Ramsden and Tripp
[2007] FMCAfam 673
•28 September 2007
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| RAMSDEN & TRIPP | [2007] FMCAfam 673 |
| FAMILY LAW – Property – marriage of fourteen years in duration – two children aged 12 and 10 predominantly resident with wife – assessment of contributions – weight to be given to husband’s initial contribution of capital, particularly former family home – assessment of parties’ contributions as parents and homemakers – whether monies should be “added back” as constituting premature distribution of assets – relevance of husband receiving bequests during marriage – s.75(2) factors – husband aged 54 and approaching retirement – wife aged 37 – husband self-employed with uncertain income – wife PAYG taxpayer – relevance of child support assessment – just and equitable. |
| Family Law Act 1975 (Cwlth) ss.75(2); 79 Evidence Act 1995 (Cwlth) s140 |
| Lee Steere v Lee Steere (1998) FLC 91-626 Ferraro v Ferraro (1993) FLC 92-335; Clauson v Clauson (1995) FLC 92-595 Wardman & Hudson (1978) FLC 90-466 In the Marriage of Townsend (1995) FLC 92-569 In the Marriage of Omacini (2005) 33FamLR 134 Weir & Weir (1993) FLC 92-388 Farnell & Farnell (1996) FLC 92-681 Pierce & Pierce (1999) FLC 92-844 Russell v Russell (1999) FamCA 187 Danielian & Danielian [2003] FamCA 473 Waters & Jurek (1995) FLC 92-635 Briese & Briese (1986) FLC 91-713 Black & Kellner (1992) FLC 92-287 Luciano & Luciano (unreported) Family Court (O’Ryan J delivered 8 May 2000) Briginshaw v Briginshaw (1938) 60CLR 336 Kennon & Kennon (1997) FLC 92-757 Kowaliw & Kowaliw (1981) FLC 91-092 Gosper & Gosper (1987) FLC 91-818 Kessey & Kessey (1994) FLC92-495 DJM v JLM (1998) FLC 92-816 Collins & Collins (1990) FLC 92-149 Levick & Levick unreported decision of Moore J delivered 31 January 2003 |
| Applicant: | MS RAMSDEN |
| Respondent: | MR TRIPP |
| File Number: | ADC656/2007 |
| Judgment of: | Brown FM |
| Hearing date: | 27 July and 6 August 2007 |
| Date of Last Submission: | 06 August 2007 |
| Delivered at: | Adelaide |
| Delivered on: | 28 September 2007 |
REPRESENTATION
| Counsel for the Applicant: | Mr Pickhaver |
| Solicitors for the Applicant: | Germein Reed Mildwaters |
| Counsel for the Respondent: | Ms Ross |
| Solicitors for the Respondent: | Nicholls Gervasi |
ORDERS
Within thirty (30) days of the date of these orders the husband transfer to the wife all his estate title and interest in the property known as and situated at Property Kin the State of South Australia and being the whole of the land described in Certificate of Title Register Book Volume 8xxx.
Concurrently with the transfer referred to in order 1 hereof the husband pay to the wife the sum of $46,250.00.
The 1956 motor vehicle be sold in such a manner as is agreed by the parties and failing agreement as nominated by the court with the proceeds of sale to be divided equally between the parties after payment of all sales costs and commissions relating to the sale have been deducted.
Forthwith the parties contribute equally to the account in the name of their children held by the Australian Scholarships Group Friendly Society by direct debit from their bank accounts and each party be restrained from withdrawing moneys from such fund other than for payment of their children’s educational expenses, when the fund has matured.
Unless specified in these orders and except for the purpose of enforcing any payment of money due under these or any subsequent orders, each party be solely entitled to the exclusion of the other to all property (including choses-in-action) in the possession of each party and superannuation standing in the name of each party as at this date.
The proceedings be otherwise dismissed.
IT IS NOTED that publication of this judgment under the pseudonym Ramsden & Tripp is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT ADELAIDE |
ADC656/2007
| MS RAMSDEN |
Applicant
And
| MR TRIPP |
Respondent
REASONS FOR JUDGMENT
Introduction
These proceedings relate to the division of matrimonial property. The applicant in the proceedings is Ms Ramsden (formerly Tripp). The respondent is Mr Tripp. The parties were married at Property K, South Australia on May 1992. Although they were divorced at Adelaide on 26 June 2007, it is convenient to refer to them as “the wife” and “the husband” respectively in these reasons for judgment.
The parties finally separated in May 2006, after having begun to live together prior to their marriage. Accordingly, the relationship between them was one in excess of fourteen years in duration. It produced two children, D born in September 1995 and M born in May 1997.
The husband is sixteen years older than the wife. He has been married before and brought considerable assets into the marriage, particularly the parties’ former family home located at Property K. This property was extensively renovated, during the marriage, largely by the parties themselves, over several years. Unfortunately the works have not as yet been completed.
Both parties worked during the marriage. The husband has been a self-employed tradesman. More recently, it is his position that he has been suffering from chronic fatigue syndrome, which he asserts has implications for his ability to earn an income, particularly as a tradesman, given the heavy nature of the work involved. The wife is a PAYG tax payer. She is currently employed as an early child care worker. It is her position that she has suffered depression following the end of the parties’ marriage.
One of the significant issues in this case is whether the husband had access to significant sums of money, in cash, during the marriage and what occurred to these sums. The husband travelled to the United States in late 2001 and bought a C van there, which he brought back to Australia. This project consumed significant funds.
More recently, it is the wife’s position that the husband removed $50,000.00 in cash from a safe in the parties’ home. The wife asserts that this cash was removed at the time of the parties’ separation and has not been properly accounted for. It is also the wife’s position that the husband has not properly accounted for his income, in the last years of the marriage, particularly as to how he has been able to accumulate significant amounts of superannuation.
The husband does not accept that he has not been frank about his financial circumstances. He acknowledges that significant sums were kept in the safe, during the parties’ marriage. However, it is his position that there was no large sum of money in the safe at separation and cash accumulated during the marriage has been spent on items of property, which can be accounted for.
The husband received two bequests following the deaths of his father and mother. His father died in 1996, resulting in the husband receiving a parcel of shares. His mother died in 2006, resulting in him receiving around $56,500.00. From the husband’s perspective, these were significant contributions, which are attributable to him alone. The wife does not agree, pointing to her close relationship with the husband’s late mother. As such, she says it can be construed that the gift was to her as much as it was to the husband.
There have been earlier proceedings between the parties concerning care arrangements for D and M. These were finalised on 17 October 2006. Pursuant to orders made on that date, the children are to live predominantly with the wife and spend time with the husband on alternate weekends from after school on Friday until 6:00pm the following Sunday, as well as overnight on each Wednesday during school terms. Orders also provide for the husband to spend time with the children during school holiday periods.
It is the husband’s position that he has been and will continue to be closely involved in care arrangements for both children. The wife does not agree and believes that, over time, it will inevitably be the case that the husband will have little interest in either of the children. In such circumstances, she is doubtful that she will receive much financial assistance, from the husband, in order to assist her with the children’s care.
The parties agree on the value of most of their items of marital property, particularly the former matrimonial home, several motor vehicles and their respective future entitlements to superannuation. They have also agreed on how items of furniture are to be divided between them. This is not a case where the parties have significant liabilities. What liabilities there are, have been agreed between them.
There are however disagreements between the parties as to the extent of the pool of marital property available to be divided between them. These disputes largely centre on whether moneys should be notionally “added back” into that pool, particularly the sum of $50,000.00. This is the central evidentiary issue in the case.
In round terms, the wife puts the parties’ net pool of assets somewhere just short of $690,000.00, whereas the husband puts it somewhere in the vicinity of $621,000.00. Of this sum, the husband proposes he should receive a sum of around fifty-five percent of the sum he has calculated and the wife the remaining forty-five percent. On the other hand, it is the wife’s position that she should receive sixty-five percent of the net pool of assets she has calculated and the husband the remaining thirty-five percent.
These proceedings are designed to resolve the various disputes between the parties and, as far as possible, finalise their financial relationship with one another.
The documents relied upon and the orders sought
The wife is the applicant in these proceedings, which she commenced on 4 September 2006. The husband responded to the application on 19 October 2006.
The wife relies on the following documents:
i)An affidavit of herself filed 10 July 2007;
ii)A statement of her financial circumstances filed 4 September 2006.
In a case outline document, prepared by her counsel Mr Pickhaver, the wife indicated that she seeks the following orders on a final basis:
“1.That the husband do transfer to the wife all his estate and interest in the property situated at Property Kin the State of South Australia and further and better described in Certificate of Title Register Book Volume 5xxx valued at $220,000.00 free of all encumbrances.
2.That the amount of $51,000 plus interest currently held by Exxx, Registered Conveyancer, in the name of the husband be transferred to the wife.
3.That the amount of $11,000 plus interest currently held by Exxx, Registered Conveyancer, in the names of the husband and the wife be transferred to the wife.
4.That the husband do transfer from his CPS account of the sum of $75,000 plus interest to the wife.
5.That the wife do retain furniture and effects to the value of $12,874.00.
6.That the wife do retain her superannuation to the value of $36,719
7.That the wife do retain Ford LTD motor-vehicle to the value of $5750.
8.That the 1956 motor vehicle valued at $28,000 be transferred to the wife.
9.Shares in the husband’s name (Ixxx and CBA) to be transferred to the wife
10.That the wife do retain her Woolworth’s Ezy account to the value of $47.99.
11.That the wife do retain the balance in her CBA account in the sum of $106.56.
12.That the wife do have responsibility for the following liabilities:
a)MasterCard debt of $7131.72
b)debt to her mother of $5000
c)her legal costs
13.The husband do retain the following assets:
a) furniture and household effects to the value of $13,110
b) husband's Ford XD motor-vehicle valued at $2400
c)husband Harley-Davidson motorcycle valued at $14,250
d) husband's Trike valued at $300
e) husband's life insurance valued at $11,113
f) husband's Statewide Superannuation valued at $112,277
g) husband's business assets totalling $42,225
h) Liabilities
The husband to be responsible for his personal and business liabilities and legal costs.
14.That the parties agreed to contribute equally to the account in the name of their children held by "Australian Scholarships Group Friendly Society" by direct debit to their bank accounts and undertake that such funds be used solely for the children’s educational expenses.”
The husband relies on the following documents:
i)An affidavit of himself filed on 2 July 2007;
ii)A statement of his financial circumstances filed 19 October 2006.
In a case outline prepared by his counsel, Ms Ross, the husband indicated that he seeks the following order:
“That by way of full and final property settlement the matrimonial assets of the parties including superannuation be divided as to forty-five percent to the wife and fifty-five percent to the husband.
This is the same order which the husband indicated he sought in his amended response filed on 2 July 2007.
There is no dispute between the parties that the wife should retain the parties’ former matrimonial home situated at Property K. The wife currently occupies this property with D and M. As previously indicated, to their great credit, the parties have now agreed on how items of furniture are to be specifically divided between them. Accordingly, there is no need for the court to make orders in this regard.
In addition, the parties have also agreed as to how a scholarship fund, which they mutually established for the benefit of D and M, should be dealt with. Essentially, it is agreed that both parties will continue to make contributions to the fund and it should be excluded from the parties’ pool of marital assets and be allowed to grow to maturity, at which stage it will be released to benefit each of the children concerned.
The parties also own a 1956 vintage motor vehicle. Because of its age and rarity, its value is difficult to ascertain accurately. The wife does not wish to retain it and it seems generally agreed that it should be sold and its proceeds divided in proportions to be determined by the court.
The parties were the only witnesses who gave evidence in the proceedings before me. The case falls to be determined on the basis of the contents of the documents referred to above and the additional oral evidence of each of the parties concerned. In addition, a number of documents were tendered into evidence. These documents included the husband’s most recent tax returns; copies of his cheque book stubs; and a number of photographs.
In the main these photographs relate to the renovations and work done at the former matrimonial home. It is the wife’s position that she played a major role in performing the work required, which was onerous and time consuming. The husband does not accept that the wife was as closely involved as she would now have the court believe. In addition, the wife has provided photographs with the purpose of supporting her assertion that the work was not done very well and is starting to deteriorate.
In addition, I have been provided with a copy of the most recent child support assessment in respect of D and M. This indicates that Mr Tripp has what is known as “substantial care” of both children. This means he has the care of the children for between 110 and 145 nights per year.
Currently, the Child Support Agency calculate that Ms Ramsden has a child support income of $31,599.00 per annum and Mr Tripp one of $10,927.00 per annum. This results in the husband having no current liability to pay the wife any child support in respect of either D or M. Given the wife’s view that the husband is not likely to maintain his interest in the children, this state of affairs is a major bone of contention between them.
As I have already indicated, both parties currently assert that they have serious ongoing health problems. The husband has provided no formal medical evidence in support of his position. On the other hand, the wife provided a brief report from a psychologist, Ms A. This confirms that the wife has been suffering depression, as a result of the end of her marriage. However, Ms A believes that the wife’s depressive condition will most likely alleviate once she is able to “move on with her life”.
The legal principles to be applied and the issues in the case
The process to be followed for the division of the parties’ property is well established by law.[1] The relevant legal principles are primarily contained in sections 79 and 75(2) of the Family Law Act 1975. I am required to follow a number of specific steps.
[1] See Lee Steere v Lee Steere (1998) FLC 91-626; Ferraro v Ferraro (1993) FLC 92-335;
Firstly, I must ascertain what are the parties’ assets and liabilities as at the date of trial.[2] To the parties’ credit, they have been able to agree upon the valuation of the vast majority of their property. However, as has previously been indicated, there exists considerable controversy between them in the following areas:
·The major issue is whether the sum of $50,000.00 should be notionally “added back” into the parties’ pool of assets, as a premature distribution allegedly made in favour of the husband.[3] This sum relates to the moneys said by the wife to have been removed by the husband from the safe around the time of the parties’ separation.
·This is also the major evidentiary issue in the case. The wife is steadfast in her assertion that there was such a significant sum in the safe, which she asserts only the husband could have removed. The husband denies that he removed any such sum from the safe.
·Associated with the wife’s claim in respect of this sum is her assertion that the husband has failed to make a full and frank disclosure of his financial position in these proceedings. In such circumstances, it is the wife’s position that the court should not be slow to make adverse findings of fact, against the husband.[4]
·The wife asserts that the court should ascribe a value of $86,567.00 to an account held in the husband’s name with Community PS Credit Union.[5] On the other hand, it is the husband’s position that this account currently contains $75,079.00.[6]
·The husband also operates a trading account relating to his trade business with Bank SA. The wife asserts that, for the sake of these proceedings, this account should be credited as holding around $16,000.00. On the other hand, it is the husband’s position that the account currently contains around $9,000.00. It is likely that the difference between the two figures relates to legal fees paid by the husband. A question arises whether this sum of $7,000.00 should be “added back”.[7]
[2] See Wardman & Hudson (1978) FLC 90-466
[3] See In the Marriage of Townsend (1995) FLC 92-569 at 81,654 which was approved In the Marriage of Omacini (2005) 33FamLR 134 at 144
[4] See Weir & Weir (1993) FLC 92-388 at 79,593
[5] See husband’s statement of financial circumstances at paragraph 37
[6] See husband’s affidavit of evidence at paragraph 54
[7] See Farnell & Farnell (1996) FLC 92-68, which discusses the issue of the re-inclusion of sums of marital monies expended for legal fees
Secondly, I must ascertain the contributions which each party has made towards those assets. Contributions fall into two broad categories. The first kind is contributions to the property: financial contributions and non-financial contributions, made directly or indirectly, by or on behalf of a party to the marriage to the acquisition, conservation or improvement of any of the property.
The second kind is contributions to the welfare of the family: in the words of the section, “the contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage, including any contribution made in the capacity of home maker or parent.” It is clear from the authorities that this second kind of contribution must be given appropriate weight and is not to be treated as a token matter or as a contribution which is inherently less valuable or important than a financial contribution to property.
The second step occasions controversy between the parties in the following major areas:
·It is agreed that the husband brought into the marriage the parties’ former matrimonial home, which was valued somewhere between $60,000.00 and $70,000.00 at the time. It was unencumbered and is now agreed to be worth $220,000.00. In addition, the husband had some superannuation and investments worth at least $20,000.00. It is the husband’s position that these are contributions which, in the overall context of this case, are such that they merit being given “special recognition” in his favour in the court’s deliberations.[8]
·In October 1996, on the death of his father, the husband received a cash bequest of $1,174.00 and shares in the Commonwealth Bank and Ixxx. These shares remain in his possession. In addition, in April 2006, on the death of his mother, the husband received a bequest of $56,747.91, which was deposited into an account in his name with the Community PS Credit Union. Again, it is the husband’s position that these are contributions solely attributable to him. The wife asserts that she had a particularly close relationship with the father’s mother herself. As such the contribution should not be linked solely to the husband.
·There are considerable disputes between the parties as to the level of their respective financial contributions, by way of wages, during the marriage. The wife was a conventional wage earner during much of the marriage. Approximately eight years ago, she retrained to become an early child care worker. It is her position that her wages during the marriage are readily ascertainable and were wholly contributed towards family expenses, which she primarily bore.
·During the marriage, the husband was a self-employed tradesman. It is the wife’s position that the husband has not been frank about his earnings during much of this period. In particular, she asserts that he was able to accumulate significant sums of money in cash, much of which he utilised for his own purposes, particularly the acquisition of expensive motor vehicles, holidays and the pursuit of social interests, which involved heavy alcohol consumption.
·The husband does not dispute that he was able to accumulate significant reserves of cash during the marriage. It is his position that it was his preference to avoid banks. However, he disputes that he utilised these sums for his own purposes or without prior reference to the wife. He denies heavy drinking or other wasteful behaviour during the marriage. In particular, he asserts that he utilised considerable sums of cash to pay for the renovations to Property K.
·The renovations to Property K were substantial. They took place between 1997 and 2003. It is the husband’s position that he undertook the vast majority of this work, at times with the assistance of other tradesmen. On the other hand, it is the wife’s position that she was equally involved in the renovations with the husband.
·It is the wife’s position that the husband is a poor and disinterested parent. As a result, during the marriage, all the parenting responsibilities for D and M fell on her shoulders, as the husband was often away pursuing his own social interests. It is also her position that she performed the vast majority of household tasks.
[8] See Pierce & Pierce (1999) FLC 92-844 at 85,811
As a result of his various assertions, primarily his initial financial contributions, the husband contends that the parties’ various contributions, at the end of the second stage, should be assessed as being 65/35 percent in his favour. On the other hand, it is the wife’s position that the husband’s initial and later injections of capital should not be given special prominence, in the overall circumstances of this case and the parties’ various contributions, during their fourteen year marriage, should be assessed as being essentially equal.
The third step involves the assessment of the parties’ prospective needs, by reference to the factors set out in section 75(2) of the Family Law Act 1975. Pursuant to section 75(2) (o), the Court is entitled to take into account “any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account”. In the main, section 75(2) deals with the prospective needs of the parties. This area too, occasions controversy between the parties in the following areas:
·The husband is significantly older than the wife and so closer to retirement age. In addition, it is his position that his health is compromised and he is unable to return to trade for a living. It is the husband’s position that these various factors favour him.
·In the absence of specific medical evidence, the wife does not accept that the husband has significant health issues. As such, she believes that he has an ability to earn a comfortable income over the next few years. For his part, the husband points to the fact that the wife has skills and experience, as an early child care worker and so has a secure income earning capacity.
·The wife points to the fact that the orders of October 2006 result in the children spending more time with her than the husband. It is also her position that, in future, the children are likely to spend more rather than less time with her, given her assertion that the husband is essentially disinterested in them.
·It is also her position that the husband has and will continue to arrange his financial affairs to minimise the payment of child support to her. In her assertion, these are factors which strongly favour her.
·The husband refutes any suggestion that he is a disinterested parent. On the other hand, it is his position that the wife has recently attempted to restrict his level of involvement with both children. Accordingly, it is his position that both children are likely to continue to spend significant periods of time in his care and so it will be inevitably the case that he will make significant financial provision for them.
At the end of the third stage, the husband concedes that there should be some further distribution in the wife’s favour primarily because she will have the primary responsibility for providing a residence for D and M and his straitened financial circumstances will not enable him to pay significant amounts of child support to her. He assesses this further distribution as being in the realm of 10% of the parties’ net available assets.
On the other hand, it is the wife’s position that the various section 75(2) factors overwhelmingly favour her, particularly that D and M will remain financially dependent upon her for at least the next five or six years. She asserts that she should be entitled to a further distribution in her favour of 15% of the parties’ net assets.
Accordingly, at the end of the third stage, the husband asserts that the parties’ assets should be divided 55/45 percent in his favour, whilst the wife asserts the division should be 65/35 percent in her favour.
Finally in determining what order the court should make under section 79, the court must be satisfied that in all the circumstances, it is just and equitable to make the relevant orders. Overall, it is the justice and equity of the actual orders that the court must consider.[9]
[9] See Russell v Russell (1999) FamCA 187
In following the various steps required of me pursuant to section 79 of the Family Law Act 1975, I bear in mind what was said by the Full Court in Danielian and Danielian[10] as follows:
“The task of the court in proceedings under s 79 is not akin to an accounting exercise. The task is to examine the facts of each case carefully to decide what is appropriate and just and equitable in the circumstances. There cannot be expected to be a universal answer to that question on any given set of facts. It is of the essence of judicial discretion that different minds may comfortably arrive at different conclusions. By and large, marriage is a joint venture where parties can expect to buffer each other from the winds of misfortune that blow during the course of their relationship. The degree of the buffer may depend on how much individual sailing they do without consultation or indeed contrary to the wishes of the other. But there can be no certain answer to how much that should be when applying s.79 principles.”
[10] Danielian & Danielian [2003] FamCA 473 at paragraph 49
The “overriding requirement” of section 79 is that considerations of justice and equity should inform each step of the process. The exercise I must undertake is not a “process of social engineering”[11] or of equalisation of assets or financial resources.
[11]See Waters & Jurek (1995) FLC 92-635 at 82,375
At the outset, I am at pains to point out to the parties that the task I must undertake is not a simple accounting or arithmetical task. In the jargon of the times, I cannot “crunch the numbers” to come up with a division of their property, which is not open to challenge or incapable of different interpretation. The task, set out for me in this case, requires me to balance and compare contributions which are by their nature different. The discretion I have is a wide one.
The Evidence
Although the marriage between the parties was one of significant length, it does not seem to me that the husband always confided his financial circumstances to the wife. He seems to have been the person who made all the significant financial decisions during the marriage, particularly in regards to the purchase of items of any significant value. He also seems to have wished to have kept separate, from the wife, as many assets as possible, particularly those he had brought into the marriage or inherited. I do not think there is anything especially sinister in this. It may reflect the husband’s previous marital experience or reflect what he believed was fair or appropriate.
Neither party struck me as being particularly financially astute nor the type of person who would maintain extensive records. The wife seems to have been content to have gone along with the husband’s financial practices, during the marriage, perhaps with a growing sense of resentment.
For his part, the husband was set on maintaining his own somewhat idiosyncratic financial ways, which are ones marked by significant levels of reticence. This is most clearly demonstrated by his admitted practice of keeping large amounts of cash at home and for paying for major purchases in cash. Although I do not think the husband can be described as being financially sophisticated, I am satisfied however that he “knows how many beans make five” and cannot be regarded as lacking intelligence.
The parties separated in unhappy circumstances. As a result they currently view each other through a distorting prism of hostility. The husband’s financial practices and the parties’ current attitude towards one another provide fertile ground for suspicions about money and financial issues to germinate and grow. Clearly, the wife is currently unlikely to accept any protestations from the husband that she now “trust him” about earlier financial transactions. To the contrary, she believes that the husband is desirous of doing her out of her proper entitlements.
For his part, the husband views the wife as opportunistic and avaricious. Although I am not in a position to make definitive findings about the nature of the husband’s business practices, I am concerned that his type of self-employed trade lends itself to the receipt of cash payments.
Certainly this is the wife’s opinion and she is of the view that the husband is tricky and cunning. Obviously, I am not in a position to undertake any forensic reconstruction of the husband’s income over the many years of the marriage or otherwise determine the accuracy of his most recent tax returns. It is clearly the wife’s position that she is suspicious of these various matters. It is against this difficult background that the court must attempt to make significant findings of fact, wherever possible.
The parties to property proceedings brought under the Family Law Act 1975 in this court, are under a duty to make a “full and frank disclosure” of their financial circumstances.[12] This duty has been described as being “fundamental to the whole operation of the Family Law Act in financial cases…”.[13] In Weir & Weir the Full Court of the Family Court said as follows:
“…the failure to disclose undermines the whole process of adjudication of proceedings for a settlement of property in that the court is unable to identify the property of the parties, to properly assess contributions, or to properly assess section 75(2) factors.”[14]
[12] See Federal Magistrates Court Rules at Rule 24.03
[13] Per Smither J in Briese & Briese (1986) FLC 91-713 cited with approval by the Full Court in Black & Kellner (1992) FLC 92-287 at 79,133
[14] Weir & Weir (1993) FLC 92-338
Accordingly, the duty to make a full and frank disclosure, in financial matters brought under the Family Law Act 1975, does not arise merely by virtue of the rules or practice of the court but rather is a fundamental rule of law, which arises because of the necessity for the court in each property proceeding to consider all aspects of the financial circumstances of the parties concerned.[15]
[15] See Luciano & Luciano (unreported) Family Court (O’Ryan J delivered 8 May 2000) at paragraph 373
In appropriate cases, there may be adverse consequences for a party, if it can be shown that he or she has deliberately failed to make a proper disclosure of some material financial fact. Such a non-disclosure may result in the court drawing an adverse inference against the party, who has not made a proper disclosure. In Weir & Weir[16] the Full Court said as follows:
“It seems to us that once it has been established that there has been a deliberate non-disclosure…then the court should not be unduly cautious about making findings in the favour of the innocent party. To do otherwise might be thought to provide a charter for fraud in proceedings of this nature…We should have thought that the courts jurisdiction to make an order going beyond the identified property arises once there is sufficient evidence to support a finding that the party has not made a full disclosure of his or her assets.”
[16] See Weir & Weir (supra) at 79,593
It is the wife’s position that the husband has not discharged this obligation fully. I am not persuaded that this is necessarily the case in respect of all financial issues in this case. My overall assessment of the husband is that he is a “knock about sort of bloke”, who mistrusts banks and financial institutions and prefers to do things himself, wherever possible. The tendency leads him to deal as much as possible in cash and avoid keeping elaborate records. This may be unorthodox but it has been his practice for many years and seems unrelated to any desire for advantage in these proceedings. He deals with his accountant as little as possible and leaves the preparation of his necessary taxation returns to this accountant. His knowledge of retirement planning and superannuation seems rudimentary.
Although the husband is “street smart” in how to run his business, on a day to day basis, particularly in regards to maximising cash returns, it seems to me that the preparation of his tax returns and the necessary profit and loss statements required for them are largely beyond his ken.
Apart from the issue of $50,000.00 sum in cash, which will receive special attention by the court, in my view, there is no strong evidence to indicate the husband has attempted to conceal assets from the wife. His financial holdings are not sophisticated. His superannuation and other investments are all held in his own name. It seems to me that he has attempted to produce to the court all the records he can.
Given this assessment, I do not believe that it can be definitively demonstrated that the husband has been deliberately obstructive in regards to his financial affairs. To the contrary, it seems to me that he was forthcoming about financial matters, when he was able to be so. Other financial matters, including how items of property were purchased, particularly how the renovations at Property K were financed are now largely a blur to him and no records exist from which matters can be accurately reconstructed. Again, I do not think this is sinister.
Pursuant to section 140 of the Evidence Act 1995 (Cwlth) the standard of proof to be applied in this case is the balance of probabilities. As a result of section 140(2), without limiting the matters which the court can take into account in determining whether it is satisfied regarding any particular matter on such a balance, the court may also take into account the following:
“(a) the nature of the cause of action or defence; and
(b) the nature of the subject-matter of the proceedings; and
(c) the gravity of the matters alleged.”
These criteria take into account what was said by Dixon J in the case of Briginshaw v Briginshaw[17] as follows:
“The seriousness of an allegation made, the inherent unlikelihood of an occurrence of a given description, or the gravity of the consequences flowing from a particular finding are considerations which must affect the answer to the question whether the issue has been proved to the reasonable satisfaction of the Tribunal. In such matters “reasonable satisfaction” should not be produced by inexact proofs, indefinite testimony, or indirect inferences.”
[17] Briginshaw v Briginshaw (1938) 60CLR 336 at 362
Proceedings between former martial partners invariably evoke strong emotions, particularly where one party feels hard done by as a result of the circumstances surrounding the end of that marriage. Such emotions are likely to inform how parties recollect past events and, when those events need to be reconstructed, for the sake of adversarial proceedings such as these, it is only to be expected that such a subsequent reconstruction should favour the party making it.
Both parties have, I think, followed the natural human tendency, in proceedings such as these, to minimise their own failings and maximise those of the other. For the same reason, both have maximised the extent of their respective contributions and minimised those of the other party. This is particularly so in respect of the renovation work performed, over many years, at Property K.
For those reasons, it is inevitable that both parties have reconstructed parts of their martial history and placed undue emphasis on matters, which are of assistance to them in the outcome of the case. This is understandable given the significance of it to both parties. The proceedings were bitterly contested and there is currently no love lost between the parties.
Whether these reconstructions were conscious or unconscious is difficult to say. From my observations of the parties in the witness box, both seemed to me to be straightforward and guileless people. I make these observations because of my view that it would be imprudent of me to make a significant finding of fact in this case on the basis of an assessment of credit alone. Particularly whether the $50,000.00 did or did not exist.
a) Chronology
The husband was born in 1953. The wife was born in 1969. The husband has been a tradesman since he left school. The wife left school after completing Year 10 in 1984. Thereafter she worked in a number of retail outlets in both Adelaide and Kxxx The parties began living together in Kxxx in late 1991.
The husband first married in 1974. He separated from his first wife in 1982. He was then involved in another significant de-facto relationship, which concluded before he met the wife. He has four living adult children from these two relationships, apart from D and M.
b) Assets at the commencement of the relationship
It is common ground between the parties that the husband had significant assets at the commencement of their relationship in late 1991. These assets included the former matrimonial home and a number of financial investments. There is now some controversy between the parties regarding the precise value of these various items. However, it is clear that Mr Tripp purchased Property K in February of 1990, for the sum of $60,000.00. The property was unencumbered. I also accept that the husband purchased a shed for the property, which increased its value.
It is also clear that, at the time the parties commenced their relationship, the husband had a long-standing investment in the IOOF Friendly Society. He has produced evidence that indicates that, as at 30 June 1992, his investment with the Friendly Society stood at $9,948.00. The wife does not dispute that the husband also had an investment with Exxx worth around $11,000.00 and superannuation worth around $5,000.00.
The wife asserts that she owned a motor vehicle and had other items of furniture and household effects. As she had been working for a number of years, she also had some modest superannuation. The exact value of the wife’s car is now uncertain and there is a dispute between the parties as to whether it was subject to a loan agreement. For his part, the husband asserts he also had a motor vehicle and some tools, which he utilised in his business.
As a result of all these matters, I am satisfied that the husband brought into the marriage assets which can be conservatively valued at around $85,000.00. The wife asserts that the various items of property she brought into the marriage were valued at around $25,000.00. She is unable now, in contrast to the husband, to provide definitive evidence in support of her claim. In all the circumstances of this case, I consider that her estimate in this regard is likely to be inflated rather than an under estimation.
Accordingly, it is my view that the husband brought in significantly more assets into the marriage than the wife. Amongst these assets was the unencumbered family home, which remains the parties’ most significant asset in terms of value.
c) Income during the marriage
There is much controversy between the parties regarding their respective incomes during the marriage. This controversy has arisen because of the parties’ different taxation status – the wife being a PAYG tax payer and the husband being self employed – as well as the husband’s inability to provide extensive records.
During the early years of the marriage, the wife was employed by Telstra. More recently, since undergoing a course of study, she has been an early childhood worker. Her periods of paid employment have been interrupted by maternity leave.
Records produced by the wife reveal that her taxable income for the years of the marriage has been as follows:
Financial Year
Taxable Income
30 June 1991
$21,797.00
30 June 1992
$19,379.00
30 June 1993
$22,672.00
30 June 1994
$22,710.00
30 June 1995
$27,381.00
30 June 1996
$6,816.00
30 June 1997
$5,899.00
30 June 1998
$7,301.00
30 June 1999
$8,152.00
30 June 2000
$6,934.00
30 June 2001
$9,276.00
30 June 2002
$14,257.00
30 June 2003
$20,731.00
30 June 2004
$25,647.00
30 June 2005
$29,629.00
30 June 2006
$31,599.00
I am satisfied that the wife fully utilised her income earning capacity during the marriage. Clearly, the periods when her annual income declined coincided with the respective births of D and M and the wife’s responsibility to care for them. It is also clear that the wife utilised all her income for household expenses.
It is the husband’s position that he too worked, during most of the marriage, operating his trade business. Given his mode of employment, it is his evidence that he was able to adopt flexible hours, which enabled him to be engaged in caring for the children and also to perform much of the extensive renovations on Property K,. The renovations were carried out between 1997 and 2003. As a light hearted magazine article, which the wife wrote in conjunction with a journalist demonstrates, the renovations were not without incident.[18] It is the husband’s position that the ambitious renovations were largely funded by him from his recurrent income. It is clear no monies were borrowed to finance them.
[18] See exhibit W5
The only formal evidence of the husband’s income, during the marriage, is provided by his tax returns for the years between 2002 and 2006. These returns also include income received by the husband from his various investments. Each return also includes a calculation of his gross receipts from the trade business, described as “sales” and the expenses which have been deducted from those sales to calculate net profit. The major expenses in each case relate to the cost of materials; vehicle running expenses; and depreciation. An analysis of the various tax returns produces the following results:
Taxation Year
“Sales”
Deducted expenses
Taxable Income
30 June 2002
$84,706.44
$65,107.11
$26,480.00
30 June 2003
$90,594.60
$77,772.19
$8,389.00
30 June 2004
$75,989.45
$65,277.51
$11,243.00
30 June 2005
$65,970.79
$49,843.89
$7,922.00
30 June 2006
$70,079.44
$51,802.07
$10,927.00
In my view, there is nothing extraordinary in any of these taxation records. They indicate that the husband has been in steady but perhaps declining employment over the past five years. Expenses claimed for depreciation and motor vehicle running expenses are likely to be somewhat artificial, being calculated in order to reduce liability for tax. Accordingly the money in his pocket is likely to be greater than the taxable income figure indicates.
As previously indicated, the husband acknowledges that he was able to accumulate significant stores of cash, during the marriage and it was his preference to pay for large expenditure items, such as cars and the renovation expenses, in cash. Given all these factors, it is my finding that the husband derived a comfortable income, as a tradesman, during the marriage. Whether he also received sums of cash for his work, I am unable to say but I have my suspicions.
d) The renovations
The renovations to the Property K property were extensive and ambitious. They also constituted a considerable stressor in the parties’ marriage. The renovations included the demolition of much of the existing home and the construction of three underground rooms, which required considerable excavation. I have been provided with some photographs of the work involved. It is impossible for me to calculate the costs of the work done, as no money was borrowed to finance it and no records have been provided to me. The wife asserts that the husband told her it was in excess of $120,000.00.
If the wife’s magazine article is to be believed, the husband somewhat cavalierly began the work, without much thought as to when it would be finished and what consequences it would have for the wife and children. I accept the wife lived in difficult and arduous circumstances over several years. My impression is that the husband was the main force behind the renovations. The wife concedes he drew up the necessary plans. It also seems to be the case that, through his trade experience, he had more of the necessary skills and contacts to complete the work than the wife.
It is the husband’s case that he reduced the paid work he did as a tradesman and concentrated on the renovation works. It is also his case that whatever spare cash was available, was channelled into the renovations. He also deposes that he bartered trade work, with other tradesman, so that they would work on the Property K property without formal payment. This seems likely.
On the other hand, it is the wife’s position that she was extensively involved in the work required, acting as the husband’s “brickies labourer” for the construction of the walls and doing many other physical tasks. As previously indicated, the husband disputes the extent of the wife’s involvement in the project and asserts that she was disinclined to provide assistance.
It is impossible to ascertain the level of either parties’ involvement from the tendered photographs alone. A photograph is after all only a frozen moment in time. Certainly, the photographs show the wife at the building site apparently engaged in work. On balance, it seems to me more likely that the husband was the major driving force in the work and the wife’s involvement was sporadic. It also seems to me likely that the project consumed considerable funds.
I accept that the husband worked very hard on the project over approximately six years. Unfortunately, it seems that it was beset by a number of unforseen difficulties. In addition, unfortunately, it also seems to be the case that the hard work involved in the project and the moneys invested in it have not translated into any significant increase in the property’s value.
Mr N, the valuer retained to value the property, notes that some walls and ceiling areas are badly cracked and it would be prudent for any owner or prospective purchaser to retain a qualified builder to ascertain what needs to be done to ensure the renovations are structurally sound. Mr N remarks that the residence is one of “character, but considerable structural work will be necessary to restore appeal to residents.”[19]
[19] See annexure E to wife’s affidavit
e) Parenting responsibilities and home making duties during the marriage
The husband asserts that he would help around the home on a daily basis and assist often with the care of the children. The wife does not accept this. It is her position that the husband was not involved with the care of the children at all and did practically nothing around the house. In fact, she asserts that the husband’s behaviour, particularly his alcohol consumption and violent disposition made it more difficult for her to properly parent the children and provide for their day to day needs. She also says he was frequently away from home.
The husband does not accept his portrayal as an abusive drunkard. This is hardly surprising. There is no evidence, apart from the wife’s assertion of the fact, to support her case in respect of the state of the parties’ marriage. Disputes of this kind are common in vitriolic proceedings between former partners, regarding the division of matrimonial property. Given the private nature of most marriages, these disputes are very often difficult for the court to resolve.
I have no doubt that the relationship between the parties was often a turbulent one, which was also periodically deeply unhappy. However, I do not believe that it can be said that one party was a “passenger”, whilst the other did all the work. It seems to me more likely that both parties contributed a great deal to the marriage, albeit probably in different ways and forms.
Both were involved in the paid workforce during the marriage. The husband did much of the renovation work. It seems likely that many but not all of the parenting and home making responsibilities fell on the wife’s shoulders. Perhaps the husband was difficult to live with at times during the relationship. The wife asserts that he was suffering from depression in its later stages. It also seems he went to Adelaide from time to time.
However, it is not the purpose of these proceedings to reinsert fault or blame into the factors relevant to determine financial matters such as this one. The thrust of much of the wife’s evidence is that she is entitled to receive some greater proportion of the parties’ marital assets on the basis of the principles laid down by the Full Court in Kennon & Kennon[20].
[20] Kennon & Kennon (1997) FLC 92-757
In this regard, it is appropriate to set out the relevant passages from the Full Court’s decision in Kennon:
“Put shortly, our view is that where there is a course of violent conduct by one party towards the other during the marriage which is demonstrated to have had a significant adverse impact upon that party’s contributions to the marriage, or, put the way, to have made his or her contributions significantly more arduous than they ought to have been, that is a fact which a trial judge is entitled to take into account in assessing the parties’ respective contributions within s.79. We prefer this approach to the concept of “negative contributions” which is sometimes referred to in this discussion.
In the above formulation, we have referred only to domestic violence, for the reasons which we indicated earlier, but its application is not limited to that.
And further on:
However, it is important to consider the “floodgates” argument. That is, these principles, which should only apply to exceptional cases, may become common coinage in property cases and be used inappropriately as tactical weapons or for personal attacks and so return this Court to fault and misconduct in property matters – a circumstance which proved so debilitating in the past. In addition, there is the risk of substantial additional time and cost.
However in our view, s 79 should encompass the exceptional cases which we described above. It would not be appropriate to exclude them as a matter of policy because of this risk. It is a matter of commonsense for the lawyers involved and, where that may not be sufficient, it is a matter for a firm hand by the Court at an early stage when a case appears to raise those issues.
It is essential to bear in mind the relative narrow band of cases to which these considerations apply. To be relevant, it would be necessary to show that the conduct occurred during the course of the marriage and had a discernible impact upon the contributions of the other party. It is not directed to conduct which does not have that effect and of necessity it does not encompass (as in Ferguson) conduct related to the breakdown of the marriage (basically because it would not have had a sufficient duration for this impact to be relevant to contributions).”[21]
[21] See Kennon & Kennon (supra) at 84,294-5
I accept that some aspects of the wife’s marital experience were unhappy. So to were the husband’s. However, on the evidence before me, I do not find these matters to be exceptional in the terms referred to by the Full Court. Indeed counsel for the wife, Mr Pickhaver concedes that this is his client’s position. However, I accept that the wife was the principal homemaker and parent in the parties’ marriage, roles which she performed admirably. But, on the other hand, I think it an overstatement to describe her essentially as a sole parent in regards to D and M.
f) Expenditure during the marriage
I have already outlined the parties’ respective incomes during most of the marriage. This analysis shows the wife to be a modest income earner. I accept that she utilised her income for family purposes and can be described as a frugal and careful homemaker. Apart from his acknowledgement that he was able to accumulate significant sums of cash from time to time, there is no clear evidence to indicate that the husband enjoyed a high income during the marriage. However, I think that I would be naïve to think that he did not receive cash payments, for work performed, from time to time.
The wife portrays the husband as a self indulgent spendthrift who wasted funds on items of his own choosing, such as motor vehicles and holidays for himself. Essentially, it is her criticism that these purchases did not benefit the family unit as a whole and the funds involved could have been much better spent. In particular, much time was expended, during the case, examining the circumstances surrounding the purchase of a C van in the United States, which the husband wished to acquire for his business.
It is not the purpose of these proceedings to examine whether the purchase of the van was appropriate. Clearly, the wife calls into question the practicality of the husband going to the United States to purchase a work vehicle, which had to be converted for use in this country.
The purchase may have been imprudent. However, in my view, there is no evidence to show that the husband has deceived the wife about the transaction or has secretly benefited from it, apart from the fact that he had the opportunity to spend two weeks in the United States. The C van in question remains in the parties’ possession, albeit at a much lesser sum than was involved in its acquisition.
The same is true of a number of other motor vehicles and motorcycles, which the husband purchased during the marriage. These can be characterised as extravagant purchasers. However, the vehicles in question remain in the parties’ possession and form part of the pool of marital assets.
The wife may not have approved of the individual purchase of the vehicles concerned. I also appreciate that she was in no position to demur. In addition, I do not think that the extent of the purchases in question are such that I can necessarily infer that the husband must have had access to considerable undisclosed sums of money in the past and, perhaps more importantly, in the context of these proceedings, then conclude that he has either concealed or wasted substantial sums to the wife’s detriment.
The wife is critical of the husband for wasting marital funds on the consumption of excessive amounts of alcohol and through holidays, which he took without her and the children. As previously indicated, the husband disputes the extent of his alcohol consumption and asserts that the wife has overstated the number of holidays, which he took alone.
I accept that the husband did take holidays alone. But it also seems to be the case that he holidayed with the family from time to time as well. In my view, it is not open to the court to make any specific finding that the husband has embarked on a course of conduct to reduce or minimise the effective value or worth of items of matrimonial assets in the senses envisaged by Baker J in Kowaliw.[22]
[22] Kowaliw & Kowaliw (1981) FLC 91-092 at 76,644
I accept that, at this juncture, the wife is somewhat resentful about what she views as the husband’s financial profligacy. However, it is a considerable extension from that for the court to make a finding that the husband’s behaviour amounts to a “negative contribution” or it should make some calculation as to a sum, which should be notionally added back into the parties’ pool of assets, to compensate the wife for this conduct. In my view, it would not be just and equitable for the court to consider either course in these proceedings.
The wife points to the fact that the husband had a legal liability to pay child support for a child from an earlier relationship. She estimates the liability at approximately $107.00 a month and indicates that the liability remained for a period of twelve years during the parties’ marriage. Clearly, this was a liability which the husband could not avoid and resulted in less moneys being received into the parties’ household. However, I do not think that it should be a strongly determinative factor in the outcome of these proceedings.
g) Bequests to the husband
The husband’s father died in January 1995. As a result, the husband received a one-third share of his father’s estate in October of 1996. In the main, this consisted of a parcel of shares in the Ixxx (formerly Westpac Property Trust) and the Commonwealth Bank. The husband has not disposed of any of these shares, which remain in his sole name. He also received a modest amount of money. In my view, if an asset by asset approach was taken to these shares, it would be difficult for the wife to assert anything other than that the husband is to be regarded as the sole contributor of them into the matrimonial pool.
More recently, in October of 2005, the husband’s mother died. As a result, in April of 2006, the husband received the sum of $56,747.91 from his mother’s estate. This sum largely remains in tact in a credit society account in the husband’s name.
It is the wife’s position that the husband had a difficult relationship with his late mother. She deposes that she visited the late Mrs L more often than the husband did and, as a result, she (Mrs L) left her estate to the husband anticipating that the wife and children would also benefit from the bequest. Accordingly, in her affidavit, the wife deposes as follows:
“I believe that if the respondent and I had separated prior to
Mrs L’s death that she would have changed her will to leave some money for the children and I.”[23]
[23] See wife’s affidavit at paragraph 56
It is difficult for me to assess the nature of the relationship between the late Mrs L and each of the parties concerned, particularly what was her intent when she made her will. Even if I accept that there existed a particularly close and loving relationship between the wife and the late Mrs L, there is no specific evidence to indicate that the legacy was anything other than as indicated on its face, namely a gift to recognise the natural ties of affection and blood, which exist between mother and child. In the circumstances of this case, I am not prepared to assume anything other than that the bequest was directed to the husband alone and accordingly should be accounted as a contribution attributable to him.[24]
[24] See Gosper & Gosper (1987) FLC 91-818 and Kessey & Kessey (1994) FLC 92-495
h) The sum of $50,000.00
$50,000.00 is a significant sum of money in anyone’s language and is particularly significant to the parties in this case. In my view, I must approach the issue of the money with caution.
The parties’ safe, where the sum was allegedly kept was in their home. It was opened by a key. Ms Ramsden said only the husband had the key. Mr Tripp says the key was kept in the kitchen, a fact known to the wife. Ms Ramsden says that she “accidentally” found the key after the parties separated and when she opened the safe discovered it was empty of cash.
On the other hand, Mr Tripp asserts that he left the former family home without the key and was anxious to return to the home to collect items of property, including his passport and his late father’s coin collection from the safe. When he eventually gained access to the property and opened the safe, he found his father’s coin collection gone and the safe essentially empty. The import of his evidence is that, whatever money was in the safe, on his case a trifling sum, the wife has taken it.
In her affidavit, the wife asserts that she saw “a large bundle of cash” in the safe shortly prior to separation. She concedes that she has guessed that the sum was $50,000.00. Her guess is informed by the fact that the bundles were of $100.00 notes and she has experience of large cash sums from working at a major grocery store.
The husband concedes that considerable sums of money were held in the safe from time to time. He does not deny that the sums in question were at times up to $50,000.00. However, it is his position that the vast majority of any cash sum had been dispersed long before separation, mostly in the purchase of the Harley Davidson motorcycle ($16,000.00); the purchase of the Ford LTD motor vehicle ($16,250.00); and the construction of the veranda on the former family home ($11,000.00).
The wife is not specific about when she allegedly saw the large amount of money other than it was “immediately prior to separation”. It was her evidence that she came on the husband surreptitiously opening the safe and saw the money over his shoulder.
She asserts that the parties had an acerbic conversation at this point. Essentially, she says she challenged the husband that he was stealing the money, to which he snidely replied “you prove it”. Mr Tripp does not disagree that the parties had such or similar an exchange of words. However, it is his position that whatever was said was said in the heat of the moment, against a background of considerable marital discord. Essentially he says the conversation means nothing and should not be taken as a statement against self interest and so likely to be true. I agree.
It is difficult to construct a clear narrative about the money held in the safe from the contradictory evidence of the parties. It is more difficult to ascribe any particular value to the sum, if any, at separation. In such circumstances, I am loathe to determine the issue on the basis of credit alone, particularly given my view that both parties are liable to have constructed aspects of their evidence.
It is the wife’s case that the husband has regularly received unexplained amounts of income, which have allowed him to purchase expensive assets, particularly the C van and the Harley Davidson motorcycle. The wife uses these significant cash purchases to provide collateral support for her assertion that there was this significant sum of money in the safe, which the husband has misappropriated. Essentially, she uses the purchases as tending to demonstrate that the husband had a long established practice of keeping such large sums of money in the safe.
As I have already indicated, I accept the husband is unorthodox about his preference to pay for things with cash. It also seems likely that he has been paid for his labours in cash from time to time. However, in my view, neither of these things logically establishes that he would defraud his wife at separation or there was such a significant sum of money in the safe at separation.
The angry conversation between the parties is not determinative of the issue either. In my view, it is possible that the wife is mistaken about when she saw the sum and what she saw. On the balance of probabilities, I am able to establish that there was this significant sum of money, in the safe at separation and accordingly I am not going to add such a sum back into the pool of the parties’ assets.
i) The husband’s post separation contributions to superannuation
Mr Pickhaver counsel for the wife, is critical of the husband for discrepancies between amounts contributed to his superannuation fund, particularly after separation and the level of income disclosed in his taxation returns and statement of financial circumstances for the same periods.
In the years for which the husband has provided taxation returns, the records indicate the following superannuation contributions:
Taxation Year
Superannuation Contributions
30 June 2002
$3,000.00
30 June 2003
$3,000.00
30 June 2004
$8,000.00
30 June 2005
$15,000.00
30 June 2006
$17,750.00
In addition, cheque stubs tendered by the wife indicate the husband wrote a number of cheques to his superannuation fund between 4 September 2004 and 22 June 2005, amounting to $25,000.00.[25]
[25] See Exhibit W7
The husband acknowledges that he made significant payments to his superannuation fund, after the parties separated. It is his position that he was advised to do so by his accountant, as he was approaching retirement age and it was a financially prudent thing to do. Essentially, he says he did what his accountant told him to do and now is unclear specifically where the sums concerned came from.
This is not a case where it is said that there has been a conscious attempt to conceal these sums of money from the wife. They were paid into a superannuation account standing in the husband’s name. The superannuation fund concerned has been disclosed by him. There is no recent evidence to indicate that the husband has been leading an extravagant lifestyle. In such circumstances, I am unwilling to draw an adverse inference, against the husband, on the basis of the contributions made by him to his superannuation fund. Certainly, I am unwilling to reach the conclusion that he has necessarily secured a premature and clandestine distribution of marital assets in his favour.
The first step – the pool of assets
Having dealt with the issue of the $50,000.00 “add back” the remaining issues in dispute between the parties, regarding the pool of marital assets, are small. I propose utilising the current balance in the husband’s Community PS Credit Union account. The husband has not provided any detailed explanation as to why the account has diminished. In all the circumstances, I do not think there is anything sinister about this. I have no reason to think anything other than that the moneys have been spent on normal living expenses.
In regards to reductions in the husband’s business account, it is conceded that the moneys concerned have been expended on legal costs relating to these proceedings. In those circumstances, I propose to add back the sum concerned into the parties’ pool of assets.[26] Accordingly, I find that the parties have the following assets and liabilities available to be divided between them:
[26] See DJM v JLM (1998) FLC 92-816 at 85,262
ITEMS OF PROPERTY
VALUE OF PROPERTY
Property K
$220,000.00
LTD motor vehicle
$5,750.00
XD motor vehicle
$2,400.00
Harley Davidson motorcycle
$14,250.00
Trike
$300.00
1956 motor vehicle
$28,000.00
Husband’s shares (Ixxx & CBA)
$22,893.00
Exxx investment
$62,000.00
Husband’s life insurance (surrender value)
$11,113.00
C van
$27,000.00
Husband’s tools
$6,225.00
Husband’s business account
$16,000.00
Wife’s savings
$1,201.00
Husband’s savings (Credit Society)
$75,079.00
Superannuation
Husband’s superannuation
$112,000.00
Wife’s superannuation
$36,719.00
Total assets
$640,930.00
LIABILITIES
Husband’s business debt
$3,465.00
Wife’s Visa card debt
$5,365.00
Wife’s debt to mother
$5,000.00
Total liabilities
$13,830.00
NET ASSETS
$627,100.00
The Second Step – assessment of contributions – Section 79(4)(a) to (c)
I now turn to the second of the steps in the exercise under section 79, namely an assessment of the parties’ contributions within the context of section 79(4)(a) to (c). These provisions are as follows:
“Section 79(4) In considering what order (if any) should be made under this section in proceedings with respect to any property of the parties to a marriage or either of them, the court shall take into account –
(a)the financial contribution 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 of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them;
(b)the contribution (other than a financial contribution) 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 of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them;
(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 children of the marriage, including any contribution made in the capacity of home maker or parent.”
Section 79(4) requires that the court look at the entirety of the contributions, both financial and non-financial, to the welfare of the family, as well as to the acquisition, conservation and improvement of those assets. Contributions are not required to be tied to the acquisition, conservation and improvement of any particular asset and maybe taken into account generally as contributions in a total sense.
The task required of me pursuant to section 79(4) of the Family Law Act thus is to weigh and assess the disparate contributions of the parties to arrive at an outcome, which is both appropriate and just and equitable in all the circumstances. Contributions, which are different in quality and nature, must be compared. The exercise is not purely an arithmetical or accounting one.
The marriage between the parties was a long one, which produced two children. The contributions of both parties during that long marriage have been significant. The husband brought into the marriage the former matrimonial home, which was unencumbered. Its current value is around one-third of the parties’ current pool of assets. In addition, the husband brought in other significant investment funds, which remain largely intact.
He also contributed the moneys he received by way of bequest from the estates of his late parents. These latter contributions have also remained largely in tact. Accordingly, in a real sense, the husband has made very significant contributions of cash, which are attributable solely to him.
On the other hand, the wife has also made significant contributions, as a homemaker and a parent, as well as having worked for the larger proportion of the marriage. Her income was wholly contributed to family purposes but has not resulted in the direct acquisition of a great deal of property.
The difficulty provided by the case is how the husband’s superior initial financial contributions and his other financial contributions are to be balanced against the significant contributions which the wife has made during the period of the marriage, which have not of themselves directly resulted in the acquisition of assets.
It is a difficulty to which I have already alluded in that, pursuant to the section 79 exercise, the court is often called to compare fundamentally different things. In Ferraro, the Full Court of the Family Court noted as follows:
“The task of evaluating and comparing the parties’ respective contributions where one party has exclusively been the breadwinner and the other exclusively the homemaker, is a most difficult one to perform because the evaluation and comparison cannot be conducted on a “level playing field”. Firstly, it involves making a crucial comparison between fundamentally different activities, and a comparison between contributions to property and contributions to the welfare of the family. Secondly, whilst a breadwinner contribution can be objectively assessed by reference to such things as that party’s employment record, income and the value of the assets acquired, an assessment of the quality of a homemaker contribution to the family is vulnerable to subjective value judgments as to what constitutes a competent homemaker and parent and can not be readily equated to the value of assets acquired. This leads to a tendency to undervalue the homemaker role”[27]
[27] Ferraro & Ferraro (1992) 16 Fam LR 1 at 38
Cases involving one party having made a significant initial injection of capital, where the marriage concerned is of a significant period and which involve the court having to assess non-financial contributions pose particular problems. As the Full Court observed in Ferraro, a court such as this one must be careful not to undervalue the homemaker role. On the other hand, it may lead to injustice if, in a similar fashion, a major discrepancy in the respective contributions of initial capital is overlooked. In the past, there has been a tendency to suggest that such an initial contribution of capital is “eroded over time” by other factors, particularly homemaking contributions. The Full Court has pointed out that such a formulation is erroneous.
In Pierce & Pierce,[28] Ellis, Baker & O’Ryan JJ made reference to several of the relevant authorities. Their Honours said as follows:
“In our opinion it is not so much a matter of erosion of contribution but a question of what weight should be attached, in all the circumstances, to the initial contribution. It is necessary to weigh the initial contributions by a party with all other relevant contributions both of the husband and the wife. In considering the weight to be attached to the initial contribution, in this case the husband, regard must be had to the use made by the parties of that contribution.”
“…there is no principle that the length of the marriage leads to a likelihood that other contributions will outweigh or weigh equally with ‘a particular contribution’. It is a matter of assessing the contributions of all relevant kinds in each case to arrive at an outcome, which is both appropriate and just and equitable. In some cases particular contributions may be outweighed or equalled by other ones. In other cases particular contributions may be so disproportionate to other contributions as to merit special recognition.”
[28] Pierce & Pierce (1999) FLC 92-844 at page 85,811
The Full Court has directed that regard be had to the use which is made of initial financial contributions. In the present case, the husband has kept many of his financial contributions quarantined from the wife. They have remained in his name alone. The one exception is the former family home, which Ms Ramsden asserts was only transferred into joint names in order to isolate it from claim by the husband’s former de-facto partner.
Notwithstanding the length of the marriage and the wife’s very significant contributions during it, in my view, the husband’s various injections of capital into the marriage at both its inception and during it are such to merit special recognition in this case.
In addition, notwithstanding the wife’s exemplary labours during the marriage, the husband has also made other significant contributions by way of income and the labour he provided for the renovations of Property K. These contributions to must be given some weight, although it is unclear whether the latter contributions have resulted in any increase in value to the former matrimonial home.
Accordingly, notwithstanding the wife’s efforts, I have reached the conclusion that the husband’s overall contributions during the marriage are to be regarded as superior. I assess the parties’ respective contributions, at the end of the second stage, as being 60/40 percent in the husband’s favour.
The third step – section 75(2) factors – the prospective needs of the parties
I am now required to consider the various matters set out in section 75(2) and in particular to consider whether any further adjustment should be made in favour of either party. The section 75(2) factors are as follows:
(a) the age and state of health of each 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;
(c) whether either party has the care or control of a child of the marriage who has not attained the age of 18 years;
(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;
(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;
(g) where the parties have separated or divorced, a standard of living that in all the circumstances is reasonable;
(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 adequate income;
(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; and
(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;
(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;
(l)the need to protect a party who wishes to continue that party’s role as a parent;
(m)if either party is cohabiting with another person – the financial circumstances relating to the cohabitation;
(n)the terms of any order made or proposed to be made under section 79 in relation to:
(i) the property of the parties; or
(ii) vested bankruptcy property in relation to a bankrupt party;
(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
(o)any other fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account; and
(p)the terms of any financial agreement that is binding on the parties.
Sub-section (a) – the husband is fifty four years old. He asserts that he is currently in poor health due to chronic fatigue syndrome. As he has not provided any formal medical evidence in support of his position, I am loathe to accept this bald assertion. As I have already noted, his income from trade has reduced over the past few years. It is the husband’s subsidiary position that, as he grows older, it is more and more difficult for him to perform the heavy physical work of a tradesman. I accept that this is so.
The wife is thirty seven years old. I accept that she has and is currently suffering from depression. This depression is likely to have been precipitated by the stressful circumstances of the parties’ separation. To the wife’s great credit, she has been able to continue in the paid workforce notwithstanding her condition. The wife herself indicated that she was able to “soldier on”. On balance, with time, it seems likely that the wife’s condition will resolve.
Sub-section (b) – the husband is a skilled tradesman, who has pursued his trade for all of his working life. In the past, his skills have enabled the husband to make a comfortable living. This must follow from the fact that he has been able to accumulate substantial sums of cash, which have funded the purchase of motor vehicles and motor cycles.
It also seems likely that the husband has considerable connections in the Kxxx area and an established reputation as a tradesman. It seems to me likely that the husband has some capacity to continue working for the next five or so years at least. I anticipate that he will be able to derive some income as a tradesman. In this regard, it is interesting to note that Mr Tripp’s gross receipts increased by about $5,000.00 between the year ending 30 June 2005 and the year completed 30 June 2006.
The wife has secure employment as an early child care worker. She has been in this employment for the last few years and it provides her with a regular but modest income in the hight $30ks to low $40ks. It seems unlikely that the wife’s income will increase other than for modest wage increases related to inflation and such like. Accordingly, in my estimation, neither party has a marked superiority so far as current and future income earning capacity is concerned.
As the Full Court recognised in Clauson[29] the most valuable “asset”, which a party can take out of a marriage, is a substantial and reliable income earning capacity. In this case, I am satisfied that both parties have the capacity to earn a reliable level of income but in neither case can it be regarded as substantial. However, on balance, I do not think that the husband’s income earning position is as dire as he would have the court believe.
[29] See Clauson & Clauson (1995) FLC92-595 81,911
Sub-section (c) – both parties concede that this is the most important consideration at this stage of the court’s deliberations. It is closely related to the considerations, which arise under sub-section (na). D is approaching his twelfth birthday. M is a few months over ten years of age. Accordingly, both children are approaching the years which are most likely to be the most expensive, so far as their financial support is concerned. They will be going to high school. They will be playing sports and being engaged in other pursuits. The costs of their education and clothing are likely to be significant.
At present, I accept that the wife is bearing more of the costs related to the children’s financial support than the husband is. This includes the provision of the children’s private school fees, although the husband did make some initial contribution to these fees, after the parties separated.
In my view, the wife is likely to be the parent who is mainly responsible for providing care for the parties’ two school aged children. She will bear the burden of delivering and collecting them to and from school; making arrangements for their care before and after school; and tending to them in the event that either is ill. These responsibilities, relating to a child’s health, education, socialisation and general well being have been described as “myriad”.[30]
[30] See Collins & Collins (1990) FLC 92-149 at 78,043-8
Inevitably, these responsibilities will impact on the hours of paid work the wife can take on and so on her prospects of promotion. I appreciate that, in this day and age, these difficulties confront many working parents and, too a large extent, the wife’s employment is the sort which is more likely to be able to fit in with her responsibilities for D and M. However, the fact remains that Ms Ramsden will carry out more of the parenting responsibilities for the children and this inevitably must have an impact on her financial “bottom line”. In my view, this is a factor which significantly favours the wife.
Sub-section (d) – the wife lives modestly. The husband has had to find new accommodation for himself and is currently living in a one-bedroom unit in Kxxx. According to his statement of financial circumstances, his income exceeds his expenditure. His major expense apparently being contributions to his superannuation fund. Apart from the children of the marriage, it seems that neither has any duty to support any other person.
Sub-section (e) – this is not a relevant consideration in this case.
Sub-section (f) – the wife is many years from retirement. She has modest superannuation. The husband, being older, has recently begun to place greater emphasis on retirement planning. He has invested significantly in superannuation, on the advice of his accountant.
Although the husband has significantly more superannuation than the wife, he cannot be described as well prepared financially for retirement. However, as I have already indicated, the husband is likely to have some years of employment before him, during which he will be able to make further contributions towards his superannuation.
It is the wife’s preference that she receive whatever property is allocated to her, following these proceedings, in the form of immediately realisable assets only. She does not seek a splitting order in respect of the husband’s superannuation.
In his material, the husband has not eluded to how he proposes the wife should receive the forty five percent of the parties’ total marital assets, which he asserts is the appropriate outcome in these proceedings, other than it is common ground between the parties that the wife should retain the former matrimonial home.
Due to their differences in age, the parties have different needs, so far as superannuation is concerned. For obvious reasons, the husband’s needs are greater in this regard. However, both parties also require cash – the husband to rehouse himself, if he wishes and to otherwise provide for the exigencies of life, the wife to finish the work on Property K and to protect her from unforseen events. The manner in which the parties will receive their respective entitlements, from these proceedings, is a matter to which I will return when considering the overall justice and equity of the final outcome.
Sub-section (g) – it is inevitable that at the end of a long marriage, both parties to it suffer a measure of financial hardship. Two households cannot live as cheaply as one. The wife has need of secure accommodation for herself and the children. This is her most pressing need. The need will be accommodated by the transfer to her of the parties’ former family home. This is the wife’s preference.
The husband is living in rented accommodation. Whether he wishes to purchase a home for himself in future is unclear to me. Given his present circumstances, it would not be an unreasonable ambition. Given his age and years of hard work, it is reasonable that the husband be left with sufficient financial resources to be able to enjoy a reasonably comfortable standard of living.
Sub-sections (h), (h)(a) and (j) – these subsections are not specifically relevant in this case.
Sub-section (k) – the marriage between the parties was of significant length. During it, to her credit, the wife was able to gain qualifications as an early child care worker. She studied part-time, fitting her studies around her responsibilities for the family and paid work. In my view, it cannot be said that the marriage between the parties has affected either of their abilities to derive an income.
Sub-section (l) – this subsection is directed toward the financial consequences of one party continuing in his or her role as a parent. I accept that both parties wish to be fully engaged parents, so far as both D and M are concerned. However, due to the current consent orders, the children will live more with Ms Ramsden than Mr Tripp. Through financial necessity, Ms Ramsden has remained in the paid workforce. It is not likely that she will cease work in the foreseeable future because of her responsibilities to parent the children concerned.
Sub-section (m) – neither party is currently cohabiting with another person.
Sub-section (n) – as a result of these proceedings, the marital property of the parties will be divided between them. It is likely that both parties will feel aggrieved at the outcome of these proceedings. Although the parties are not without assets, at this point, it seems to me that there are insufficient assets to provide comfortably for both of their prospective needs.
This is particularly so, given on the one hand, the husband’s age and his need to make provision for his retirement and, on the other hand, given the wife’s need to have a home for herself and the children. As I have already observed, both parties have need for some cash to protect them from the exigencies of life. In addition, the wife needs some liquid assets to finish the work on Property K and the husband to secure accommodation for himself, if he so wishes.
However, in my assessment, both parties have some capacity to reach a level of financial equilibrium because both have employment skills and both remain in the paid workforce.
Sub-section (na)
– Mr Tripp is currently assessed as not being liable to pay any child support to Ms Ramsden in respect of D and M. This has come about because of the care arrangements for the two children and more importantly because currently the Child Support Agency calculates that Ms Ramsden has an income three times that of
Mr Tripp.
As a PAYG tax payer, there is little controversy about Ms Ramsden’s level of income. That is not the case so far as Mr Tripp is concerned. Mr Tripp derives some benefits from self employment. These include being able to deduct his car running and telephone expenses from his income. In addition, he is able to claim a deduction from his income on the basis of the depreciation of his tools of trade and other equipment related to his trade business. In all these circumstances, I am not convinced that the disparity in the parties’ respective incomes is or is likely to remain as great as the Child Support Agency currently believe it to be.
As I have already found, it is my assessment that the husband retains a significant capacity to earn an income as a tradesman. He has not provided any convincing medical evidence to support his assertion that he is presently significantly disabled.
However, whether the current assessment will be changed in future is unclear to me. I am concerned that the mother will continue to receive little if any child support from the father. These concerns are heightened by the husband’s admitted preference to deal in cash and his aversion to keeping comprehensive financial records. In all these circumstances, it is likely to be difficult for the Child Support Agency to make an accurate assessment of the husband’s income.
In Clauson & Clauson[31] the Full Court said as follows:
“The weight to be attached to a child support assessment will vary with the circumstances of each case, including the amount of the assessment, the financial circumstances of the parties, the needs of the children, whether the assessment is being paid regularly, and whether it is likely that it will continue to be paid at a regular and adequate rate in the future.”
[31] Clauson & Clauson (1995) FLC92-595 at 81,911
The payment of child support does not fully compensate a parent for loss of career possibilities and financial advancement, which are often the lot of a parent who has principle responsibility for the day to day care of the child. In this case, Ms Ramsden is working full-time. She receives no child support from Mr Tripp. It is difficult to see that this circumstance will change in the foreseeable future. The two children concerned are entering their most expensive years of care. These are considerations which strongly favour the wife.
Pursuant to the orders of 17 October 2006, the children spend alternate weekends and each Wednesday evening, during school terms, with their father, as well as for more extended periods during school holidays. Undoubtedly, Mr Tripp spends significant periods of time with the children and during these periods, he must provide for them.
Ms Ramsden asserts that inevitably Mr Tripp’s interest in the children will flag and he will spend less and less time with them. I do not accept that this is the case. However, Ms Ramsden will remain the parent responsible for more of the children’s day to day needs. It also seems likely that she will provide more of the children’s clothing and expend more on their education and sporting needs.
Sub-section (o) and (p) – neither of these subsections are relevant in the present case.
Conclusions on section 75(2) factors
After considering the various 75(2) factors, the most serious consideration is the mother’s responsibility to provide more the children’s day to day care, which will inevitably constitute a significant financial burden, for at least the next six to eight years. She is unlikely to be assisted by any significant amounts of child support from
Mr Tripp. Otherwise, both parties have an ability to earn an income, although the end of Mr Tripp’s working life is in sight and he, if prudent, must begin to prepare actively for retirement.
In balancing the various section 75(2) factors, I have come to the conclusion that there should be a further distribution of the parties’ total assets of ten percent in the wife’s favour, at the end of the third stage.
Section 79(2) – is this a just and equitable outcome
The final step in determining property matters is to stand back and consider whether the proposed result is just and equitable. It is all very well to talk in percentage terms, so far as orders are concerned, but what matters to the parties is what the orders mean to them in dollars and cents and what affect they have on their long term plans and aspirations.
Fifty percent of the parties’ net assets, less the 1956 motor vehicle, which is to be sold, is represented by the sum of $299,550.00. In order for the wife to achieve this sum, if she retains the former family home ($220,000.00); her LTD motor vehicle ($5,750.00); her savings ($1,201.00); and her superannuation ($36,719.00) and retains the liabilities for which she is currently personally responsible ($10,365.00); she will have net assets to the value of $253,305.00. Accordingly, it will be necessary for the husband to pay her the sum of $46,245.00, in order to bring about the fifty percent distribution of net assets in her favour.
The husband has adequate liquid resources to pay this sum. It will leave him with significant savings and superannuation. Given his age, the husband needs to retain his superannuation. He also has the tools of his trade and a motor vehicle. If he deems it appropriate, he will have sufficient funds to make a substantial payment towards the purchase of a piece of real property for himself.
This outcome leaves both of the parties’ superannuation intact. As I have previously indicated, neither party has actively proposed any splitting order in respect of the other’s superannuation. The question of what factors should apply to the determination of what percentage of actual assets and what percentage of superannuation assets each party should receive, in proceedings such as these, was considered by Moore J in Levick & Levick[32]. Her Honour considered that the relevant factors were as follows:
·the purchase price of appropriate accommodation and re-housing costs for both parties;
·the need for a financial buffer for ordinary exigencies of independent living;
·the current level of the parties’ superannuation;
·the probability that the wife would be able to acquire appropriate superannuation benefits from her own future income;
·the husband’s substantial earning capacity and ability to borrow significant sums at favourable rates (from his employer).
[32] Levick & Levick unreported decision of Moore J delivered 31 January 2003
Given the parties’ different needs in respect of superannuation, arising from their different ages and given the wife’s need for accommodation, I am satisfied that this is not a case where considerations of justice and equity require that there should be any split in the husband’s superannuation in the wife’s favour. I am also satisfied that overall this represents a just and equitable outcome, although it leaves neither party in a particularly strong financial position.
The wife has the security of Property K. She also has some cash to protect her against the exigencies of life and also, if necessary, to conduct improvements to the property.
On the other hand, the husband retains his superannuation and much of his investments. On my assessment, he will be able to augment his superannuation, in the next few years and also has a capacity to continue to earn income as a tradesman.
The result also accords recognition to his significant injection of capital, at the outset of the parties’ marriage. However, in my view, it does not discount the wife’s significant contributions during the marriage or her considerable future needs now the marriage is over. I am satisfied that it represents a just and equitable outcome.
For all these reasons, the orders of the court will be as set out at the commencement of these reasons for judgment.
I certify that the preceding one hundred and eighty-one (181) paragraphs are a true copy of the reasons for judgment of Brown FM
Associate: P Smith
Date: 28 September 2007
and Clauson v Clauson (1995) FLC 92-595
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