ROWLEY & TOOMEY

FEDERAL CIRCUIT COURT OF AUSTRALIA

ROWLEY & TOOMEY

[2019] FCCA 1549

Catchwords:
FAMILY LAW – Property – marital relationship – determination of property pool – where the husband made a significant initial financial contribution – where the wife received a significant inheritance during the relationship – whether funds accrued during the relationship and spent post-separation should be ‘added back’ – where the wife has accrued property post-separation – where the husband was the primary income earner and the wife the primary homemaker – determined it is just and equitable for a division of property – consideration of section 75(2) factors.

Legislation:

Family Law Act 1975 (Cth), ss.4, 75, 79

Child Support (Assessment) Act 1989 (Cth), s.117

Cases cited:

Bevan v Bevan (2013) 279 FLR 1

C v C (2005) FLC 93-220

Dickons v Dickons [2012] FamCAFC 154

Eufrosin v Eufrosin [2014] FamCAFC 191

Lovine v Connor [2012] FamCAFC 168

Norbis v Norbis (1986) 161 CLR 513

Stanford v Stanford (2012) 247 CLR 108

Applicant:

MS ROWLEY

Respondent:

MR TOOMEY

File Number:

MLC 8744 of 2017

Judgment of:

Judge Blake

Hearing dates:

11 & 12 April 2019

Date of Last Submission:

12 April 2019

Delivered at:

Melbourne

Delivered on:

7 June 2019

REPRESENTATION

Counsel for the Applicant:

Mr Sweeney

Solicitors for the Applicant:

Farrar Gesini Dunn

Counsel for the Respondent:

Ms Swart

Solicitors for the Respondent:

J A Middlemis

ORDERS

Within 14 days, the parties do all things necessary to cause the funds held in the interest-bearing investment account held by Farrar Gesini Dunn on behalf of the parties to be distributed as follows:
(a)$14,025 to School A in satisfaction of the 2019 school fees for the children [X] and [Y] (‘children’);
(b)$60,000 to a bank account to be held thereafter on trust for the benefit of the children (‘children’s bank account’) and for the purpose of paying the following expenses for the children:
(i)school fees;
(ii)camps and excursions;
(iii)uniforms and school materials;
(iv)private health insurance;
(v)out-of-pocket expenses for health care and dental care;
(vi)extracurricular activities including hobbies and sports and any other activities agreed between the parties.
(c)the balance to be split between the parties as follows:
(i)68% to the Applicant; and
(ii)32% to the Respondent.
Upon the funds in the children’s bank account being deposited, the parties do all such acts and things as may be required to:
(a)Ensure that the account requires both parties’ signatures to release any funds from the account;
(b)Come to an agreement regarding the use of any money and it be used only for the expenses outlined in order 1(b) herein; and
(c)Divide any funds equally between the parties in the event that there is any funds remaining in the account upon the children completing their secondary education.
The Property B Property and any liabilities associated with it in Pool 2 to remain with the Applicant.
The Motor Vehicle C and the Paintings be sold and the proceeds be split equally between the Applicant and the Respondent.
In accordance with section 90XT(4) of the Family Law Act 1975 (‘Act’), a base amount of $156,743.10 is allocated to the Applicant out of the Respondent’s interest in his Super Fund D Account, member number ….
In accordance with section 90XT(1)(a) of the Act:
(a)the Applicant is entitled to be paid, using the base amount allocated in the immediately preceding order, the amount calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001;
(b)the entitlement of the Respondent in the Super Fund D Account (or the entitlement of such other person who becomes entitled to receive a payment out of the Respondent’s superannuation interest) is correspondingly reduced by force of this Order; and
(c)this Order has effect 5 business days from the date of this Order.
The Trustee of the Super Fund D Fund (‘the Trustee’) shall do all such acts and things and sign all such documents as may be necessary to:
(a)calculate, in accordance with the requirements of the Act, the entitlement awarded to the Applicant in the immediately preceding clause of this Order; and
(b)pay the entitlement whenever the Trustee makes a splittable payment from the Respondent’s interest in the Super Fund D Fund.
Unless otherwise provided by these Orders, the Applicant be entitled to be the sole legal and beneficial owner of all items of property including real property, money, motor vehicles, insurances, equities, superannuation entitlements and personal effects in her name, possession or control.
Unless otherwise provided by these orders the Respondent be entitled to be the sole legal and beneficial owner of all items of property including real property, money, motor vehicles, insurances, equities, superannuation entitlements, and personal effects in his name, possession or control.
The Applicant indemnify the Respondent in respect of all liabilities in her sole name or jointly with any other person, including but not limited to any credit card debt in her sole name or jointly with another person, and any loan or debt to any financial institution or other person in her sole name or jointly with another person.
The Respondent indemnify the Applicant in respect of all liabilities in his sole name or jointly with any other person, including but not limited to, any credit card debt in his sole name or jointly with another person, or any loan or debt to any financial institution in his sole name jointly or with another person.
There be no order as to costs.

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

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT MELBOURNE

MLC 8744 of 2017

MS ROWLEY

Applicant

And

MR TOOMEY

Respondent

REASONS FOR JUDGMENT

Introduction

This is an application by the wife for division of property. The Initiating Application was filed on 28 August 2017. The application was later amended by the wife on 14 March 2019, with leave of the Court.
With the leave of the Court, the husband filed an Amended Response on 14 March 2019. The husband indicated at the outset of the trial, following a query from the Court, that he did not seek to pursue a claim for departure from the administrative assessment of child support pursuant to section 117 of the Child Support (Assessment) Act 1989, for the purposes of which the wife’s income be fixed in the sum of $80,000 per annum.
The issues before the Court in this matter are therefore as follows:
a)What is the property of the marriage and, in particular, what is in the pool of assets available for distribution and what values ought to be ascribed to the assets in the pool;
b)What were the contributions made by the parties during the course of the marriage, and the weight to be given to those contributions;
c)What is the relevance of any matters required to be considered under section 75(2) of the Family Law Act 1975 (‘the Act’) and what adjustment, if any, should flow as a result of the application of these factors.

Facts

The wife is currently 48 years of age. She works as a part-time public servant and runs a small business.
The husband is currently 46 years of age. He works full-time as a professional. He is in good health.
The parties met in 1996 or thereabouts. They commenced living together in either 1997 or early 1998. They became engaged in 1997.
In around … 1997, the parties purchased a property at Property E (‘the Property E property’). The purchase price was $135,000. At the time of the purchase, the husband contributed $53,500 toward the Property E property. The wife contributed $5,000. The balance was funded by way of a mortgage from the Commonwealth Bank. The husband says, and I accept, that he had $5,000 in savings after the purchase which he ultimately contributed to paying down the mortgage.
When acquired, the Property E property was held by both parties as tenants-in-common to reflect what were their different contributions to the property at that time. The wife held one tenth of the property as a tenant-in-common. The husband held the remaining nine tenths of the property as a tenant-in-common.
The husband says that, in addition to the amounts above, he contributed a further $30,500 to the purchase of the Property E property post settlement. I accept that he did so. However, I find that this level of contribution was only possible because of the wife’s contributions to living expenses, which I have made findings in respect of below.
In early 1998, the parties moved to Town F. The Property E property was rented. Rental proceeds from the Property E property were used to pay down the mortgage on the Property E property. The husband’s personal income was also used, in this period, to pay down the mortgage on the Property E property. The wife’s income as a public servant was used to cover joint living expenses and the rent on the Property F property.
In late 1998 or early 1999, the parties returned to Melbourne and reoccupied the Property E property. The husband continued to apply his income to paying down the mortgage on the Property E property and the wife applied her income to living expenses.
Throughout the duration of the marriage, both parties maintained separate bank accounts. However, each made significant financial contributions for each other’s benefit or for the benefit of their family. I am satisfied on the evidence that a significant amount of the husband’s income in the period from 1998 until the mortgage on the Property E Property was discharged, was applied to reducing the mortgage. I am also satisfied that during this period, the wife’s income was applied for living and other expenses for the joint benefit of both of the parties.
The parties’ first child was born in early 2002. The wife was off work for 5 months. She then returned to work part time 5 months after giving birth. A second child was born in … 2005. The wife returned to work on a casual basis 3 weeks after giving birth to the second child. She was not paid much for this work.
The mortgage on the Property E property was paid down by about early 2002.
In late 2005, the husband was made redundant from his position at Employer. He received a $35,000 redundancy payment. He was out of work for approximately 6 weeks.
At around this time, the parties renovated the Property E property. This was funded by the redundancy payment paid to the husband. I accept the wife also borrowed $15,000 from her parents to complete the renovations. The husband’s father did most of the renovation work on the kitchen. The husband provided some assistance to the builder during this period as well.
On … 2008, the wife received an inheritance of $306,149.68 (‘the Inheritance’). I accept the wife’s evidence that the Inheritance was used in the following ways:
a)$15,000 was used to repay the loan given by the wife’s parents to complete the renovations on the Property E property;
b)approximately $12,000 was used to purchase a second-hand car;
c)a number of payments were applied for the benefit of the family including for medical treatments and medical procedures, speech therapy, paying bills, credit card debts, garden supplies, glasses and extracurricular activities for the children;
d)$20,000 was given by the wife to the husband to purchase shares; and
e)around $171,214.69 was used to contribute to the purchase of a property in Property G (‘the Property G property’).
In addition to the above, I accept the wife’s evidence that approximately $20,000 from the Inheritance was used to build a carport, deck and pergola at the Property E property.
The amount paid for the Property G property by the parties was $367,000. The balance of the purchase amount for the Property G property was funded by a mortgage from the Commonwealth Bank of Australia of around $236,000 and other costs were funded to the amount of around $18,000 from the sale of the shares. The husband says he sold shares that he had purchased out of his personal income to contribute to the Property G property. The wife says that the shares that were sold were shares that the husband purchased using the money from the Inheritance that was given to him by the wife. No documents were produced about this issue. It is a matter the wife dealt with in her affidavit, which the husband did not do. I accept the wife’s version of this.
In around August 2013, the wife received a further distribution from the Inheritance of $6,426. I find that this was applied by the parties to purchase a Jacuzzi for the Property E property.
In … 2016, the wife discovered that the husband had an investment account with a balance of $48,004.66. This ultimately led to the breakdown of the marriage. These monies have since been spent by the husband in the following way:
a)$21,307 for the children’s school fees for 2017 and 2018;
b)$5,000 for a holiday to Country H;
c)$6,000 for furniture and the costs of rehousing himself; and
d)the balance has been paid toward legal fees relating to these proceedings. The husband estimated, under cross examination, his legal fees to be in the order of $33,000.
At some point in time between October and December 2016, the husband sold shares in his CommSec share portfolio. The value of those shares after sale totalled $20,717.54.
On 25 November 2016, the parties separated.
Following separation, the husband remained in the Property E property. The wife and children moved to live with the wife’s parents.
On 4 March 2017, the wife purchased a property in Property B (‘the Property B property’). The purchase price was $1,126,000. The stamp duty was $61,930. The purchase of this property and the stamp duty costs were funded entirely by a loan from the wife’s father. A loan agreement is in evidence (annexure R-25 of the wife’s affidavit) and was executed on 31 May 2017. The loan is secured by a mortgage on the title of the property and the mortgage was in evidence.
The Property E property was sold at auction on 6 May 2017 for $1,326,000. The funds were put into a trust account for the benefit of both parties. The husband says that he prepared the Property E property for sale. The wife was prevented from assisting with preparing the Property E property for sale. The husband says he spent around $5,000 doing so. He was cross examined on this and I accept the genuineness of this evidence as to the costs incurred, noting that there is no documentary evidence on his point.
On 24 May 2017, the parties sold the Property G property at auction for $450,000. The balance was put into a trust account for the benefit of both parties. The wife says that she prepared the Property G property for sale. There is no evidence before me relating to the amount that the wife spent on preparing the Property G property for sale.
During the marriage, the wife says, and I accept, that she was the primary carer for the children. The husband conceded, during cross examination, that the wife had been the primary home maker and had done a good job. I accept much of the wife’s evidence about her role during the marriage including that she looked after the children when they were young, cooked meals, took the children to their doctors appointments, helped with their homework, became involved in the children’s play group, attended parent teacher interviews, attended working bees, and did volunteer work at the schools and kindergartens. This is consistent with the husband’s evidence that he was the primary income earner and the wife was the primary carer.
The wife also says, and I accept, that she did all of the gardening at the family home and maintained the property, which included conducting most minor repairs.
The husband says, and I accept, that he was an active parent. The fact that his children spend five nights per fortnight with him indicates that he was not an absent parent during the marriage. I accept that he helped with the children’s homework when they were older. I also accept that he has been involved in some of the children’s extracurricular activities, and in particular those of [X] who has an interest in sports. However, as I noted above, I find that the majority of looking after the children and providing a home for the entire family fell to the wife, and that she did a good job in this respect. I accept that the husband’s contribution to family life largely related to earning an income which went towards supporting his family.
The wife obtained a valuation report of the Property B property. That valuation, which was admitted into evidence, discloses the current value of the Property B property as being $1,050,000 as at 27 March 2019.

The Law

The power of the Court to alter the property interests of parties to a marriage begins with an examination of the terms of the Act itself.
‘Property’ is defined in section 4 of the Act. In relation to parties to a marriage, ‘property’ is defined as ‘property to which those parties are, or that party is, as the case may be, entitled, whether in possession or reversion’.
The provision of key relevance when assessing an alteration of property interests is section 79 of the Act. Section 79(1) of the Act empowers the Court to make such orders as it considers appropriate in altering the interests of the parties to the marriage.
The power of the Court under section 79(1) is a power to be exercised having regard to the subsections that follow. Of primary importance is what is set out in section 79(2). Section 79(2) provides as follows.
‘The Court shall not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.’
Also of significance, in this matter, is section 79(4) of the Act. Section 79(4) requires the Court, ‘in considering what order (if any) should be made under this section in property settlement proceedings’ to take account of the various factors set out in subsections (a) to (g) of section 79(4). One of the factors set out in section 79(4) is subsection (e) which requires the Court to take into account, so far as they are relevant, the matters referred to in section 75(2) of the Act.
The provisions set out above have been the subject of extensive consideration by both the High Court of Australia and also by the Full Court of the Family Court of Australia.
In Stanford v Stanford (2012) 247 CLR 108, the High Court said this at paragraphs [35]-[36] in relation to the operation of section 79 of the Act.
‘[35] It will be recalled that s 79(2) provides that “[t]he court shall not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order”. Section 79(4) prescribes the matters that must be taken into account in considering what order (if any) should be made under the section. The requirements of the two subsections are not to be conflated. In every case in which a property settlement order under s 79 is sought, it is necessary to satisfy the court that, in all the circumstances, it is just and equitable to make the order.
[36] The expression “just and equitable” is a qualitative description of a conclusion reached after examination of a range of potentially competing considerations. It does not admit an exhaustive definition. It is not possible to chart its metres and bounds. And while the power given by section 79 is not “to be exercised in accordance with fixed rules”, nevertheless, the three fundamental propositions must not be obscured.’ Citations omitted
The High Court then set out the three fundamental propositions that guide a property settlement. The High Court stated as follows:
‘[37] First, it is necessary to begin consideration of whether it is just and equitable to make a property settlement order by identifying, according to ordinary common law and equitable principles, the existing legal and equitable interests of the parties in the property.
…
[38] Second, although s 79 confers a broad power on a court exercising jurisdiction under the Act to make a property settlement order, it is not a power that is to be exercised according to an unguided judicial discretion... any question between husband and wife as to the title to or possession of property, is a power which “rests upon the law and not upon judicial discretion”
...
[39] Because of the power to make a property settlement order is not to be exercised in an unprincipled fashion, whether it is “just and equitable” to make the order is not to be answered by assuming that the parties’ rights to or interests in marital property are or should be different from those that then exist.
…
[40] Third, whether making a property settlement order is “just and equitable” is not to be determined by beginning from the assumption that one or the other party has the right to have the property of the parties divided between them or has the right to an interest in marital property which is fixed by reference to the various matters (including financial and other contributions) set out in s 79(4). The power to make a property settlement order must be exercised “in accordance with legal principles, including the principles which the Act itself lays down”. To conclude that making an order is “just and equitable” only because of and by reference to various matters in s 79(4), without a separate consideration of s 79(2), would be to conflate the statutory requirements and ignore the principles laid down by the Act.’ Citations omitted

The three fundamental propositions set out above by the High Court were the subject of comment and guidance by the Full Court of the Family Court in Bevan v Bevan (2013) 279 FLR 1 at paragraphs [73] to [86]. In Bevan, the Full Court noted that the High Court did not approve nor disprove the ‘4 step process’ that was applied prior to the High Court decision in Stanford. Rather, what the Full Court did in Bevan was to note that the High Court in Stanford refocused attention on the obligation not to make an order adjusting property interests unless it is just and equitable to do so.
In Bevan, the Full Court at [86] stated that it did not consider it helpful, and indeed ‘it is misleading’, to describe the enquiry as to whether it is just and equitable to make a property settlement order as a ‘threshold’ issue. Rather, the Court stated that ‘…the just and equitable requirement is therefore not a threshold issue, but rather one permeating the entire process.’
Having addressed the interaction between sections 79(2) and 79(4) of the Act, the Full Court noted (as was noted in Stanford at [42]), that in many cases, the preliminary question of whether it is just and equitable to make an order is effectively answered by the way that the parties present their case. Indeed the High Court in Stanford at paragraph [42] noted that:
‘…the just and equitable requirement is readily satisfied by observing that, as a result of the choice made by one or both of the parties, the husband and wife are no longer living in a marital relationship. It will be just and equitable to make a property settlement order in such a case because there is not and will not thereafter be the common use of property by the husband and the wife.’
In Bevan, the Full Court provided express guidance for trial Judges in respect of the application of, and approach, to section 79 of the Act. First, at paragraph [72], the Full Court cautioned as follows:
‘It follows that judges would be well advised to avoid what we considered to be arid discussion of the “stage in the process” at which “adjustments” are permissible. Such discussion tends to elevate the 4 step process to the status of a statutory edict, when in fact it is no more than a shorthand distillation of the words of a statute which has but one ultimate requirement, namely not to make an order unless it is just and equitable to do so.’
The following was also stated by the Full Court in Bevan at paragraph [89] in relation to the approach that trial Judges should take:
‘In our view, it will be less likely that the separate issues arising under s 79(2) and (4) will be conflated if judges refrain from evaluating contributions and other relevant factors in percentage or monetary terms until they have first determined that it would be just and equitable to make an order.’
In this matter, the Court was urged to apply a four step process to the alteration of the parties’ property rights. In light of the pronouncements of the High Court and the Full Court set out above, I propose to deal with the matter consistently in alignment with the three fundamental propositions set down by the High Court in Stanford, as examined by the Full Court in Bevan.
When it comes to the assessment of contributions and the approach to be taken, I have had regard to the comments of the Full Court in Dickons v Dickons [2012] FamCAFC 154, and Eufrosin v Eufrosin [2014] FamCAFC 191, in particular the following extract from paragraph [24] of Dickons:
‘The essential task [of the court] is to assess the nature, form and extent of the contributions of all types made by each of the parties within the context of an analysis of their particular relationship.’
In respect of an approach which attributes percentage contributions to differing periods within the relationship, or types of contributions to be made, the Full Court has stated that there is little to be gained, and much to be said against approaching the task of assessing contributions by attaching percentages to components of it: Dickons at [23]. Further, in, Lovine v Connor [2012] FamCAFC 168, the Full Court stated as follows:
‘[42] As part of the process of ultimately determining just and equitable orders under s 79 there is included a complex of discretionary assessments and judgements of many components of contribution, only some of which are capable of measurement in money terms and then often only in historical, rather than present, money terms. Any dictate to the effect that in the course of assessment each disparate component part or kind of contribution must be assigned a discrete and identifiable value or percentage is antithetical to the nature of the discretion involved.’
The task of assessing contribution is ‘holistic’: Dickons at [24].
I am satisfied that in this matter it is just and equitable to embark upon an exercise of determining how the assets between the parties are to be split. The parties have been separated since November 2016. A divorce Order was made on 27 March 2018. The evidence is that the husband has re-partnered. It is self-evident that the parties are no longer in a relationship and that there will no longer be any common property available for shared use by the parties.

The Pool of Assets

There is a lack of agreement between the parties as to the value of the assets and liabilities in the marriage. The position of the parties was conveniently summarised in a table set out in the wife’s Outline of Case. It is reproduced below:

Asset	Owned By	Value	Agreed/Disputed
Farrar Gesini Dunn Investment account	Joint	$1,600,616.45	Agreed
Property B Gardens	Wife	$1,050,000	Not agreed
Motor Vehicle C	Wife	$4,000	Not agreed
Painting	Wife	$2,000	Not agreed
CBA account ending #…	Wife	$336.03	Not agreed
ANZ bank account ending #…	Husband	Nil	Agreed
ANZ bank account ending #…	Husband	Nil	Agreed
CBA bank account ending #…	Husband	$3,920	Agreed
CBA bank account ending #…	Husband	Nil	Agreed
Undeposited cash savings	Husband	Undisclosed	Not agreed
Total Assets:		$2,660,872.48

Add Back	Owned By	Value	Agreed/Disputed
Balance of ANZ account ending #… at separation	Husband	$48,004.66	Not agreed
Proceeds of sale of shares	Husband	$20,717.54	Not agreed
Total Add Backs:		$68,722.20

Liability	Owned By	Value	Agreed/Disputed
Loan from Mr & Mrs Rowley	Wife	$1,187,930	Not agreed
CBA credit card ending #…	Wife	$4,798.10	Not agreed
CBA credit card ending #…	Husband	$1,259	Agreed
Total Liabilities:		$1,193,987.10

Superannuation	Owned By	Value	Agreed/Disputed
Super Fund D, member #… at 31 December 2018	Wife	$54,888.29	Agreed
Super Fund D member #… as at 31 December 2018	Husband	$368,374.49	Agreed
Total Superannuation:		$423,262.78

Excluded Assets and Liabilities	Owned By	Value	Agreed/Disputed
Westpac credit #…	Husband	$4,864	Not agreed

Net value of assets excluding superannuation (on the Wife’s contentions)	$1,535,607.58
Net value of assets including superannuation (on the Wife’s contentions)	$1,958,870.36

It can be seen from the table above that the most substantial property of the parties that was acquired during the marriage and before separation, is the money in the Investment Account. It is agreed that this amount should be placed in the pool. It is also agreed that the funds in the husband’s bank account ending in #… of $3,920 ought to be in the pool.
I now deal with each of the matters in dispute below.

The Property B Property

The wife purchased this property approximately 4 months after separation. The purchase price was $1,126,000. The stamp duty was $61,930. The wife has funded the entirety of the purchase price and ancillary costs through a loan from her father. Settlement on this property occurred on 28 June 2017. The total amount of the loan, under which no repayments have been made to date, is $1,187,930.
The wife tendered into evidence a report from Valuers. That report, dated 27 March 2019, values the Property B property at $1,050,000. The reduction in the value reflects a fall in property values across the city.
The husband was not consulted in relation to the purchase or the financing arrangements. The evidence of the wife is that the home was purchased to provide accommodation for her and the children as the husband elected to stay in the matrimonial home in Property E. The evidence is that the wife does not propose to sell the property. She intends to use the proceeds from the property settlement to repay the loan to her father, and live with the children in the house.
The husband in his trial affidavit and in submissions asserted that the loan to the wife will not be required to be repaid. No evidence was adduced to support that proposition, other than the statement in the husband’s affidavit.
Mr J, the father of the wife, also gave evidence in the proceedings. Annexed to his affidavit was, among other things, a copy of the loan agreement between himself, his wife, Ms K, and the Applicant wife in these proceedings, dated 31 May 2017. Also annexed to his affidavit was a copy of the mortgage on title securing the principal sum advanced under the loan, along with details of the mortgage registration number. In his oral evidence, Mr J gave evidence that he expects his daughter to repay the loan.
In the circumstances, I find that the loan is a genuine loan and that the wife will be required to repay the amounts under the loan to her father and mother.
In light of the circumstances relating to the acquisition of the Property B property, I propose to establish a second, separate pool for it. It is accepted that the Court has a discretion as to whether it uses a global approach or an asset by assets approach: Norbis v Norbis (1986) 161 CLR 513; C v C (2005) FLC 93-220.

The Motor Vehicle C and the Painting

The parties could not agree on the value of these items. At the commencement of the trial, I asked respective Counsel to come to some sort of agreement as to the value of these items. I indicated that if no agreement could be reached, I would consider issuing an order to sell the items. Regrettably, no agreement was able to be reached.
I have no evidence before me as to the value of these items. All I have is competing assertions from the parties as to value. Accordingly, I will issue an order that the items be sold and that the proceeds be split equally between husband and the wife.

The Wife’s CBA Account ending in # …

At trial, the wife estimated the amount of money in this account as being $336.03. In his Outline of Case, the husband accepts that the amount in this account is nominal. I accept that the amount in this account is $336.03. I will include it in pool 1.

The husband’s bank accounts and the withdrawals post separation

The amount in the husband’s bank account ending in # … is in pool 1, as noted above.
The evidence discloses that the husband operated three bank accounts during the marriage, in addition to CBA account number # …. These were CBA account ending # …, ANZ account number # … and ANZ account number # …. It is agreed that the amount currently in these three additional accounts are nil.
The wife tendered into evidence some bank account statements in respect of the above accounts. In her affidavit, she also deposed as to the way in which the husband moved money between the accounts, and to the husband’s pattern of making multiple withdrawals from the accounts during the marriage.
In respect of the husband’s withdrawals during the marriage, the wife sought in her Outline of Case that the cash withdrawals made during the marriage be included in the pool.
I will not include cash withdrawals made by the husband during the marriage in any pool. The amount was not quantified. Apart from bank statements said to be representative of specific periods in time and provided by way of example, I was not provided with any other evidence as to the value of those transactions.
The statements of the husband’s bank account ending in # … post separation were also placed in evidence before the court. Those statements show that in the period since separation, the husband has made numerous withdrawals from that account. On some days, the husband made multiple withdrawals of small amounts from the account. This appears to continue a pattern of the husband making small withdrawals, sometimes multiple times a day, that also occurred during the marriage.
The husband was rigorously cross-examined about his reasons for making these withdrawals post separation. The response given by the husband was that he regularly withdrew small amounts for living expenses. He says small withdrawals were used as a means to help him with his budgeting. His evidence was that if he withdrew a larger amount of cash, he would spend it quickly. He said that multiple withdrawals of small amounts helped him to reduce his spending.
It was put to the husband that he was making multiple withdrawals to hide cash and to ensure that it was not included as part of the property settlement proceedings. The husband denied this.
I accept the husband’s explanation of the reasons why he makes multiple withdrawals of cash in his accounts each day. While some may find multiple withdrawals in the course of a single day unusual, I am not satisfied that the husband embarked upon a course of making multiple withdrawals each day post separation to hide cash from the wife, particularly in circumstances where this continued a pattern of withdrawals that had existed during the marriage. Subject to one matter below, I find the husband does not have a hidden cash reserve of any substance.
During cross examination, the husband indicated that he had a safe at home with what he estimates to be around $800 cash in it. He also conceded that there was an envelope in the glove box of his car which contains some cash.
There is no evidence before me as to the amount of money in the glove box. There is evidence of $800 cash being held in a safe. I will include that amount in pool 1.

The Add Backs

The wife seeks to add back to the pool of assets an amount of $48,004.66. This amount was held in an ANZ account in the husband’s sole name at the time of separation. She also seeks to have added back to the pool the amount of $20,717.54 which the husband received from selling shares in 2016.
In considering the issue of add backs, I am mindful of what the Full Court said in Bevan. The Full Court said this in relation to add backs, at paragraph [79]:
‘We observe that “notional property”, which is sometimes “added back” to a list of assets to account for the unilateral disposal of assets, is unlikely to constitute “property of the parties to the marriage or either of them”, and that is not amenable to alteration under s79. It is important to deal with such disposals carefully, recognising the assets no longer exist, but that the disposal of them forms part of the history of the marriage – and potentially an important part. As the question does not arise here, we need say nothing more on this topic, save to note that s79(4) and in particular s75(2)(o) gives ample scope to ensure a just and equitable outcome when dealing with the unilateral disposal of property.’
In light of the comments above, I do not propose to add back either of the amounts sought by the wife. I propose to deal with these amounts pursuant to section 75(2)(o) of the Act.

Liabilities – The Loan

The husband disputed the inclusion of the wife’s loan for the purchase of the Property B property. I have already determined that the Property B property will be included in a separate pool. It is appropriate to include the loan relating to this property as a liability in pool 2.

Liabilities – The Credit Cards

The husband seeks to include his Westpac credit card balance in the amount of $4,864 as a liability to the asset pool. The wife objects to the inclusion of that amount because the amount was transferred onto the card 18 months after separation and she does not know where the debt was transferred from. There is no evidence from the husband about how the debt arose, or the circumstances of its transfer. I will not include this amount in pool 1.
The husband also has a Commonwealth Bank credit card balance outstanding in the amount of $1,259. It is agreed that this amount should be a liability. I will include it in pool 1.
The current balance on the wife’s credit card is $4,798.10. The amount is not agreed. There is no evidence before me in relation to why the husband objects to this amount being included in the pool. In closing, the husband conceded that the wife’s credit card debt at separation being $4,314 had to be included in the pool. I will include the amount of $4,798.10 in pool 1.

Superannuation

The value of each party’s superannuation entitlements was agreed at trial. There is a significant disparity between the superannuation accumulated by the husband and the superannuation accumulated by the wife as a result of the way the parties structured their marriage.
The parties are each in their mid to late 40s. The parties are at an age where their superannuation balances are likely to be of increasing importance. For that reason, and given the disparity in superannuation entitlements, I will establish a third pool of assets comprising the parties’ superannuation entitlements.

Summary of Net Assets available for distribution

In light of the findings I have made above, the assets available for distribution by the parties, are as follows.
Pool 1:

Assets	Owned By	Value
Farrar Gesini Dunn Investment account	Joint	$1,600,616.45
CBA account ending # …	Husband	$3,920
CBA account ending # …	Wife	$336.03
Cash in safe	Husband	$800
Total Assets:		$1,605,672.48

Liabilities	Owned By	Value
CBA credit card # …	Husband	$1,259
CBA credit card # …	Wife	$4,798.10
Total Liabilities		$6,057.10
Net Assets in Pool 1:		$1,599,615.38

Pool 2:

Assets	Owned By	Value
Property B Property	Wife	$1,050,000

Liabilities	Owned By	Value
Loan from Mr & Mrs Rowley	Wife	$1,187,930
Net Assets in Pool 2:		-$137,930

Pool 3:

Assets	Owned By	Value
Super Fund D, member # …	Wife	$54,888.29
Super Fund D member # …	Husband	$368,374.49
Total Superannuation in Pool 3:		$423,262.78

Contributions by the Parties

Financial Contributions

The central contention advanced by the husband in this matter was that his initial contribution to the acquisition of the Property E property must be recognised and appropriate weight attached to it. The settlement proceeds of the Property E property total $1,299,059.15. This comprises the bulk of the sum available for distribution in the trust account.
During the hearing, it became apparent that there were three bases to the husband’s submission in relation to the value of his initial contribution. The first was that the initial deposit that he paid dwarfed that paid by the wife. The second was that these interests were recognised on the title with the husband being recorded as owning nine tenths of the tenancy in common and the wife owning one tenth of the tenancy in common. Thirdly, the husband says that during the period from 1998 to 2002, it was his additional contributions to the mortgage that resulted in the mortgage eventually being discharged.
I am satisfied that the husband made a significant initial financial contribution to the acquisition of the Property E property by way of his deposit, and that there ought to be some recognition for this. I am also satisfied that the recording of the different ownership interests in this property were intended by the parties to recognise that contribution. I will give weight to these matters in favour of the husband in my overall assessment.

I do not accept, however, that the contributions made by the husband from 1998 to 2002 attract any significant weight. The parties were in a relationship during this period. The period of the relationship included cohabitation, moving to Property F and the parties sharing expenses. While I am satisfied that the husband did in fact make the additional payments that he claims to have made, those additional payments were only possible because the wife was contributing to the living and other expenses for both of them.
There is then the matter of the wife’s contribution by means of the Inheritance she received. The sum received by the wife, totalling around $312,000, was significant. Slightly more than half of this sum, being around $167,000, was used to purchase the Property G property. There is not any real challenge to the wife’s evidence that the funds received from the inheritance were also expended for the benefit of the family as noted above. This includes significant contributions to improving the value of the Property E property directly (through the building of the carport, deck and pergola) and indirectly (repayment of the loan to the wife’s parents for funding the renovation of the kitchen and back area of the home). These contributions to the Property E property were important and need to be recognised.
The wife stated in evidence that both she and the husband felt very blessed at the receipt of the inheritance. I find the receipt of the inheritance was a windfall when one takes into account that, at that stage, the parties were living mortgage free, were able to attend to various lifestyle matters to improve their situation and were able to purchase a lifestyle property for the family. In these circumstances, I regard the inheritance as being a substantial financial contribution by the wife and one to which I attribute some weight in coming to an overall assessment of how the assets should be split. It is to be noted that she made this financial contribution notwithstanding the relationship of the parties was one where she was the primary carer and the husband the primary income earner.
In respect of the maintenance of the properties, I take into account the fact that the wife primarily maintained the garden and carried out minor repairs at the Property E property. I will also have regard to her contribution (of which there is no evidence as to value) in preparing the Property G property for sale. Likewise, I will take into account the contribution of the husband in preparing the Property E property for sale.
Having regard to the matters above, I am satisfied that the section 79(4)(a) factors favour the husband. The wife, however, also made financial contributions which I have noted above that were significant. The Inheritance, in the way in which it was applied by the wife to improvements in the Property E property, and to the acquisition of the Property G property, means that while this factor tends to favour the husband, it does not do so to the extent that it might otherwise had the Inheritance not been received and utilised in the way that it was.

Non-Financial contributions

I have made findings above that the wife made significant non-financial contributions in the role of homemaker and parent. It is unnecessary for me to repeat those findings here. I accept that the husband, as noted above, was an active parent, however I do not accept that his contribution on the homemaker front was remotely equal to the contribution made by the wife. This is not a criticism of the husband. He was clearly working long hours to provide for his family and did so. Rather, this merely reflects the way the parties structured and approached their relationship which saw the bulk of the financial contribution being made by the husband (save and except for the receipt of the inheritance) and the wife taking responsibility for the children and as a homemaker.
There are two additional matters to take into account in relation to non-financial contributions. The first relates to the period that the parties were separated in 2012/2013. In this period of 5 months, the husband went to Country L and worked there. During this period, the wife had sole responsibility for raising the children, the husband being absent. I have taken this into account.
Secondly, it is important to recognise the non-financial contributions being made by the wife following separation. She still has the bulk of the care arrangements, looking after the children nine nights per fortnight. Her evidence, which I accept, is that there are occasions when the husband is not able to make use of the time available to him to parent the children, because of work or other commitments. When this occurs, the wife picks up the additional responsibility. In this respect, I have no reason to doubt the evidence of the wife and I have taken this into account.
For the reasons set out above and earlier, I find the section 79(4)(c) factors significantly favour the wife.

Child Support

The husband currently pays child support to the wife of $241 per week. That equates to an amount of $12,532 per annum. The amount being received in child support by the wife is currently reduced because the wife is, through the child support system, reimbursing the husband for her percentage of the children’s 2018 school fees.
During the hearing, it emerged that there were various instances of the husband applying to the child support agency to reduce his child support payments. The husband was challenged about his reasons for doing this at various times since separation occurred. The most recent instance of the husband seeking to have his child support reduced related to the period in February/March 2019 when the husband estimated his income as being $96,270 per year. The husband claimed under cross examination that his income was reduced because he had elected to purchase additional leave through work which resulted in a reduction in his annual salary. He said that he had done this in order to take additional leave to be with his children. I accept his explanation and evidence in this respect.
It is difficult to know what to make of the husband’s attitude to child support. Counsel for the wife took me to child support documentation for the period that the parties were separated in 2013. Documentation there discloses that, at one point, the husband estimated his income as being $32,097.63. This resulted in less child support payments to the wife in circumstances where the husband was earning, at least for part of that period, a reasonable income in Country L. The husband’s explanation for this is that at the time he completed the documentation, he did not know what his income would be.
Ultimately, I do not regard it as necessary to make express findings as to the husband’s applications to amend child support, or to his motivations for doing so. Ultimately, child support is being paid, and the husband is not in arrears. This is a matter I have taken into account in assessing the parties’ respective contributions under section 79(4)(g) of the Act.

Section 75(2) Factors

The claimed addbacks and section 75(2)(o)

I indicated above that I would deal with the wife’s claims for add backs pursuant to section 75(2)(o) of the Act.
The first matter relates to the amount of $48,004.66 in the husbands ANZ account # … at the time of separation. The amount is not in dispute. The husband says that the amount in this account, which existed at the time of separation, accrued in two ways. First, the husband says that $35,000 was saved during the 12 months when he and the wife were separated in 2012 and 2013. He says that the balance of the $13,000 was saved from his own wages after meeting family expenses.
The husband deposed that since separation the amount in this account has been exhausted. He deposes that:
a)$21,307 was paid toward the children’s school fees for 2017 and 2018;
b)Almost $5,000 was spent travelling with the children to Country H in … 2017;
c)$6,000 was spent buying furniture and rehousing himself, which was necessary because the wife retained the majority of the family furnishings upon the sale of the Property E Property;
d)$5000 was spent preparing the Property E Property for sale; and
e)The balance has been spent on living costs and legal fees.
Under cross examination, the husband estimated his legal fees as being $33,000.
The husband, in closing submissions, conceded an add back of $15,693. The husband admits to using this for his own living expenses. The husband does not concede the $6,000 used to re-furnish the contents of his home (given the wife retained the furnishings from the matrimonial home). The husband also points out that the wife concedes that he paid the school fees of $21,307 and therefore this amount should not be added back.
I deal firstly with the school fees. These are a joint expense. The evidence, which is accepted, is that the husband has paid for both the 2017 and 2018 school fees. The school fees for both children for 2018 are $12,207. It is unclear to me on the evidence what the amount of the 2017 school fees were. On one view, it is the balance of $21,307 less $12,207 (or $9,100). The husband’s credit card statements however, show an amount paid on 9 March 2017 of $10,332.
The evidence is that the wife is repaying the husband an amount of $1,587 through the child support system for her contribution to the 2018 fees. I was not taken to any evidence about whether child support was adjusted in relation to 2017 school fees.
In respect of the 2018 school fees, the wife is paying her contribution toward these fees through the Child Support Agency. In my view, the 2018 school fees cannot be a credit to the husband in respect of child support and also be deducted from the amount of property to be adjusted. In light of this, I will not take into account the husband’s payment of the 2018 school fees as a matter in his favour.
I have no evidence of what has occurred in relation to the 2017 school fees paid by the husband and whether adjustments were made through child support on account of these fees. These fees are a joint expense payable by both parties for their children. In those circumstances, I will consider favourably the husband’s payment of the 2017 school fees when making any orders.
There is then the $6,000 that the husband spent on furnishings and other matters to rehouse himself following separation. The evidence before me is that the wife retained the property and furnishings in the matrimonial home. It was therefore reasonable for the husband to rehouse himself. I will not take this into account adversely to the husband in making final orders.
The husband’s evidence, unsupported by receipts, was that he spent $5,000 preparing the Property E property for sale. He was criticised for not being able to produce these receipts and was criticised throughout the trial for his lack of financial disclosure. As I have found above, I accept the husband incurred costs of preparing the Property E property for sale in the amount of $5,000. I will take this into account in favour of the husband in making final orders.
At the conclusion of the hearing, the husband conceded an ‘add back’ of $15,693 that he used for living expenses. I will take this into account in making final orders.
In respect of the shares, the value of the proceeds of the share sales was alleged by the wife to total $20,717.54. The husband conceded an ‘add back’ in closing submissions of $11,500 in relation to the share sale proceeds. He submitted that the remaining $8,500 was used to discharge the margin loan, and produced some loan statements that he said supported this.
The margin loan documentation tendered by the husband at the conclusion of the trial is unsatisfactory. There is a statement without a date on it which indicates a credit limit for a margin loan of $20,000. There is then a CommSec summary statement showing an apparent summary of shares sold. The final documents dated October and November 2016 show loan limits in one instance and loan limits with shares in the other instance. There is no direct evidence about the loan facility being discharged or otherwise repaid. I am therefore unable to making a finding that the loan was discharged or repaid.
In light of the wife’s claim and the inability of the husband to demonstrate through evidence loan repayments, I will take these matters into account in favour of the wife when making final orders.

The other section 75(2) factors

In final submissions, the husband contended that no adjustment ought to be made for the factors under section 75(2) of the Act. That being said, the husband also submitted that the wife has the prospect of returning to full-time work.
The wife contended that various matters under section 75(2) of the Act were relevant. She pointed, in particular, to her primary care of the children, the husband’s ongoing earning capacity, the interruption to her career to care for the children and the income and resources that are available to the husband as a result of it.
I find that the wife will continue to have primary care of the children of the marriage. The children currently live with her for nine days per fortnight, and live with the husband for the remainder of the time. The wife gave evidence, which I accept, that the husband is not able to fully utilise his time with the children given his various commitments. The evidence is that the wife has to adjust her day and other responsibilities to deal with those variations to the usual parenting regime. These are matters that I have taken into account.
I am satisfied that the husband has an ongoing capacity for work. The husband currently earns a salary in the vicinity of $100,000, with the amount varying depending on the extent to which he purchased leave. He is a qualified professional and has been in continuous employment, except for a short period in 2005 when he was made redundant. He is 46 years of age and in good health. I have had regard to these matters.
The husband gave some evidence that his position with his current employer may be insecure. The basis for this evidence was a conversation the husband says he had with a co-worker. No evidence was produced to the Court to indicate that workplace consultations were occurring, that a restructure was imminent, or that the husband’s employment was in jeopardy.
I find that the husband has the potential to continue to earn an income that is equivalent to the income he currently earns either with his current employer, or given his employment history, with a new employer, and I have considered this in arriving at the final orders.
I find the wife’s prospects of returning to full-time employment as a public servant to be poor to non-existent. The wife interrupted her career to look after the children. She has been absent from work as a public servant for 14 years. Her registration is no longer current. It is fanciful to suggest that she could walk into a role and earn an income that is around $80,000 per year, which was at one point a claim made by the husband. While she has the capacity for part-time work, which she currently undertakes, I find that her prospects of returning to meaningful and well remunerated full-time work are low when one has regard to the period of time she has been out of the full-time workforce and when one has regard to her role as the primary carer of the children. I have taken this into account.
One factor about which there was little direct evidence was the husband’s relationship with his new partner. The evidence before the Court, such as it is, is that the husband has re-partnered with a person who works on a casual basis as a professional. The evidence is that the husband’s new partner has recently given birth to a baby girl.
The extent to which the husband’s new partner has assets or other resources behind her to contribute to the husband’s new family is not known. The husband chose not to call her, perhaps understandably, in circumstances where she has only recently given birth and where he did not wish to subject her to the Court process and what he described as being ‘[his] problems.’
It is regrettable that more information was not placed before the Court in relation to the husband’s new family arrangements. A matter to be taken into account under section 75(2) is the responsibility of either party to support any other person. Another matter to be taken into account is the financial circumstances relating to the cohabitation where either party is cohabiting with another person. It may be that the husband does have a responsibility to support others as he claimed, namely his new partner and new child. I have no evidence or information before me which indicates the nature of those responsibilities, the cost of those responsibilities or how those responsibilities are proposed to be shared between the husband and his new partner. As there is no evidence before me in relation to these matters, I am not able to take them into account.

Decision and Final Orders

Both parties sought an order to the effect that $60,000 be set aside in an account for the benefit of their children. The husband described this as a school fees account. The wife described this as an account to pay for school fees, camps and excursions, uniforms and school materials, private health insurance, out-of-pocket expenses for health care and dental and extracurricular activities. The husband asked for a joint bank account in the names of the parties. The wife sought for the account to be held in her name and thereafter to be held on trust.
I will make an order that an amount of $60,000 be set aside for the children for the types of expenses contemplated by both the husband and the wife. The monies are to be held in an account on trust for the benefit of the children.
The wife also sought an order that the amount of $14,025 be paid directly from the funds available for distribution to School A in satisfaction of the 2019 school fees for the children. The husband did not seek such an order, but nor was it actively contested during the hearing. In these circumstances, I will make an order to this effect.
The husband also sought distribution from the amount held in trust to help him pay his capital gains tax liability and income tax liabilities. The wife opposed these orders, having already paid her share of capital gains tax and income tax. I do not propose to make an order advancing to the husband, from the sum in trust before distribution, an amount for his tax liabilities.
The wife seeks that she receive 69% of the property pool, including superannuation. Superannuation is dealt with below. The husband seeks that he receive 60% of the property pool, excluding superannuation.
I order that the remaining funds held in the Farrar Gesini Dunn investment account be split 68% to the wife and 32% to the husband.
The wife will otherwise retain her CBA account ending in # … with a value of $336.03 and the liability for her CBA credit card ending in # … with a debt of $4,798.10 in pool 1.
The husband will otherwise retain his CBA bank account ending in # … with a value of $3,920, the cash in the safe of $800 and the liability for his CBA credit card ending in # … with a debt of $1,259 in pool 1.
The position in relation to superannuation is as follows. In her Amended Initiating Application, which I gave leave to the wife to rely on, the wife sought an equalisation of superannuation interests. The wife’s Outline of Case, however, seeks an order for division of the total net asset pool, including superannuation, 69% in favour of the wife and 31% in favour of the husband. The reason for the late change in the wife’s position was not adequately explained at trial.
The husband’s position is that a base amount of $112,106 be allocated to the wife from his superannuation fund. The husband submits that this is a split of 38% of his superannuation to the wife.

I have formed the view that it is desirable to split evenly the superannuation contributions of the husband and wife and will make orders that Pool 3 be so split. The wife’s superannuation account balance is low, reflecting her years as a homemaker and her lower income earning capacity. Her ability to make that up in future years will be limited. I accept the submission made by Counsel that both parties are now at an age where attention needs to be given to their superannuation savings.
Equally, the husband appears in need of funds to move forward with his life and secure appropriate accommodation for his new family.
The Property B property and the contents of Pool 2 are to remain with the wife. The Property B property was acquired in the manner noted earlier. I will not make any adjustment in favour of the wife for the fact that the value of the property is now on paper, less than the loan amount. The evidence is that the wife intends to remain living in the property with the children. It was acquired for this purpose. It is neither just nor equitable for the wife to receive an adjustment in her favour now, for a notional or paper loss that may never crystallise.
I have considered the overall effect of the orders made above and am satisfied that they represent a just and equitable distribution of the assets of the parties.

I certify that the preceding one hundred and forty-one (141) paragraphs are a true copy of the reasons for judgment of Judge Blake

Date: 7 June 2019

[2019] FCCA 1549

7 June 2019

Key Legal Topics

Areas of Law

Family Law

Equity & Trusts

Legal Concepts

Constructive Trust

Remedies

Costs

Statutory Construction