Rattray & Macauley
[2023] FedCFamC2F 1011
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Rattray & Macauley [2023] FedCFamC2F 1011
File number(s): PAC 2013 of 2019 Judgment of: JUDGE NEWBRUN Date of judgment: 11 August 2023 Catchwords: FAMILY LAW – PROPERTY – Just and equitable Orders made. Legislation: Family Law Act 1975 (Cth) ss 75(2), 79(2), 106A Cases cited: Lotta & Lotta [2017] FamCA 50 Division: Division 2 Family Law Number of paragraphs: 69 Date of hearing: 24–25 July 2023 Place: Parramatta Counsel for the Applicant: Mr Harper Solicitor for the Applicant: Arch Law (Australia) Pty Ltd Counsel for the Respondent: Mr Schonell Solicitor for the Respondent: Swaab Attorneys ORDERS
PAC 2013 of 2019 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MR RATTRAY
Applicant
AND: MS MACAULEY
Respondent
ORDER MADE BY:
JUDGE NEWBRUN
DATE OF ORDER:
11 AUGUST 2023
ON A FINAL BASIS THE COURT ORDERS THAT:
1.The wife’s Application in a Proceeding filed 14 July 2023 is dismissed.
2.The Application in a Proceeding filed on 31 July 2023 is listed on 7 September 2023 at 10.30am for determination of the husband’s partner’s costs application.
3.Within 21 days of the date of these Orders the wife is to file and serve any Response and any affidavit upon which she relies in respect of the above Application in a Proceeding.
4.The wife’s oral application for an adjournment of the final hearing is dismissed.
5.Within four months of the making of these Orders the following shall occur simultaneously:
(a)the wife shall pay to the husband the sum of $398,000.
(b)the husband shall do all acts and things and sign all documents necessary to cause the transfer to the wife of all his right title and interest in the property situated at and known as B Street, Suburb C NSW (“the B Street, Suburb C property”) being the whole of the land in Folio Identifier ….
(c)the wife do all acts and things and sign all necessary documents to discharge the mortgage secured over the Suburb C property and refinance that mortgage in her sole name.
And the wife shall indemnify and keep indemnified the husband in respect of all liabilities in relation to the Suburb C property whenever and however arising.
6.Pending the above transfer of the husband’s right title and interest in the Suburb C property to the wife, the wife shall be responsible for all mortgage payments, statutory rates and charges, other utilities, insurance, outgoings, and expenses in relation to the Suburb C property incurred prior to the date of the transfer and shall make all such payments as and when they fall due and hereby indemnifies the husband in respect of all other liabilities incurred prior to the date of transfer.
7.Failing the wife paying to the husband the above sum of $398,000 within four (4) months of the making of these Orders, that the husband and wife shall forthwith do all acts and things and sign all necessary documents to effect a sale of the Suburb C property and by way of consequential arrangement:
(a)The listing price for the Suburb C property shall be as agreed between the parties and if there is no agreement then the listing price shall be as advised by a valuer nominated by the President of the Real Estate Institute of New South Wales.
(b)The Suburb C property shall be listed for sale by private treaty with estate agents as agreed upon between the parties and if there is no agreement then the estate agent shall be as nominated by the President of the Real Estate Institute of New South Wales.
(c)In the event that the Suburb C property has not been sold by or before a date three (3) months from the date that the Suburb C property is listed for sale by private treaty, then the husband and wife shall make all such arrangements and do all such acts and things and sign all such documents and pay all moneys equally, necessary to procure a sale by public auction of the Suburb C property upon the following terms:
(i)The auctioneer shall be as agreed upon between the parties and if there is no agreement then the auctioneer shall be as nominated by the President of the Real Estate Institute of New South Wales.
(ii)The auction shall take place within three months after the deadline date for sale by private treaty.
(iii)The reserve price shall, unless agreed upon the parties, be as proposed by the auctioneer.
(iv)The parties shall each pay and be responsible for payment of one half of the auction expenses payable before the Suburb C property's auction.
(d)In the event that the Suburb C property is not sold by auction or by private negotiation within fourteen (14) days after the said auction, then the husband and wife shall do all such acts and sign all necessary documents and shall pay all moneys equally necessary to procure a second auction within a further five (5) weeks of that date otherwise upon the same terms and conditions as apply to the first auction.
8.On completion of the sale pursuant to Order 7 above, the proceeds of the sale shall be applied as follows:
(a)To pay all costs, commissions and expenses of the sale and to pay any Council and Water rates and maintenance levies outstanding in respect of the Suburb C property.
(b)To discharge the mortgage affecting the Suburb C property.
(c)The balance of the proceeds of sale shall be divided:
(i)60 per cent thereof to the wife, less her half share of the above sale costs.
(ii)40 per cent thereof to the husband, less his half share of the above sale costs.
9.That pending payment or completion of the sale of the Suburb C property:
(a)The wife shall have the sole right to occupy the Suburb C property and that during such right of occupation the wife shall pay all instalments pursuant to the mortgage and all rates and taxes and like apportionable outgoings of the Suburb C property as they fall due.
(b)The parties hold their respective interest in the Suburb C property upon trust pursuant to these Orders.
(c)Neither party shall encumber or further encumber the Suburb C property without the consent in writing of the other party.
10.That unless otherwise specified in these Orders:
(a)Each party shall be solely entitled to the exclusion of the other to all other property and chattels of whatsoever nature and kind in the possession of such parties at the date of the making of these Orders and that for this purpose bank accounts are deemed to be in the possession of the person whose name appears on the bank's records thereof, insurance policies are deemed to be in the possession of the party named as the life insured, superannuation entitlements are deemed to be in the possession of the person who is named as the worker whose age or working future provides the conditions for payment out of such entitlement.
(b)Each party shall be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these Orders.
11.That both parties shall do all acts and things and sign all documents necessary to give effect to these Orders.
12.That if either party refuses or neglects to sign, within 14 days of a written request to do so, any documents necessary to effect the terms of these Orders, a Registrar or such other officer or person as may be appointed by the Federal Circuit and Family Court of Australia is hereby appointed pursuant to the provisions of Section 106A of the Family Law Act to execute such documents on behalf of such party.
13.Each party has liberty to apply in relation to the implementation or enforcement of these Orders upon 14 days’ notice.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE NEWBRUN:
APPLICATION IN A PROCEEDING BY WIFE FILED 14 JULY 2023 AND APPLICATION FOR ADJOURNMENT OF THE FINAL HEARING
Below, the Court sets out its Reasons for Judgment relating to a final property hearing held before the Court on 24 and 25 July 2023.
However, at the outset, it is necessary to provide reasons for the Court having dismissed on 24 July 2023, just prior to the final hearing commencing, the wife’s Application in a Proceeding filed 14 July 2023.
The above Application in a Proceeding was listed for 24 July 2023. That Application in a Proceeding was opposed by the husband. The Application in a Proceeding sought orders as follows:
1.That this Application in a Proceeding be listing for hearing on an urgent basis before Judge Newbrun.
2.That [Ms D] be joined as a party to these proceedings.
3.That the parties do all acts and things to appoint a Single Expert Witness to value the current value of the [Town F] property.
4.That the respondent be granted leave to file and serve a Further Amended Response to Initiating Application that seeks declaratory relief in respect of the applicant's interest in the property located at [E Street, Town F], NSW held in the name of [Ms D] (the [Town F] property).
5.That within 14 days of the date of these orders, the applicant provide full and frank disclosure in accordance with rule 6.01 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 in respect of the [Town F] property.
6.That in accordance with Division 7.1.2 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021, a Single Expert Witness, being a certified practising valuer, be appointed to value the [Town F] property.
7.That in accordance with Division 7.1.2 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021, a Single Expert Witness be appointed to report on the respondent's psychological condition and the impact an order necessitating her vacation of the former matrimonial home would have on her health, wellbeing and safety.
8.To facilitate Order 6 and Order 7, the following apply:
(a)Within 14 days of date of these Orders, the respondent's solicitors provide to the applicant's solicitors the names of 3 proposed Single Expert Witness Psychiatrists and 3 Single Expert Witness Certified Practising Valuers (3 of each).
(b)Within 7 days thereafter, the applicant will select 1 psychiatrist proposed by the respondent to be appointed in the proceedings.
(c)Within 14 days thereafter, the respondent's solicitors shall provide to the applicant's solicitors a proposed joint letter of instruction addressed to each appointed Single Expert Witness.
(d)Within 14 days thereafter, the applicant's solicitors shall provide to the respondent's solicitors amendments, if any, to the joint letters of instructions.
(e)Within 14 days thereafter, the shall each sign and send letters of instruction to each Single Expert Witness.
(f)That the cost of each Single Expert Witnesses shall be borne equally by the parties.
9. That the matter be listed for further directions at a time convenient to the Court.
Ms Rebehy of counsel appeared for Ms D with leave of the Court on 24 July 2023.
The wife, in support of her above Application in a Proceeding relied upon the evidence of her solicitor Mr R Gannon filed 14 July 2023.
The husband relied upon his affidavit filed 17 July 2023 in opposition to the above Application in a Proceeding.
The wife’s Application to join the husband’s partner Ms D, her application to amend her Response to seek declaratory relief in respect of the husband’s interest in a property at Town F, her application seeking disclosure in respect to this property, and application that a Single Expert Witness be appointed to value their property, was without merit.
The husband and wife commenced cohabitation in 2006 and separated in about April 2013. The husband commenced a relationship with Ms D thereafter in 2013, and they have continued that relationship to the present time. The husband and Ms D have a child G aged seven years. Ms D purchased a property at Town F, in her sole name, in about early 2022 and settlement of that purchase occurred in about early-2023. That property was purchased for the sum of $645,000 and a mortgage loan from ANZ was taken out by Ms D in the sum of $516,000. It can be seen the approximate equity in the property is about $129,000.
The husband stated that he has no interest in the Town F property, with Ms D having purchased the property solely from monies she had at the commencement of their cohabitation and monies saved by her solely from her income during their cohabitation. It follows that the husband had no obligation to provide disclosure in relation to the Town F property. The wife’s side had been aware of the husband’s relationship with Ms D at least by about the time of Ms D’s affidavit filed 6 March 2023. It would have been open to the wife side to have conducted enquiries of any property owned by Ms D or at least sought particulars from the husband’s solicitors in this regard at about this time.
The wife adduced no evidence to indicate that any matrimonial property arising out of her relationship with the husband was utilised by the husband or Ms D in relation to the purchase of the Town F property. Again, the husband and wife’s relationship ended in April 2013, over ten years ago.
During the hearing of the wife’s Application in a Proceeding, the Court indicated to the wife’s counsel that should the wife’s Application in a Proceeding be dismissed, it would still be open to the wife to cross-examine the husband and/or Ms D (Ms D had sworn an affidavit in the main property proceedings) in relation to, inter alia, the source of funds for the purchase of the Town F property, and it would still be open to the wife to seek to establish, at the final hearing, that the husband had some interest in the Town F property and that he had utilised matrimonial property to acquire such interest.
During the hearing of the wife’s Application in a Proceeding, noting the equity in the Town F property was only about $129,000, the Court indicated to the wife’s counsel that even if at the final hearing the wife could establish that the husband had an equitable interest in the Town F property, and that he had utilised matrimonial property to acquire such interest, by reference to the equity of $129,000, it could not be particularly large. It was apparent in the property proceedings that there was an equity in the husband and wife’s B Street, Suburb C property of about $995,000.
In the above circumstances, there was no utility in the Court appointing a valuer to value the Town F property, and moreover there would have needed to have been an adjournment of the final hearing to allow such a valuation to occur.
As to the balance of the wife’s Application in a Proceeding, she had sought Orders that a Single Expert witness be appointed to report upon her psychological condition and the impact an Order necessitating her to vacate the former matrimonial home at Suburb C would have on her health, well-being and safety. No explanation was provided by the wife’s side as to why they had not obtained a medicolegal report, for example, on behalf of the wife, addressing the wife’s mental health, with the Court observing that the wife’s mental health had allegedly been unsatisfactory following a workplace injury in 2018. The husband’s Initiating Application filed 1 May 2019 had sought Orders that the Suburb C property be sold.
The Court observes that the final property hearing was set down for hearing on 13 March 2023. A compliance hearing had been held on 11 October 2022 when relevant final hearing documents were ordered to be filed. The husband’s Initiating Application commencing these property proceedings was filed on 1 May 2019. Had the wife’s above Application in a Proceeding been acceded to by the Court the property final hearing would have been required to be adjourned to a later date for hearing. There would have been a delay of well over six months, with the Court’s diary having been fully subscribed for 2023. Such an adjournment would not have been in the interests of justice. The Court had taken this matter into account, together with the other matters discussed above, in dismissing the wife’s above Application in a Proceeding.
An oral application for an adjournment was sought by the wife and was refused by the Court after it had struck out from the wife’s property affidavit filed 7 March 2023 various medicolegal reports annexed to that affidavit (see the reference to medicolegal reports in paragraphs 55 and 56 of the wife’s aforesaid affidavit). The wife had submitted that an adjournment of the final hearing was necessary to avoid a risk of injustice to the wife if her case proceeded without relevant medical evidence pertaining to her mental health and the impact upon her if she was required to vacate the Suburb C property. The medicolegal reports struck out by the Court from the wife’s affidavit, again, had merely been annexed to the wife’s affidavit and did not comply with rule 7.21 requiring the author of the medicolegal report to prepare an affidavit and attach the relevant report[1]; in the absence of a relevant affidavit from the authors of the medicolegal reports, the content of their reports were inadmissible hearsay. It would have been theoretically open for the Court to adjourn the proceedings to allow the authors of the medicolegal reports to attend Court and be subject to cross-examination, however, as discussed above, an adjournment of the proceedings would not have been in the interests of justice, in the circumstances. There was no clear indication from the wife’s side that any medicolegal report to be obtained by the wife would likely have produced relevant evidence relating to the wife’s mental health and adverse outcomes if she was required to vacate the Suburb C property. The Court observes that the wife, at the final hearing, relied upon an affidavit from a former treating psychologist Ms H filed 10 March 2023. The wife also, at the final hearing, tendered in evidence hospital and other records pertaining to the wife’s historical mental health (Exhibit E), and some NSW police records relating to the wife’s mental health (Exhibit D).
[1] Federal Circuit and Family Court of Australia (Family Law) Rules 2021 r 7.21.
The Court will now proceed to deal with its determination in relation to the final property hearing.
APPLICATION FOR FINAL ORDERS
PROPOSALS
The husband, by his Initiating Application filed 1 May 2019, sought orders in the following terms:
1.That the husband and wife shall forthwith do all acts and things and sign all necessary documents to effect a sale of the real property situated at and known as [B Street, Suburb C] (the real property) being the whole of the land comprised in certificate of Title Folio identifier […] and by way of consequential arrangement:
(a)The listing price for the real property shall be as agreed between the parties and if there is no agreement then the listing price shall be as advised by a valuer nominated by the President of the Real Estate Institute of New South Wales.
(b)The real property shall be listed for sale by private treaty with estate agents as agreed upon between the parties and if there is no agreement then the estate agent shall be as nominated by the President of the Real Estate Institute of New South Wales.
(c)In the event that the real property has not been sold by or before a date three (3) months from the date of these Orders, then the Husband and Wife shall make all such arrangements and do all such acts and things and sign all such documents and pay all moneys equally, necessary to procure a sale by public auction of the real property upon the following terms:
(i)The auctioneer shall be as agreed upon between the parties and if there is no agreement then the auctioneer shall be as nominated by the President of the Real Estate Institute of New South Wales.
(ii)The auction shall take place within three months after the deadline date for sale by private treaty.
(iii)The reserve price shall, unless agreed upon the parties, be as proposed by the auctioneer.
(iv)The parties shall each pay and be responsible for payment of one half of the auction expenses payable before the real property's auction.
(d)In the event that the real property is not sold by auction or by private negotiation within fourteen (14) days after the said auction, then the Husband and Wife shall do all such acts and sign all necessary documents and shall pay all moneys equally necessary to procure a second auction within a further five (5) weeks of that date otherwise upon the same terms and conditions as apply to the first auction.
2.On completion of the sale pursuant to Order 1 above, the proceeds of the sale shall be applied as follows:
(a) To pay all costs, commissions and expenses of the sale and to pay any Council and Water rates and maintenance levies outstanding in respect of the real property.
(b)To discharge the mortgage affecting the real property.
(c)The balance and remaining to be divided in the proportions of:
(i)50% therof to the Husband.
(ii)50% thereof to the Wife.
3. That pending payment or completion of the sale:
(a)The Wife shall have the sole right to occupy the real property and that during such right of occupation the Wife shall pay all installments pursuant to the mortgage and all rates and taxes and like apportionable outgoings of the real property as they fall due.
(b)The parties hold their respective interest in the real property upon trust pursuant to these Orders.
(c)Neither party shall encumber or further encumber the real property without the consent in writing of the other party.
4. That unless otherwise specified in these Orders:
(a)Each party shall be solely entitled to the exclusion of the other to all other property and chattels of whatsoever nature and kind in the possession of such parties at the date of the making of these Orders and that for this purpose bank accounts are deemed to be in the possession of the person whose name appears on the bank's records thereof, insurance policies are deemed to be in the possession of the party named as the life insured, superannuation entitlements are deemed to be in the possession of the person who is named as the worker whose age or working future provides the conditions for payment out of such entitlement.
(b)Each party shall be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these Orders.
5.That both parties shall do all acts and things and sign all documents necessary to give effect to these Orders.
6.That if either party refuses or neglects to sign, within 14 days of a written request to do so, any documents necessary to effect the terms of these Orders, a Registrar or such other officer or person as may be appointed by the Family Court of Australia or Federal Circuit Court of Australia is hereby appointed pursuant to the provisions of Section 106A of the Family Law Act to execute such documents on behalf of such party.
The wife, by her Amended Response filed 10 June 2021, sought orders in the following terms:
1.That Orders be made pursuant to s79 of the Family Law Act 1975 (Cth) (‘the Act’) in accordance with paragraphs 2 to 11 below, so as to address the consequences of the breakdown of the marriage and the injustice that would occur given the circumstances if legal an equitable title were not altered.
2.That within 84 days (12 weeks) of the making of these Orders the following shall occur simultaneously:
(a)The Respondent Wife do all acts and things and sign all necessary documents to discharge the mortgage secured over the [Suburb C] property and refinance that mortgage in her sole name.
(b)That the Applicant Husband do all acts and things and sign all documents necessary to cause the transfer to the wife of all his right title and interest in the property situated at and known as [Suburb C] (“the [Suburb C] property”) being the whole of the land in Folio Identifier […].
And that the Respondent Wife shall indemnify and keep indemnified the Applicant husband in respect of all liabilities in relation to the property whenever and however arising.
3.That pending transfer of the property provided for in paragraph 2 above, the Respondent Wife shall be responsible for all mortgage payments, statutory rates and charges, other utilities, insurance, outgoings, and expenses in relation to the property incurred prior to the date of the transfer and shall make all such payments as and when they fall due and hereby indemnifies the Applicant Husband in respect of all other liabilities incurred prior to the date of transfer.
Default Clause
4.That in the event the Respondent Wife is unable to re-finance and re-mortgage the [Suburb C] property pursuant to Orders 2 and 3 above then, within a further 21 days, each party shall do all acts and things necessary to cause the [Suburb C] property to be sold by private treaty at the earliest possible date at a price to be agreed between the parties and failing such agreement, to be determined by the president of the Australian Institute of Valuers and Land Economists (NSW) or his/her nominee and that the proceeds of sale shall be disbursed as follows:
(a)In payment of any fees incurred in the process of selling the [Suburb C] property including real estate agent fees, advertising fees, conveyancing fees; and
(b) The remainder to the Respondent Wife.
5.In the event the [Suburb C] property is not sold by way of private treaty pursuant to Order 5 above within 90 days of the date of these Orders, then the parties shall do all things necessary to cause the property to be sold by public auction at the earliest possible date at ap rice to be agreed upon between the parties or failing nominated by the President of the Australian Institute of valuers and Land Economists (NSW). Further that for the purpose of any auction conducted in relation to the [Suburb C] property that any reserve price be agreed upon by the parties and failing agreement reserve price to be determined by the President of the Australian Institute of valuers and Land Economists (NSW) or his/her nominee.
6.That in the event the [Suburb C] property is successfully sold by way of public auction pursuant to Order 5 above, the proceeds of such sale be disbursed as follows:
(a) In payment of any fees associated with the auction of that property;
(b)In payment of any fees associated with the advertisement and preparation of that property for inspection and sale;
(c)In payment of any legal or conveyancing fees associated with the sale and transfer of that property;
(d) The remainder to the Respondent Wife.
Superannuation
7.That paragraphs 8 to 11 inclusive of these Orders are binding on the Trustee of [Super Fund 1]
8.That the base amount of $100,000 is allocated, as required by S90XT of the Family Law Act 1975 to the Respondent Wife out of the Applicant Husband's interest in his [Super Fund 1].
9.That in accordance with s90XT(1)(a) of the Family Law Act 1975:
(a)The Respondent Wife is entitled to be paid the amount calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001;
(b)The Applicant Husband's entitlement to payments out of his [Super Fund 1], and the entitlements of such other person to which a splitable payment may be payable, is correspondingly reduced by force of this Order.
10.That the Trustee of the [Super Fund 1] shall do all acts and things and sign all documents as may be necessary to:
(a)Calculate, in accordance with the requirements of the Family Law Act 1975 and the Family Law (Superannuation) Regulations 2001, the entitlement created for the Respondent Wife by paragraph 9 of these Orders;
(b)Pay the entitlement whenever the Trustee makes a splitable payment out of the Applicant's interest in his [Super Fund 1] interest.
11.That the Orders have effect from the operative time and the operative time for this order is the seventh (7th) business day after service of a copy of this Order on the Trustee.
…
Declarations
15.That unless otherwise provided in these Orders, the Respondent Wife shall be declared the sole owner of and the Applicant Husband has no interest of any nature or kind in:
(a) Any bank accounts in the Respondent Wife's name;
(b) Any superannuation entitlements in the Respondent Wife's name;
(c) any shareholdings in the Respondent Wife's name;
(d)Any furniture, effects, home contents, art and jewellery in the Respondent Wife's possession and control;
(e) Any motor vehicle in the Wife's name; and
(f)All other property and financial resources in the Respondent Wife's possession or control or in her name as a t the date of the making of these Orders and in the future.
16.That unless otherwise provided in these Orders, the Applicant Husband shall be declared the sole owner of and the Respondent Wife has no interest of any nature and kind in:
(a)Any bank accounts in the Applicant Husband's name;
(b)Any superannuation entitlements in the Applicant Husband's name;
(c)any shareholdings in the Applicant Husband's name;
(d)Any furniture, effects, home contents, art and jewellery in the Applicant Husband's possession and control;
(e)Any motor vehicle in the Applicant Husband's; and
(f)All other property and financial resources in the Applicant Husband's possession or control or in his name as at the date of the making of these Orders and in the future.
17.That pursuant to section 81 of the Family Law Act these Orders shall determine on a final basis all financial relationship between the parties with the view to avoiding further proceedings between them.
18.That in the event either party refuses or neglects to execute any deed, document or instrument necessary to give effect to all or any of these Orders, then the Registrar of the Court shall be appointed pursuant to Section 106A of the Family Law Act 1975 to execute such deed, document or instrument in the name of the said party and do all acts and things necessary to give validity and operation to the deed, document or instrument upon the Registrar being provided with verification of such refusal or failure by way of affidavit
19.That the Applicant Husband pay the Respondent's Wife's costs of and incidental to this Applicant.
MATERIAL RELIED UPON
The husband relied upon the following documents:
(a)His Case Outline filed 23 July 2023;
(b)His affidavits filed:
(i)7 March 2023;
(ii)17 July 2023;
(c)His Financial Statement filed 27 June 2023;
(d)Affidavit of Ms D filed 6 March 2023.
The wife relied upon the following documents:
(a)Her Case Outline filed 21 July 2023;
(b)Her Amended Response filed 14 July 2023;
(c)Her affidavits filed:
(i)7 March 2023;
(ii)14 July 2023;
(d)Her Financial Statement filed 9 March 2023;
(e)Affidavit of Ms H filed 10 March 2023;
The exhibits were as follows:
(a)Exhibit A: 2022 Tax Return of the Husband;
(b)Exhibit B: Husband’s ANZ bank statements dated 5 July 2012 to 29 September 2014;
(c)Exhibit C: Husband’s January 2022 J Bank and K Bank Statements;
(d)Exhibit D: Police records relating to the wife;
(e)Exhibit E: L Hospital records relating to the wife;
(f)Exhibit F: Financial Statement of M Pty Ltd for year ending 30 June 2023;
(g)Exhibit G: Permanent impairment certificate issued by N Company dated September 2019;
(h)Exhibit H: O Company account summary FY2021–2022 (annexure R9 to husband’s trial affidavit);
(i)Exhibit I: Documents from P Bank and pre-filing tax report of the husband;
(j)Exhibit J: Joint balance sheet.
EVIDENCE
The Court has considered the documentary material relied upon by the parties discussed above, the parties’ oral evidence, and the oral evidence of Ms D.
The standard of proof applied by the Court in respect to the evidence is the balance of probabilities. The Court does not propose to set out the entirety of the evidence. Relevant evidence including factual findings relating to the issues to be determined will be set out under the headings “Balance sheet”, “Contributions”, and “Section 75(2)”.
Legal principles
In Lotta & Lotta [2017] FamCA 50 Foster J stated:
281 The approach to the determination of an application under s 79 of the Act is set out in Stanford v Stanford (2012) 247 CLR 108 and further considered by the Full Court in Bevan & Bevan [2014] FamCAFC 19, Chapman & Chapman (2014) FLC 93–592 and Scott & Danton [2014] FamCAFC 203.
282The Court must identify the existing legal and equitable interests of the parties’ in the property, the liabilities and financial resources of the parties’ at the time of the hearing and then whether it is just and equitable to make a property settlement order.
283Such a consideration should not be guided by an assumption that the parties’ rights to or interests in property are or should be different from those that then exist. The question is whether those rights and interests should be altered.
284There is no presumption that one or other party has the right to have the property of the parties’ divided between them or a right to an interest in marital property that is fixed by reference to the various matters in s 79(4). The Court needs to conclude that it would be unjust or unfair to leave property rights intact under s 79(2) of the Act.
285In many cases this requirement is readily satisfied where the parties’ are no longer in a marital or de facto relationship and, thus, for example, the common ownership or use of property by husband and wife will no longer be possible or the express or implicit assumptions that underpinned existing property arrangements such as the accumulation of assets or financial resources by one for the benefit of both have been brought to an end with the relationship.
286In particular, such a circumstance arises where both parties’ seek property adjustment orders but are unable to agree as to same. Here the wife seeks an order for adjustment of property and the husband contends that there should be no such adjustment.
287It is thus important to ascertain the present property and resources of the parties’ so as to facilitate a consideration of the s 79(2) question.
288In some circumstances it is not possible to determine whether it is just and equitable to make adjustment orders as to the parties’ present property rights without a consideration of s 79 (4) matters.
289Section 79(4) requires a consideration of the contributions made by the parties’ as defined in s 79(4)(a) to (c). The Court must then consider s 79(4)(d) to (g) in particular the subjective considerations as to the parties’ by having regard to the provisions of s 75(2) in so far as they are relevant (s 79(4)(e)).
290The Court can then consider the “justice and equity” of the actual orders to be made: Russell & Russell (1999) FLC 92–877; Teal & Teal [2010] FamCAFC 120, in the context of the Court’s obligation to make “appropriate orders” as provided for in s 79(1) of the Act.
BALANCE SHEET
The joint balance sheet of the parties (Exhibit J) is now set out.
BALANCE SHEET Ownership Description Wife’s value Husband’s value Assets 1 J B Street, Suburb C NSW $1,450,000 $1,450,000 2 W Westpac Bank accounts …11 $905 $905 3 W Westpac Bank accounts …32 NIL NIL 4 W Westpac Bank accounts …70 NIL NIL 5 H 33% interest in ANZ Bank Account …12 (account held in name of Ms D) $8,852 $3,318 6 H J Bank Account …53 $6,817 $4,740 7 H J Bank Account …45 $3,805 $2,880 8 H Bank accounts held with J Bank NK NIL 9 H Q Bank Accounts NK NIL 10 H 50% share of Home contents $10,000 $2,500 11 W Home contents $1,500 $1,500 12 H R Company $3,457 $69 13 H 50% of shares in M Pty Ltd $53,969 $19,650 14 H Interest in property located at E Street, Town F NSW NK NIL 15 H Interest in Motor Vehicle held by S Pty Ltd $20,000 NIL 16 W Workers Compensation Claim NIL NIL Total $1,559,305
(+ NK)$1,485,562 Addbacks 16 H Sale proceeds of T Street, City U $87,209 NIL 17 H V Company Shares, sold by the Husband to meet legal fees $21,596 $0 18 Total $108,805 $0 Liabilities 19 J Mortgage secured over title of the former matrimonial home $455,000 $455,000 Total $455,000 $455,000 Superannuation Member Name of Fund Type of Interest Wife’s value Husband’s Value 21 H Super Fund 1 Accumulation $311,505 $311,505 22 H Super Fund 2 Accumulation $51,345 $51,345 23 W Super Fund 3 Accumulation $193,000 $193,000 24 25 Total $ $ Financial Resources Ownership Description Applicant’s (sic) Value Respondent’s (sic) Value 26 H Dividends/ Benefits from M Pty Ltd NK NIL 27 Total $0 $0 (As per the original)
Whilst the Court acknowledges the existence of the assets in items 2 to 16 inclusive, they shall be removed from the final balance sheet for the following reasons. There is no persuasive evidence that the parties made a relevant contribution to the assets of the other party referred to in items 2 to 16 (item 16 firstly referred to), the parties separated in about April 2013 and it is likely that items 2 to 16 are unrelated to the parties’ relationship, and those assets are relatively quite modest in value.
As to item 16 (item 16 secondly referred to), a contended addback relating to the sale of the City U property, this shall be dealt with under s 75(2) below and item 16 (item 16 secondly referred to) shall be removed from the balance sheet.
As to item 17, the husband’s V Company shares, by reference to Exhibit H, these shares were purchased post separation and to which the wife made no relevant contribution. Item 17 should be removed from the balance sheet.
The final balance sheet accordingly will be as follows:
BALANCE SHEET Ownership Description Value Assets 1 J B Street, Suburb C NSW $1,450,000 Total $1,450,000 Liabilities 2 J Mortgage secured over title of the former matrimonial home $455,000 Total $455,000 Superannuation Member Name of Fund Type of Interest Value 3 H Super Fund 1 Accumulation $311,505 4 H Super Fund 2 Accumulation $51,345 5 W Super Fund 3 Accumulation $193,000 Total $555,850
The parties’ net assets from the above final balance sheet are $995,000 and their superannuation entitlements are $555,850.
SECTION 79(2) OF THE ACT
The Court is satisfied that it is just and equitable in this case to alter the property interests of the parties, in light of the breakdown of their relationship, the fact that they will no longer have the joint use and enjoyment of their property, and the fact that the continuance of the current legal ownership of their property would not afford them justice and equity.
CONTRIBUTIONS
The parties commenced cohabitation in about 2006. They separated in about April 2013.
The husband had purchased a property at City U in 2004 for $170,000; he had paid a deposit of $8,500 and borrowed about $162,000 from ANZ. At cohabitation commencement the mortgage balance was about $160,000.
On balance, it is likely that during the parties’ relationship both parties contributed towards the mortgage loan repayments for the City U property approximately equally.
In about 2008 the parties purchased a property at B Street, Suburb C in the sum of $557,000; they borrowed $529,000 from Westpac and a deposit was paid from the wife’s savings ($27,850), and a loan of $13,000 from her mother. This property was rented until early 2010, with the rent paying the mortgage loan repayments, when the parties moved into this property to live.
During the relationship, on balance, the parties contributed towards the mortgage loan repayments for the Suburb C property approximately equally.
During the relationship, on balance, both parties contributed their respective incomes to the payment of their living expenses approximately equally.
During the relationship, on balance, both parties contributed approximately equally to the welfare of the family constituted by themselves, including approximately equal contributions as homemakers.
Post separation, the wife made contributions towards the mortgage loan repayments for the City U property up to about 2014, together with the husband, and their contributions in this regard were approximately equal. The husband’s sole contributions to this mortgage loan post about 2014 were made up to about the property’s sale in late 2014.
Post separation, both parties contributed towards the mortgage loan repayments for the Suburb C property, however the husband’s contributions in this regard ceased in about November 2014. The wife thereafter continued as the sole financial contributor towards the mortgage loan repayments, maintenance and rates/utilities of that property up to the present time. Such maintenance included the sum of $25,000 spent by her for home repairs. The mortgage loan balance for this property as at separation was about $528,000, and the mortgage loan balance presently is $455,000. In this context, there were significant periods post November 2014 when the wife made interest only payments under the mortgage loan for the Suburb C property (the wife had stated in her affidavit filed 7 March 2023 that she had suffered a workplace injury in 2018 and thereafter was without income for about 12 months until her workers compensation claim was accepted). Further, in the context of the wife’s mortgage loan repayments, and maintenance and payment of rates/utilities of the Suburb C property up to the present time, the Court takes into account that the wife has continued to reside in that property post separation to date. Post separation the husband had resided in rental accommodation until he moved into a property at Town F in about early 2023 with his new partner, which property had been purchased by such partner in her name.
The evidence relating to the parties’ respective superannuation entitlements was sparse and ultimately was left in an incomplete state.There was no documentary evidence from the parties’ superannuation providers.
At cohabitation commencement the husband had superannuation with the Super Fund 2 in the sum of $27,850. He also had at cohabitation commencement additional superannuation entitlements, the value of which at this time is not stated, which “were eventually rolled over into my current superannuation fund” (see paragraph 17 of the husband’s affidavit filed 7 March 2023). The husband did not contribute to the above Super Fund 2 during the parties’ relationship. His total superannuation entitlements as at separation were about $80,000. His entitlement in the Super Fund 2 as at 30 June 2022 was $47,771, and as at trial it is $51,345. His Super Fund 1 entitlement as at trial is $311,505.
At cohabitation the wife’s superannuation was about $17,431. In about 2006 the wife had established her own business and worked as a professional earning income in this business up to $120,000 pa until 2012. In about late 2012 she undertook work earning about $100,000‑$120,000 pa. The wife’s superannuation as at separation is not known. She had made withdrawals from her superannuation entitlements in about January 2019 in the total sum of about $62,000 to meet mortgage loan arrears ($55,961) and pay for repairs to the Suburb C property ($6,000). Her present entitlement with Super Fund 3 is $193,000.
Neither party made any direct contribution towards the other party’s superannuation entitlements at any time. No express submissions were made on behalf of the wife as to the nature of any indirect contribution she made to the husband’s superannuation during the parties’ relationship or post separation. The wife had sought, inter alia, a superannuation splitting Order.
The husband had submitted, inter alia, in relation to superannuation, that there should be no adjustment to the superannuation assets; there was considerable uncertainty relating to the historical growth of those assets, and the Court should find that neither party made any relevant contribution towards the other party’s present superannuation entitlements.
The Court is not persuaded that either party made any indirect contribution to the other’s superannuation entitlements during their relationship or after their relationship to date. During their relationship both parties worked and obtained income, and there was no children of this relationship. They separated in March 2013. They both worked post separation. The wife only ceased working in about 2018. And again, the evidence relating to the growth of their respective superannuation entitlements during their relationship was sparse and incomplete.
The husband contended that during the parties’ relationship, the parties’ contributions to non-superannuation assets were approximately equal.
The wife contended that her contributions outweighed those of the husband being in the order of 70 per cent.
Taking into account the above matters, and viewing the parties’ overall contributions holistically, the Court assesses the parties’ contributions to the above non-superannuation assets of $995,000, to be 55 per cent to the wife and 45 per cent to the husband. This results in a disparity of $99,500 in the wife’s favour. In light of the above discussions relating to superannuation there should be no adjustment to the parties’ superannuation assets.
SECTION 75(2) OF THE ACT
The husband is aged 44 years, and the wife 53 years.
The husband’s health would appear to be reasonable. The husband works as a professional with his new partner. They operate a business trading as M Pty Ltd.
The wife was last in paid employment in mid-2018. She suffered a workplace injury in 2018. The report of psychologist Ms H attached to her affidavit filed 10 March 2023 indicates the wife had incurred a complex post-traumatic stress disorder. She receives workers compensation in the sum of about $2,341 per week (see her recent Financial Statement). Exhibit G, being a permanent impairment statement from the workers compensation insurer N Company dated September 2019, states that the wife’s permanent impairment injury has been assessed as having reached maximum medical improvement and has resulted in a permanent impairment of 24 per cent. She received $65,616 in 2019 arising out of this permanent impairment finding. As submitted by the wife, she is liable to be subject to a work capacity assessment at least once every two years.
The Court accepts the wife’s evidence in respect to her asserted mental health symptomatology. The Court accepts the evidence of the psychologist Ms H whilst noting that her treatment of the wife ceased in December 2019.
Whilst there is an absence of contemporary health professional evidence in relation to the wife indicating her mental health and work capacity prognosis, there is no persuasive evidence before the Court to indicate that there is a real prospect if not a likelihood that the wife will prospectively lose her workers compensation entitlement which, as submitted by the wife, will continue until age 67 years (but subject to any future work capacity assessment finding that the wife has a relevant work capacity). In this context, and again, the Court refers to Exhibit G being the reference to the wife’s permanent impairment assessment of 24 per cent. Nevertheless, subject to the above matters, the Court takes into account the wife’s lack of work capacity compared to the husband.
The City U property was sold in late 2014 for the sum of approximately $220,000. The mortgage loan balance with ANZ as at separation was about $163,734 (see paragraph 32 of the wife’s affidavit filed 7 March 2023). The mortgage loan balance with ANZ as at 10 June 2014 was about $200,000. The husband’s affidavit stated that he received a net amount from the sale in the sum of $18,271 and then with such monies reduced the parties’ liabilities (including a roof repair liability of about $15,000) which evidence the Court, on the balance of probabilities, accepts.
The Court finds that on about 9 July 2012 the husband drew down into his ANZ Access Advantage account a sum of $25,000 from a mortgage loan encumbering the City U property. He has failed to provide a persuasive explanation that such drawdown was other than a premature distribution of matrimonial property to himself; such drawdown shall be taken into account under s75(2)(o) in favour of the wife. In this context the Court has had regard to all the documentary material relied upon by the parties, including the bank statements in evidence and the husband’s cross-examination in relation to a Statement of Financial Position that he provided to ANZ on about 9 July 2012.
The Court finds that on about 10 December 2013 the husband drew down into his ANZ Access Advantage account a sum of $37,704 from a mortgage loan encumbering the City U property. He has failed to provide a persuasive explanation that such drawdown was other than a premature distribution of matrimonial property to himself; such drawdown shall be taken into account under s75(2)(o) in favour of the wife. In this context the Court has had regard to all the documentary material relied upon by the parties including the bank statements in evidence and the husband’s cross-examination in relation to a Statement of Financial Position that he provided to ANZ on about 10 December 2013.
As to the parties’ present superannuation entitlements, the Court takes into account the husband’s greater superannuation entitlements compared to the wife, with the Court noting the wife’s lack of work capacity and thereby inability to accumulate further significant superannuation. (In this context the Court has not overlooked that the wife drew down on her superannuation the total sum of about $62,000 in about January 2019 to meet mortgage loan arrears and pay for repairs and expenses all in respect to the Suburb C property which latter matters were considered under Contributions above). The Court also takes into account those assets of the husband referred to in items 2–16 (item 16 as firstly referred to) of the original balance sheet (Exhibit J) which ultimately were removed from that balance sheet.
The Court is not persuaded, on the balance of probabilities, that the husband failed to disclose relevant bank accounts in these proceedings. In this regard, the Court has had regard to, inter alia, the material in Exhibit A and Exhibit I in particular.
The wife sought an adjustment under section 75(2) of the Act of 5 per cent. The husband sought no adjustment.
The Court, on balance, and taking into account the above matters, determines that there should be an adjustment for s 75(2) factors in the wife’s favour of 5 per cent. Thus the adjusted contributions finding will be 60 per cent to the wife and 40 per cent to the husband in respect to the net non-superannuation assets of $995,000. Such adjusted contributions finding results in the wife receiving $597,000 and the husband $398,000, representing a disparity of $199,000. Each party will retain their superannuation assets.
JUSTICE AND EQUITY
Should the wife retain the Suburb C property, $1,450,000, less mortgage loan $455,000, leaving net $995,000, then the wife will need to pay the husband the sum of $398,000 ($995,000 less $597,000). The parties will retain their superannuation assets.
The Court will afford the wife an opportunity to retain the Suburb C property by making an Order that she have four months to pay to the husband the sum of $398,000 in return for the husband transferring his interest in the Suburb C property to the wife. Should the wife be unable to comply with this Order then the Suburb C property should be sold. On the evidence, it is unlikely that the wife will be in a financial position to comply with such Order in view of her sole weekly income being her workers compensation receipts, the need for the wife to refinance the existing mortgage loan, and the wife’s need to repay her litigation funding debt.
The Court now turns to what should occur if the Suburb C property is sold.
The wife will receive $597,000 less her half share of the sale costs (e.g. agent’s commission and legal fees). With such cash the wife can possibly purchase real estate or invest such sum and rent accommodation. She will retain her superannuation entitlements of $193,000. She will continue to receive weekly workers compensation benefits, subject to any review after work capacity assessment, as discussed under s 75(2).
The husband will receive $398,000 less his half share of the sale costs. He will retain, inter alia, his superannuation entitlements of $362,850. He continues to earn income in his business.
The Court is of the view that its proposed property adjustment orders will represent a just and equitable property settlement between the parties.
The Court makes Orders accordingly.
I certify that the preceding sixty-nine (69) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Newbrun. Associate:
Dated: 11 August 2023
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