated 1 February 2023 at paragraph 16.
In respect to superannuation, the orders will provide for the position agreed between the parties for the wife to roll over her entitlement pursuant to the parties’ self-managed superannuation fund to a new complying superannuation fund nominated by her. In circumstances where the wife will be more impacted by that order, I will make orders in respect of superannuation that are consistent with her minute of order.
I will make orders that the parties retain their respective interests in property in their possession.[51]
[51] Orders sought by wife within Case Outline filed 27 January 2023 at paragraphs 13 and 14; husband’s minute of order dated 1 February 2023 at paragraphs 15 and 16.
Both parties, appropriately, propose that an order be made pursuant to s 106A of the Act in the event that either party fails to comply with these orders.
I will make orders in the nature of child support departure orders that were substantially agreed between the parties. As he is most impacted by those orders, I will make orders in respect of child support as proposed by the husband.
Finally, there will be no further order for liberty to apply.
I certify that the preceding two hundred and fifty (250) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Deputy Chief Justice McClelland. Associate:
Dated: 19 May 2023
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