RUSHWORTH & LONG - [2013] FMCAfam 171

FEDERAL MAGISTRATES COURT OF AUSTRALIA

RUSHWORTH & LONG

[2013] FMCAfam 171

FAMILY LAW – Property – consideration of notional add backs.

Family Law Act 1975, ss.75, 79

Stanford (2012) HCA 52
Hickey & Hickey & Commonwealth (2003) FLC 93-143, 30 FamLR 355
AJO v GRO (2005) 33 Fam LR 134, (2005) FLC 93-218
DJM and JLM (1998) 23 Fam LR 396; (1998) FLC 92-816
Townsend (1994) 18 Fam LR 505; (1995) FLC 92-569
Kowaliw (1981) FLC 91-092; (1981) 7 Fam LR N13
Re NHC & RCH (2004) FLC 93-204
Rosati (1998) FLC 92-804

Applicant:

MR RUSHWORTH

Respondent:

MS LONG

File Number:

BRC 5928 of 2010

Judgment of:

Lapthorn FM

Hearing dates:

6, 7 & 8 November 2012

Date of Last Submission:

8 November 2012

Delivered at:

Brisbane

Delivered on:

26 February 2013

REPRESENTATION

Counsel for the Applicant:

n/a

Solicitors for the Applicant:

n/a

Counsel for the Respondent:

n/a

Solicitors for the Respondent:

n/a

ORDERS

That as and by way of property Orders, the Wife receive 55% and the Husband receive 45% of the nett matrimonial pool excluding superannuation in the manner set out herein.
That within 14 days of these orders the Husband pay to the wife the sum of $44,296.75.
That within 45 days of these orders the Husband:
(i)Pay to the wife the sum of $166,641.85;
(ii)pay out the Mortgage secured over Property C, [C], Queensland more particularly described as Lot [omitted] (Former Matrimonial Home); and
(iii)vacate the former matrimonial home.
That upon compliance with Order (3) herein:
(i)The Husband retain, for his sole use and benefit, free from any claim from the Wife the property situate at Property M, [M], in the State of Queensland, more particularly described as Lot [omitted] (the [M] property); and
(ii)The Wife retain, for her sole use and benefit, free from any claim from the Husband the former matrimonial home.
That in the event of the Husband not complying with Order (3) herein the Husband and Wife shall forthwith do all acts and things and sign all documents necessary to affect the sale of both the [M] property and the former matrimonial home by way of private treaty.
That for the purposes of Order (5) herein and in relation to the [M] property and by way of consequential arrangements that shall be made for the purposes of affecting the sale:-
(a)The listing price for the real property shall be as agreed between the parties and failing agreement as determined by a valuer retained jointly by the parties;
(b)The real property shall be listed by private treaty with a listing agent to be agreed between the parties and failing agreement as nominated by the Chief Executive Officer of the Real Estate Institute of Queensland;
(c)Upon sale, the proceeds be paid in the following order:
(i)The costs of sale including legal fees and agent’s commission;
(ii)All outstanding Council and Water Rates in relation to the property; and
(iii)Thereafter divided between the parties to achieve an overall division of 55% to the wife and 45% to the husband of the nett non-superannuation pool of assets and liabilities consistent with the reasons for judgment delivered this day.
That for the purposes of Order (5) herein and in relation to the former matrimonial home and by way of consequential arrangements that shall be made for the purposes of affecting the sale:-
(a)The listing price for the real property shall be as agreed between the parties and failing agreement as determined by a valuer retained jointly by the parties;
(b)The real property shall be listed by private treaty with a listing agent to be agreed between the parties and failing agreement as nominated by the Chief Executive Officer of the Real Estate Institute of Queensland;
(c)Upon sale, the proceeds be paid in the following order:
(i)The costs of sale including legal fees and agent’s commission;
(ii)All outstanding Council and Water Rates in relation to the property;
(iii)To discharge the mortgage and any other encumbrances affecting the said property; and
(iv)Thereafter divided between the parties to achieve an overall division of 55% to the wife and 45% to the husband of the nett non-superannuation pool of assets and liabilities consistent with the reasons for judgment delivered this day.
That unless otherwise specified in these Orders and save for the purposes of enforcing any monies due under these or any subsequent Orders:
(a)each party shall be solely entitled to the exclusion of the other to all other property in their possession and/or control including but not limited to motor vehicles, furniture and bank account deposits;
(b)each party 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.
That each party retain and be solely entitled to the exclusion of the other all of their respective superannuation entitlements.
That each party shall do all such things and sign all such documents necessary to give effect to the terms of these Orders within seven (7) days of the date of receiving any request to do so by the other party.
That pursuant to section 106A of the Family Law Act 1975, should either party refuse, fail or neglect to do all things and sign all documents necessary to give effect to all or any of these Orders within seven (7) days of receiving a request by the other party to do so then the Registrar or Deputy Registrar of this Court shall be appointed to execute such documents in the name of the party in default. The provision of an affidavit by the party seeking relief pursuant to section 106A shall be prima facie evidence for the purposes of the appointment.

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

FEDERAL MAGISTRATES
COURT OF AUSTRALIA
AT BRISBANE

BRC 5928 of 2010

MR RUSHWORTH

Applicant

And

MS LONG

Respondent

REASONS FOR JUDGMENT

Applications

Mr Rushworth and Ms Long are unable to agree as to a property settlement following the breakdown of their 12 year marriage.
The husband filed his Initiating Application on 25 June 2010 wherein he sought orders that would provide in effect for a 60% distribution of the nett pool of assets and liabilities in his favour. He proposed as part of that distribution the wife would keep the former matrimonial home and receive a cash adjustment from him and he would retain a commercial property.
The wife in her Response filed on 5 October 2012 sought a 70%/30% adjustment in her favour. Her proposed orders provided for her to retain the commercial property and for the husband to receive the former matrimonial home. However at the hearing the wife amended her orders sought to provide for both properties be sold and a final distribution of 60% in her favour.

Background

The husband is 47 years of age. He resides in the former matrimonial home in [C]. Mr Rushworth is not currently in paid employment but manages the commercial unit in [M] which is held in his name. His only source of income is derived from this property. He wishes to retain it in order to provide him with an income while he undergoes further study and re-training. His intention then would be to sell the property. Mr Rushworth was awarded a [qualification omitted] in 1998 but submitted that his qualifications are out of date.
The wife is 45 years of age. She resides with her parents in their home in [suburb omitted], Brisbane. Ms Long holds a [qualification omitted] and is currently employed with [omitted] on a part time basis.
The parties commenced cohabitation in 1994 on the husband’s case, and in 1996 on the wife’s case. They were married [in] 1997 and separated on 2 July 2009 but remained living under the one roof until the wife moved out of the former matrimonial home in about late September or early October 2010. The parties were divorced on 13 May 2011. There are two children of the marriage: [X] born [in] 2003 and [Y] born [in] 2006.
When the matter came before the court on 6 November 2012 the parties were also seeking parenting orders. After delivering an extempore judgment on 7 November I made final parenting orders which provided for the children to live 8 nights per fortnight with the mother and 6 nights per fortnight with the father until the commencement of the first school term in 2014 and thereafter the children live with the parents in an equal shared care arrangement.

Evidence

Neither party was legally represented at the hearing and they each filed lengthy and detailed affidavits.
In support of his case the husband relied on:
a)His Initiating Application filed 25 June 2010;
b)His affidavits filed:
i)23 June 2011;
ii)5 October 2012; and
iii)22 October 2012;
c)His financial statement filed 15 June 2011.
In support of her case the wife relied on:
a)Her Response filed 5 October 2012;
b)Her affidavit filed 5 October 2012;
c)The affidavit of Ms L filed 5 October 2012;
d)The affidavit of Mr L filed 5 October 2012; and
e)Her financial statement filed 22 June 2011.
Documents were also tendered into evidence at the hearing.[1]
[1] Exhibit C1: Agreed Balance Sheet
Both parties were cross-examined. At the conclusion of the hearing I heard submissions from both parties and received written submissions by the husband.
Throughout these reasons I will refer to a number of facts. Any such reference should be regarded as a finding of fact unless a contrary intention is clear from the context.
Both parties impressed as honest witnesses. Even though some of their evidence differed I am satisfied each party gave their evidence honestly according to their recollections.
The parties held different views as to when their relationship commenced. The husband asserted they commenced to live together in 1993. His evidence was that the wife would stay over at his place between three and five nights a week. In 1995 the parties travelled overseas together for about four months. It was not until the middle of 1996 when the pair commenced living together full time after the husband moved to Sydney to be with the wife who was studying at [omitted]. It was at this point the wife contended they commenced co-habitation. She accepted she would stay over some nights with the husband before then but primarily lived with friends or family. Although the parties were in a relationship by at least 1993 I am satisfied it was not until July 1996 that they established a common household. I accept the wife’s evidence that they did not jointly own any assets prior to then. For the purposes of these proceedings I find that co-habitation commenced in July 1996. They married in [omitted] the following year.
The husband’s qualifications are in [omitted]. Prior to their relationship the husband was a [occupation omitted]. He also worked with his father [omitted] however this business venture was not a commercial success. In 1999 an opportunity arose, through his uncle, for the husband to work as a [omitted]. In taking up this opportunity the husband moved to the Gold Coast with the wife following a few months later. This company was sold in 2001 and the husband received around $330,000 by way of instalments between 2001 and 2003. These funds were utilised towards the purchase of a commercial property in [M] in 2002.
The husband has not been in paid employment since that time but has managed the [M] unit. The wife was also involved in the management of the unit.
Although the wife was studying full time for her [qualification omitted] when the parties commenced to live together she was also working as a casual [omitted]. In November 1996 the wife commenced working fulltime as an [omitted]. When she moved to the Gold Coast in 1999 she worked as a [omitted] before obtaining a [omitted] position at [omitted]. In March 2001 the wife commenced working as an [omitted]. Although this job was initially full time, after taking maternity leave for 12 months in 2003 she returned to work on a part time basis.
The parties purchased three pieces of real estate during their marriage. The first was a residential unit on the Gold Coast in March 2000. It was purchased for $132,000 and funded without mortgage from joint savings. The husband said the money used to purchase it was predominately from his own savings. The wife on the other hand said it was predominately her savings plus savings from their respective wages. I preferred the wife’s evidence to a certain extent on this issue as I am satisfied she had greater savings when they commenced to live together in 1996. However I also accept the husband’s savings were used as well as the savings the parties jointly acquired from 1996 onwards. This property was purchased in the wife’s name. They sold the property in March 2006 for $320,000 and used the proceeds to reduce a mortgage on their [C] property to which I will refer below.
In March 2002 they purchased the commercial unit at [M] for $388,000 plus $11,000 stamp duty. It was purchased in the husband’s name. They did not require a mortgage but instead funded the purchase from joint savings acquired from their respective wages and the proceeds received from the [omitted] company. The property which has been valued for the purposes of these proceedings at $1,000,000 was severely flooded in the 2011 floods.
In June 2005 the praties purchased in the wife’s name a house in [C] (the former matrimonial home) for $400,000. They funded this purchase through joint savings and a bridging loan of $320,000. This loan was reduced to just $200 after the proceeds of sale of the Gold Coast unit was applied to it. The loan was then treated by the parties as a business loan in relation to the [M] property. This loan currently stands at $122,871. The property has been valued for the purposes of these proceedings at $550,000.

Legal Approach

In determining property proceedings the court is firstly required to identify according to ordinary common law and equitable principles the existing legal and equitable interests of the parties in the property that is available for distribution between them. It is then necessary to determine whether it is just and equitable to make an order altering the parties’ interests in the property. If so satisfied the court must then consider the contributions made by each of them under the various s.79(4) considerations before looking at their future needs by reference to the s.75(2) factors. [2]
[2] Ss.79(2) & (4), Stanford (2012) HCA 52. See Hickey & Hickey & Commonwealth (2003) FLC 93-143, 30 FamLR 355 for approach prior to the High Court decision in Stanford

The property of the parties

Given the wife had greater superannuation assets than the husband at the commencement of the relationship and continued to receive superannuation through her paid employment I propose to adopt a two pools approach addressing the superannuation and non-superannuation pools separately.
The parties were able to reach agreement as to the values to be attributed to various items of property. They handed up a table of agreed values which became exhibit C1. Although there was an arithmetical error as to the total assets I otherwise accept the values as agreed between the parties. They disagreed however in relation to whether some items should be included in the pool of assets and liabilities. Of particular concern to the parties was whether various monies should be notionally added back into the pool.

Notional Add Backs

It is open to a court, in appropriate circumstances to exercise its discretion and notionally add back into a pool of assets for distribution funds that no longer exist. The adoption of that course will depend on the facts of each case. The Full Court of the Family Court in AJO v GRO[3] summarised the three categories of such cases:
a)Where the parties have expended money on legal fees[4];
b)Where there has been a premature distribution of matrimonial assets[5]; and
c)Where a party has by a course of conduct reduced the value of an asset or where the party has acted recklessly, negligently or wantonly with the matrimonial assets effectively reducing their value.[6]
[3] (2005) 33 Fam LR 134 at p.144, (2005) FLC 93-218 at p.79,617
[4] DJM and JLM (1998) 23 Fam LR 396; (1998) FLC 92-816
[5] Townsend (1994) 18 Fam LR 505; (1995) FLC 92-569
[6] Kowaliw (1981) FLC 91-092; (1981) 7 Fam LR N13
Many of the items sought by the parties to be added back into the pool are not of the nature that would warrant such approach but will still be relevant when the court considers the contribution elements. These include living expenses for the parties and children, rental expenses and money spent on the former matrimonial home.
Legal expenses are however a category of expenses where it is appropriate to add back into the pool in certain circumstances. In Re NHC & RCH[7] the Full Court discussed at length the authorities addressing this issue. They had this to say:
[7] (2004) FLC 93-204
56.    In summary, we consider that the above mentioned decisions of the Full Court establish that, while the treatment of funds used to pay legal costs remains ultimately a matter for the discretion of the trial Judge, in determining how to exercise that discretion, regard should be had to the source of the funds.
57.    If the funds used existed at separation, and are such that both parties can be seen as having an interest in them (on account, for example, of contributions), then such funds should be added back as a notional asset of the party, who has had the benefit of them.
58.    If funds used to pay legal fees have been generated by a party post-separation from his or her own endeavours or received in his or her own right (for example, by way of gift or inheritance), they would generally not be added back as a notional asset; nor would any borrowing undertaken by a party post-separation to pay legal fees be taken into account as a liability in the calculation of the net property of the parties. Funds generated from assets or businesses to which the other party had made a significant contribution or has an actual legal entitlement may need to be looked at differently from other post-separation income or acquisitions.
59.    Outstanding legal fees themselves are generally not taken into account as a liability.
60.    If in the exercise of the discretion, it is determined that legal fees already paid should be taken into account as a notional asset, then normally any liability associated with the acquisition of the monies used to pay the legal fees should also be taken into account.
The wife’s legal fees were paid from her income earned after the parties separated. They therefore should not be added back into the pool. The husband’s legal fees were paid out of the rental income received from the [M] unit. This income was generated after separation. The wife argued that as this investment is a joint enterprise albeit in the husband’s sole name the fees should be added back. Whilst there is much merit in the wife’s argument when I take into account the fact that the husband was managing the property and thereby using his own physical endeavours and the arrangement of relying on this income had been a long standing one during the relationship I will exercise my discretion and not add the fees back into the pool. Having said that I am conscious to avoid the wife in effect contributing to the husband’s costs given the source of the funds was joint income. I propose therefore to take these paid fees into account when I consider the s.75(2)(o) factor.

Alleged debt to wife’s parents

The wife gave evidence of borrowing $33,836 from her parents to assist her with meeting living expenses. The wife’s father gave evidence in his affidavit filed 5 October 2012 that he had an informal arrangement with the wife to lend her money when needed and for it to be paid back at the end of the property settlement. Although the husband was suspicious that the wife was moving money around between her parents and her I am satisfied that the wife has borrowed the funds she has attested to and that they will be paid back. Although the loan was post separation and would therefore not normally be included in the pool I accept the wife needed to access these funds in the context of the husband having remained living in the former matrimonial home and retaining the rental income from the [M] property. For those reasons I will include the debt in the pool.

Contingent Capital Gains Tax Liability

The parties agreed that $157,000 should be attributable to a potential Capital Gains Tax liability the husband will incur when the [M] property is sold.
In exercising its discretion as to whether provision should be made for potential capital gains tax liabilities the court should have regard to the general principles laid out in Rosati.[8] If an asset is to be sold following the property settlement then the capital gains tax should be taken into account. It may be taken into account in cases where there is an intention to sell the property in the short to medium term but it would not ordinarily be provided for if there is no evidence of any intention to sell the property.
[8] (1998) FLC 92-804
The husband’s evidence was that if he was able to retain the property he would sell it in the foreseeable future but not immediately as he would want to rely on the rental income to support himself while he retrained. I accept his evidence.
Making provision for potential capital gains tax liabilities is fraught with difficulties because the variables are unknown. Notwithstanding the imprecise nature of the exercise to ignore it altogether could potentially lead to an injustice. During the hearing I canvassed with the parties the prospect of making provision for any future capital gains tax liability being shared equally between them given the joint enterprise undertaken in purchasing the property. Upon reflection and after accepting the husband’s evidence that he intends to sell the property, although not immediately, but in the foreseeable future it would be preferable to make provision for it. The property is in the husband’s sole name and accordingly any orders made should take this into account.

I find from the evidence that the assets of the parties are as follows:

Assets	Ownership	Value
Property M	Husband	$1,000,000
Property C	Wife	550,000
Toyota Corolla Sedan (2003)	Husband	4,000
Toyota Corolla Wagon (2006)	Wife	11,000
Westpac Cheque ([omitted]) account	Husband	56,621
Suncorp eOption Work ([omitted])	Husband	10,290
Suncorp eOption Home ([omitted])	Husband	13,648
Suncorp everyday basic ([omitted])	Husband	1,000
ME savings accounts ([omitted])	Wife	487
ME savings accounts ([omitted])	Wife	759
furniture	Husband	6,807
Total Non-Superannuation Assets	$1,654,612

Liabilities
Members Equity Loan	Joint	$122,871
FAO Debt incurred for 2008-9	Wife	2,500
Loans from wife's parents	Wife	33,836
Mastercard	Wife	1,613
Mastercard	Husband	Nil
CGT Property M	Husband	157,000
Total Liabilities	$317,820

Net Non-Superannuation Assets less liabilities

$1,336,792

Superannuation
[1] Super (Defined)	Wife	$36,240
[2] Super (Accumulation)	Wife	88,345
[3] Super	Wife	5,532
[F] Superannuation	Wife	1,274
[S] Super	Husband	28,148
Total Superannuation	$159,539

Is it just and equitable to alter the property interests?

In the High Court’s decision in Stanford[9] the plurality held:
In many cases where an application is made for a property settlement order, the just and equitable requirement is readily satisfied by observing that, as the result of a 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 wife. No less importantly, the express and implicit assumptions that underpinned the existing property arrangements have been brought to an end by the voluntary severance of the mutuality of the marital relationship. That is, any express or implicit assumption that the parties may have made to the effect that existing arrangements of marital property interests were sufficient or appropriate during the continuance of their marital relationship is brought to an end with the ending of the marital relationship. And the assumption that any adjustment to those interests could be effected consensually as needed or desired is also brought to an end. Hence it will be just and equitable that the court make a property settlement order. What order, if any, should then be made is determined by applying s 79(4).
[9] [2012] HCA 52
I am satisfied that it is appropriate in this case to alter the property interests of the parties in light of the demise of their marriage and the fact that the maintenance of the current legal ownership of their property would not afford them justice and equity.

Contributions

I now turn to the next step namely an assessment of the parties’ contributions. In doing so I will address the non-superannuation contributions first before considering the superannuation contributions.
Because each party presented their case on the basis of different dates for the commencement of their relationship determining the financial position vis-à-vis each other is problematic. I am satisfied that they each had a motor vehicle and savings as well as some superannuation. The wife’s evidence was that she had savings of approximately $48,000 in July 1996. The husband considered the parties’ relationship commenced in 1993 and his evidence was that he had around $9,000 in savings at that time. Although I am satisfied the husband’s savings would have increased by 1996 I am also satisfied that the wife had more than him.
The husband’s evidence was that he had an interest in [D] Pty Ltd. Ltd. which he estimated was worth $10,000. This company which was primarily owned by his father was not viable commercially. Prior to co-habitation he had also loaned his father $42,786 for use in the company but this sum was never repaid.
When I take into account the financial losses the husband ultimately incurred in relation to [D] and the non cash nature of his interest in the company and loan to his father I am satisfied the wife made a greater contribution to the marriage at the commencement of the co-habitation by virtue of her greater savings.
During the relationship the husband made a significant contribution by utilising the proceeds of sale from the [omitted] company towards the purchase of the [M] property. The wife argued that the husband should not receive sole credit for this contribution as she gave up a higher paying job in Sydney to relocate to the Gold Coast in order to support the husband in his endeavours with the company. Although I accept the wife’s argument that she made an indirect contribution to the income received from this company and the proceeds of sale this was clearly a significant contribution from the husband which came about by the offer made by his uncle. The parties would not have been able to purchase the [M] unit free of a mortgage if it were not for the financial position they found themselves in as a result of receiving the proceeds of sale of the company. They have also benefited from the significant increase in the value of the property.
Up until the purchase of the [M] unit the income of the parties was roughly equal. After the wife returned to part time employment from maternity leave she made a greater financial contribution from her wages. Although the husband relied on his taxable income this was derived largely from the investment in the [M] unit as it was in his name. Nonetheless it was a joint enterprise.
The wife argued that the husband did not contribute to his capacity in that he did not have paid employment outside the home and relied on the income from the [M] unit. Although she conceded he occupied himself with some of the management of that property in her view it was not a full time job and for the majority of the time she did more tasks in that regard than the husband. The husband’s evidence was that he did substantially more than the wife in managing the property including attending to renovations both physically and by retaining tradespeople at different times over the years. He did concede however it was not a full time job. Each party appeared to minimise the other’s efforts in the management of this property however I am of the view that this is as a result of their honestly held perceptions rather than any deliberate attempt to down play the other’s contribution. Overall I am satisfied that during the relationship they each contributed significantly to the management of the property and it is not necessary to determine who did more than the other.
Both parties made contributions as homemakers and parents but each sought greater credit over the other in this regard. I am satisfied they were both involved in the general upkeep and maintenance of the Gold Coast unit and the former matrimonial home. I am also satisfied they attended to the care of the children. Although the husband worked from home I was not persuaded he fulfilled a greater role than the wife in the care of the children. I note they also had assistance from the maternal grandparents in caring for the children from time to time.
When I weigh up all of the contributions referred to above I find that the husband has made a greater contribution during the relationship primarily because of the sale proceeds from the gaming company. Without this significant contribution and the subsequent investment in the [M] unit the parties would not be in as strong a financial position as they find themselves today. The disparity between the contributions however is not that great when you take into account the wife’s own contribution to that investment; her income from paid employment and her slightly greater contributions as home maker and parent.
The wife argued that she has made greater financial contributions after separation. She has been living with and paying rent to her parents since moving out of the former matrimonial home in October 2010. The husband has remained in that home. The wife contributed to the mortgage from separation until 2010 and the husband has been meeting the mortgage repayments from the income received from the [M] unit. The wife has remained in paid employment whereas the husband has not obtained any paid employment relying on the investment income. He has been largely responsible for the management of the [M] property since separation including during the aftermath of the floods. Weighing these contributions I am satisfied the wife has made a greater contribution post separation.
When I consider the different levels of contribution at various stages of the relationship overall I am satisfied the wife has made the greater contribution. In arriving at that finding I have taken into account her greater contribution at the commencement of the relationship, the significant contribution by her paid employment throughout the relationship particularly after returning from maternity leave and her continuation of this employment after they separated. When that is weighed up with the greater contribution of the husband through the proceeds of sale of the gaming products company and subsequent investment in the [M] property along with the other contributions considered above I assess the contributions to the non-superannuation pool at 55% to the wife and 45% to the husband.

Superannuation Pool

In relation to the superannuation assets the wife has around $131,000 to the husband’s $28,000. The wife had significantly more superannuation than the husband at the commencement of the relationship and as was able to acquire more through her paid employment both during and after the relationship. The husband’s reliance on the income generated from the [M] property has meant he has not acquired anywhere near the superannuation the wife has. There is no evidence of any agreement that the husband would not obtain paid employment outside of the home. Indeed the wife complained that his failure to do so amounted to a lack of contribution on his part. Minus that agreement I am not persuaded that the superannuation earned by the wife should be considered part of their joint enterprise. For this reason I find that the superannuation assets should be assessed at 82.3% to the wife and 17.6% to the husband.

Section 75(2) factors

Having determined the contribution elements the court is required to have regard to the provisions of s.75(2).
Both parties are of a similar age and in good health. Although the husband listed a number of medical issues affecting him in his written submissions there was no evidence that would lead me to conclude any adjustment is warranted on medical grounds. Neither has re-partnered. They share the care of their two young children. The orders made on 7 November 2012 provide for the children to live with the wife for 8 nights and with the husband for 6 nights a fortnight until the commencement of the school year in 2014 when the time with be 7 nights each.
The wife is in permanent part time employment as an [omitted] but the husband is not in paid employment outside the home and has not done so for about 10 years. He has relied on the rental income from the [M] property. He conceded he could get some form of work ‘tomorrow’ but said he would need re-training to obtain a well paying job as in his view his qualifications are now out of date. Consequently he argued there is a discrepancy of income that should be taken into account. I was not persuaded to do so given, his concession that he could obtain some work albeit not in his field and that the wife is working part time. Both parties are well educated and I could see no reason why they could not be employed in meaningful and reasonably well paid positions.
Apart from the children, neither party has any legal obligation to support any other person however the husband has been providing some financial and practical support to his father who has health issues.
I take into account under s.75(2)(o) the fact the husband has paid his legal fees from the joint income from the [M] unit. I also take into account the wife will have greater superannuation assets than the husband.
When I weigh up these considerations I am not persuaded there should be any adjustment under s.75(2) in either the superannuation or non-superannuation pools.

Conclusion as to percentage division after consideration of sections 79(4) and 75(2)

I find that the appropriate division in relation to the non-superannuation pool is 55% to the wife and 45% to the husband. My findings as to the appropriate distribution of superannuation would see each party retain the funds in their respective superannuation accounts.

Are the orders proposed just and equitable?

The wife invited the court to order the sale of the two pieces of real estate whereas the husband sought to retain the [M] property. He was open to making a cash adjustment to the wife to enable him to do so. I accept that if the husband is to re-train he will benefit from having access to the income that can be generated out of the investment property. I am persuaded that it would be appropriate to afford the husband the opportunity to obtain finance in order to make a cash adjustment to the wife. If he is unable to do so the property will need to be sold.
In light of my decision to not order the sale of the [M] property unless the husband is unable to obtain finance I do not intend to order the sale of the [C] property as it is currently held in the wife’s sole name. The parties arranged for the mortgage over it to be used primarily for business purposes associated with the [M] property. As the husband seeks to retain the investment unit he should also refinance the mortgage over the [C] property so that it is retained by the wife free of any encumbrance.
In the event he is unable to do so both properties should be sold so as to enable the proceeds to be divided in a way that will achieve an overall 55/45 division of the non-superannuation assets in the wife’s favour.
I am mindful that pending the refinancing envisaged by the orders I will make, or the sale of the properties, justice and equity warrants each party having access to cash funds. To this end I will order the husband pay the wife a cash adjustment from his bank accounts to achieve a 55/45 division of the cash at bank. Using the agreed figures for cash at bank the husband had $81,559 and the wife had $1,246. To achieve the division I have indicated the husband will be ordered to pay the wife the sum of $44,296.75 from is bank accounts within 14 days.
The orders I propose to make will see the wife retain: the [C] home free of any encumbrance; her motor vehicle; bank account balances; the loan from her parents; her FAO debt; her credit card; and receive two cash adjustments being $44,296.75 in 14 days and $166,641.85 in 45 days. The husband will retain: the [M] property with an allowance of $157,000 for potential capital gains tax; his motor vehicle; furniture; and $37,262.25 of his cash at bank. He will be required to refinance the mortgage over the [C] property so that the wife obtains the property without any mortgage and pay the wife the sums of $44,296.75 in 14 days and the sum of $166,641.85 in 45 days.
In the event the husband is unable to refinance the mortgage and obtain sufficient finance to pay the wife the sum of $166,641.85 both properties will be sold and the proceeds distributed so that a 55/45% division is achieved on the overall non-superannuation pool of assets and liabilities taking into account the distribution I have already indicated above and the ultimate sale prices received.
For the above reasons I will make the orders set out in the beginning of this judgment having satisfied myself they are just and equitable.

I certify that the preceding sixty-two (62) paragraphs are a true copy of the reasons for judgment of Lapthorn FM

Associate:

Date: 26 February 2013

Exhibit H1: Printout of ME Bank Mortgage Account Statement 15/3/09 to 31/8/10