PUNT & PUNT
[2010] FamCA 1151
•15 December 2010
FAMILY COURT OF AUSTRALIA
| PUNT & PUNT | [2010] FamCA 1151 |
| FAMILY LAW – PROPERTY SETTLEMENT – Contributions – Form of orders |
| Family Law Act 1975 (Cth) ss 75 & 79 |
In the Marriage of Hickey (2003) 30 Fam LR 355
Mallett v Mallett (1984) 9 Fam LR 449
In the Marriage of Ferraro (1992) 16 Fam LR 1
In the Marriage of Shewring (1987) l2 Fam LR 139
In the Marriage of Lenehan (1987) 11 Fam LR 615
In the Marriage of Norbis (1986) 10 Fam LR 819; FLC 91-712
In the Marriage of Zyk (1995) 19 Fam LR 797
In the Marriage of Coghlan (2004) 33 Fam LR 414
In the Marriage of Pierce (1999) 24 Fam LR 377; FLC 92-844
In the Marriage of Robb (1994) 18 Fam LR 489
C and C [1998] FamCA 143
In the Marriage of Omacini (2005) 33 Fam LR 134
In the Marriage of DJM and JLM (1998) 23 Fam LR 396; (1998) FLC 92-816
| APPLICANT: | Ms Punt |
| RESPONDENT: | Mr Punt |
| FILE NUMBER: | SYC | 6871 | of | 2008 |
| DATE DELIVERED: | 15 December 2010 |
| PLACE DELIVERED: | Parramatta |
PLACE HEARD: | Sydney |
| JUDGMENT OF: | Justice Loughnan |
| HEARING DATES: | 6 & 7 December 2010 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr G. Gersbach |
SOLICITOR FOR THE APPLICANT: | Castle Lawyers |
| COUNSEL FOR THE RESPONDENT: | Mr D. Dura |
SOLICITOR FOR THE RESPONDENT: | Gonzalez & Co. Solicitors |
Orders
The husband and the wife shall each do all acts and things necessary to cause the real property known as and situated at G, New South Wales being the land in Folio Identifier … (“the G property”) to be sold by private treaty for the best price reasonably obtainable within 3 months, and for not less than the valuation price provided by HT, registered valuer.
If the G property is not sold by private treaty within 3 months the husband and the wife each do all acts and things necessary to cause it to be sold by public auction at an agreed reserve price, and failing agreement, at a price to be nominated by HT, registered valuer.
Pending completion of the sale of the G property the husband shall be entitled to receive all rental income received for that property and shall pay all rates, levies and other outgoings in relation to that property.
Immediately following the completion of the sale of the G property, the husband and the wife shall each do all acts and things necessary to cause the real property known as and situated at K, New South Wales, being the land in Folio Identifier … (“the K property”) to be sold by private treaty for the best price reasonably obtainable within 3 months and for not less than the valuation price provided by HT, registered valuer.
If the K property is not sold by private treaty within 3 months the husband and the wife each do all acts and things necessary to cause it to be sold by public auction at an agreed reserve price, and failing agreement, at a price to be nominated by HT, registered valuer.
Pending completion of the sale of the K property the wife shall be entitled to receive all rental income received for that property and pay all rates, levies and other outgoings in relation to the that property.
Pending completion of the sale of the G property the husband pay all money from time to time payable to the Commonwealth Bank (“the Bank”) in respect of mortgage investment loan …01 as and when they fall due for payment and indemnify the wife in relation to all liability in respect of that loan.
Upon completion of the sale of the G property, the parties shall cause the net proceeds of sale, after payment of all costs of sale, including estate agents and conveyancing fees, to be applied to Commonwealth Bank loan …01.
Pending completion of the sale of the K property the wife shall pay all money from time to time payable to Commonwealth Bank in respect of mortgage loan …08 and Veridian loan …04 as and when they fall due for payment and indemnify the husband in relation to all liability in respect of those loans.
Upon completion of the sale of the K property the husband and the wife each do all acts and things necessary to cause the whole of the net proceeds of sale, after repayment of the balance owing on mortgage investment loan …01 and mortgage loan …04, and all costs of the sale including estate agents and conveyancing fees, to be paid:
a) As to 42.5 per cent of the net proceeds to the wife; and
b) As to the balance, to the husband.
Forthwith upon completion of the sale of the K property, the husband the pay the sum of $86,298 to the wife.
In the event that the husband fails to comply with order 11 herein, the husband shall, within 3 months of the date of completion of the sale of K property:
a)cause the hire car number plates licence number … to be transferred into his sole name; and
b)cause the hire car number plates to be sold and from the net proceeds of sale, pay to the wife pay the sum of $86,298 or the net proceeds of sale, whichever is the lesser sum.
Pending the husband’s compliance with orders 11 and 12 herein, the husband is restrained from encumbering or borrowing money using the said hire car number plates as security.
In accordance with Section 90MT(1)(a) of the Family Law Act 1975, whenever a splittable payment becomes payable to the husband from his interest in the Wealth Personal Super and Pension Fund (“the Fund”), Ms Punt (“the wife”) is entitled to be paid an amount calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001 using a base amount of $100,000 (“the base amount”) and there shall be is a corresponding reduction in the entitlement the husband shall have had but for these Orders.
Order 14 shall have effect from the operative time which is 21 days after service of a copy of these orders on the trustee of the fund.
The solicitor for the husband shall cause a copy of these orders to be served on the trustee of the fund within 7 days from the date of these orders.
The husband and the wife are each otherwise declared to be the sole legal and beneficial owner of all personal property and entitlement including but not limited to superannuation, insurance policies, savings, chattels and personal effects currently in the possession or control of each of them respectively.
In the event either party refuses or neglects to execute any deed or instrument necessary to give effect to these Orders, the Registrar of the Court be and is hereby appointed pursuant to s 106A of the Act to execute such deed or instrument in the name of either party and to do all other acts and things necessary to give validity and operation to the said deed or instrument.
Leave is granted to either party to restore these proceedings before Justice Loughnan in relation to the form or implementation of these orders not later than 20 December 2010, on giving at least 48 hours notice to Justice Loughnan’s associate and the solicitor for the other party.
The operation of these orders, except for Order 16, is stayed for 7 days from the date hereof.
IT IS NOTED that publication of this judgment under the pseudonym Punt & Punt is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)
| FAMILY COURT OF AUSTRALIA AT SYDNEY |
FILE NUMBER: SYC 6871 OF 2008
| MS PUNT |
Applicant
And
| MR PUNT |
Respondent
REASONS FOR JUDGMENT
These are proceedings for property settlement. Mr and Ms Punt lived together for nearly 14 years. They have not been able to agree on an appropriate settlement of property.
The parties are divorced but for convenience I will refer to them as the husband and wife.
Applications
The wife seeks orders in terms of a Minute of Orders handed up at the conclusion of the oral evidence. She seeks:
1.That the Husband and the Wife each do all acts and things necessary to cause the real property known as and situated at [G] New South Wales being the land in Folio Identifier […] (“[G property]”) to be sold by private treaty for the best price reasonably obtainable within 3 months, and for not less than the valuation price provided by [HT], registered valuer.
2.If [G property] is not sold by private treaty within 3 months the Husband and the Wife each do all acts and things necessary to cause it to be sold by public auction at an agreed reserve price, and failing agreement, at a price to be nominated by [HT], registered valuer.
3.That pending completion of the sale of [G property] the Husband be entitled to receive all rental income received for [G property] and pay all rates, levies and other outgoings in relation to the that property.
4.That immediately following the completion of the sale of [G property] the Husband and the Wife each do all acts and things necessary to cause the real property known as and situated at [K] New South Wales being the land in Folio Identifier […] (“[K property]”) to be sold by private treaty for the best price reasonably obtainable within 3 months and for not less than the valuation price provided by [HT], registered valuer..
5.If [K property] is not sold by private treaty within 3 months the Husband and the Wife each do all acts and things necessary to cause it to be sold by public auction at an agreed reserve price, and failing agreement, at a price to be nominated by [HT], registered valuer.
6.That pending completion of the sale of [K property] the Wife be entitled to receive all rental income received for [K property] and pay all rates, levies and other outgoings in relation to the that property.
7.That pending completion of the sale of [G property] the Husband pay all moneys from time to time payable to the Commonwealth Bank (“the Bank”) in respect of mortgage investment loan […]01 as and when they fall due for payment and indemnify the Wife in relation to all liability in respect of that loan.
8.That upon completion of the sale of [G property], Commonwealth Bank loan […]01 be discharged to the extent allowable by the net proceeds of sale of the [G] property after payment of all costs of sale including estate agents and conveyancing fees.
9.That pending completion of the sale of [K property] the Wife pay all moneys from time to time payable to Commonwealth Bank in respect of mortgage loan […]08 and Veridian loan […]04 as and when they fall due for payment and indemnify the Husband in relation to all liability in respect of that loan.
10.That upon completion of the sale of [K property] the Husband and the Wife each do all acts and things necessary to cause the whole of the net proceeds of sale after repayment of the balance owing on mortgage investment loan […]01 and mortgage loan […]04, and all costs of the sale including estate agents and conveyancing fees to be paid to the Wife.
11.That simultaneously upon completion of the sale of [K property] the Husband pay the sum of one hundred thousand dollars ($100,000) to the Wife.
12.In the event that the husband fails to comply with order 11 herein, the husband within 28 days of the date of completion of the sale of [K property]:
a) cause the hire car number plates licence number […] to be transferred into his sole name; and
b) then transfer the whole of his right title and interest in the said number plates to the wife.
13.That pending the husband’s compliance with orders 11 and 12 herein, the husband be injuncted from encumbering or borrowing money using the said hire car number plates as security.
14.That in accordance with s.90MT(1)(a) of the Family Law Act, 1975 (“the Act”), whenever a splittable payment becomes payable in respect of the interest of the Husband [Mr Punt] in the Wealth Personal Super and Pension Fund (“the Fund”) the Wife [Ms Punt] is entitled to be paid an amount of one hundred thousand dollars ($100,000) (“the base amount”) and there is to be a corresponding reduction in the entitlement the Husband would have but for these Orders.
15.That the Husband and the Wife are each otherwise declared to be the sole legal and beneficial owner of all personal property and entitlement including but not limited to superannuation, insurance policies, savings, chattels and personal effects currently in the possession or control of each of them respectively.
16.That in the event either party refuses or neglects to execute any deed or instrument necessary to give effect to these Orders the Registrar of the Court be and is hereby appointed pursuant to s.106A of the Act to execute such deed or instrument in the name of either party and to do all other acts and things necessary to give validity and operation to the said deed or instrument.
The husband formally seeks orders in terms of a Minute of Orders handed up at the conclusion of the oral evidence. However, his counsel said that the husband would agree to the form of orders proposed on behalf of the wife, except for paragraphs 11, 12 & 13 and in relation to personalty, he seeks the return of 5 items from the K property.
By the Minute of Orders proposed on behalf of the husband, he seeks:
3.That the parties forthwith do all acts and things and sign all documents necessary to cause the property situate at and known as [G] to be listed for sale by private treaty and if not sold by private treaty within 3 months from the date of listing, then to be listed for sale by auction at the earliest possible date thereafter, at a price to be agreed on between the parties and failing such agreement at a price to be determined by the President of the Real Estate Institute of New South Wales (or any successor of it) or his/her nominee and to disburse the proceeds of the said sale in the following manner and priority:
(i)Payment of agent's commission and advertising expenses and legal expenses of the sale;
(ii)Discharge of the Mortgage to Commonwealth Bank secured over the said property;
(iii)Payment of costs incurred, if any, in relation to determination of value or selling price by the President of the Real Estate Institute of New South Wales or his/her nominee; and
(iv)The balance then remaining to the Wife
4.That as soon as contracts have exchanged for the sale of the [G] property as provided for in Order 1 above, the parties thereafter forthwith do all things and sign all documents necessary to cause the property situate at and known as [K] to be listed for sale by private treaty and if not sold by private treaty within 3 months from the date of listing, then to be listed for sale by auction at the earliest possible date thereafter, at a price to be agreed upon between the parties and failing such agreement at a price to be determined by the President of the Real Estate Institute of New South Wales (or any successor of it) or his/her nominee and to disburse the proceeds of the said sale in the following manner and priority:
(i)Payment of agent's commission and advertising expenses and legal expenses of the sale;
(ii)Discharge of the Mortgage to Commonwealth Bank secured over the said property;
(iii)Discharge of the Viridian Line of Credit secured over the said property;
(iv)Payment of costs incurred, if any, in relation to determination of value or selling price by the President of the Real Estate Institute of New South Wales or his/her nominee;
(v)Payment of any shortfall on monies owing on the property at [G] after the sale of that property; and
(vi)The balance then remaining to the wife.
5.That in the event that the payments to the Wife referred to in paragraphs 1(iv) and 2(vi) above do not amount to $100,000, then the husband shall pay to the Wife, within 3 months of the date of settlement of the sale of the latter property, the sum equivalent to 50% of difference between the sum of $100,000 and the amount paid to the wife in accordance with paragraphs 1(iv) and 2(vi) above.
6.That in accordance with Section 90MT(1)(a) of the Family Law Act 1975, whenever a splittable payment becomes payable to [the husband] from his interest in the Wealth Personal Super and Pension Fund (“the Fund”), [Ms Punt] (“the Wife”) is entitled to be paid an amount of $100,000 (“the base amount”) and there is a corresponding reduction in the entitlement [the husband] have had but for these Orders.
7.The above sum of $100,000.00 is to be deducted from the existing Member Account of the Husband with the Fund.
8.The Trustee of the Fund shall pay into a corresponding Fund nominated by the wife the sum of $100,000.00.
9.That Orders 4 to 6 have effect from the operative time.
10.The operative time for this Order is within 28 days from the making of these orders.
11.That as between the Husband and Wife, and subject to the above Orders, the Husband and Wife shall each respectively retain all interest in and entitlement to:
a.All personal property now in his/her respective possession or control;
b.All shares, debentures, units in unit trusts, bank, building society or credit union accounts standing in his/her sole name respectively; and
c.All interests in life insurance policies and superannuation funds standing in his/her sole name respectively.
12.That within 14 days from the date of these Orders the wife make available for collection by the husband the following items currently located at the property at [K]:-
a.Oil seascape painting;
b.Water colour Australiana painting;
c.Glass dome clock;
d.Santa Maria sailing ship in glass blown bottle; and
e.Didjeridoo.
13.That pending the sale of the [G] property, the husband shall be responsible for all outgoings associated with the said property including but not limited to the mortgage and rates as when they fall due.
14.That pending the sale of the [K] property, the wife shall be responsible for all outgoings associated with the said property including but not limited to the mortgage, Viridian Line of Credit and rates as when they fall due.
15.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.
16.That in the event that either party fails, refuses and/or neglects to sign any document necessary to give effect to these Orders, then the Registrar of the Family Law Act is authorised pursuant to s106A of the Family Law Act to execute any document on behalf of that party.
Documents read
The wife relies on:
Wife’s Amended Application filed 29 April 2010.
Wife Amended Financial Statement filed 29 April 2010.
Wife’s Amended Balance Sheet filed 22 July 2010.
Wife’s Financial Questionnaire filed 29 April 2010.
Wife’s Undertaking as to Disclosure filed 29 April 2010.
Wife’s Affidavit filed 25 April 2010.
The husband relies on:
Response filed 4 February 2009.
Affidavit of the Husband filed 20 May 2010.
Financial Statement of the Husband filed 4 February 2010.
Issues for determination
The parties’ dispute is of narrow compass. The following issues were identified by counsel:
·The extent by which the husband’s contributions exceeded those of the wife;
·The proportions in which the parties settlement should be expressed in superannuation and non-superannuation assets; and
·The form of the orders;
Short History
As at the date of the hearing the wife and husband were 49 and 51 years of age, respectively. They started living together on about 28 March 1992, were married in 1998 and separated on 14 January 2006. The parties’ divorce was finalised on 30 October 2008.
Children
There are no children of the marriage:
Background Facts
The parties started living together on 27 March 1992.
The husband and wife each have two children from previous relationships. The husband’s children are two daughters, who are now aged 21 years and 19 years of age. The wife’s children are two daughters, who are aged 28 years and 25 years of age.
At the commencement of cohabitation, the husband spent time with his children on weekends and during school holidays. The wife spent time with her children on weekends and during school holidays.
At the date of cohabitation, the parties rented a home. At that time, the husband was working full time with M Company with an income of approximately $57,000 per annum. The wife was not in paid employment.
The husband retained an interest in a set of hire car plates as a result of his property settlement with his first wife. The plates were purchased in 1988 for approximately $100,000. In their property settlement which was the subject of orders made in the Local Court, the husband’s first wife agreed to transfer her interest to him. Those orders have not been implemented but the husband concedes that he is the beneficial owner of the plates. The income received from the rental of the hire car plates has been used toward the expenses for his children.
In August 1992, the husband ceased working at M Company. In October 1992, the husband commenced employment with P Company with an income of approximately $40,000 per annum, plus the use of a motor vehicle.
In March 1993, the parties moved to K, NSW and rented a property for approximately two years.
From March 1993 to June 1993, the wife obtained part-time employment as a Salesperson, earning a total of $3,000 gross, during that period.
From August 1993 to 1995, the wife was employed as a Salesperson, earning approximately $23,000 per annum.
In September 1994, the husband commenced employment with his current employer, T Company, at an income of approximately $50,000 per annum, plus the use of a motor vehicle.
The husband says that in around February 1995, the parties purchased a property at K for approximately $165,000. The wife says this purchase took place in October 1994. The purchase was funded by a mortgage with the Commonwealth Bank for $150,000. The deposit was provided equally by the husband and his parents. The wife says that the husband’s mother contributed $13,000 for the deposit which was later repaid by the parties. The husband says the wife repaid his parents $7,500 from her property settlement.
From 1995 to 2001, the wife worked as a Salesperson for another company earning approximately $28,000 in the first year, increasing to approximately $34,000 per annum in the final year.
The parties were married in 1998.
Between 2001 and 2003, the wife held several jobs for other companies continuously, earning between $24,000 and $53,000 per annum.
From 2003 until recently the wife was employed as a Salesperson, earning $55,000 per annum.
For about 6 years of the marriage the husband had an affair with a work colleague.
In 2003, the parties took out a Viridian line of credit with the Commonwealth Bank in the sum of $75,000.
The parties renovated the K property, at a cost of approximately $40,000. They used $15,000 from the husband’s savings and borrowed an additional $25,000. They also renovated the kitchen at a cost of $7,500, paid for by the wife.
In May 2004, the parties purchased a property at G for approximately $440,000. The property was purchased as tenants in common with the wife holding a 1% share and the husband holding a 99% share. The parties borrowed the entire purchase price, plus an amount for the costs associated with the purchase, from the Commonwealth Bank. The loan was taken out on an interest-only basis for 5 years.
In 2004 and 2005 the husband lost about $40,000 in share scams. He did not tell the wife that he had bought shares or that the money was lost.
In March 2005, the husband bought a 10% interest in a Riviera cruising vessel for $30,000. The vessel was sold after separation; the wife says that the husband has kept the proceeds.
On 14 January 2006, the parties separated. The wife has continued to reside at the K property since separation. The husband moved into the G property upon separation. He later left the property and rented it out.
The parties continued to apply their wages to the line of credit until approximately August 2006.
The wife commenced living with her new partner, Mr Y, at the K property in September 2006.
In May 2008 the husband sold his 10% interest in a Riviera boat and received $7,281.80.
The parties were divorced on 30 October 2008.
In late 2008 or early 2009 the wife acquired a 10% interest in a horse. She has spent $6,000 on acquiring the horse and on fees and has received $1,500 in winnings. Thus the horse has cost $4,500.
The husband currently holds the position with T Company with a salary package which he estimates at about $150,000 per annum. As at the date of the hearing the G property is not tenanted.
The wife was made redundant on 31 May 2010. She was paid about $6,000. She has applied for sales positions and has not yet been successful.
Credit and Submissions
The evidence of the witnesses
The only witnesses called for cross-examination were the parties. There are no significant factual disputes and therefore credit findings have no relevance.
Submissions
The written submissions on behalf of the wife are:
ASSETS AND LIABILITIES
ASSETS Ownership Description Asserted Value Source of Information 1. Joint [K property] 390,000 Valuation 2. Joint [G] home unit 295,000 Valuation 3. Wife NAB A/c 5,000 W FS * 4. Wife IAG shares 750 W FS * 5. Husband Bank accounts 33,650 H FS * 6. Husband Hire car number plates 100,000 W FS * 7. Wife Other chattels 33,000 W FS * 8. Wife 2005 Holden vehicle 28,000 W FS * 9. Husband 2007 BMW 60,000 H FS * 10. Husband Other chattels ? H FS * Total ~$945,400
SUPERANNUATION Ownership Description Asserted Value Source of Information 11. Wife Colonial First State 32,600 W FS * 12. Wife AMP 17,000 W FS * 13. Husband Various ~360,000 * Total ~$409,600
ADD-BACKS Ownership Description Asserted Value Source of Information 14. Husband Prepaid legal fees * Total TOTAL ASSETS, ADD-BACKS & SUPER $~1,335,000
LIABILITIES Ownership Description Asserted Value Source of Information 14. Joint CBA home mortgage ([K property]) 63,300 W FS * 15. Joint CBA mortgage ([G property]) 436,700 W FS * 16. Joint CBA line of credit loan 74,200 W FS * 17. Wife CBA credit card 3,500 W FS * 18. Husband CBA credit cards 18,491 H FS * 19. Husband Car lease 65,000 H FS * Total $661,191
NET ASSET POOL ~$693,809
* Denotes items in respect of which there is no valuation or independent evidence as to value
CONTRIBUTIONS PURSUANT TO SECTION 79(1) – (4)
Section 79(4) (a)
Financial contributions made directly or indirectly by or on behalf of a party or a child of the marriage, to the acquisition, conservation or improvement of any property of the parties or any of them.
·At the commencement of the relationship the Wife contributed $29,500 and personal effects.
·The Husband asserts he contributed a half interest in a set of hire car number plates worth $50,000 (but he later became entitled to the other half interest), $10,000 in superannuation and about $18,000 in savings.
·The Husband and the Wife each generally contributed their income during cohabitation towards the acquisition conservation and improvement of their joint and individual property, and to their living expenses.
·Both parties each applied some of their income to the welfare of their children from their prior relationships.
·The Wife contends that the Husband applied some part of his income towards another relationship that he simultaneously pursued over a period of about 6 years.
·Following separation the Husband has borrowed further and increased the line of credit loan liability while allegedly diverting his income into his superannuation and leasing an expensive vehicle.
Section 79(4) (b)
The contribution, (other than financial contributions) made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any property of the parties to the marriage.
·The Wife made the majority of non financial contributions to the conservation and improvement of the [K] home throughout the period of cohabitation.
Section 79(4) (c)
The contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage and any of the children of the marriage, including any contribution made in the capacities of homemaker and parent.
·The Wife was solely responsible for the cooking, cleaning, washing, ironing and grocery shopping for the benefit of both parties throughout the period of cohabitation.
·The Husband inevitably made some non financial contributions to the welfare of the parties during the marriage but his non financial contributions were minimal compared to those of the Wife.
·Each party contributed to some degree towards the welfare of the children of the other who did not live with the parties but who visited and stayed with the parties from time to time.
Section 79(4) (d)
The effect of any proposed order upon the earning capacity of each party to the marriage.
·The Orders proposed by the Wife would have no significant impact on the earning capacity of the Husband or the Wife.
·The Orders proposed by the Husband provide for the home where the Wife remains living to be sold. The need for the Wife to relocate would materially impact on the capacity of the Wife to support herself.
·The Husband asserts he has been making extra contributions from his income to superannuation since separation. From the commencement of cohabitation when he had only $10,000 in superannuation the Husband has now accumulated superannuation worth about $360,000 which he seeks to retain.
Section 79(4) (e)
The matters referred to in subsection 75(2) so far as they are relevant.
·These matters, so far as they are relevant, they are referred to below in relation to Subsection 75(2).
Section 79(4) (f)
Any order made under this Act affecting a party to the marriage or a child of the marriage.
·Not relevant
Section 79(4) (g)
Any Child Support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future for a child of the marriage.
·Not relevant
The Wife submits that her contributions to the asset pool up to the date of hearing should be assessed to be at least 50%.
6.3 FACTORS TO BE CONSIDERED PURSUANT TO SECTION 75(2)
Section 75(2) (a)
The age and state of health of each of the parties;
·The Husband is aged 51 and in good health.
·The Wife is aged 49 years and in good health.
Section 75(2) (b)
The income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment;
·The Husband:
ohas a demonstrated a high earning capacity of about $3,200 per week or $166,000 per annum received by way of salary and benefits from his employment and income from the rent of the hire car number plates;
ohas accumulated substantial superannuation during the relationship; and
ois in good physical and mental health, and capable of continuing his current employment.
·The Wife:
oWas earning about $1,000 per week or $52,000 per annum by way of salary but has recently been made redundant;
oWhile seeking work, her prospects of gainful employment and unknown.
Section 75(2) (c)
Whether either party has the care or control of a child of the marriage who has not attained the age of 18 years;
·Not relevant.
Section 75(2) (d)
Commitments of each of the parties that are necessary to enable the party to support;
i. himself or herself; and
ii.a child or another person that the party has a duty to maintain;
·Not relevant
·Neither party has any responsibility to maintain any other person.
Section 75(2) (e)
The responsibilities of either party to support any other person;
·Neither party has any duty to support any other person, except to the extent that they each might be held to have a liability to the other to the extent of their reasonable capacity if the other were unable to support himself or herself.
·There current circumstances do warrant either party having a liability to support the other.
Section 75(2) (f)
Subject to subsection (3) the eligibility of either party for a pension, allowance or benefit under –
i.any law of the Commonwealth, of a State or Territory or of another country; or
ii.any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia, and the rate of any such pension, allowance or benefit being paid to either party;
·Neither party is in receipt of any pension allowance or benefit.
·Both parties are members of superannuation funds. The Wife’s superannuation interests are worth about $50,000. The Husband’s superannuation interests are worth about $360,000.
·Accordingly there is a substantial imbalance in their superannuation interests.
Section 75(2) (g)
Where the parties have separated or the marriage has been dissolved, a standard of living that in all the circumstances is reasonable;
·It is appropriate that the parties live at a similar standard of living.
·Given the imbalance in their incomes and property interests a significant adjustment in favour of the Wife is warranted.
Section 75(2) (h)
The extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income;
·Not relevant.
Section 75(2) (j)
The extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party;
·Both parties have contributed to the income, earning capacity, property and financial resources of the other to some degree.
Section 75(2) (k)
The duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration.
·This is a marriage of over about 10 years with a period of about 14 years cohabitation.
Section 75(2) (l)
The need to protect a party who wishes to continue that party’s role as a parent;
·Not relevant.
Section 75(2) (m)
If either party is cohabiting with another person – the financial circumstances relating to the cohabitation;
·Not relevant, except to the extent that the Wife has now commenced cohabitation with another person who has an income of about $1,100 per week (about $57,000 per annum) but the future prospects of that relationship are relatively unknown.
Section 75(2) (n)
The terms of any order made or proposed to be made under Section 79 in relation to the property of the parties;
·The Orders proposed by the Wife are the most appropriate.
Section 75(2) (o)
Any fact or circumstance which, in the opinion of the Court, the justice of the case requires to be taken into account;
·Since separation the Husband has solely operated and utilized the investment property and the parties’ joint investment mortgage and line-of-credit loans at his discretion. He has retained all income from the hire car number plates and minimized his income available to repay the loans to invest in his superannuation.
·The Husband has failed to provide information as to his current financial circumstances.
·The Wife should not suffer the negative consequences of the Husband’s unwise post separation investment decisions or his failure to provide full and frank disclosure.
The Wife submits that the factors to be considered under subsection 75(2) weigh in support of a small adjustment in her favour.
6.4 OVERALL OUTCOME
The Wife submits that overall the matters to be considered should result in her receiving about 55% of the overall net asset pool including superannuation, and that it would be just and equitable for orders to be made that would give that result.
The written submissions on behalf of the husband are:
6. Assessment of Contributions
The husband asserts that he made the following initial contributions to the relationship:-
o 50% interest in hire car plates (these plates were the subject of Orders made between the husband and [former wife] and still exist in their same form as at the date of hearing);
o approximately $18,000 in savings;
o Superannuation interest of approximately $10,000; and
o An interest in a property at [D], subject to a mortgage (the husband’s interest in this property was the subject of Orders and transferred to [his former wife]).
The husband asserts the wife entered the relationship with no real assets of any significance.
During the course of the relationship the husband earned significantly more income than the wife and contributed his income to the parties’ expenses.
During the relationship the husband made additional contributions to his Superannuation fund.
Following separation the following has occurred:-
o The husband has maintained all repayments and expenses associated with the [G] property. At times the husband resided in the property and subsequent to his vacating the property the husband met the shortfall on the mortgage. During periods when the property was not tenanted, the husband was responsible for the entire mortgage repayments.
o The wife has had the benefit of occupation of the [K] property whilst maintaining the repayments and outgoings associated with that property.
o The husband has salary sacrificed and significantly increased his Superannuation entitlements
o The husband has maintained the interest repayments on a credit card liability of the parties in the amount of $15,000 incurred prior to the parties’ separation
7. Assessment of relevant s75(2) factors
The husband asserts that the following are relevant in the determination of any assessment for s75(2) factors:-
o The husband earns more than the wife however the wife has demonstrated a capacity to earn at least $55,000 per annum;
o The husband has worked for the same employer since approximately 1995. In light of the husband’s age and lack of formal and/or current academic qualifications, it is unlikely that the husband would have a capacity to earn the same income in the event that was not able to continue working with his current employer
o The wife is in a relationship and financial circumstances of that relationship are not known
o The husband is not in another relationship
The husband asserts that there ought to be no further adjustment for s75(2) factors
The approach in proceedings under section 79
The case law reveals that there is a permissible approach to the determination of an application brought pursuant to the provisions of s 79. That approach involves four inter-related steps. First, I am to make findings as to the identity and value of the property, liabilities and financial resources of the parties at the date of the hearing. Second, I should identify and assess the contributions of the parties within the meaning of s 79(4)(a), (b) and (c) and determine the contribution based entitlements of the parties expressed as a percentage of the net value of the property of the parties. Third, I should identify and assess the relevant matters referred to in s 79(4)(d), (e), (f) and (g), (the other factors) including, because of s 79(4)(e), the matters referred to in s 75(2) so far as they are relevant and determine the adjustment (if any) that should be made to the contribution based entitlements of the parties established at step two. Fourth, I should consider the effect of those findings and determination and resolve what order is just and equitable in all the circumstances of the case.[1]
[1] This summary of the effect of the authorities is paraphrased from the comments of the Full Court in In the Marriage of Hickey (2003) 30 Fam LR 355 at 370.
The property of the parties at the date of the hearing
The Court is required to make findings as to the property of the parties and the value of that property.
There have been circumstances in other cases whereby assets were included in the list for division although they no longer existed. Similarly, debts that exist at the date of the hearing have been excluded from the relevant list of liabilities. In In the Marriage of Omacini (2005) 33 Fam LR 134 the Full Court noted:
[30] To date, three clear categories of cases have emerged where the court has determined that it is appropriate to notionally add back to the pool of assets, that is, assets that no longer exist. They are:
(a)Where the parties have expended money on legal fees. In In the Marriage of DJM and JLM (1998) 23 Fam LR 396; (1998) FLC 92-816; [1998] FamCA 97 the Full Court said at [11.6]:
[11.6] For reasons set out in Farnell, s 117 provides that each party to proceedings under the Family Law Act shall bear their own costs unless the Court otherwise orders. Failing to add back monies expended by parties on costs frequently has the effect of defeating the policy of s 117 by permitting the pool of available assets for distribution between the parties to be diminished by any monies that either of the parties have managed to spend on their costs up to the date of trial. We are of the view that the normal approach ought be to add costs already paid back into the pool. Whilst there may be cases where that approach is inappropriate, the reasons why it is not taken ought normally be spelt out.
(b)Where there has been a premature distribution of matrimonial assets. In In the Marriage of Townsend (1994) 18 Fam LR 505; (1995) FLC 92-569 Nicholson CJ as he then was with whom Fogarty and Jordan JJ agreed, said at Fam LR 509; FLC 81,654:
In my view, what occurred in this case, as I said during the course of argument was, in fact, a premature distribution of a proportion of the matrimonial assets. What the husband did was to distribute to himself an asset in which the wife had a legitimate interest. In such circumstances I consider that it would be unjust in the extreme to simply treat such conduct by the husband as a matter to which regard should be had under section 75(2). It seems to me that the husband has had the benefit of that money. Had he retained, for example, the taxi licence instead of selling it, that would have been brought into account as an item of property which would have been dealt with in the same way as the remaining items of property in this case. Accordingly, I am of the view that the correct way in which to deal with the husband’s receipt of those moneys is to bring them into the pool of assets on a notional basis and make a distribution accordingly.
(c)In the circumstances outlined by Baker J in In the Marriage of Kowaliw (1981) 7 Fam LN N13; (1981) FLC 91-092 at FLC 76,644:
As a statement of general principle. I am firmly of the view that financial losses incurred by parties or either of them in the course of a marriage whether such losses result from a joint or several liability, should be shared by them (although not necessarily equally) except in the following circumstances:
(a) where one of the parties has embarked upon a course of conduct designed to reduce or minimise the effective value or worth of matrimonial assets, or
(b) where one of the parties has acted recklessly, negligently or wantonly with matrimonial assets, the overall effect of which has reduced or minimised their value.
Conduct of the kind referred to in para (a) and (b) above having economic consequences is clearly in my view relevant under s 75(2)(o) to applications for settlement of property instituted under the provisions of s 79.
That is not to say that the Court should struggle to find bases for add-backs. Despite a recent fashion in the presentation of property cases, the Court has consistently noted that add-backs or notional assets are not the norm.[2] In an unreported decision the Full Court comprising Nicholson CJ, Ellis & Kay JJ in C and C [1998] FamCA 143 said:
“Whilst not seeking to place a fetter upon the exercise of discretion of a trial judge in individual cases, it seems to us that the concept of adding monies reasonably disposed of back into the pool ought to be the exception rather than the rule. The parties are entitled to reasonably conduct their affairs post-separation in a manner that is consistent with properly getting on with their lives.”
[2] In the Marriage of DJM and JLM above.
Here the parties have settled a Balance Sheet. The identity and value of the all items are agreed. The only issue for me is as to the treatment of paid legal fees. The husband has paid $7,018 from his earnings. The wife has paid $37,500 from borrowings. The latter fact came to light in response to a question I asked in final submissions. The costs advice document[3] provided to the wife is defective in that it does not identify the source of the funds used to pay those costs. I ordered that an amended costs advice document be provided to my chambers and to the solicitor for the husband. Thus the wife’s evidence would be that she has a debt corresponding to her paid costs, being a debt which is not brought to account in the Balance Sheet. On that basis, and for the reasons discussed in In the Marriage of DJM and JLM (above), I will read back the costs paid by the husband but not the costs paid by the wife. I foreshadowed that approach in the course of submissions without complaint on behalf of the husband.
[3] Exhibit 2
On the basis of the parties’ agreement I find that the assets of the parties for the purposes of these proceedings are:
Non Superannuation Assets
Value
K property
$390,000
G property
$295,000
Wife’s NAB account
$5,000
Wife’s IAG shares
$750
Wife’s jewellery
$8,000
Wife’s motor vehicle – Holden HSV
$36,000
Wife’s household contents
$25,000
Hire car plates – husband
$100,000
Husband’s savings
$38,850
Husband’s motor vehicle
$115,000
Husband’s household contents
$10,000
Add-back paid legal fees – husband
$7,018
Total
$1,030,618.00
Superannuation Assets
Value
Wealth Personal Super and Pension Fund[4] @ 30/06/2010 – husband’s superannuation
$414,000
Wife’s superannuation – Colonial First State
$32,600
Wife’s superannuation – AMP
$17,000
Total
$463,600.00
[4] In the course of final submissions I was told by the husband’s counsel that the reference to the husband’s superannuation fund in the Minute of Orders sought on behalf of the wife is correct.
Liabilities:
The liabilities are agreed to be:
Liabilities
Amount
Mortgage on K property
$63,300
Mortgage on G property
$436,700
Veridian line of credit
$74,200
Wife’s car lease
$36,000
Wife’s credit cards
$4,800
Husband’s credit cards
$18,481
Husband’s motor vehicle lease
$115,000
$748,481.00
The net assets have a value of $745,737 ($1,030,618 + $463,600 - $748,481). Of that, $463,600 is in the form of superannuation.
Financial Resources
The parties disclose no financial resources.
Contributions
The obligations placed on the Court by s 79 call for an assessment of the respective contributions of the parties. The manner of assessing contributions has been the subject of previous decisions. The contributions of a parent and homemaker are to be assessed, not in any merely token way, but in terms of their true worth to the building up of the assets.[5] There are said to be risks in taking an overly technical approach to the assessment of the respective contributions of the parties in that the Court can become involved in questions of the quality of contributions which go far beyond the real world expectations of parties.[6]
[5] Mallett v Mallett (1984) 9 Fam LR 449; In the Marriage of Ferraro (1992) 16 Fam LR 1.
[6] In the Marriage of Shewring (1987) l2 Fam LR 139.
A separate pool for superannuation
As to whether the Court should assess contributions asset by asset or globally, the authorities have it that the latter approach is generally preferred, in appropriate circumstances either approach is permissible and sometimes the asset by asset approach is best. See In the Marriage of Lenehan (1987) 11 Fam LR 615; In the Marriage of Norbis (1986) 10 Fam LR 819; FLC 91-712; In the Marriage of Zyk (1995) 19 Fam LR 797.
In the Marriage of Coghlan (2004) 33 Fam LR 414 the Full Court opined that it is preferable for contributions to superannuation to be assessed separately from those made to other assets. However the Court allowed that superannuation may be included in the list of property drawn up as “the first step” in the determination of proceedings under s 79, whether or not a splitting order is sought in those proceedings. The Full Court suggests that that:
“… approach could be adopted where the parties agree that it should be adopted, or where the court is satisfied that the superannuation interest is indeed property within the meaning of the definition of property contained in s 4(1), or if the interest is not within that definition, but is of relatively small value in the context of the value of the other assets in the case, or there are features about the interest which leads the court to conclude that this would be an appropriate approach.”
Here the parties have adopted a global approach to the assessment of contributions. On that basis, I too will employ a global approach.
Section 79(4)(a) Contributions
At the commencement of cohabitation the wife had about $29,500 and personal effects. The husband had an interest in a set of hire car plates. That interest had and has a value of $100,000. As to the use to which that asset was put,[7] at no time were the plates brought into the marriage. There is no evidence of any expenses associated with the plates being paid out. The income from the plates was diverted from the purposes of the marriage. The plates have remained in the same form as they had at the start of cohabitation. The husband also had about $10,000 in superannuation and between $10,000 and $20,000 in savings.
[7] In the Marriage of Pierce (1999) 24 Fam LR 377; FLC 92-844.
Each of the parties had paid employment during the marriage. The wife was out of work for about a year at the start of the marriage. The husband had some months where he too was out of work. A concession is made in the wife’s Case Outline to the effect that the parties generally contributed their income towards the acquisition, conservation and improvement of their joint and individual property, and to their living expenses. However, the parties each applied some of their income to the welfare of their children from their prior relationships. Indeed it is the husband’s case that he diverted all of the taxi plate income to the support of his children. The wife sought to make a case that the husband applied some part of his income towards another relationship that he simultaneously pursued over a period of about 6 years. She was not able to make that case.
Since separation the husband’s superannuation interest has increased considerably. In May 2006 it stood at $237,000 and it now stands at $414,000. Some of that increase has been generated by additional contributions made by the husband through salary sacrifice.
Section 79(4)(b) contributions
Each of the parties had the use of one of the properties after separation. In that way, the parties have made a non-financial contribution to each other.
The wife and her fiancé have lived in the K property and continue to do so. The husband lived in the G property until about May 2008. Thereafter he rented the property, although the property was not tenanted at the time of the hearing.
The wife paid the outgoings on the K property and serviced the loans secured on that property. The husband paid the outgoings on the G property. For the first 5 years of the mortgage on the G property the repayments were made on an interest only basis. At some time in the last couple of years, that arrangement concluded and the husband thereafter paid both principal and interest. Since May 2008 the husband also had the benefit of modest rent on the property. The mortgage secured on the G property is greater than those secured on the K property by a factor of three. In summary, the wife has had a greater benefit, at a lesser cost than those experienced by the husband.
Otherwise, there is no evidence that any non-financial contributions were made by the parties.
Section 79(4)(c) contributions
This provision deals with contributions to the family including contributions in the form of homemaker contributions and contributions to children of the marriage.
Here, there are no children of the marriage. Each party contributed to some degree towards the welfare of the children of the other who did not live with the parties but who visited and stayed with the parties from time to time. Those contributions cannot be recognised here as the children in question were not the children of this marriage. They could be taken into account under section 75(2)(o).[8]
[8] In the Marriage of Robb (1994)18 Fam LR 489.
The unchallenged evidence of the wife is that she was solely responsible for the cooking, cleaning, washing, ironing and grocery shopping for the benefit of both parties throughout the period of cohabitation.
The unchallenged evidence of the husband is that throughout the marriage he maintained the properties they purchased, undertaking such tasks as maintaining the garden and premises.
Conclusion on Contribution
It is submitted for the husband that contributions favoured him in the proportions 65 per cent compared to 35 per cent by the wife.
The wife’s case is more difficult to divine. In the Case Outline document prepared on her behalf the submission is that the wife’s contributions were at least 50%. However, in final submissions I was told that the wife sought 45% of the net assets and that no adjustments were sought under section 75(2).
The parties were together for nearly 14 years. Contributions have continued since separation. The husband brought significantly more assets into the marriage than the wife (by $100,000); his income was greater than hers during the marriage; and since separation, substantially through his contributions, his superannuation interests increased by nearly $180,000. The wife had the better use of the parties’ housing resources since separation. There are no children of the marriage and the entirety of the evidence about the parties’ homemaker contributions is contained in two sentences. At the margins, there are issues that would diminish the impact of the husband’s contributions. For example, he diverted all of the available income from the taxi plates from the purposes of the marriage. He allowed one secured debt to increase. Nevertheless, it follows that the husband’s contributions exceeded those of the wife. The imbalance of initial contributions and the increase in superannuation must be seen in the context of a net property pool of only $745,737.
In a case such as this, where there is little focus on non-financial contributions, no children of the marriage and little evidence about homemaker contributions, attention naturally turns to the parties’ respective financial contributions. However, that does not mean the task of assessing contributions is a mathematical one. In relation to the effect of initial contributions I am to take account of the valuable contributions subsequently made by both parties during 14 years of cohabitation and since. In relation to the increase in the husband’s superannuation interest, there is the impact of the market on the notional assets of the fund and the fact that the interest does not represent cash or the equivalent of cash.
In my view, the proper assessment is that the husband’s contributions were 57.5% compared to 42.5% by the wife. In the context of this case, that would mean a difference between the parties of about $120,000.
The other matters in Section 79
Neither of the parties seeks an adjustment for the other matters referred to in section 79(4). I will therefore deal briefly with those matters identified in the legislation:
Section 79(4) (d)
Pursuant to s 79(4)(d) I am required to take into account the effect of any proposed orders on the earning capacities of the parties. There is no evidence and no submissions were made about this.
Section 79(4)(e) - Section 75(2) Factors
The relevant matters in s 75(2) would seem to be paragraphs (b), (m) and (o).
(a) the age and state of health of each of the parties;
First, as to the age and state of health of each of the parties. The husband is 51 years of age and the wife is 49 years of age. There is no evidence about the health of the parties.
(b) the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment;
As at April 2010, the wife received $1,057.69 per week by way of a salary. On 31 May 2010 she was made redundant and has no income.
She lives with her fiancée, Mr Y, who earns about $80,000 per annum. The wife understands that Mr Y pays child support for his 9 year old son and that he owns a property which is subject to a mortgage and that the property is currently rented out. As at April 2010, Mr Y contributed $280 per week for food, $75 per week for utilities and $50 per week in house repairs. The wife’s expenditure is as follows:
Expenditure
Amount
Income tax
$219.00
Superannuation
$95.00
Mortgage payments – Commonwealth Bank
$282.00
Rates
$25.00
Mortgage payments on the G property – Commonwealth Bank
$335.00
ING Life Insurance
$24.40
Motor Vehicle insurance – AAMI
$25.70
Health Insurance - HCF
$31.50
Home and contents insurance NRMA & Commonwealth Building Insurance
$16.10
Motor vehicle registration – Holden
$15.80
Car lease – GMH Finance
$205.20
Visa credit card payments – CBA
$125.00
Visa credit card payments - NAB
$125.00
Total
$1524.70
The above figures come from the wife’s April 2010 Financial Statement. Since then she lost her job. There is no evidence of it, but it may be that as at the date of the hearing, some of those payments are not being made or that they are being made by Mr Y.
The wife has applied and continues to apply for jobs in sales but has yet to secure a new position.
The husband receives $3,051 each week, made up of his salary with T Company of $1,790 per week, $167 by way of income from Hire Car plates, car lease payments of $460 and superannuation contributions of $634 per week. The husband lives alone.
The husband’s expenditure is as follows:
Expenditure
Amount
Income Tax
$461.00
Superannuation contributions
$634.00
Rent
$400.00
Mortgage Payments on the G property – Commonwealth Bank
$715.00
Rates
$63.00
Life Insurance Premiums - MLC
$14.00
Comprehensive motor vehicle insurance – AAMI
$33.00
Motor Vehicle registration – BMW
$12.00
Motor Vehicle lease payments – Audi
$460.00
Visa Gold credit card payments – Commonwealth Bank
$75.00
Visa credit card payments – Commonwealth Bank
$100.00
Support payments – children from previous marriage
$100.00
All other expenditure
$250.00
Total
$3317.00
It is not suggested that the husband is not exercising his earning capacity.
(c) whether either party has the care or control of a child of the marriage who has not attained the age of 18 years;
There are no children of the marriage.
(d)commitments of each of the parties that are necessary to enable the party to support:
(i) himself or herself; and
(ii) a child or another person that the party has a duty to maintain;
(e) the responsibilities of either party to support any other person;
The parties support themselves. The husband provides financial support to at least one of his daughters.
I have set out the detail of those commitments above.
(f) subject to subsection (3), the eligibility of either party for a pension, allowance or benefit under:
any law of the Commonwealth, of a State or Territory or of another country; or
any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia, and the rate of any such pension, allowance or benefit being paid to either party;
Each of the parties has interests in a superannuation fund.
(g) where the parties have separated or the marriage has been dissolved, a standard of living that in all the circumstances is reasonable;
There is little evidence about the standard of living during the marriage. The wife had a trip to England. The husband bought a share in a boat.
(h) the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income;
There is no evidence that either of the parties wish to engage in further study or to establish a new business.
(ha) the effect of any proposed order on the ability of a creditor of a party to recover the creditor’s debt, so far as that effect is relevant;
This is not relevant.
(j) the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party;
This is not relevant.
(k) the duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration;
There is no evidence of any such effect.
(l) the need to protect a party who wishes to continue that party's role as a parent;
The parties’ children are over 18 years of age.
(m) if either party is cohabiting with another person — the financial circumstances relating to the cohabitation;
The husband lives alone.
The wife lives in the K property with her fiancé, Mr Y. I have set out above the payments made by Mr Y.
(n) the terms of any order made or proposed to be made under section 79 in relation to the property of the parties;
(na) any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage; and
There is no Child Support Assessment.
(o) any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account;
Each party contributed to some degree towards the welfare of the children of the other who did not live with the parties but who visited and stayed with the parties from time to time. Those contributions can be recognised under this provision.[9] There is little detail about this issue and no sensible findings can be made.
[9] In the Marriage of Robb (1994)18 Fam LR 489.
Otherwise, nothing comes to attention here.
(p) the terms of any financial agreement that is binding on the parties.
There was no binding agreement made between the parties.
Section 79(4)(f)
There are no relevant orders.
Section 79(4)(g)
There is no Child Support Assessment.
Conclusion
Neither party seeks an adjustment for these matters. In the circumstances, that is appropriate.
Just and Equitable
Based on the matters set out in s 79(4), the appropriate division of property is 57.5% to the husband and 42.5% to the wife. I must consider whether it would be just and equitable within the context of s 79 if the net assets of the parties were divided in those proportions.
The net assets (including superannuation) have a value of $745,737 ($1,030,618 + $463,600 - $748,481). Of that, $463,600 is in the form of superannuation. If the net pool of assets, including superannuation, was divided in the proportions 57.5% to the husband and 42.5% to the wife, they would be entitled to about $428,799 and $316,938, respectively.
The wife has or will have the benefit of :
Wife’s assets, superannuation and liabilities
Value
Wife’s NAB account
$5,000
Wife’s IAG shares
$750
Wife’s jewellery
$8,000
Wife’s motor vehicle – Holden HSV
$36,000
Wife’s household contents
$25,000
Wife’s superannuation – Colonial First State
$32,600
Wife’s superannuation – AMP
$17,000
Wife’s car lease
-$36,000
Wife’s credit cards
-$4,800
Total
$83,550.00
In order to bring her to 42.5 per cent overall, the wife should receive about $233,388 ($316,938 - $83,550) from the remaining assets.
That will leave the husband with:
Husband’s assets, superannuation and liabilities
Value
Hire car plates – husband
$100,000
Husband’s savings
$38,850
Husband’s motor vehicle
$115,000
Husband’s household contents
$10,000
Add-back paid legal fees – husband
$7,018
Wealth Personal Super and Pension Fund @ 30/06/2010 – husband’s superannuation
$414,000
Husband’s credit cards
-$18,481
Husband’s motor vehicle lease
-$115,000
Total
$551,387.00
In order to bring him to 57.5 per cent overall, the husband should pay (or commit from his superannuation) to the wife, $122,588.
Learned counsel for the husband said that the husband agrees to the form of orders proposed on behalf of the wife except for paragraphs 11, 12 & 13 and in relation to personalty, he seeks the return of 5 items from the K property.
In relation to the latter issue, by the Minute of Orders sought by the husband, he seeks the return of the following items of personalty:
a.Oil seascape painting;
b.Water colour Australiana painting;
c.Glass dome clock;
d.Santa Maria sailing ship in glass blown bottle; and
e.Didgeridoo.
There is no evidence about the existence or value of these items. The wife’s counsel said that the wife did not have possession of the items. That is the end of this issue. I cannot make orders or adjustments in relation to the items.
Thus the only issue as to the form of orders is that addressed in paragraphs 11, 12 & 13 of the wife’s Minute of Orders and paragraph 3 of the husband’s Minute. The wife seeks:
11.That simultaneously upon completion of the sale of [K property] the Husband pay the sum of one hundred thousand dollars ($100,000) to the Wife.
12.In the event that the husband fails to comply with order 11 herein, the husband within 28 days of the date of completion of the sale of [K property]:
a)cause the hire car number plates licence number […] to be transferred into his sole name; and
b)then transfer the whole of his right title and interest in the said number plates to the wife.
13.That pending the husband’s compliance with orders 11 and 12 herein, the husband be injuncted from encumbering or borrowing money using the said hire car number plates as security.
Whereas the husband seeks:
3.That in the event that the payments to the Wife referred to in paragraphs 1(iv) and 2(vi) above do not amount to $100,000, then the husband shall pay to the Wife, within 3 months of the date of settlement of the sale of the latter property, the sum equivalent to 50% of difference between the sum of $100,000 and the amount paid to the wife in accordance with paragraphs 1(iv) and 2(vi) above.
Counsel for the parties told me that the parties had struggled to come up with a set of proposed orders that would achieve a proper settlement in a timely way. The main problem is that the parties do not know what the real estate will realise. The balance sheet has the properties at a combined value of $685,000 and the secured liabilities at $574,200 – leaving a notional equity of $110,800. However, the parties are not sanguine about achieving that sum by way of net proceeds of sale. There will be sale costs and in relation to the G property there may be problems in selling. The evidence of the husband in cross-examination is that the G unit suffers from structural problems that afflict the block of units in which it is located and that it has unique problems of its own.
As I understand the logic of it, the wife’s orders address this problem by assuming she will receive little from the sale of those properties. The husband seeks to deal with it by proposing that he contribute one half of any shortfall between the ultimate net sale proceeds and $100,000. I was not told the relevance of $100,000.
The wife’s approach:
If I was to adopt the approach offered on behalf of the wife there would be no way of predicting the ultimate division achieved. If for example there were no net proceeds of sale of the two properties and I made the other orders she seeks, the wife would receive $283,550 out of a pool of $634,937 or 44% of the available pool. If the sale of the two properties achieves $50,000 the wife would receive $333,550 out of a pool of $684,937 or 48% of the available pool. If the sale of the two properties achieves $100,000 the wife would receive $383,550 out of a pool of $734,937 or 52% of the available pool.
That does not achieve the outcome I have foreshadowed.
The husband’s approach:
If I was to adopt the approach offered on behalf of the husband the outcome would be slightly more uniform. If, for example, there were no net proceeds of sale of the two properties and I made the other orders he seeks, the wife would receive $233,550 out of a pool of $634,937 or 37% of the available pool. If the sale of the two properties achieves $50,000 the wife would receive $258,550 out of a pool of $684,937 or 38% of the available pool. If the sale of the two properties achieves $100,000 the wife would receive $283,550 out of a pool of $734,937 or 38.5% of the available pool.
That does not achieve the outcome I have foreshadowed.
The husband’s approach plus 25%:
If I was to adopt the approach offered on behalf of the husband but increased the proportion of the husband’s indemnity to 75% of the shortfall. If for example there were no net proceeds of sale of the two properties and I ordered the husband to pay the wife 75% of the shortfall from $100,000, the wife would receive $258,550 out of a pool of $634,937 or 40.7% of the available pool. If the sale of the two properties achieves $50,000 the wife would receive $271,050 out of a pool of $684,937 or 39.5% of the available pool. If the sale of the two properties achieves $100,000 the wife would receive $283,550 out of a pool of $734,937 or 38.5% of the available pool.
That does not achieve the outcome I have foreshadowed.
The husband’s approach plus part capital payment part indemnity:
If I was to adopt the approach offered on behalf of the husband but required that he pay the wife $20,000 together with any amount by which the net proceeds of sale fall short of $70,000, the result would be: If there were no net proceeds of sale of the two properties the wife would receive $273,550 out of a pool of $634,937 or 43% of the available pool. If the sale of the two properties achieves $50,000, on that same basis, the wife would receive $253,550 out of a pool of $684,937 or 37% of the available pool. If the sale of the two properties achieves $100,000 the wife would receive $303,550 out of a pool of $734,937 or 41.3% of the available pool.
That does not achieve the outcome I have foreshadowed.
Alternate approach:
There are problems with the approaches proposed on behalf of the parties and I have not been able to think of a way of adapting them so as to achieve the outcome required. Neither of the parties wants me to make orders that await the outcome of the sale of the K and G properties before the parties make their settlement.
The only way I can think of to achieve a predictable outcome is to ignore the properties until the outcome of the sale program is known.
The balance sheet has the K and G properties at a combined value of $685,000 and the secured liabilities at $574,200 – leaving a notional equity of $110,800. Omitting the properties and the related liabilities from the balance sheet, leaves the assets and superannuation with a net value of $634,937 ($745,737 - $110,800). Based on the division I propose, of those remaining assets the wife should have $269,848 and the husband, $365,089. Of those assets the wife has or will have the benefit of :
Wife’s assets, superannuation and liabilities
Value
Wife’s NAB account
$5,000
Wife’s IAG shares
$750.00
Wife’s jewellery
$8,000
Wife’s motor vehicle – Holden HSV
$36,000
Wife’s household contents
$25,000
Wife’s superannuation – Colonial First State
$32,600
Wife’s superannuation – AMP
$17,000
Wife’s car lease
-$36,000
Wife’s credit cards
-$4,800
Total
$83,550.00
In order to bring her to 42.5 per cent overall, the wife should receive about $186,298 ($269,848 - $83,550). The parties both propose a superannuation split from the husband’s superannuation using a base amount of $100,000. Subject to the outcome of the property sales, the husband should pay the wife about $86,298.
The parties agree that there should be a splitting order in relation to the husband’s superannuation. The wife seeks a cash adjustment and in the event that she is not successful in the overall settlement she seeks, the wife seeks that the reduction be expressed more in the superannuation splitting order than in any cash adjustment. Learned counsel for the wife told me that the trustee of the husband’s fund has been served with a version of the orders sought on behalf of the wife.
Given that superannuation interests have different characteristics to non-superannuation assets, it is often unfair to require one party to retain a disproportionate amount of the superannuation interests and the other to retain a disproportionate amount of the non-superannuation assets. The different characteristics are both positive and negative. For example, there are restrictions on accessing superannuation interests. On the other hand, superannuation interests receive favourable income tax treatment. Here the superannuation interests are a significant proportion of the pool. The agreed split based on $100,000 already leaves the wife with proportionally more of the non-superannuation assets than the husband. As I pointed out during submissions, the main argument for the wife on this point is that, of the parties, only the husband is likely to be able to establish a self funded retirement. With the assistance of salary sacrifice, the husband is building his superannuation interests at a substantial rate. The payment to the wife I foreshadow is not significantly less than the payment she seeks and, in my view, no real mischief is done to her.
On the other hand, the husband will be required to find over $86,000 to pay the wife. It is likely that the net payment required of the husband will be less than that sum as he will receive the greater share of the net sale proceeds of the properties. The stark difference between the parties is the husband’s income and earning capacity and I am satisfied that the husband will be able to make arrangements to find that sum. He will know what his obligations will be once the parties exchange contracts on the G property. He will have the time between settlement and exchange to make arrangements to pay the wife. That should be sufficient time. In default the hire car plates will be sold and the payment can be made from that source.
That will leave the husband with:
Husband’s assets, superannuation and liabilities
Value
Hire car plates – husband
$100,000
Husband’s savings
$38,850
Husband’s motor vehicle
$115,000
Husband’s household contents
$10,000
Add-back paid legal fees – husband
$7,018
Wealth Personal Super and Pension Fund @ 30/06/2010 – husband’s superannuation
$414,000
Superannuation split
-$100,000
Husband’s credit cards
-$18,481
Husband’s motor vehicle lease
-$115,000
Payment to wife
-$86,298
Total
$365,089.00
This approach simplifies matters considerably. The parties will then divide the net proceeds of sale of the K and G properties (if any) in the proportions 57.5% to the husband and 42.5% to the wife. In the event that there is a shortfall, the parties will be required to contribute in the same proportions.
That is the only approach I can find that has a prospect of achieving a settlement in the proportions I have identified.
Conclusion under Section 79
The parties’ marriage involved cohabitation spanning 14 years and contributions over about 20 years. They each made valuable contributions, but because he brought more assets into the marriage and because of his contributions after separation, the husband’s contributions should be recognised as greater than those of the wife. It is agreed that there should be no adjustment for the non-contribution factors referred to in paragraphs (d) to (g) inclusive of s 79(4). In effect, the main dispute between the parties was the form of the orders and those that I propose achieve some certainty and a just and equitable outcome. I will give the parties leave to relist the matter in relation to the drafting of the orders and any other machinery issues within 14 days. I will stay the operation of the orders for 7 days in case some serious mischief need be addressed.
I certify that the preceding one hundred and thirty three (133) paragraphs are a true copy of the reasons for judgment of Justice Ian Loughnan.
Associate:
Date: 15 December 2010
Key Legal Topics
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Family Law
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Property Law
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Civil Procedure
Legal Concepts
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Injunction
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Jurisdiction
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Procedural Fairness
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Stay of Proceedings
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