Raeburn and Raeburn

[2010] FamCA 334

FAMILY COURT OF AUSTRALIA

RAEBURN & RAEBURN [2010] FamCA 334

FAMILY LAW – PROPERTY – Settlement in relation to marriage – Gambling – Initial contributions

Family Law Act 1975 (Cth) ss 75(2), 79

Lee Steere and Lee Steere (1985) FLC 91-626
Ferraro and Ferraro (1993) FLC 92-335
Hickey and Hickey (2003) FLC 93-143; 30 Fam LR 355
Coghlan and Coghlan (2005) FLC 93-220; 32 Fam LR 414
Clauson and Clauson (1995) FLC 92-595; 18 Fam LR 693
Crawford and Crawford (1979) FLC 90-647
White and White (1982)FLC 91-246
Money and Money (1994) FLC 92-485
Pierce and Pierce (1999) FLC 92-844
Cabbell and Cabbell [2009] FamCAFC 205

APPLICANT: Mr Raeburn

RESPONDENT: Ms Raeburn

FILE NUMBER: SYC 1914 of 2009

DATE DELIVERED: 30 April 2010

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Johnston JR

HEARING DATE: 28 & 29 January and 1 March 2010

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Foster

SOLICITOR FOR THE APPLICANT: MCW Lawyers

COUNSEL FOR THE RESPONDENT: Ms Messner

SOLICITOR FOR THE RESPONDENT: Moira Ryan Lawyers

Orders

1. That the husband and the wife forthwith do all acts and things and sign all documents necessary to effect a sale of the property situate at and known as E property being the whole of the property contained in Folio Identifier … (“the home”) in accordance with the following conditions of sale:

   1.1.That within 30 days from the date of these orders the parties will sign all selling authorities as may be necessary to enable the home to be listed for sale with a licensed real estate agent or agents as agreed between them and in default of agreement such agent or agents as may be nominated by the President for the time being of the Real Estate Institute of New South Wales or his nominee or its then present equivalent for such purpose.

   1.2.That within 30 days from the date of these orders the parties will instruct a solicitor / conveyancer to have the carriage of the sale of the home being such solicitor as agreed between the parties and in default of agreement such solicitor as may be appointed by the President of the Law Society of NSW for such purpose.

   1.3.That within 30 days from the date of these orders the parties will list the home at such price as the parties shall agree and failing agreement then at such price as may be determined by a valuer appointed by the President for the time being of the Australian Property Institute (NSW) Division or his nominee or its then present equivalent for such purpose.

   1.4.The wife will co-operate in allowing access to the home at all reasonable times to prospective purchasers and such licensed real estate agent as may have been appointed by the parties in accordance with the provisions of these orders.

   1.5.The wife will maintain the home in reasonable condition and repair having regard to its present condition and state, pending completion of the sale of the home.

   1.6.If Contracts for Sale of the home by private treaty have not been exchanged within 4 months from the date of these orders then the parties will cause the home to be listed for sale by way of public auction within 6 months from the date of these orders.

   1.7.If listed for sale by way of public auction, a reserve price shall be fixed by agreement between the parties, and failing agreement the reserve price will be determined by a valuer appointed by the parties, or failing agreement, appointed by the President for the time being of the Australian Property Institute (NSW) Division or his nominee, or its then present equivalent, upon the written request of either party.

   1.8.The husband and the wife will attend the said auction (“the first auction”) of the home and in the event that the said reserve price of the home is not reached, the parties will negotiate with any bidder present at the first auction and will accept any offer made by such bidder which is no more than 5 percent below the reserve price unless otherwise agreed by both parties.  If Contracts for Sale of the home are not exchanged as aforesaid within fourteen (14) days of the first auction taking place then the husband and the wife will cause a second auction (“the second auction”) to be conducted no later than one month from the date of the first auction and for the purposes of the second auction, the reserve price will be 5 percent below the reserve price of the first auction and in the event that the said reserve price of the home is not reached, the parties will negotiate with any bidder present at the second auction and will accept any offer made by such bidder which is no more than 5 percent below the said reserve price unless otherwise agreed by both parties.

   1.9.In the event that the home is not sold at either the first or second auction the husband and the wife will do all acts and things and sign all documents necessary to cause further auctions to be conducted on the same terms as referred to in paragraph 1.6 until such time as the home is sold.

   1.10.In the event that the home is to be sold by auction then each of the parties will, upon demand, pay in equal shares the auction advertising expenses.  In the event that either party should fail to do so, then the auction expenses shall be deducted from the defaulting party’s entitlement from the proceeds of sale of the home.

2. That pending settlement of the sale of the home, the wife will continue to make all repayments in respect of the mortgage secured over the home with RHG Mortgage Corporation Ltd and pay all outgoings in respect of the home as and when they fall due.

3. That if the wife defaults in meeting the mortgage repayments and outgoings pursuant to order 2, then those amounts shall be deducted from the wife’s share of the net proceeds of sale in order 4 and paid to the husband.

4. That upon completion of the sale of the home, the husband and the wife do all acts and things and sign all documents necessary to distribute the proceeds of sale as follows:

   4.1.To pay all real estate agent’s costs, commissions, legal expenses and any other expenses of the sale;

   4.2.To discharge the mortgage to the RHG Mortgage Corporation Ltd secured against the home;

   4.3.To pay to the husband 21.792 percent of the balance;

   4.4.To pay to the husband the sum of $357.50 being the wife’s share of the valuation report prepared by M Valuers; and

   4.5.To pay to the wife the balance.

5. That the Court allocates as required by s 90MT(4) of the Family Law Act 1975, a base amount of $70,000 to the wife out of the husband’s interest in the Raeburn Superannuation Fund (“the Fund”).

6. In accordance with s 90MT(1)(a) of the Family Law Act 1975, the Court:

   6.1.Creates an entitlement on the part of the wife to be paid the amount calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001; and

   6.2.Makes a corresponding reduction in the entitlement of the husband, or such other person to whom a splittable payment may be made, would have had in the Fund, but for this order.

7. Whenever the Trustee of the Fund makes a splittable payment out of the husband’s interest in the Fund, the Trustee shall do all acts and things and sign all documents as may be necessary to pay the entitlement created in order 6 of these orders in accordance with the requirements of the Family Law Act 1975 and the Family Law (Superannuation) Regulations 2001.

8. This order has effect from the operative time and the operative time is 4 business days after the date when the sealed copy of these orders is served on the Trustee.

9. That within 30 days the husband do all things and sign all documents necessary to place on the market for sale the 1991 Mercedes Benz motor vehicle registered number …, to sell it for the best price reasonably able to be obtained and to divide the net proceeds of sale between himself and the wife equally.

10. That the parties otherwise be entitled to be the sole, legal and beneficial owners of all other items of real and personal property of whatsoever nature and kind in their respective ownership, possession and/or control as at the date of these orders including but without limiting the generality thereof monies on deposits, shareholdings, insurance policies, motor vehicles, furniture, furnishings and effects and superannuation.

11. That in default of either or both the husband and the wife executing all documents necessary to comply with these orders the Registrars of the Family Court of Australia are appointed to execute all such documents on behalf of either of the husband and the wife and to do all things necessary to give validity and operation to the documents.

12. That the above orders not commence operation until 14 May 2010.

13. That both parties have leave to relist these proceedings at any time not later than 13 May 2010 for the purpose only of making further submissions in relation to the form of the orders.

14. That all exhibits be released.

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

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYC 1914 of 2009

MR RAEBURN

Applicant

And

MS RAEBURN

Respondent

REASONS FOR JUDGMENT

Introduction and applications

1. These are contested property proceedings.  The parties are Mr Raeburn and Ms Raeburn.  For convenience I shall refer to them as “the husband” and “the wife” respectively.

2. The husband seeks orders to the following effect:

   ·That the parties sell the former matrimonial home and the proceeds of sale be paid to pay agent’s costs, commissions, legal expenses and any other expenses of sale, to discharge the mortgage to RHG Mortgage Corporation Limited, to pay the husband’s credit card liability, to pay Y Home Maintenance the sum of $900, to pay the husband an unspecified amount which would bring the final result to the husband enjoying 55% of the available property and superannuation, to pay to the husband the sum of $357.50 being the wife’s share of the valuation report and to pay the balance to the wife;

   ·A superannuation splitting order the base amount for the wife to be $100 000;

   ·An order declaring the parties to be the sole owners of all other property in their possession and / or control respectively; and

   ·An enforcement order.

3. On the other hand, the wife seeks order to the following effect:

   ·That the husband transfer his interest in the former matrimonial home to her unencumbered;

   ·That the parties be declared the sole owners respectively of a number of specified items of property and superannuation; and

   ·An enforcement order.

Background

1. The wife was born in 1958 and she is therefore 51 years of age.  The husband was born in 1961 and he is therefore 48 years of age.  The parties commenced their cohabitation in May / June 1990.  They married in August 1990 and separated on 30 March 2008.  They were divorced on 5 July 2009. 

2. There are two children of the marriage namely, a daughter born in 1991 and a son born in 1993.  The children are therefore 18 years and 17 years respectively.  The husband has a child from his previous marriage, a son who was born in 1986.  The wife also has a child from her previous marriage namely a son who was born in 1985. 

3. At the time the parties commenced their cohabitation the husband’s property consisted of the following:-

   ·His business “C Business”;

   ·Equity in an investment property at W;

   ·Equity in an investment property at S;

   ·Equity in a block of land at H; and

   ·His personalty.

   The husband was working in his business full time.

4. On the other hand, at the time the parties commenced their cohabitation the wife did not own any property of significant value apart from some modest furniture and jewellery.  The wife was working in publishing.  She had come from South Africa with her son. 

5. The husband had purchased his W property for $175 000 in December 1988.  He used his savings and borrowed $150 000 from the State Bank of New South Wales to fund this purchase. 

6. The husband had purchased his S property for $159 000 in 1989.  He borrowed $136 000 and used savings to fund this purchase.

7. The husband had purchased his H land for $100 000 in October 1989.  He borrowed $85 000 and used savings for this purchase. 

8. The wife ceased working shortly before the birth of the parties’ eldest child which was in May 1991 as I have said. 

9. In April 1992 the parties purchased the former matrimonial home at E for $245 000.  This was funded by the parties paying $12 250 from their savings and taking a loan for approximately $230 000 from the St George Bank. 

10. In June 1992 the husband sold his land at H and used the net proceeds of sale of approximately $58 700 to reduce the outstanding mortgage balance on the E home. 

11. In January 1993, as indicated above, the parties’ youngest child was born.  The wife remained out of the paid workforce in order to care full time for the three children.  The wife’s son had lived with the parties from the outset of their cohabitation.

12. In approximately 1993 / 1994 the parties refinanced the St George Bank mortgage with RAMS.  The husband also refinanced the mortgages in relation to the investment properties with RAMS. 

13. At this time the parties had arranged for the installation of a swimming pool and for landscaping to be done in the backyard of their home, the total cost of which was approximately $70 000.  They also had a new kitchen installed which cost approximately $30 000 as well as air conditioning and an alarm system, the latter items costing a total of approximately $15 000. 

14. Later the parties had a new driveway constructed at the home which cost approximately $6-7000.

15. On 19 September 1997 the husband sold his W property for $192 500.  The net sale proceeds of $84 217 were paid to reduce the outstanding mortgage balance over the parties’ E home.

16. In late December 1999 the parties and the three children went on a three week holiday to the United States of America.  The husband closed the business for five weeks.  I accept that taking into account the ongoing staff and rental costs of the business during this period of its closure, the real cost of this holiday was approximately $50 000.  This was funded by drawing down $30 000 on the mortgage and the balance was drawn from the business. 

17. On 24 July 2002 the husband sold his S property for $297 500.  The husband said that the sale proceeds of approximately $190 677 were paid to reduce the outstanding mortgage balance or to pay business expenses. 

18. On 28 November 2002 the husband sold his business for $300 000.  He used $200 000 to establish the Raeburn Superannuation Fund.  The husband said that the balance of $100 000 was used to pay staff entitlements and outstanding debts.  There is an issue about this and I shall refer to this again below.

19. The husband was unemployed between November 2002 and July 2003 when he commenced working full time with X Company. 

20. The wife worked part time for a shop as a sales assistant between February 2003 and March 2004. 

21. In 2004 the husband had a capital gains tax liability in the amount of approximately $30 000.  The husband said that he thought this arose from the sale of the business but I am satisfied that it arose from the sale of his S property.  This liability was paid by a draw down on the mortgage.

22. Also in 2004 the husband, the wife and the children went on a holiday to Bali.  The $10 000 cost was funded by drawing down on the mortgage. 

23. In 2004 the wife undertook some part time work for the local Community Health Care.

24. In January 2006 the parties and the children went on a cruising holiday.

25. In March 2007 the husband resigned from his employment with X Company and commenced employment with his current employer, a firm called R Firm. 

26. By late 2007 it was clear that the family was in serious financial difficulty.

27. As indicated above, the parties separated under the same roof on 30 March 2008. 

28. In approximately February 2009 the husband met his current wife Ms F.  He commenced cohabiting with her in June 2009 and in August 2009 they married.  The husband had moved from the former matrimonial home on 15 August 2009.

The Applicable Law

1. Sub-section 79(1) of the Act provides that in property settlement proceedings, the Court may make such order as it considers appropriate.

2. Sub-section 79(2) provides that the Court shall not make an order under the above sub-section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.

3. There is a long-standing preferred approach to the determination of an application brought pursuant to the provisions of s 79.  This involves four inter-related steps.  Firstly, the Court should make findings about the identity and value of the property, liabilities and financial resources of the parties at the date of the hearing.  Secondly, the Court should identify and assess the contributions of the parties within the meaning of ss 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.  Thirdly, the Court should identify and assess the relevant matters referred to in ss 79(4)(d), (e), (f) and (g), 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.  Fourthly, the Court should consider the effect of those findings and determination and resolve what order is just and equitable in all the circumstances of the case. 

4. This approach has been confirmed in numerous cases in this Court including for example Lee Steere and Lee Steere (1985) FLC 91-626; Ferraro and Ferraro (1993) FLC 92-335; Hickey and Hickey (2003) FLC 93-143; 30 Fam LR 355; Coghlan and Coghlan (2005) FLC 93-220; 32 Fam LR 414 and Clauson and Clauson (1995) FLC 92-595; 18 Fam LR 693.

Property available for division

1. To the parties’ credit most of the items of available property were agreed and there was also agreement about most of the values thereof.  But there were also some issues. 

2. A minor issue was how to deal with an old unregistered Mercedes motor vehicle.  But the parties agreed that the appropriate course was to include an order for the sale of this item of property and for the proceeds to be divided equally between the parties.  I accept this.

3. The wife asserts that there ought to be added back to the pool of available property the following two items.  Firstly, the amount of $4490 which represented the husband’s salary paid into the joint account which the husband withdrew from the account.  The husband said that he withdrew those funds after the wife had asked him to fill out a form for the purposes of providing evidence to Centrelink that the parties had separated under the same roof.  The husband said that he did this because he thought that the wife was going to withdraw the funds.  The second item is the amount of $5450 which the husband drew down from the mortgage at approximately the time of separation.  The husband said that he thought that the wife was going to withdraw this money and that this is what precipitated his actions in this regard. 

4. It was submitted on behalf of the wife that the husband acted unreasonably in converting these funds for his own use because these were properly assets of both parties.  On the other hand it was submitted on behalf of the husband that in circumstances where the husband had continued to pay the mortgage repayments he should not be penalised by having these amounts added back into the pool of available property.  I must say that I prefer the submissions on behalf of the wife about these matters to those on behalf of the husband.  I accept that the money was that of both parties and that the wife should have been able to have some of the funds.  Accordingly, in my view, it is appropriate to add these amounts back into the pool of available property.

1. There was an initial submission to the effect that the Court should add back an unquantified amount being what was submitted were monies lost as a consequence of the husband’s gambling activities. However, later it was submitted that the Court should take into account pursuant to s 75(2) of the Act the fact that the husband must have lost significant monies in gambling over many years.  There was also a submission on behalf of the wife to the effect that the Court should add back $75 000 on the basis that the husband failed to account for this part of the $100 000 being the balance of proceeds of sale of his business after investing $200 000 to establish the Raeburn Superannuation Fund.  I must say I do not accept these submissions and do not propose to add back further monies to the pool of available property.  I shall discuss these submissions further below.

2. On this basis I find the property available for division between the parties to be as follows:-

$
1.         Former matrimonial home at E	630,000
2.         Husband’s NIB shares	5,984
3.         Husband’s stamp collection	2,600
4.         Husband’s salary withdrawn at separation (add back)	4,990
5.         Husband’s mortgage drawdown at separation (add back)	5,450
6.         Wife’s Mitsubishi motor vehicle	5,100
7.         Wife’s jewellery	12,503
_____________
$666,627

1. The liabilities are as follows:-

$
1.         Mortgage on home	128,000
2.         Husband’s NAB credit card	10,000
_____________
$138,000
Surplus	$528,627

1. The superannuation is as follows:-

$
1.         Husband’s Raeburn Superannuation Fund	270,063
2.         Husband’s AON Master Fund	27,787
3.         Husband’s BT Super	14,913
4.         Husband’s ING Super	39,049
_____________
$351,812
5.         Wife’s Raeburn Superannuation Fund	1,553
6.         Wife’s REST Super	716
7.         Wife’s BT Business Super	1,079
8.         Wife’s ING Master Fund	25,827
_____________
$29,175
Total property and superannuation	$909,614

1. The husband has a financial resource in his anticipated inheritance from his late mother’s estate of $150 000. 

Gambling

1. The major issue in these proceedings was an assertion by the wife to the effect that the husband has wasted a significant amount of the parties’ funds over most years of the marriage through his gambling, particularly on poker machines.  The husband said that he has engaged in some gambling on poker machines over the years.  He said that he was undertaking this regularly during the period when the marriage was breaking down and also following separation.  He denied that there had been any problem with his gambling.  He said that during earlier years the maximum amount that he would have put through the poker machines was $200 in any one session.

2. During cross-examination the husband was asked questions about many of the entries in his National Australia Bank account statements.  It is clear that there are numerous entries for multiple withdrawals from automatic teller machines at the E RSL Club, the H Hotel, Royal Crest, Star City, S Club, S Leagues Club, S Sports and Recreation Club, and S Leagues Club.  The husband’s explanation for withdrawing multiple amounts of $200 on the same day on a substantial number of occasions was that he believed that the automatic teller machines were set to pay a maximum of $200 in any one withdrawal transaction.  The husband said that he was in the habit of withdrawing cash at clubs to meet expenditure including living costs.  He conceded that some of the money, but not more than $200 on any gambling occasion as I have said, was expended on playing poker machines. 

3. After the husband became unemployed in late 2002, his history of withdrawals from the automatic teller machines changed.  Whereas in earlier periods there were many entries of $200 withdrawals and some $100 withdrawals, during 2003 those records showed withdrawals mainly in $50 amounts.  The husband’s explanation was that he was unemployed at the time and that he was trying to reduce the parties’ costs as much as possible so his expenditure on living costs had to be reduced.  He says that this is what the record of withdrawals reflects. 

4. I must say I do not accept the husband’s explanation for the high incidence of withdrawals of funds from automatic teller machines at clubs and other institutions which offer patrons poker machines.  In my view it is more probable than not that what in fact the husband was doing was using most of the money to put through the poker machines.  I shall refer to this again below in relation to my consideration of relevant s 75(2) matters.

Alleged failure by husband to disclose disposition of $100 000 from proceeds of sale of business

1. There was also an issue concerning the extent to which the husband has accounted for the disposition of $100 000 of the $300 000 received by him in November 2002 upon the sale of his business, C Business.  This matter occupied a considerable amount of the available hearing time.  In his affidavit the husband said that on 28 November 2002 he sold the business for the sum of $300 000.  He said that the sum of $200 000 from the sale proceeds was used to create the Raeburn Superannuation Fund.  There is no issue about this.  The husband went on to say that the balance of the sale proceeds of the business of $100 000 was used to pay staff long service leave and holiday entitlements, and to pay outstanding debts. 

2. This assertion became the subject of close scrutiny by those representing the wife.  What emerged during cross-examination was that in fact $14 000 of the proceeds of sale were used to pay the entitlements of the staff.  I would also accept that there was an outstanding amount owing on a motor vehicle lease for the Mitsubishi Verada vehicle.  I accept that part of the approximately $30 000 owing was paid from the E Trade share account.  The remaining unpaid amount was $11 000 and I accept that such $11 000 was paid from the proceeds of sale of the business.  This left $75 000 of such sale proceeds the disposition of which the husband was unable to provide any detailed account for.  Much time was spent during cross-examination and re-examination in detailed questions relating to Annexure L to the husband’s affidavit which was a Reconciliation Report for the corporation C Pty Limited which was the vehicle through which the husband’s business was operated. 

3. I accept the submission on behalf of the wife that the details in the Reconciliation Report do not assist the husband’s assertions that business debts were paid from the sale proceeds.  Having said this, I am not persuaded by the wife that in these circumstances it is appropriate to add back into the property available for division the sum of $75 000 or indeed any amount at all. 

4. The wife’s representatives used the reconciliation report in an endeavour to demonstrate that in fact the business was quite profitable.  The husband’s evidence was that he sold the business in circumstances where he said the business was struggling and the reconciliation report includes details which demonstrate a picture of success whereas in fact the husband says that was not the case for the relevant period.  He said that the figures contained in the reconciliation report illustrate what he says was an inflated revenue position for the business.  He said that this was because he arranged for numerous friends to purchase produce from the business in an endeavour to inflate the figures for the relevant period in order to demonstrate to the purchaser of the business a healthy trading position. 

5. At the end of the day it is for the wife to establish any basis for so called add backs of matrimonial property as against the husband.  In my view she has been unable to do this.  It is clear that upon the sale of the business in November 2002 the husband was then unemployed for many months until July 2003.

6. Learned counsel for the husband made a general submission to the effect that over many years this family struggled to make ends meet and this was certainly the case for the 4½ year period after the husband recommenced working in 2003.  Inferentially one wonders why this would not have been the case prior to that period so that monies which would have been available from the proceeds of sale of the business would be expected to have been used to retire some debt and presumably form a fund to enable the family to continue to survive financially through the period prior to the time when the husband commenced his employment in July 2003.  In any event it is not suggested on behalf of the wife that there was some specific account in which the husband held the $75 000.  The only conclusion from the submission is an inference that somehow the husband must have spent $75000 on his own purposes.  I must say in my view this appears to be highly unlikely. 

7. In all the circumstances in my view there is no substance in this submission on behalf of the wife.

Contributions

1. There was a serious issue about the finding which the Court should make about the contributions of the parties overall.

2. It is clear that the major financial contributions were made by the husband.  I have referred to the property owned by him at the commencement of the parties’ cohabitation.  Clearly there was a significant disparity in their property at that time.  In addition, the husband has been the breadwinner for the family having made almost the entirety of the financial contributions.

3. It is true that the wife worked until shortly before the birth of the parties’ elder child and that she earned income from a number of part time casual positions during the course of the marriage.  These included as a personal care assistant, working at a Shop and supervising school certificate and higher school certificate examinations.  The wife also undertook banking for the C business and she washed uniforms used by the staff of the business.

4. Having said this, there was no question that the wife made the overwhelming contribution to the welfare of the family constituted by herself, the husband, and the five children.  The husband conceded that the wife undertook the major role in respect of the children and that she did most of the cooking and the housecleaning for the family.  She was the children’s primary parent. 

5. But the husband maintained the swimming pool and the gardens. He also cleaned windows and on occasions mopped floors. He undertook the general maintenance of the property.

6. It was submitted on behalf of the husband that such was the significance of his initial contribution by way of owning the properties and his business referred to above, that the Court ought to make a finding overall of contributions in his favour of 65 percent.

7. On the other hand it was submitted on behalf of the wife that although the wife conceded that there was a disparity in the parties’ property at the outset of their cohabitation, the Court should not lose sight of the fact that this was an 18 year period of cohabitation during the course of which two children of the parties were raised to their current ages.  It was submitted that in all the circumstances because of the subsequent contributions by the wife and the duration of the marriage, whatever significance the imbalance of property had at the outset has become diminished over time to the point where currently it has little significance.

8. How the Court is to take account of initial contributions has been the subject of much consideration over many years.  Examples of some relevant authorities are Crawford and Crawford (1979) FLC 90-647, White and White (1982)FLC 91-246, Money and Money (1994) FLC 92-485, Pierce and Pierce (1999) FLC 92-844 and the more recent case of Cabbell and Cabbell [2009] FamCAFC 205.

9. The relevant principles have been conveniently set out in the following passage from Cabbell (above) at pages 10 and 11:

   (iv)How has the Court’s jurisprudence in respect of initial contributions developed?

   As the wife’s senior counsel appropriately and candidly conceded before us, there is no formula, nor could there be, given the wide discretion exercised under s 79, which prescribes how a court should deal with initial contributions in cases of property adjustment.

   The principles enunciated in decisions prior to 1999 are conveniently reviewed in Pierce & Pierce (1999) FLC 92-844 at paragraphs 25 - 27 of that judgment. In those paragraphs the Full Court (Ellis, Baker and O’Ryan JJ) referred to the cases which discussed the concept of an initial contribution being “eroded” or offset to a greater or lesser extent by later contributions during the marriage, and the qualification to or expansion of this concept by Fogarty J in Money & Money (1994) FLC 92-485 at 81,054, namely that later contributions over a long marriage did not need to be greater, but rather those contributions (sometimes referred to as the myriad of other contributions) “offset” the significance which might be placed on greater initial contributions. Their Honours then, at paragraph 28, explained that in assessing contribution (including initial contributions) rather than considering if an initial contribution had been “eroded”, what was relevant was the “weight to be attached, in all the circumstances, to the initial contribution”. Their Honours then explained the initial contribution should be weighed with all other contributions, and in paragraph 30 stressed the need for a trial Judge “not only to identify the relevant contributions, but also to assess them”. That latter statement of principle is consistent with the discussion in Mallet v Mallet (1984) 156 CLR 605 where Mason J said in discussing s 79:

   The section contemplates that an order will not be made unless the court is satisfied that it is just and equitable to make the order (s. 79(2)), after taking into account the factors mentioned in (a) to (e) of s. 79(4). The requirement that the court “shall take into account” these factors imposes a duty on the court to evaluate them.  Thus, the court must in a given case evaluate the respective contributions of husband and wife under pars. (a) and (b) of sub-s. (4), difficult though that may be in some cases.

   In Williams & Williams [2007] FamCA 313 the Full Court (Kay, Coleman and Stevenson JJ), after discussing conflicting cases determined in the New South Wales Court of Appeal under the Property (Relationships) Act1984 (NSW) which involved discussion of how initial contributions should be assessed in a property adjustment case under that legislation, said at paragraph 26:

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

10. During the course of submissions I indicated that in my view to make a finding in favour of the husband of 65 percent contributions overall would visit a significant injustice on the wife.  This was because, in my view, such a finding would involve the Court taking the view that the husband’s contributions over this long marriage have been almost double those of the wife. In my view, given all the contributions made by both parties over this long marriage, that would be untenable.  Having said this, in my view, clearly the interests of the husband in his property initially were significant, including his business interest. I cannot accept that such a significant initial contribution simply becomes diminished over the period of years of the marriage to the point where at the present time it no longer has any significance.  In my view, because of the initial disparity between the parties in terms of their ownership of property, the Court ought to find the overall contributions by the husband as having been higher than those of the wife.  It becomes a matter of weighing all the contributions to arrive at a judgment about where the overall assessment lies.  The Full Court of this Court has said on many occasions that this assessment is not an arithmetical exercise.  I accept this. In my view a finding of 56 percent in favour of the husband is appropriate in all the circumstances. This would be a differential between their property positions based on contributions of $109 154.

11. Accordingly, I find the contributions overall by the parties to be 56 percent by the husband and 44 percent by the wife.

s 75(2) matters

1. The husband is 48 years of age and he is in reasonable health.  His total average weekly income is $2015 per week consisting of salary of $1675 and car, fuel and superannuation worth $340 per week.  This income is earned from his position as a manager with the corporation R Pty Limited.  On all present indications the husband would be expected to be able to continue in this type of employment for the foreseeable future. 

2. On the other hand the wife is 51 years of age and she too is in reasonable health.  She is in receipt of the Newstart Allowance and Family Tax Benefit which provide her with weekly income of $338.  I have referred above to her history of employment.  In more recent times this employment has involved shop assistant duties, supervising school examinations and some receptionist / administrative work.  The wife said that she hoped she would be able to resume full time employment this year and that her preferred occupation would be in the area of publishing work.  But the wife also has other skills because she has qualifications in shorthand, bookkeeping and typing.  The wife said that she has not worked in recent times because she has been suffering from depression and some other health issues.  But she expects that with the stress of these proceedings behind her, she will be able to fulfil appropriate employment duties. 

3. The three children remain living with the wife.  Each of them is now working including the parties’ son who is undertaking an apprenticeship.  The husband is paying child support in accordance with the current assessment of approximately $75 per week.  This will cease upon the son attaining the age of 18 years which will occur in January 2011. 

4. As indicated above, the husband has remarried although his wife Ms F is dependent on him for her support. 

5. In my view the most relevant matter pursuant to s 75(2) of the Act is the disparity between the capacities of the parties for earning income.  On the one hand the husband has been able to have continuity of employment in various capacities during the whole of the parties’ cohabitation and marriage, apart from the approximately 7 months that he was unemployed after selling his business.  Clearly this has culminated in him being able to develop the skills and qualifications required to command his current salary and benefits.

6. On the other hand the wife’s capacity for earning income has been affected by the marriage.  The parties arranged their responsibilities so that the wife was the primary parent for the children and this has had the consequence that her opportunity for employment has been limited.  She has undertaken the somewhat limited opportunities which have come her way and her employment history is not one characterised by her having concentrated on developing her skills in a particular area.  Accordingly, her capacity to earn income is limited certainly by comparison with that of the husband.  It is also the case that by undertaking responsibilities as the primary homemaker and parent the wife has supported the husband in his capacity to develop his skills and experience.  These matters are to be acknowledged and taken into account in a manner which will reflect just and equitable orders. 

1. But there are other relevant s 75(2) matters.  I have referred above to the issue concerning the husband’s gambling and this is to be taken into account.  In this regard, in my view, a just and equitable order requires a modest set-off of available property in favour of the wife to take account of this matter.  Having said this, in my view, the effect of such set-off will be cancelled out by the fact that the husband has provided almost entirely for the financial, and much of the physical, support of the wife’s child.  The wife’s son was just under 5 years of age when the parties commenced cohabiting and he lived with the parties until he attained adulthood.  The parties received no financial support from the child’s natural father towards the costs of the child.  Having said this I have not lost sight of the fact also that the husband’s child also spent time regularly with the parties and no doubt contributions have been made to his welfare by the wife over the many years. 

2. I also take into account the fact that the husband would have the benefit of more property and superannuation based on contributions and the fact that he has a financial resource in that he expects to inherit approximately $150 000 from his late mother’s estate.

3. It was submitted on behalf of the husband that taking proper account of the relevant s 75(2) matters an appropriate adjustment of available property in favour of the wife would be 10 percent thereof.  On the other hand, it was submitted on behalf of the wife that an adjustment in a higher amount than this would be justified.

4. Learned counsel for the husband submitted that a 10 percent adjustment of available property and superannuation would be approximately equivalent to a $180 000 differential in the overall financial positions between the parties.  In my view this is a little low.

5. Accordingly, in my view, the appropriate set-off taking account of all relevant s 75(2) matters is 12 percent in favour of the wife.

Conclusion and fourth step

1. The husband is to have 44 percent of the property and superannuation available for division between the parties. This would be property and superannuation with a value of $400 230 (44 percent of $909 614 = $400 230).

2. The husband has sought an order to the effect that the Raeburn Superannuation Fund be split so that the wife would have a base amount therein of $100 000.  I accept in principle the appropriateness of what is submitted although in my view a base amount of $100 000 would be too high in all the circumstances.  I note that in the Explanatory Memorandum to the Family Law Legislation Amendment (Superannuation) Bill 2000 which brought about superannuation changes in family law, amongst the objectives of this legislation were the following: 

   -to encourage parties to take responsibility for their own affairs wherever possible and

   -to be consistent with the Government’s broader retirement incomes policy goals.

3. Such goals include encouraging people in the community to be self-funded in retirement.

4. Accordingly, in all the circumstances including the above objectives, in my view it would be appropriate to make a superannuation splitting order to provide for the wife to have a base amount of $70 000 in the Raeburn Superannuation Fund.

5. As I have said, the husband is to have property and superannuation with a value of $400 230.  On the basis of the superannuation splitting order I propose, the husband would have the following:

$
1.         NIB shares	5,984
2.         Stamp collection	2,600
3.         Salary (add back)	4990
4.         Mortgage drawdown (add back)	5,450
5.         Balance of Raeburn Superannuation Fund	200,063
6.         AON Master Fund	27,787
7.         BT Super	14,913
8.         ING Super	39,049
_____________
$300,836

1. But the husband has his NAB credit card liability of $10 000.  Accordingly, the husband would have net property and superannuation with a value of $290 836 ($300 836 - $10 000 = $290 836).

2. To achieve property and superannuation with a value of $400 230 the husband would require a payment of $109 394 ($400 230 - $290 836 = $109 394).  This would be paid from the net proceeds of sale of the former matrimonial home.  The equity in the home is $502 000 ($630 000 - $128 000 = $502 000).  $109 394 would be 21.792 percent thereof.

3. On the other hand the wife is to have 56 percent of the property and superannuation available for division between the parties.  This would have a value of $509 384 (56 percent of $909 614 = $509 384).  The wife would have the following:

$
1.         Mitsubishi motor vehicle	5,100
2.         Jewellery	12,503
3.         Raeburn Superannuation Fund	71,553
4.         REST Super	716
5.         BT Business Super	1,079
6.         ING Master Fund	25,827
_____________
$116,778

1. To achieve property and superannuation with a value of $509 384 the wife would require an additional payment of $392 606 ($509 384 - $116 778 = $392 606).  This would be 78.208 percent of the equity in the home.

2. The orders I propose to make will not affect the capacity of either party to earn income.

3. The husband would have the property and superannuation referred to above and a payment from the sale of the former matrimonial home of approximately $109 394. In addition, it appears that the husband will also receive approximately $150 000 from the estate of his late mother.

4. These monies should enable the husband to be able to pay a substantial deposit on the purchase of a home.  He has a significant capacity to be able to service a loan for such a purpose and certainly a stronger capacity than the wife in this regard.

5. On the other hand the wife would have the property and superannuation referred to above and a payment of approximately $392 606 from the sale of the former matrimonial home.  The wife would be able to pay a substantial deposit towards the purchase of a home although she would almost certainly have to borrow funds for this purpose.  Assuming that the wife will work full time she would be able to pay the costs of servicing a modest loan.  Otherwise the money could be paid towards renting suitable accommodation or used as the wife desires.

6. In all the circumstances, in my view the orders I propose will achieve a just and equitable outcome for the parties.

I certify that the preceding ninety-one (91) paragraphs are a true copy of the reasons for judgment of Judicial Registrar W P Johnston.

Associate:     

Date:              30 April 2010