PORTER & DENT

[2011] FamCA 960

FAMILY COURT OF AUSTRALIA

PORTER & DENT [2011] FamCA 960

FAMILY LAW – DE FACTO RELATIONSHIPS – Property – alteration of property interests – division of 74 per cent to the wife and 26 per cent to the husband – superannuation as a separate property pool – division of superannuation contributed during the relationship of 70 per cent to the husband and 30 per cent to the wife

Family Law Act 1975 (Cth)

APPLICANT: Mr Porter

RESPONDENT: Ms Dent

FILE NUMBER: SYC 6837 of 2010

DATE DELIVERED: 19 December 2011

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Fowler J

HEARING DATE: 10-11 November 2011

REPRESENTATION

APPLICANT: Mr Porter

COUNSEL FOR THE RESPONDENT: Mr Hodgson

Orders

1. The wife is to forthwith sign all documents and do all things necessary to transfer to the husband or his nominee all of her right, title and interest in the property and contents at … B Street, Suburb C in the State of New South Wales (“the Suburb C property”) unencumbered by any security collateral to the security granted to the National Australia Bank with respect to the Suburb E property.

2. Upon the transfer referred to in Order 1 the husband is to pay the wife $550,000.  The husband is to indemnify the wife in respect of any outgoings on the property referred to in Order 1.

3. The husband is to pay the wife a further sum of $50,000 on or before the expiration of 12 months from the date of these Orders.

4. The husband is to forthwith sign all documents and do all things necessary to execute and deliver to the wife a transfer in registrable form all of his right, title and interest in the property at … D Street, Suburb E in the State of Victoria (“the Suburb E property”).  The wife is to indemnify the husband from and against all claims arising out of the mortgage charged thereon and do all such acts and things as may be necessary to release him from any liability under the said mortgage.

5. The husband is solely entitled to the property at … F Street, Town G in the State of New South Wales subjected to the first registered mortgage to the National Australia Bank.  The husband is to indemnify the wife from and against all claims arising out of the mortgage charged thereon and do all such acts and things necessary to release her from any liability under the said mortgage.

6. The husband is to retain the benefit in the following assets to the exclusion of the wife:

   (a)monies in any bank, building society or other financial institution in the husband’s sole name or jointly with any other person

   (b)interest (if any) in the Porter Family Trust

(c)Type H Boat

(d)furniture and effects and personalty in the husband’s sole possession or control.

1. The wife is to retain the benefit in the following assets to the exclusion of the husband:

   (a)monies in any bank, building society or other financial institution in the wife’s sole name or jointly with any other person

   (b)shares in A Pty Ltd and associated financial entities

   (c)interest in the Dent Family Trust

   (d)Vespa Motor Scooter

   (e)furniture and effects, jewellery and personalty in the wife’s sole possession and control.

2. The husband is to be solely liable for and indemnify the wife against the following liabilities:

   (a)       all credit card liability held in his name.

3. The wife is to be solely liable for and indemnify the husband against the following liabilities

   (a)       any liability to A Pty Ltd

   (b)       any contingent or actual liability of A Pty Ltd

   (c)       all credit card liability held in her name

   (d)the liability for the balance of the National Australia Bank bank bill charged over the Suburb E property and any “break fee” payable in respect of the said bill.

4. The wife is forthwith to do all such acts and things as may be necessary to cause her engagement ring and Cartier watch listed in the list of assets provided to the Court to be sold at the best price reasonably obtainable therefore and to divide the nett proceeds after the deduction of all reasonable selling costs and commissions as follows:

   (a)       to the wife 74 per cent thereof and

   (b)       to the husband 26 per cent thereof.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Porter & Dent has been approved by the Chief Justice pursuant to s 121(9)(g) of the Act.

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYC 6837 of 2010

Mr Porter

Applicant

And

Ms Dent

Respondent

REASONS FOR JUDGMENT

Introduction

1. The proceedings before the court are proceedings in which both the applicant and the respondent seek orders altering their interests in property.

2. The application arises under the provisions of s 90SM of the Family Law Act 1975 (Cth) (“the Act”) in the circumstance that the applicant and the respondent resided in a de facto relationship for a period in excess of two years.

3. I shall hereafter in this judgment refer to the applicant as “the husband” and the respondent as “the wife”.

4. The parties in this case, the Court finds, satisfy the geographical requirements of s 90SK in that the husband resided in New South Wales when the application was filed and the parties resided in New South Wales for more than one third of the relationship, although the wife from time to time attended to her business in Victoria.

5. The Court, accepting the husband’s version of the date of breakdown of the relationship, finds that the provisions of s 90SK(1A) are met.

6. The major issues before the court are:

   a)the nature, extent and value of the property of the parties or either of them and their liabilities

   b)the nature and extent of the contributions made by or on behalf of the parties to the acquisition, conservation and improvement of the property of the parties or either of them and to the welfare of the family constituted by the husband and the wife and their relative value

c)the comparative needs, means, and financial resources of the parties

d)whether having regard inter alia to the fact that since the acquisition of some of the property the value of that property has significantly diminished, the parties should share equally or in some other proportion in the loss thus occasioned to the former wealth of the parties and for other reasons what the justice of the case requires to be done

e)what is overall a just and equitable division of the property of the parties or either of them.

Background Facts

1. Where in this judgment I make statements of fact they are, unless otherwise specified, my findings of fact.

2. The wife was born in 1968 in the United States of America.  She is now 42 years of age.

3. The husband was born in 1973 in the United Kingdom.  He is now

   
   

   38 years of age.

4. In December 1997 the company A Pty Ltd was incorporated and thereafter operated by the respondent.  The respondent was the sole director and shareholder of the company.  The company employed ten full-time staff and 200 casual employees the husband alleges.  It currently appears to turn over gross income of close to $4,000,000 per year.

5. A Pty Ltd operated its business from premises at D Street, Suburb E, Victoria (“the Suburb E property”) owned by a company I Pty Ltd as trustee of a trust of which the Court is informed the wife was a beneficiary and which was known as the “Dent Family Trust”.  The full terms of the trust deed or the nature of all of the assets and liabilities of the trust then and now are not known since there has been no current disclosure of those matters by the wife;  however it is clear that this company owned property in Suburb E, Victoria from which A Pty Ltd conducted its business.

6. Although the parties had developed a relationship prior to 2007 they commenced to cohabit in a de facto marriage relationship in November 2007.

7. In December 2007 the parties purchased a property known as B Street, Suburb C (“the Suburb C property”) in their joint names for the sum of $1,050,000.  A portion of the purchase price was funded by a mortgage advance in the sum of $840,000 and the balance of the purchase price was funded by the husband’s funds from the sale of properties he owned in Suburb J, Victoria.  The parties took up residence in the property.

1. In September 2008 the parties purchased the Suburb E property from the Dent Family Trust for $1,300,000.  The wife was the director of the trustee company which held property in trust for her.  The parties borrowed from the National Australia Bank the sum of $1,300,000 collaterally secured against both the Suburb E property and the Suburb C property.  The loan was approved on the basis of the formal lease agreement entered into by A Pty Ltd to pay the sum of $13,500 rental per month to the parties which was equivalent to the repayment requirements of the bank.  The balance of the funds paid for the purchase of the property were it seems distributed by the trust to the wife and were applied to the benefit of the parties by in part discharging the mortgage charged on the Suburb C property and repaying the wife’s mother a loan of $60,000.  In addition to the retirement of debt, the legal costs and disbursements relating to the purchase including stamp duty were paid by the wife from pre-existing funds.

2. The balance of the settlement funds, after retirement of the debt, of $158,896 were deposited into the parties’ joint account.  As a consequence of this transaction the company I Pty Ltd incurred a potential capital gains tax liability of $87,855.  A Pty Ltd entered into a formal lease agreement with the parties and paid the sum of $13,500 rental per month.

3. In late 2008 substantial renovations were made to the Suburb C property at a total cost of about $132,000.

4. In March 2009 the husband lent significant monies to A Pty Ltd he says on the basis that he would be reimbursed from the proceeds of sale of the business which he says the wife indicated she was going to undertake.  He asserts that for the period between 5 March 2009 and 5 May 2010 payments in the amount of $268,314.05 were made to A Pty Ltd from his earnings, sale proceeds of two motor vehicles, and moneys from a business acquaintance.

5. In October 2009 the parties purchased a property at F Street, Town G (“the Town G property”) in the husband’s sole name for $1,100,000.  It is presently valued at $875,000.  The husband asserts, and the Court accepts, that with sales commission any current sale of that property will crystallise a capital loss of $250,000.  He proposes in his orders sought to retain the property and indemnify the wife against any liability under the mortgage.

6. The purchase of the Town G property was funded by a mortgage advance from the National Australia Bank (“National Australia Bank”) and the current balance of the mortgage is $1,092,000.  The property is tenanted from time to time and the outgoings on the property are paid either from rental monies or from the husband’s earnings.  The husband at hearing asserted that the shortfall on the outgoings and mortgage payments was in the order of $100,000 per annum.

7. The husband asserts that the parties separated in April 2010.  The wife asserts a date in June.  The wife says that the ongoing fiscal arrangements made between the parties must be accepted as evidence of her assertions.  The Court however finds that the relationship did end in April.  It was the time of cessation of cohabitation and although the husband held some hopes for reconciliation his hopes were held in vain and any attempt to move in that direction was unsuccessful.

8. In April 2010 the wife returned to Melbourne and the husband remained as he has since in sole occupation of the Suburb C property.  He has in part been responsible for the payments on the Town G property.  He has paid the outgoings of that property and the company A Pty Ltd has paid rent in relation to the Suburb E property which has been applied in payment of the mortgages secured to the bank.

9. In June 2010 the respondent returned to the Suburb C property and took personalty including a Land Rover motor vehicle.

10. Thereafter the husband filed an Initiating Application and the wife a Response in the same month.

11. On 24 January 2011 the parties entered into interim property orders by consent ordering that the applicant pay the respondent the sum of $22,500 it is said by way of partial property settlement.  The Court notes that this was not included in the balance sheet and appears abandoned as a partial property settlement.

12. In May 2011 the husband was made redundant and received a net amount of $166,259.

13. On 23 August 2011 the matter was fixed for hearing for two days.

The Orders Sought by Each Party

1. In summary, the husband sought the following orders:

   (1)The husband pay to the wife the sum of $550,000.

   (2)The wife to pay monies to discharge the mortgage over the properties at D Street, Suburb E, Victoria (“the Suburb E property”) and B Street, Suburb C, New South Wales (“the Suburb C property”).

   (3)The wife transfer her right, title and interest in the Suburb C property to the husband.

   (4)The husband transfer his right, title and interest in the Suburb E property to the wife.

   (5)The husband indemnify the wife in relation to monies due and owing to the National Australia Bank by way of mortgage over the Town G property, and release the wife from any liability in relation to that mortgage.

   (6)The wife indemnify the husband in relation to any monies due and owing over the Suburb E property, and any loan account due and owing by the husband to A Pty Ltd and any other financial entity in which the wife has an interest.

   (7)The husband be solely entitled to the following property:

   (a)monies in any bank or other financial institution in the husband’s name

   (b)property at F Street, Town G, NSW

   (c)interest in the Porter Family Trust

   (d)Type H Boat

   (e)Toyota motor vehicle

   (f)entitlement to the AMP Signature Super Personal Plan or any other superannuation entitlement

   (g)furniture and effects and personalty in the husband’s sole possession or control and

   (h)interest in K Pty Ltd.

   (8)The wife be solely entitled to the following property:

   (a)monies in any bank or other financial institution in the wife’s name

   (b)shares in A Pty Ltd and associated financial entities

   (c)interest in the Dent Family Trust and

   (d)furniture and effects, jewellery and personalty in the wife’s sole possession and control.

2. In summary, the wife sought the following orders:

   (1)The property at B Street, Suburb C, NSW be sold and that the proceeds of sale be disbursed as follows:

   (a)to discharge any encumbrance against the Suburb C property

   (b)to meet the selling costs associated with the sale of the Suburb C property

   (c)to pay the sum of $87,855 being the wife’s Capital Gains Tax liability (as asserted in the order but which was later conceded to be a liability of I Pty Ltd) from the sale of the Suburb E property to the ATO

   (d)the sum of $100,000 to the husband and

   (e)the balance to be applied to the debt of Ms L, the A Pty Ltd overdraft and the National Australia Bank Bill secured over the Suburb E property and the Town G property, the National Australia Bank “break fee” associated with the National Australia Bank Bank Bill and any arrears due to the National Australia Bank.

   (2)The property at D Street, Suburb E, Victoria be transferred into the sole name of the wife at her expense, and that the wife discharge the balance of the National Australia Bank Bank Bill secured against the property.

   (3)The property at F Street, Town G, NSW be transferred into the sole name of the husband at his expense, and that he discharge the balance of the National Australia Bank mortgage secured against the property.

   (4)The husband retain the benefit of the following assets:

   (a)the credit balances in any bank accounts

   (b)his interest in the property at M Street, Town N

   (c)all shares held in his name or in which he has an interest

   (d)the Toyota motor vehicle and

   (e)his AMP superannuation.

   (5)The husband be solely liable and indemnify the wife against all credit card liability held in his name.

   (6)The wife retain the benefit of the following assets:

   (a)the credit balances in any bank accounts

   (b)her interests in A Pty Ltd, Business O, I Pty Ltd and the Dent Family Trust

   (c)the Vespa motor vehicle and

   (d)her AMP superannuation.

   (7)The wife be solely liable and indemnify the husband against the following liabilities:

   (a)the loan from Ms L

   (b)the A Pty Ltd overdraft

   (c)her outstanding BAS

   (d)all credit card liability in her name and

   (e)the balance of the National Australia Bank bank bill.

   (8)The furniture and chattels of the parties be divided equally by agreement.

Property matters

1. The first step I must undertake is to identify the property of the parties or either of them available for division between them.

2. The Court at the commencement of the hearing was provided with a balance sheet by each of the husband and the wife.  During the course of the proceedings it was amended.  The final balance sheet is set out hereunder for its consideration.

The Balance Sheet

Ownership	Description	Wife’s Value	Husband’s Value
Assets
1	Joint	[B Street, Suburb C] NSW (Single Expert valuation dated 11 May 2011)	$1,100,000	$1,100,000
2	Husband	[F Street, Town G] NSW (Single Expert valuation dated 19 May 2011)	$875,000	$875,000
3	Joint	[D Street, Town G] VIC – valued at 100% (Husband’s ownership currently 95%) (Single Expert valuation dated 14 April 2011)	$1,465,000	$1,465,000
4	Husband	ANZ [Branch omitted] Account …12	$28,000	$28,000
5	Husband	ANZ Account …12 (jointly with [Ms P] – 50%)	$14,430	$14,430
6	Joint	National Australia Bank Bank Account …68	$100	$100
7	Wife	National Australia Bank Account
8	Wife	[Year omitted] Vespa motor scooter [identifiers omitted]	$6,000	$6,000
9	Husband	[K] Pty Limited – Husband’s share 100% (not trading)	Nil	Nil
10	Wife	Interest in [A] Pty Ltd, [Business O] and [I] Pty Ltd	$350,000	$350,000
11	Wife	[Business O] (incorporated in the value of interest in [A] Pty Ltd)	Nil	Nil
12	Wife	[I] Pty Ltd (trustee company – incorporated in the value of interest in [A] Pty Ltd)	Nil	Nil
13	Wife	Jewellery (including engagement ring and Cartier watch)	To be sold	To be sold
14	Husband	Half interest in [Type H] boat	$15,000	$15,000
Total Assets	$3,853,530	$3,853,530
Addbacks
15	Husband	Legal fees paid	$81,000	$81,000
16	Wife	Legal fees paid	$17,619	$17,619
17	Husband	Proceeds of sale – boat [Type Q] (Husband’s share)	$20,086	$20,086
18	Wife	Proceeds of sale – boat [Type Q] (Wife’s share)	$22,250	$22,250
Total Addbacks	$140,955	$140,955

Liabilities
19	Joint	National Australia Bank Mortgage secured against [Town G] property	$1,092,000	$1,092,000
20	Joint	National Australia Bank Bank Bill secured against [Suburb E] property (plus break fee of $71,800)	$1,153,015 $71,800	$1,153,015 $71,800
21	Joint	[Suburb C] property is collateral security for the [Suburb E] Bank Bill and mortgage over [Town G] mortgage	Nil
22	Husband	AMEX	NK	Nil
23	Husband	Visa	NK	Nil
24	Wife	ANZ Visa	$10,000	NK
25	Wife	*Unpaid legal fees	$49,753	Nil
26	Wife	*CGT Liability	$80,175	Nil
27	Wife	*Loan from [Ms L] (Respondent’s mother)	$180,000	Nil
28	Wife	*Land Tax	$1,750	Nil
29	Husband	*Tax Liability	Nil	E$33,000
Total Liabilities	$2,638,493	$2,349,815
Net Total Excluding Superannuation	$1,356,022	$1,644,670
Super-annuation
30	Husband	AMP Signature Super Personal Plan	$198,202	$198,202
31	Wife	AMP Flexible Lifetime Super	$65,687	$65,687
Total Superannuation	$263,889	$263,889
Financial Resources
32	Wife	Interest in [Dent] Family Trust	Nominal	NK
Net Total Including Superannuation	$1,619,911	$1,908,559

1. The Court will add back the several amounts received from the sale of the parties’ boat and their paid legal fees.

2. The Court accepts, as do the parties, that the “break fee” of $71,800 relating to the Bank Bill should be added to the liability under item 20.

3. The Court declines to include as a liability of the parties the Capital Gains Tax liability of I Pty Ltd with respect to the sale of the Suburb E property.  The liability which is not yet assessed was that of the company as trustee of the trust and is not a liability of either of the parties.  It appears that it may not be assessed or if assessed that there are measures which the wife could take which could mean that she would have offsetting taxation benefits.  There is no evidence from the wife of her intention to take those steps.  It is noted however that the failure to pay it at this time must be regarded as a contribution made on behalf of the wife to the extent at least of the value to the parties of the utilisation of the funds which they had by reason of its

   
   

   non-payment for the period.

4. The Court declines to include the loan from Ms L (the wife’s mother).  The evidence is that the loan was on lent by the wife to A Pty Ltd which is a company which on the balance sheet has an agreed positive valuation in excess of the loan.  The whole loan must have been taken into account in coming to the valuation.  There is an amount due by A Pty Ltd to the wife which equals the amount provided by her mother and accordingly the amounts balance out and the loan will not be included since there is no inclusion of the amount due to the wife by A Pty Ltd in the balance sheet.

5. The Court notes that there was an amount due to A Pty Ltd by the parties in the form of a loan which was not included in the joint balance sheet.

6. Neither party in this case seeks a splitting order in relation to superannuation.  It is clear that the husband had significant superannuation at the date of the commencement of cohabitation and it is the Court’s view that justice will require for the purpose of determination of contribution and a just result for superannuation to be looked at as a separate pool of assets.  In relation to the provisions of a just result in the division of the property however that will be achieved after considering the proper credit that should be in this case accrued to the wife by reason of the differential in superannuation and reflecting that in the result.

7. I find the assets and liabilities of the parties excluding superannuation are as follows:

Assets	($)
B Street, Suburb C, NSW  (j)	1,100,000
F Street, Town G, NSW  (h)	875,000
D Street, Suburb E, VIC  (j)	1,465,000
ANZ Account …12  (h)	28,000
ANZ Account …12  (jointly with Ms P – 50 per cent) (h)	14,430
National Australia Bank Bank Account …68  (j)	100
Vespa motor scooter  (w)	6,000
Interest in A Pty Ltd, Business O and I Pty Ltd  (w)	350,000
Jewellery (including engagement ring and Cartier watch)  (w)	To be Sold
Half interest in Type H Boat	15,000
Addback:  Legal Fees paid  (h)	81,000
Addback:  Legal Fees paid  (w)	17,619
Addback:  Proceeds of sale – boat Type Q  (h)	20,086
Addback:  Proceeds of sale – boat Type Q  (w)	22,250
Total Assets	$3,994,485

Liabilities
National Australia Bank Mortgage secured against Town G property  (j)	1,092,000
National Australia Bank Bank Bill secured against Suburb E property and break fee  (j)	1,153,015 71,800
ANZ Visa  (w)	10,000
Unpaid Legal Fees  (w)	49,573
Land Tax  (w)	1,750
Tax Liability  (h)	33,000
Total Liabilities	$2,411,138
Nett Asset Pool (exclusive of Superannuation)	$1,583,347

Superannuation

1. I find the superannuation of the parties to be as follows:

Superannuation	($)
AMP Signature Super Personal Plan  (h)	198,202
AMP Flexible Lifetime Super  (w)	65,687
Total Superannuation	$263,889

Section 90sm contributions other than to superannuation

Initial Contributions of the husband

1. At the date of the commencement of cohabitation the husband asserts that he owned two properties at Suburb J, Victoria known as the R Street property and the other known as the S Street property, and a unit at Suburb U in Victoria known as the T Street property jointly with his former defacto spouse, Ms P, with whom his relationship broke down in 2006.  He says that prior to the commencement of cohabitation with the wife, he and Ms P sold the R Street property and the T Street property and the total net proceeds the husband asserts were about $437,000.  The later sale of the S Street property yielded net proceeds of $243,681.  The total net proceeds of sale amounted to $681,181 and the husband’s share of the proceeds amounted to about $340,000.

2. The husband had another property with Ms P, the husband’s interest in which the wife accepted had been gifted in circumstances known to her.  The property, although still in his name, was excluded from the revised balance sheet.

3. At the date of commencement of cohabitation the husband also owned a 50 per cent interest in a share portfolio, which was owned jointly with Ms P.  It was sold.  The net proceeds of the sale of the shares to which the husband was entitled namely $89,113 were credited to the joint account that the husband had with Ms P.  Some $55,000 of this sum was applied to the deposit on the purchase of the Town G property.  In addition, in his sole name the husband had shares in the Macquarie Network which he sold and a sum of $2,020.50 was credited to the joint account the husband had with Ms P.

4. The husband asserts that he has paid no monies into the joint account with

   
   

   Ms P other than from the sale of shares jointly owned by Ms P and him and the net proceeds of sale of real estate.  Whilst the account remains in their joint names the husband asserts that Ms P has the sole use of the account for the purpose of payment of mortgage and outgoings on the Town N property.

5. The husband just prior to cohabitation sold his Nissan motor vehicle for $30,000 and purchased a Jaguar motor vehicle with some of the purchase price being provided by lease finance in the sum of $60,000.  The Jaguar motor vehicle was purchased in October 2007 for $85,000.

6. The husband had a superannuation entitlement which is estimated to have then had a value in the order of $93,439.

7. The husband had a share in a Type V boat owned jointly with his brother.  The husband estimates his interest in the boat at $16,250 at the date of cohabitation.

8. The husband had purchased with funds from the joint account a diamond engagement ring for a price of $22,000.

9. The contributions above referred to amount in excess of approximately $570,000.

10. The husband was employed as a director for Company W from October 2007 to 13 May 2011 when he was made redundant.  He was receiving a salary, inclusive of superannuation, car and other allowances, of $350,000 per annum at the commencement of cohabitation, with incentives to the value of $100,000.

Initial Contributions of the wife

1. The wife was at the time of cohabitation the beneficiary of a trust, the trustee of which was a corporation of which she was the director and shareholder.  The trustee held certain property at Suburb E, Victoria which was valued at about $1,300,000 but was subject to a mortgage of $170,163 having therefore a net value of about $1,130,000.

2. The wife was the sole shareholder of the company a Pty Ltd which operated a business in catering.  It seems from the wife’s evidence that she had from the company certain benefits including the use of a car and the payment of telephone and some entertaining expenses and some food.  She also had the use of the company loan account for the purchase of items which were of a personal nature.

3. The loan account was the beneficiary of payments made to it by the parties from the joint account.  The loan account provided benefits to either the husband or the wife or both.  The husband was clear in pointing out that much of the expenditure had not been able to be verified by him because of late disclosure by the wife but he said had not been spent to his benefit and only to that of the wife.  Much of the expenditure was for the payment of credit card debt and the accounts for those credit cards, which had previously been requested, were only provided on the morning of the hearing and were voluminous.  This was another example of untimely disclosure by the wife.

4. To the loan account were debited the monies said to be paid by the company to the parties above the fair market rent of the property it occupied and a debit is shown in the sum of $229,840 for this payment, but in that regard the amount is already counted as a contribution made on behalf of the wife.  There is produced to the Court a schedule of debits created by a payment of a credit card in the name of the wife were set out in the loan account.  The credit card expenditure was said by the husband to be for the benefit of the husband but not having the time to consider the particulars of the expenditure on credit card he did not concede that they were other than for the benefit of the wife.  This may be so but the parties to a relationship which is interdependent have their needs met from a variety of sources.  There is insufficient evidence before the court to make any order other than that the wife indemnify the husband in respect of any liability with respect to that account.  The account will be considered as a contribution to the extent that it is representative of expenditure of monies on either the husband or the wife.

5. A letter dated 18 May 2011 from the parties’ accountant was annexed to the wife’s affidavit sworn 13 October 2011.  The letter indicates that over the period of 1 November 2007 to 30 April 2011 a sum of $255,714.60 was loaned to A Pty Ltd and treated as a director’s loan to the company from the parties.  During this period a sum of $241,689.90 was paid by A Pty Ltd for various private expenses of the parties and treated as a director’s loan from the company.  The accountant concluded that, taking into account the sum in excess of fair market rent paid for by A Pty Ltd, a net amount of $215,816.03 was loaned by A Pty Ltd to the parties over the period from 1 November 2007 to 30 April 2011.

6. The value of A Pty Ltd at the date of cohabitation was the subject of debate with the wife asserting that whatever the current value, the business was worth more as at the date of commencement of cohabitation.  Notwithstanding that assertion her affidavit filed in the proceedings says that it was valued by the National Australia Bank at between $270,000 and $320,000.  The wife asserts an estimate, based on the fact that the business then had a net equity after liabilities of $100,000, of about $170,000.

7. The Court notes however that the parties have presently agreed on a value of the company at $350,000.

8. The wife had personal effects of indeterminate value.

9. The wife had superannuation to the value of $50,000.

10. The wife’s contributions as at the date of the cohabitation totalled approximately $1,240,000.

Contributions to date of separation by the husband

1. During the course of the cohabitation and for some time after it ceased, namely from 22 November 2007 until 9 June 2010, the husband asserts that he paid to the credit of the parties’ joint bank account a total sum of $569,515.58 from his salary.  Copies of the husband’s bank statements evidencing such payments became Exhibit 7.

2. The husband provides the following particulars of some of his contributions.

3. The husband asserts that he contributed in total $271,000 from his savings held in a joint account with his former partner to the purchase of the Suburb C property.  He asserts that he provided namely $25,000 for the initial deposit;  payment of $80,000 to the real estate agent;  the balance of the 10 per cent deposit of $105,000;  and associated expenses totalling $61,000.

4. The husband’s evidence is that he contributed in July 2009 an amount of $55,000 toward the purchase of the Town G property.  A copy of his bank statements evidencing this payment is contained in Exhibit 8.

5. The husband asserts that between 13 May and 3 June 2009 he deposited the sum of $50,000 to the parties’ joint account.

6. The husband claims a contribution from the joint account of the parties to A Pty Ltd between 5 March 2009 and 5 May 2010 a total amount of $223,000 of which some $35,000 was raised by him from the sale of his motor vehicle.  He further asserts that an amount of $45,314.05 was contributed from funds he raised from a business acquaintance.  The total of those contributions was $268,314.05.

7. The Jaguar motor vehicle that the husband purchased just prior to cohabitation was damaged in July 2009 and the husband received monies from his insurer in the amount of $43,726 which the husband asserts were deposited into the joint National Australia Bank account.  The husband asserts that the monies were used by both him and the wife, and some monies were loaned to A Pty Ltd at the wife’s request.

8. In November 2009 the husband purchased an Audi motor vehicle on his AMEX credit card for $37,500.  The vehicle was sold in May 2010 for $35,000 and the husband asserts the monies were deposited into the joint National Australia Bank account and then were immediately loaned to A Pty Ltd at the wife’s request.

9. The husband says that he contributed society, help and comfort to the wife and did some of the household chores.

Contributions to date of separation by the wife

1. The parties purchased the Suburb E property in about September 2008 for the sum of $1,300,000 from the trustee of the Dent Trust, I Pty Ltd.

2. The trust distributed the monies to the wife who inter alia paid out the existing mortgage over the property at Suburb E and to discharge the mortgage over the Suburb C property.  The wife’s trust assumed a contingent liability for Capital Gains Tax and to the extent that the contingency may be fulfilled must be regarded as a contribution made on behalf of the wife.

3. The balance of the funds paid for the purchase of the property were distributed to the wife and applied to the benefit of the parties with the parties discharging the mortgage charged on the Suburb C property in the amount of $836,439.58.  In addition to the retirement of that debt, the wife also repaid a loan to her mother in the amount of $60,000.  The legal costs and disbursements relating to the purchase including stamp duty were paid by the wife from pre-existing funds.  After payment of those amounts the balance of $158,896 was deposited to the credit of the joint account.

4. The wife claims that A Pty Ltd met the legal fees for the purchase of the Suburb C property.  She does not specify the amount of those fees in her affidavit.

5. The wife says that she was solely responsible for servicing the mortgage on the Suburb C property from December 2007 to September 2008 at the rate of $6,000 per month, a total of $60,000.

6. The wife claims to have met the service costs of the mortgage payments with respect to the property purchased by the parties from I Pty Ltd at the rate of $6,100 per month approximating an amount of $72,000 per year.

7. The contribution was facilitated in the following way.  The trustee of the wife’s trust entered into a lease with A Pty Ltd for a period of five years commencing

   
   

   1 September 2008.  The rental provided for in the lease was the sum of $162,000 per annum.  That was payable at the rate of $13,500 per month payable monthly in advance.

8. A lease document evidencing the above agreement was tendered and became Exhibit 3.

9. A further lease document which became Exhibit 4 was a lease document made between the husband and the wife as lessors and A Pty Ltd as lessee which required payments of rental including appropriate tax in the sum of $4,950 per month.  The lease was for a period of five years and said to be commencing

   
   

   19 September 2008.

10. The husband said that he had not seen the document until it was put to him in the witness box.  The lease was executed by the wife as a party and the wife as enduring power of attorney for the husband as a party.  It did not bear the signature of the husband.  The wife claims that the proposed lease was discussed with the husband.

11. The legal effects of the various documents were not argued.  It however was noted that the lease in Exhibit 3 was set at a rent which was sufficient to service the advances that the parties were procuring for the purpose of acquisition of property.  The wife asserted that the second lease was set at the current market rental value of the property.

12. The husband proposed that the Court should accept that the sum negotiated under Exhibit 3 should be the amount specified since that is what was agreed notwithstanding that the lease was not between the husband and wife as lessor.  The husband asserted that the lease was assigned upon the transfer of the property.  There is no document of assignment nor is there any instrument of surrender of the lease.  It was said that the arrangement provided two advantages namely the possibility of procuring an advance from the bank and the benefit of some tax deductibility.

13. If that be so then the arrangement for whatever odour might attach to it was in the assertion of the wife’s counsel one which meant that A Pty Ltd or the wife in fact paid more than the fair rent and got a tax advantage.  It is not possible to determine the nature and extent of any such advantage on the evidence.  It also means that the wife contributed or there was contributed on her behalf the differential sum due under the mortgage.  The wife claims that sum to be $123,066.

14. The husband occupied the Suburb C property paying the outgoings from the date of separation to date and the wife initially occupied rented premises at a cost of $2,000 per month for a period and then occupied premises rent free, the rental payable being provided by gifts from her mother.  The wife also asserted that rent was paid by the company for her premises required in Melbourne from November 2007 until November 2008.  It appears however that since she ordinarily resided in Sydney the payment of such rent was legitimate business expenditure in the provision of accommodation to a director.

15. The wife asserts that during the cohabitation she was responsible in a major way for keeping the household, undertaking cooking, washing, ironing, laundry and cleaning.

Contributions post separation of the husband

1. The husband says that he paid, with respect to the Town G property on an accounting of the income and expenses of that property for the period from April 2010 until October 2011, the shortfall of $98,503.11.  A schedule of income and expenses was tendered and became Exhibit 9.

2. Since the date of separation the husband has paid the outgoings with respect to the Suburb C property between April 2010 and October 2011 the sum of $16,466.21.  A schedule of these expenses was tendered and became Exhibit 10.  He did nevertheless have the sole occupancy of the property and the benefit of the wife’s right of occupancy which was not exercised.

3. On 13 May 2011 the husband was made redundant and received redundancy pay in the sum of $166,259.  The husband has remained unemployed and has applied the sum he received to the payment of his living expenses and legal fees.

Contributions post separation of the wife

1. The wife has since separation funded the mortgage payments to the bank with respect to the Suburb E property in the order of $13,800 per month together with land tax and insurance and this is taken into account.

2. The wife has been paid rental of $6,100 per month from A Pty Ltd and paid from borrowings and her salary the balance of $7,700 per month to meet the full mortgage commitment for the Suburb E property.

3. Since separation the wife has been living in rental accommodation.  From April 2010 to January 2011 she was paying $1,400 per month, and since January 2011 she has been living at a friend’s house and paying rent of $2,000 per month.

1. It is the wife’s evidence that she has borrowed in total $180,000 from her mother to assist in paying the arrears on the bank bill for the Suburb E property.

Superannuation

1. At the commencement of cohabitation the wife had superannuation in the amount of $50,000 and the husband had superannuation in the amount of $93,439.

2. The husband currently has $198,202 in superannuation and the wife has $65,687.

3. The amount of superannuation accumulated by the husband throughout the relationship was $104,763 and that accumulated by the wife was $15,687 totalling $120,450.

4. It is not intended nor is it sought that any splitting order in relation to superannuation entitlements be made.  Having regard to the amount of superannuation held by each of the husband and the wife at the date of commencement of cohabitation, and the contributions made towards superannuation during the relationship, the superannuation accumulated by the parties throughout the relationship will be notionally divided with 70 per cent to the husband and 30 per cent to the wife.  These adjustments are taken into account in making the determination in this matter, but in accordance with the parties desire no splitting order is made.

Conclusion based on contribution

1. All in all I assess the contributions of the parties to the acquisition, conservation and improvement of the property of the parties to the marriage or either of them including such property which is no longer the property of the parties to the marriage or either of them to be in the proportion of 74 per cet/26 per cent in favour of the wife to date of the hearing.

Section 90sf considerations

1. There is no evidence that either party is in ill health.  The ages of the parties are as set out above.

2. Each of the parties has the physical and mental capacity to be employed.  The wife it seems will continue in the business in which she has always worked.  She will receive income from the business and benefits as she presently does.  It is noted that the figures for the company A Pty Ltd specify a profit after tax in the 2010 year of $85,334.  The wife talks of improvement in the business and benefits she receives from it which in part no doubt will continue.

3. The wife deposes that her taxable income in the past three financial years have been $68,338 for 2008, $46,582 in 2009, and $56,918 in 2010.  It seems in addition in that year (2010) the company, of which the wife is the sole shareholder, had a profit of $50,540.  The wife deposes that she earns an income of about $70,000 per annum from A Pty Ltd noting however that it varies.  The wife without providing any justification or documentary evidence to support it says that her income in 2011 is estimated to be in the order of $55,000.  If the husband is ordered to pay money to the wife with which she can retire debt then it is likely that her income will increase by reason of the reduction in borrowing costs.

4. The wife has not broken up her income as salary, taxable benefit, or dividend.

5. The wife remarks that the business is turning around and that the company expects to show a profit this year.  It is not in evidence what the profit will be.  No management figures for the year ending 30 June 2011 have been produced.

6. The Court has been concerned that the wife’s disclosure has been incomplete and also, where it has been made, untimely and unsatisfactorily.  This has led the Court to assume in some respects as with there being no reliable estimate of the current return to the wife from her business, which is solely within her control, that the information if produced would not assist her.

7. It is also noted that there is no current financial statement filed and the last statement filed was in 2010.

8. Balance sheets for the company A Pty Ltd were not produced in a timely manner and neither were the wife’s tax returns placed before the Court and the husband in like manner.

9. The obligation of parties to make proper disclosure is an important obligation for the purpose of doing justice between parties in these matters.  It should be clearly understood that the Full Court has approved of robust decision making of trial judges in reaching conclusions in these circumstances which do not favour the non-disclosing party.

10. The husband asserts that having been made redundant he has not been able to procure employment in a like job.  He says that such opportunities come but rarely and that there are a handful only in Australia at the level he was previously employed.  He is however reasonably confident that in the new year he will be able to procure employment carrying with it about $250,000 per year including salary and bonuses.

11. There is no child of this relationship nor is there any child which is the responsibility of either party to support or care for.

12. The husband has and, if his orders are granted, will continue to have the responsibility of paying outgoings of each of the properties at Town G and Suburb C.  His proposal that the Town G property not be sold at this time has sense to it since it is accepted that all it would do is provide him with a negative equity of about $250,000 with no capacity to pay it.  He hopes to be able to continue meeting the mortgage and other outgoings of the property with the assistance of the rental income.  If the husband’s orders are proposed he will have an interest in the Suburb C property jointly with his friend valued in the sum of about $550,000 which will be offset by his negative equity of $250,000 which would leave him in a position of net property assets of about $300,000 plus his superannuation.

1. The evidence is that the husband’s friend will pay $550,000 to him for a half share in the property when acquired from the wife.

2. He will under the orders to be made have a further obligation to pay the wife the sum of $600,000, which is inclusive of an amount for adjustment of the parties’ superannuation.

3. Given the husband’s unemployment and his evidence as to the funds presently available to him he will pay the amount of $550,000 forthwith and will be allowed time to pay the balance.

Conclusion on Section 90SF

1. The wife proposed that she should receive what she had or controlled at the date of the commencement of cohabitation and share with the husband any profit or loss made since then equally.  It had the appearance of an argument for restitution.  However, counsel for the wife readily conceded that that was not the basis on which the Court would make a decision.  It is the Court’s responsibility to make a decision that it considers just and equitable having considered the matters which it is required to consider.  It is not a mathematical or accounting exercise but of course in cases of relatively short cohabitation it is quite significant and appropriate to consider the financial circumstances of the relationship from beginning to end.  This is of course not to the detriment of a consideration of other matters but they have in such a case perhaps less weight.  The Court does not consider it necessary to make any adjustment pursuant to this section.

Overall division of assets

1. The above determination will see the wife receive approximately 74 per cent of the parties’ assets and the husband receive approximately 26 per cent and the husband and wife will each retain their superannuation.

Just and Equitable Section 90SM

1. The division of assets would see the wife receive $1,174,781 worth of nett assets plus her superannuation in the amount of $65,687 and the husband receive $408,566 worth of nett assets plus his superannuation in the amount of $198,202.

2. In the circumstances of this case I determine that result to be just and equitable.

Orders which should be made

1. I propose orders which will give effect to the following division.

2. The wife will receive:

Assets	($)
D Street, Suburb E, Victoria	1,465,000
Interest in A Pty Ltd, Business O and I Pty Ltd	350,000
National Australia Bank Account …68 (50 per cent share)	50
Vespa motor scooter	6,000
Addback:  Legal fees paid	17,619
Addback:  Proceeds of sale – boat Type Q	22,250
Total Assets	$1,860,919
Liabilities
National Australia Bank ,  Bank Bill secured against Suburb E property including break fee	1,153,015 71,800
ANZ Visa	10,000
Unpaid Legal Fees	49,573
Land Tax	1,750
Total Liabilities	$1,286,138
Sub-Total Assets	$574,781
Payment by the husband to the wife   (inclusive of amount for adjustment of superannuation)	$600,000
Net Assets – 74.196 per cent	$1,174,781
Plus Superannuation
Superannuation of wife	65,687
Total to be received by the wife	$1,240,468

1. The husband will receive:

Assets	($)
B Street, Suburb C, NSW (50 per cent share)	1,100,000
F Street, Town G, NSW	875,000
ANZ Account …12	28,000
ANZ Account 12 (jointly with Ms P – 50 per cent)	14,430
National Australia Bank  Account …68 (50 per cent share)	50
Half interest in Type H boat	15,000
Addback:  Legal fees paid	81,000
Addback:  Proceeds of sale – boat Type Q	20,086
Total Assets	$2,133,566

Liabilities
National Australia Bank   Mortgage secured against Town G property	1,092,000
Tax Liability	33,000
Sub-Total Liabilities	$1,125,000
Amount due to wife under these Orders from the husband (inclusive of amount for adjustment of superannuation)	$600,000
Total Liabilities	$1,725,000
Net Assets – 25.804 per cent	$408,566
Plus Superannuation
Husband’s Superannuation	198,202
Total to be Received by the Husband	$606,768

I certify that the preceding one-hundred and sixteen (116) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Fowler delivered on 19 December 2011.

Associate: 

Date:  19 December 2011