Sanders and Sanders
[2009] FamCA 457
•29 May 2009
FAMILY COURT OF AUSTRALIA
SANDERS & SANDERS [2009] FamCA 457
FAMILY LAW – PROPERTY SETTLEMENT – Assets and Liabilities – Contributions – Adjustments
FAMILY LAW – SPOUSE MAINTENANCE – Threshold issue – Need – Adequate Reason – Capacity
Family Law Act 1975 (Cth) ss 75 & 79 In the Marriage of Kennon (1997) FLC 92-757; 22 Fam LR 1
In the Marriage of Hickey (2003) 30 Fam LR 355
In the Marriage of Omacini (2005) 33 Fam LR 134
In the Marriage of DJM and JLM (1998) 23 Fam LR 396; (1998) FLC 92-816; [1998] FamCA 97
Mallett v Mallett (1984) 9 Fam LR 449
In the Marriage of Ferraro (1992) 16 Fam LR 1
In the Marriage of Shewring (1987) l2 Fam LR 139
In the Marriage of Lenehan (1987) 11 Fam LR 615
In the Marriage of Norbis (1986) 10 Fam LR 819; FLC 91-712
In the Marriage of Zyk (1995) 19 Fam LR 797
In the Marriage of Coghlan (2004) 33 Fam LR 414
M v M (2006) 36 Fam LR 97
Mitchell v Mitchell (1995) 19 Fam LR 44; 120 FLR 292; (1995) FLC 92-601
APPLICANT: Mr Sanders
RESPONDENT: Ms Sanders
FILE NUMBER: SYC 8576 of 2007
DATE DELIVERED: 29 May 2009
PLACE DELIVERED: Sydney
JUDGMENT OF: Judicial Registrar Loughnan PLACE HEARD: Sydney
HEARING DATE: 11& 12 May 2009 REPRESENTATION
COUNSEL FOR THE APPLICANT
HUSBAND:
Mr R. Bell SOLICITOR FOR THE APPLICANT: Argyle Lawyers
COUNSEL FOR THE RESPONDENT
WIFE:
Mr J. Priestley SOLICITOR FOR THE RESPONDENT Penny Waters Armstrong Legal Orders
1.DEFINITIONS
(a)“Y Company” means Y Pty Limited (ACN …) a company in which the husband is the sole director/secretary. There are 2 ordinary shares issued in Y Company. The husband holds 1 ordinary share and the wife holds 1 ordinary share. Y Company is the corporate trustee of the Sanders Family Trust and the Sanders Family Trust (I).
(b)“N Holdings” means N Holdings Pty Limited (ACN …). The husband and Mr A are the directors of N Holdings. The husband holds 60 ordinary shares, the wife holds 3 “C” and 2 “E” Class shares and W and G respectively hold 3 “C” and 2 “F” Class shares. The remaining shares are held by LA, PA and JA. N Holdings is the corporate trustee of the Sanders and A Family Trust.
(c) “the former matrimonial home” means the whole of the land contained in Certificate of Title folio identifier … together with the improvements erected thereon and known as V property, registered in the names of the parties as joint tenants. The former matrimonial home is currently listed for sale.
(d)“the husband's car” means the Mercedes … registration number A… registered in the name of NPA Company.
(e)“the husband’s superannuation entitlements” means the husband’s superannuation with National Mutual/AXA Fund via the Summit Master Trust.
(f)“the NPA Group” (ABN …) means the trading names of NPA Company, M Company under NE Group which represents a business partnership.
(g)“the R Street units” means the two joint commercial offices situated at R Street, being the whole of the land contained in Certificate of Title Folio Identifier … registered in the name of N Holdings Pty Limited, subject to a mortgage to National Australia Bank.
(h)“the wife's bank account” means the monies standing to the credit of the wife in the account held in her sole name
(i)“the wife's car” means the Mercedes … registration number B… registered in the name of NPA Company.
(j)“wife's superannuation entitlements” means the wife’s superannuation fund with the National Mutual/AXA Fund via Summit Master Trust.
(k)“W and G” means the children of the marriage namely, W born … September 1986 (“W”) and B (“G”) born on … July 1988.
(l)“The NE Group” means the trading names of NPA Company, M Company and the NE Group.
2.PROPERTY ORDERS
2.1That the former matrimonial home be sold as soon as practicable. In the event that the parties are unable to agree on an issue to do with the price or the marketing of the home they are to request the President of the Real Estate Institute of NSW to make a decision on that issue and will abide by that decision.
2.2That upon settlement of the sale of the former matrimonial home the net proceeds of sale shall be distributed in the following manner and priority:
(a)Firstly, to discharge the following liabilities:
(i)The overdraft facility with the National Australia Bank; being account number …;
(ii)The business instalment loans with the National Australia bank; being account number 57… and account number 79 …;
(iii)The Flexiplus mortgage line of credit with the National Australia Bank; being account number …;
(iv)The National Australia Bank Home Loan; being account number …; and
(v)The L Sanders Investment Account; being account number ….
(b)Secondly, to pay all costs and expenses of the sale including legal costs and disbursements.
(c)Thirdly, in payment of agent’s commission and any advertising expenses.
(d)Fourthly, to meet the costs of the President of the Real Estate Institute of NSW or his delegate, arising from any request made by the parties pursuant to these orders;
(e)Fifthly, in the payment of 77% of the remaining balance to the wife; and
(f)Sixthly, in payment of the remaining balance to the husband.
2.3That within 28 days from the date of this Order, the husband shall do all acts and things and sign all documents as may be necessary to transfer the wife’s motor vehicle into her sole name and at her expense.
2.4That within 28 days from the date of this order the wife shall do all acts and things and sign all documents as may be necessary to transfer to the husband:
(a)her one share in Y Company;
(b)her 3 “C” class shares in N Holdings.
2.5That within 28 days from the date of these orders the wife shall:
(a)Disclaim her interest in the Sanders Family Trust, the Sanders Family Trust (I) and the Sanders and A Family Trust; and
(b)Assign to the husband any loan account (debit or credit) that she has in the Sanders Family Trust, the Sanders Family Trust (I) and the Sanders and A Family Trust.
2.6It is declared that except as otherwise provided for herein the wife shall be declared to be the sole owner of and the husband shall have no interest in:
(a)The wife’s motor vehicle;
(b)The wife’s bank accounts;
(c)The wife’s superannuation entitlements; and
(d)All other property and personal effects in her possession, custody and control as at the date of these orders.
2.7It is declared that except as otherwise provided for herein the husband shall be declared to be the sole owner of and the wife shall have no interest in:
(a)The NE Group;
(b)Y Pty Ltd;
(c)N Holdings Pty Ltd;
(d)The husband’s motor vehicle;
(e)The husband’s Superannuation entitlements;
(f)The husband’s bank accounts;
(g)All other property and personal effects in his possession, custody and control as at the date of these orders.
2.8The husband shall be solely responsible for and indemnify and keep indemnified the wife in respect of:
(a)the husband's credit card debts;
(b)any liabilities, taxation obligations, debts, dues or obligations of the husband.
2.9The wife shall be solely responsible for and indemnify and keep the husband indemnified in respect of:
(a)the wife's credit card debts.
(b)any liabilities, taxation obligations, debts, dues or obligations of the wife.
2.10Except as any clause forming part of this Order provides to the contrary, each of the husband and the wife releases the other from all debts owing from one to the other.
3.SPOUSE MAINTENANCE ORDER
3.1The order for spouse maintenance contained in the orders made by this Court on 18 February 2008 is varied to provide that as from the date of this order the rate of maintenance be reduced to $357.00 per week and that unless the parties otherwise agree in writing those payments continue only until 29 November 2009.
4.MACHINERY ORDERS
4.1The parties are to sign any deeds, documents, instruments and writings as may be necessary to give affect to these orders and to do all acts and things necessary to give them validity and operation.
4.2Should either party refuse or neglect to sign any deeds, documents, instruments and writings as may be necessary to give affect to these orders within fourteen (14) days of being requested to do so, the Registrar and each Deputy Registrar of the Family Court of Australia is appointed, pursuant to Section 106A of the Family Law Act 1975, to execute such deeds, documents, instruments or writings in the name of the defaulting party and do all acts and things necessary to give them validity and operation.
IT IS NOTED that publication of this judgment under the pseudonym Sanders & Sanders is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)
FAMILY COURT OF AUSTRALIA AT SYDNEY FILE NUMBER: SYC 8576 of 2007
MR SANDERS Applicant
And
MS SANDERS Respondent
REASONS FOR JUDGMENT
1.After living together for about 23 years the parties cannot agree on a settlement of their property.
Applications
2.The husband seeks orders in terms of Annexure A to his Application for Final Orders filed 13 December 2007 as follows:
1.DEFINITIONS
(a)“[Y Company]” means [Y] Pty Limited (ACN […]) a company in which the husband is the sole director/secretary. There are 2 ordinary shares issued in [Y Company]. The husband holds 1 ordinary share and the wife holds 1 ordinary share. [Y Company] is the corporate trustee of the [Sanders] Family Trust and the [Sanders] Family Trust (I).
(b)“[N] Holdings” means [N] Holdings Pty Limited (ACN […]). The husband and [Mr A] are the directors of [N] Holdings. The husband holds 60 ordinary shares, the wife holds 3 “C” and 2 “E” Class shares and [W] and [G] respectively hold 3 “C” and 2 “F” Class shares. The remaining shares are held by [LA], [PA] and [JA]. [N] Holdings is the corporate trustee of the [Sanders and A] Family Trust.
(c) “the former matrimonial home” means the whole of the land contained in Certificate of Title folio identifier […] together with the improvements erected thereon and known as [V property], registered in the names of the parties as joint tenants. The former matrimonial home is currently listed for sale.
(d)“the husband's car” means the Mercedes […] registration number [A…] registered in the name of [NPA Company].
(e)“the husband’s superannuation entitlements” means the husband’s superannuation with National Mutual/AXA Fund via the Summit Master Trust.
(f)“the [NPA] Group” (ABN […]) means the trading names of [NPA Company], [M Company] under [NE] Group which represents a business partnership.
(g)“the [R Street] units” means the two joint commercial offices situated at [R Street], being the whole of the land contained in Certificate of Title Folio Identifier […] registered in the name of [N] Holdings Pty Limited, subject to a mortgage to National Australia Bank.
(h)“the wife's bank account” means the monies standing to the credit of the wife in the account held in her sole name
(i)“the wife's car” means the Mercedes […] registration number [B…] registered in the name of [NPA].
(j)“wife's superannuation entitlements” means the wife’s superannuation fund with the National Mutual/AXA Fund via Summit Master Trust.
(k)“[W] and [G]” means the children of the marriage namely, [W] born […] September 1986 (“[W]”) and [G] (“[G]”) born on […] July 1988.
(l)“The [NE] Group” means the trading names of [NPA Company], [M Company] and the [NE] Group.
2.PROPERTY ORDERS
2.1That upon settlement of the sale of the former matrimonial home the net proceeds of sale shall be distributed in the following manner and priority:
(a)Firstly, to discharge the following liabilities:
(i)The overdraft facility with the National Australia Bank; being account number […];
(ii)The business instalment loans with the National Australia bank; being account number 57[…] and account number 79 […];
(iii)The Flexiplus mortgage line of credit with the National Australia Bank; being account number […];
(iv)The National Australia Bank Home Loan; being account number […]; and
(v)The [L Sanders] Investment Account; being account number […].
(b)Secondly, to pay all costs and expenses of the sale including legal costs and disbursements.
(c)Thirdly, in payment of agent’s commission and any advertising expenses.
(d)Fourthly, to repay the husband the sum of $11,296 (being the reimbursement of advertising expenses paid by him);
(e)Fifthly, the remaining balance shall be divided equally between the husband and wife.
2.2That within 28 days from the date of this Order, the husband shall do all acts and things and sign all documents as may be necessary to transfer the wife’s motor vehicle into her sole name and at her expense, in exchange for which the wife shall pay to the husband the sum of $17,500.
2.3That within 28 days from the date of this order the wife shall do all acts and things and sign all documents as may be necessary to transfer to the husband:
(a)her one share in [Y Company];
(b)her 3 “C” class shares in [N] Holdings.
in exchange for which the husband should pay to the wife the sum of $20,711.
2.4That the parties shall pay one half of any capital gains tax liability which is assessed in respect of the sale of the [C] property within 28 days upon receipt of such assessment.
2.5That within 28 days from the date of these orders the wife shall:
(a)Disclaim her interest in the [Sanders] Family Trust, the [Sanders] Family Trust (I) and the [Sanders and A] Family Trust; and
(b)Assign to the husband any loan account (debit or credit) that she has in the [Sanders] Family Trust, the [Sanders] Family Trust (I) and the [Sanders and A] Family Trust.
2.6It is declared that except as otherwise provided for herein the wife shall be declared to be the sole owner of and the husband shall have no interest in:
(a)The wife’s motor vehicle;
(b)The wife’s bank accounts;
(c)The wife’s superannuation entitlements; and
(d)All other property and personal effects in her possession, custody and control as at the date of these orders.
2.7It is declared that except as otherwise provided for herein the husband shall be declared to be the sole owner of and the wife shall have no interest in:
(a)The [NE] Group;
(b)[Y Company] Pty Ltd;
(c)[N] Holdings Pty Ltd;
(d)The husband’s motor vehicle;
(e)The husband’s Superannuation entitlements;
(f)The husband’s bank accounts;
(g)All other property and personal effects in his possession, custody and control as at the date of these orders.
2.8The husband shall be solely responsible for and indemnify and keep indemnified the wife in respect of:
(a)the husband's credit card debts;
(b)any liabilities, taxation obligations, debts, dues or obligations of the husband.
2.9The wife shall be solely responsible for and indemnify and keep the husband indemnified in respect of:
(a)the wife's credit card debts.
(b)any liabilities, taxation obligations, debts, dues or obligations of the wife.
2.10Except as any clause forming part of this Order provides to the contrary, each of the husband and the wife releases the other from all debts owing from one to the other.
2.11That all previous orders be dismissed.
2.12That the wife pay the husband’s costs of and incidental to these proceedings.
3.The wife seeks orders in terms of a Minute of Orders forwarded to chambers by email on 11 May 2009 as follows:
1. That the former matrimonial home known as [V property] being the whole of the land contained in Certificate of Title identifier […] be sold.
2. That the proceeds from the sale of the former matrimonial home be distributed in the following manner:
a. To pay all costs and expenses of the sale including legal costs and disbursements and agents commissions and any advertising expenses;
b. To the wife the sum of $2.4M;
c. The balance to the husband.
3. In the alternative to order 2 above, and only in the event that the National Australia Bank (“NAB”) requires repayment pursuant to its securities of the whole of the indebtedness of the parties and the business [NE], or such other amount but more than $800,000, upon the sale of the former matrimonial home, then the proceeds from the sale of the former matrimonial home be distributed in the following manner:
a. To pay all costs and expenses of the sale including legal costs and disbursements and agents commissions and any advertising expenses;
b. To the NAB such sum as it may require as evidenced in writing from the NAB;
c. The balance to the wife.
4. Further in the alternative to order 2, the husband pay to the wife such sum as is necessary so that the total amount received by the wife pursuant to this order and order 3c. above totals $2.4M within 12 months of the sale of the matrimonial home.
5. That upon payment of the amount referred to in order 2 above, or alternatively orders 3 and 4 above then the wife shall:
a. Transfer to the husband all her shares in [Y company] Pty Ltd and [N] Pty Ltd;
b. Disclaim her interest in the [Sanders and A] Family Trust, the [Sanders] Family Trust, and the [Sanders] Family Trust 1;
c. Be indemnified by the husband in respect of all debts in connection with [Y Company] Pty Ltd, the [Sanders and A] Family Trust, the [Sanders] Family Trust, and the [Sanders] Family Trust 1, and the [NE] Group; and
d. Be indemnified by the husband in respect of all debts in their joints names including with the National Australia Bank as to which the husband is to refinance within thirty days of the sale of the former matrimonial home.
6. In the event that the husband fails to comply with Order 4 then the assets and undertakings of the [Sanders] Family Trust shall be realised in a genuine bona fide arms length and for market value transaction and the proceeds of such realisation be distributed as follows:
a. To pay all costs and expenses of such realisation;
b. To the wife the lesser of the balance or such an amount so as to satisfy order 4 above; and
c. The balance to the husband.
7. That the wife be declared the beneficial owner of the motor vehicle in her possession.
8. That except as otherwise specified in these orders both the wife and husband shall each relinquish any claim, one against the other, to any interest in property not otherwise specifically referred to including, but not limited to, superannuation entitlements, bank or building society accounts, jewellery, furniture, appliances, debtors, choses in action, and any other property whether realty or personalty wheresoever situate and or whatsoever kind presently in the possession or registered in the name of the other party.
9. For the purpose of these orders any debt attached to any property is deemed to be the sole responsibility of the person in whose possession the property remains. The possessing party shall indemnify the other in relation to all outgoings in respect of the said property including all payments in respect of any mortgage, rates, taxes, charges, insurances, expenses in relation to repairs and improvements, and any other sums due or accruing in respect of the said property.
10. That the applicant and the respondent shall, in bona fide manner, do all acts and things, give all consents and execute all deeds, documents, instruments and writings as may be necessary so as to give effect to these orders.
11. Should the applicant and or the respondent refuse or neglect to sign any deeds, documents, instruments and writings as may be necessary to give affect to these orders within fourteen (14) days the Registrar of the Family Court of Australia shall be appointed, pursuant to Section 106A of the Family Law Act 1975, to execute such deeds, documents, instruments or writings in the name of the defaulting party and do all acts and things necessary to give validity and operation of the said deeds, documents, instruments, and writings.
12. That the defaulting party shall pay the other’s costs in the event of the party making application to the court pursuant to order 9 above.
13. In the event that the property of the parties net of liabilities is found to be less than $1M, and in any event until payment by the husband in accordance with either order 2 or orders 3 and 4 above, then, by way of spousal maintenance, there be assigned to the wife the entitlement of the [Sanders] Family Trust to the rent received from the [R Street] Units.
DATED: 11 May 2009
Documents read
4.The parties relied on the following documents:
Affidavit of the husband sworn 24 November 2008 and filed 25 November 2008
Husband’s Financial Statement sworn 12 December 2007 and filed 13 December 2007
Husband’s Financial Statement sworn 19 November 2008 and filed 21 November 2008
Response to Application for Final Orders filed 1 February 2008;
Affidavit of wife sworn 16 February 2009;
Wife’s Financial Statement filed 1 February 2008.
Wife’s Financial Questionnaire dated 8 May 2009.
Affidavit of Mr E (single expert) sworn 27 November 2007 and filed 28 November 2007Short history
5.As at the date of the hearing the parties were both 48 years of age. They were married in November 1984, separated in November 2007 and their divorce became final on 16 February 2009.
Children
6.There are two adult children of the marriage:
W was born in September 1986 and as at the date of the hearing he was 22 years of age; and
G was born in July 1988 and as at the date of the hearing he was 20 years of age.
Issues in dispute
7.The issues identified by counsel that were pursued in the proceedings were:
1. The value of NE (and therefore of the Sanders Family Trust);
2. The value of the Sanders and A Family Trust;
3. Whether $1,875,000 of debt is being double counted;
8. Late in the hearing an issue arose about the spousal maintenance paid by the husband:
4. The date on which the husband’s spousal maintenance payments should cease
Background facts
9.The parties were married in November 1984.
10.At that date the husband owned a unit at R which sold for $62,500 in 1986. He had a car, motorbike, furniture and savings which he estimates were $10,000. He owed $22,000 on the mortgage on the R unit. He was employed by a bank on a salary of about $60,000 per annum.
11.The wife was given $12,000 by her parents. Those funds were applied to furniture and renovations. The wife worked in a shop.
12.In 1985 the husband left the Bank and worked in a Recruitment Agency on a salary of about $70,000 per annum.
13.W was born in September 1986.
14.In 1986 the R unit was sold. The parties bought a unit at B in joint names. They paid either $87,500 or $70,000. The husband says the mortgage was $52,000.
15.Renovations were undertaken at the B property in 1987. The husband painted, installed light fittings and window dressings, did carpentry, repairs and maintenance and hung paintings.
16.G was born in July 1988.
17.In 1988 the B unit was sold for $165,000. The parties bought a property at D in joint names for either $154,000 or $120.000. They borrowed $87,000 by way of mortgage.
18.In 1989 renovations were undertaken to the D property. The husband did painting, paving, timber cladding, carpentry repairs and maintenance and gardening and planting, making and fitting windows, hanging doors, installing lights and fittings and hanging blinds, curtains and paintings.
19.The husband was promoted to Manager. He set up a new branch office.
20.In 1990 the parties sold the D property for $247,000 and achieved net proceeds of $150,000. The parties rented a property.
21.In 1990 a property in E was purchased for $232,000. The parties borrowed $150,000 by way of mortgage and took out another loan of $70,000 or $80,000 for the purpose of renovations. The husband did painting, carpentry, repairs and maintenance, decking, put bitumen on the drive way, laid blue metal, did pool maintenance, demolished a kitchen and garage, excavated and filled after the installation of a swimming pool, gardening and planting, making and fitting windows, hanging doors, installing lights and fittings and hanging blinds, curtains and paintings. In addition the husband supervised tradesmen who installed a new kitchen, bathroom, pool and carport.
22.In 1990 the husband started NE Group with his brother in law, Mr A. The husband contributed $70,000 from savings.
23.In 1990 the wife completed the St John’s Ambulance Australia Senior First Aid Course and a Sports Instructors Certificate.
24.In 1994 the parties bought an investment property at Q in the husband’s name for $117,000 with the assistance of a loan of $122,000. The property was rented out.
25.In 1995 the parties bought an investment unit in C in the husband’s name for $287,000. They borrowed the whole purchase price. The unit was rented out.
26.In 1996 offices in R Street were purchased with Mr A. The offices cost $235,000 and $260,000. The offices later came to be held in the name of N Holdings Pty Ltd as trustee for the Sanders and A Family Trust. The property was leased by NE for offices. The husband organised renovations to the property.
27.In 1996 a property was bought in H in joint names. It cost $432,000 and the parties borrowed $445,000. The wife says the mortgage was $340,000. Renovations were undertaken at a cost of $50,000. The husband says he painted, did carpentry, installed a new kitchen, polished floor boards and installed blinds, curtains and some new doors.
28.In 1997 the parties sold the E property for a net $150,000. The wife says it was $130,000. It is not necessary to resolve that dispute. Those moneys were applied to reduce the mortgage on the H property. Renovations were undertaken to the H property at a cost of $400,000. The wife says it was $230,000. It is not necessary to resolve that dispute. The renovations were financed by National Australia Bank loans.
29.The husband painted, undertook general handyman work, repairs and maintenance, planted and gardened, hung blinds, curtains and paintings and performed pool maintenance. The major component of the renovations was undertaken by contractors. The property partially collapsed during the renovations and that added to the costs.
30.In June 1998 Y Company Pty Limited was established.
31.In June 1998 N Holdings Pty Limited was established. It had two directors, the husband and Mr A.
32.In 2000 the Q property was sold for a net $17,000. That sum was applied to the H property mortgage.
33.The wife says she injured her back in 2000.
34.In 2001 the C unit was sold for a net $270,000. Those moneys were applied to the H property mortgage.
35.In 2001 O property was purchased for $485,000 + GST in name of Y Company Pty Ltd as trustee for the Sanders Family Trust No. 1. The purchase price was borrowed from the National Australia Bank.
36.In 2001 the H property was sold for $1,530,000 and V property was purchased in joint names for $1,700,000. The parties applied the proceeds of the H property sale to the purchase and borrowed the balance from the National Australia Bank.
37.In 2002 the NE Group was restructured so that the Sanders Family Trust held 9% of the shares, Mr A held 29% and 4 employees held 10.5% each.
38.In 2002 a property at T was purchased as an investment property in the name of the husband for $1,270,000. The purchase was wholly financed by the National Australia Bank.
39.In 2003 $170,000 was spent on renovating the T property.
40.In 2004 the whole family went on a World trip at a cost of $50,000, funded on the overdraft.
41.In 2004 W finished High School.
42.In 2004 a property at N was purchased for $690,000 in the name of Y Company Pty Ltd as trustee for the Sanders Family Trust No. 1. The purchase was funded with a loan from the National Australia Bank.
43.In 2005 W commenced studying at a tertiary institution for 3 ½ years at a cost of $13,000 per annum.
44.In 2006, G finished High School.
45.In 2006 there was a partial buy out of NE resulting in the Sanders Family Trust No. 1 having a 70% interest, Z Trust 15% and G Trust 15%. The company was valued at $1,290,000.
46.In 2007 the T property was sold for $1,870,000. The net proceeds were applied to pay out debts.
47.In 2007 the husband bought two units at S for a total of approximately $2,400,000. All of that sum was borrowed.
48.The wife left the former matrimonial home on 21 July 2007 or 21 November 2007 and moved in with her mother.
49.On 18 February 2008 the parties consented to orders including an order requiring the husband to pay the wife $400 per week by way of spousal maintenance pending final further order.
50.On 3 July 2008 the O property was sold for $575,000. The entire proceeds were applied to reduce debt.
51.On 5 August 2008 the N property was sold for $732,000. The whole net proceeds of $667,212 were applied to reduce debt.
52.On 8 August 2008 the S units were sold for total of $1,920,000 or $2,135,000. All of the proceeds were applied to reduce debt. The property sold for about $500,000 less than it had been bought for. With transaction costs there was a loss in the order of $600,000.
53.In August 2008 the husband paid out the lease on the wife’s Mercedes motor vehicle. He pays the wife $1,733 per month.
Credit and Submissions
The evidence of the witnesses
54.The only witnesses called for cross-examination were the parties. There are few factual disputes and therefore it is not necessary to make findings on credit.
55.I should make reference to the removal of rafts of material from the wife’s affidavit on objection. In a case where I was told there would be no argument as was discussed in In the Marriage of Kennon[1] (that the conduct of the husband prevented the wife from making a proper contribution or made her contributions more arduous), there was a great deal of evidence about the husband’s conduct during the marriage, including violent and controlling conduct towards the wife. Violence is generally abhorrent and often illegal. The reason that the evidence was excluded was not that the events in question, if true, were acceptable or insignificant. The exclusion was because the evidence is irrelevant to the exercise of discretion under section 79 in this case. There are mechanisms for dealing with violent conduct, for example, and those mechanisms, both through civil and criminal proceedings, are generally managed by the State courts.
[1] (1997) FLC 92-757; 22 Fam LR 1
Submissions
56.The written submissions on behalf of the husband attached to an email of 11May 2009 include the following:
Assets, Liabilities and Resources at Trial
Assets
Item Ownership Husband Value Husband Draft Financial Statement Wife Value [V property] H & W E 3,200,000 E 3,000,000 3,700,000 NAB Investment Account W 24 24 199 [R Units] [N Holdings] 175,000 [Y Company] Cheque Account [Y Co.] 2,000 ? 200 Motor Vehicles 218,000 160,000 Business interests 41,422 41,422 Household contents 70,000 (Now divided) 75,000 Jewellery W 2,500 Life Insurance policy W 200,000 Superannuation W 58,000 Superannuation H 70,430 57,443 TOTAL Liabilities
Item Ownership Husband Value Husband Draft Financial Statement Wife Value Home mortgage H & W NIL NIL Other mortgages 1,858,859 1,762,541 NAB overdraft — joint H & W 499,929 500,000 NAB Overdraft — [L Sanders] Investment account W 249,990 250,000 NAB O'draft — [husband] H 70,407 69,000 NAB Visa & Mastercard H 1,500 20,000 NAB Visa W 23,609 NAB HP on Mercedes [A…] H 161,361 125,000 Capital Gains Tax on [O property] NY, NY, Unpaid income tax H E 18,000 Agents fees & costs sale of house H E 65,000 TOTAL NK = Not known
Expert's valuation of Trusts
Entity Value [Husband’s] Share The [Sanders & A Family] Trust $82,845 [Husband]; $41,422 (as 50% controlling shareholder in trustee company [N] Holdings Pty Ltd with Mr [A]) The [Sanders] Family Trust (No. 1) $32,133 [Husband]; $16,066 (as 50% shareholder in trustee company [Y] Pty Ltd)
[Wife]; $16,066 (as 50% shareholder in trustee company [Y] Pty Ltd
[NPA Company] $Nil based on Future Maintainable Earning and Net Asset backing, or $1,290,000 based on a recent transaction with retiring partners [Sanders] Family Trust share; $Nil based on Future Maintainable Earning and Net Asset Backing. Possible issue (not admitted re relevance of $748,200 based on share of recent transaction with retiring partners)## The [Sanders] Family Trust ($93,458.67) This assumes all liabilities will be met. It is probable that the related parties would receive less on their debts and the value is therefore $Nil ($93,458.67) This assumes all liabilities will be met. It is probable that the related parties would receive less on their debts and the value is therefore $Nil
## Expert refers to transaction by way of disclosure. This does not affect valuation. Husband by his solicitors filed a joint balance sheet. Wife did not raise issue.
Possible interpretation of wife's outline makes pool and possibly jurisdiction ambiguous but may be able to be clarified.
Husband’s Statement of his Contributions
1.Main income earner during the marriage
2.Maintenance and improvements of properties in which the parties lived
3.Care and support for children shared with Wife. The Husband adopted a greater role especially after the earlier years but made significant homemaker and non-financialcontributions
Assessment of contributions and needs
In view of long marriage, children and respective roles of parties and the small pool, a reasonable outcome would be equality of contribution. Although modest features may prima facie favour the Wife pursuant to section 75(2), there are other countervailing features.
a. The Wife has a work capacity if not at a high end
b. The Husband has been and will be the party more likely to assist the children where relevant
c. The conduct of the case by the Wife (e.g. non-attendance to the conciliation) has resulted in delay, cost, waste and a reduced pool that would have otherwise been available. The Court cannot be required to ascertain precisely the impact but it is likely to have been sufficient to displace any greater adjustment. It would not be just and equitable to allow any or any substantial s 75(2) adjustments in the circumstances.
d. The Husband has made a greater post separation contribution financially and non-financially.
Authorities
The matter may be resolved by general principle. However the relevance of the "just and equitable" outcome in different but arguably analogous circumstances was helpfully by canvassed Moore J in Chang and Su [1999] FamCA 1203 — upheld on appeal — [2002] FamCA 156 and in the refusal of the special leave application.
57.The oral submissions on behalf of the husband took a slightly different turn. It is argued for the husband that the contributions overall favour him 55% compared to 45% by the wife, because of an imbalance of contributions after separation.
58.In relation to spousal maintenance it is submitted that the wife has a capacity for paid employment. She is at an age whereby she would expect to secure a job. Through her son and brothers she has connections to a career in sales and she has a recent qualification for that work. The husband would not oppose a continuation of the current order until judgment and for some short finite period thereafter. He strongly opposes the award being extended until the sale of the V property as he is anxious that there be no motivation for the wife to delay that sale.
59.The written submissions on behalf of the wife are as follows:
Assets
No Asset W value H value Held by 1 [V property] $3.25M $3.2M Joint 2 [Sanders] Family Trust (on basis of 2006 buyout of 3 partners (50%) for $2.38M, or as per management accounts of the partnership conducting [NE Group]; see p7 of Mr [E’s] report) $1.773M-$4.76M nil 3 [Sanders & A] Family Trust (it is unclear whether the trust’s main asset, [R Street], has been sold; as per Mr [E] the value is:) $42,422 $42,422 4 [Sanders] Family Trust I $32,133 $32,133 5 Motor vehicles (these are not included as they appear in the books of [NE Group]) Nil Total Assets $8,084,555-$5,097,555 $3,274,555 Liabilities
NB: as to liabilities the wife’s position is provisional. It will be argued that on one view of it items 1, 2 and 3 have already been taken up in the valuation of [NE] and are therefore being double counted. Further, it may be argued that some of this indebtedness should be quarantined solely to the husband, pending determination of the purpose of the loan and whether there has been any wastage 1 NAB loan (1) 1.875M 1.875M 2 NAB loans (2) 72K 72K 3 Overdraft 750K 750K 4 ATO 15K 15K 5 CGT [O property] 8K 8K Total Liabilities 2.875M 2.875M
NET ASSETS $5,209555-$2,222555 $399,555 SUPERANNUATION
Superannuation 58K 97K
Each of the considerations provided by s79(4) is considered in turn.
(a) the financial contribution made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last mentioned property, whether or not that last mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them;
· The wife relies on the $13,000 provided at the date of the marriage.
· The wife worked in paid employment for part of the time of the marriage, including up to shortly before the birth of the first child, [W], and also worked in the business of [NE Group]. The wife’s earnings were handed to the husband.
· The wife was joint proprietor to a number of the properties bought and sold by the parties, and thus contributed significantly with these transactions by utilising her half interest in the purchase of the next property.
· The “[DG]” business.
· The use of the family home jointly owned as security for [NE Group].
· An issue in the case is the husband’s spending; eg motor vehicles and entertainment. The wife contributed by not being profligate in the way that the husband was, as alleged by the wife. The approximate $600,000 loss made on the [S] units also needs consideration.
(b) the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last mentioned property, whether or not that last mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them;
· Maintenance of the homes of the parties both internally and externally eg cleaning, vacuuming, mowing lawns, gardening etc.
· Renovations to various of the properties of the parties, including pricing the renovations, planning and overseeing the renovations.
· By fulfilling the role of primary homemaker and parent the wife created the opportunity for the husband to develop the business of [NE Group].
(c) the contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage and any children of the marriage, including any contribution made in the capacity of homemaker or parent;
· The wife was the primary homemaker and parent of the two children 22 months apart.
· The wife attended to the duties of cleaning, ironing, washing, cooking, mowing lawns, gardening and the whole range of such activities commonly associated with raising a family.
· Providing care and comfort in times of illness, eg the husband’s kidney stones, [W’s] asthma, and [G’s] infant sleeplessness.
· Forgoing [sport] instructing to devote time to the family, as well as forgoing other employment opportunities.
· The aforementioned renovations (in particular the [E] and [H] properties as detailed in the wife’s affidavit).
(d) the effect of any proposed order upon the earning capacity of either party to the marriage;
· The husband’s orders propose that the [Sanders Family Trust] interest become solely his. The effect of this that the wife will no longer receive any distributions from this trust, nor from the business of [NE Group].
· The result will be that the husband’s earnings will be unaffected by the order, and will continue to earn in the order of $250,000, and the wife income will be meager.
(e) the matters referred to in subsection 75(2) so far as they are relevant
· Age; the wife is of an age where meaningful employment is difficult to find.
· Income, property and financial resources; depending on the findings made by the court, the wife’s property could be modest, and as noted above her income will be limited and her financial resources scarce.
· Standard of living: the wife has enjoyed materially a good standard of living throughout the marriage. To allow this to continue within the bounds of the available property, an adjustment is needed.
· Duration of marriage; this is a long marriage of some 23 years, and the earning capacity of the wife has been adversely affected as a result.
· The high spending of the husband throughout a large period of the marriage on items solely of benefit to him, and which financially disadvantaged the wife, eg by resulting in a higher level of debt. Further, the wife raises an issue as to whether there should added back to the property of the parties monies received as rent which have been appropriated to service the above liabilities.
(f) any other order made under this Act affecting a party to the marriage or a child of the marriage; and
(g) any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage.
60.The submission on behalf of the wife in relation to spouse maintenance is that she is currently restricted in relation to paid employment. The husband is able to pay $400 per week by way of the interim order and makes no complaint about his capacity to do so. It would be a convenient solution to divert some part of the $800 per week rental income paid on the business premises. The submission is that the wife survives on credit cards and requires support for some time.
The approach in proceedings under section 79
61.The case law reveals that there is a permissible approach to the determination of an application brought pursuant to the provisions of s 79. That approach involves four inter-related steps. First, I am to make findings as to the identity and value of the property, liabilities and financial resources of the parties at the date of the hearing. Second, I should identify and assess the contributions of the parties within the meaning of s 79(4)(a), (b) and (c) and determine the contribution based entitlements of the parties expressed as a percentage of the net value of the property of the parties. Third, I should identify and assess the relevant matters referred to in s 79(4)(d), (e), (f) and (g), (the other factors) including, because of s 79(4)(e), the matters referred to in s 75(2) so far as they are relevant and determine the adjustment (if any) that should be made to the contribution based entitlements of the parties established at step two. Fourth, I should consider the effect of those findings and determination and resolve what order is just and equitable in all the circumstances of the case.[2]
[2] This summary of the effect of the authorities is paraphrased from the comments of the Full Court in In the Marriage of Hickey (2003) 30 Fam LR 355 at 370
62.There is no mention of steps in section 79 but it is convenient to approach the exercise of discretion in a structured way. The Full Court has supported such an approach.
The property of the parties at the date of the hearing
63.The Court is required to make a finding as to the property of the parties. That involves identifying assets, liabilities and financial resources and their values.
64.There are circumstances whereby assets are included in the list for division although they no longer exist. The same logic would apply to the exclusion from the relevant list of liabilities, debts that do exist at the date of the hearing. In the Marriage of Omacini (2005) 33 Fam LR 134 the Full Court noted:
[30] To date, three clear categories of cases have emerged where the court has determined that it is appropriate to notionally add back to the pool of assets, that is, assets that no longer exist. They are:
(a) Where the parties have expended money on legal fees. In In the Marriage of DJM and JLM (1998) 23 Fam LR 396; (1998) FLC 92-816; [1998] FamCA 97 the Full Court said at [11.6]:
[11.6] For reasons set out in Farnell, s 117 provides that each party to proceedings under the Family Law Act shall bear their own costs unless the Court otherwise orders. Failing to add back monies expended by parties on costs frequently has the effect of defeating the policy of s 117 by permitting the pool of available assets for distribution between the parties to be diminished by any monies that either of the parties have managed to spend on their costs up to the date of trial. We are of the view that the normal approach ought be to add costs already paid back into the pool. Whilst there may be cases where that approach is inappropriate, the reasons why it is not taken ought normally be spelt out.
(b) Where there has been a premature distribution of matrimonial assets. In In the Marriage of Townsend (1994) 18 Fam LR 505; (1995) FLC 92-569 Nicholson CJ as he then was with whom Fogarty and Jordan JJ agreed, said at Fam LR 509; FLC 81,654:
In my view, what occurred in this case, as I said during the course of argument was, in fact, a premature distribution of a proportion of the matrimonial assets. What the husband did was to distribute to himself an asset in which the wife had a legitimate interest. In such circumstances I consider that it would be unjust in the extreme to simply treat such conduct by the husband as a matter to which regard should be had under section 75(2). It seems to me that the husband has had the benefit of that money. Had he retained, for example, the taxi licence instead of selling it, that would have been brought into account as an item of property which would have been dealt with in the same way as the remaining items of property in this case. Accordingly, I am of the view that the correct way in which to deal with the husband’s receipt of those moneys is to bring them into the pool of assets on a notional basis and make a distribution accordingly.
(c) In the circumstances outlined by Baker J in In the Marriage of Kowaliw (1981) 7 Fam LN N13; (1981) FLC 91-092 at FLC 76,644:
As a statement of general principle, I am firmly of the view that financial losses incurred by parties or either of them in the course of a marriage whether such losses result from a joint or several liability, should be shared by them (although not necessarily equally) except in the following circumstances:
(a) where one of the parties has embarked upon a course of conduct designed to reduce or minimise the effective value or worth of matrimonial assets, or
(b) where one of the parties has acted recklessly, negligently or wantonly with matrimonial assets, the overall effect of which has reduced or minimised their value.
Conduct of the kind referred to in para (a) and (b) above having economic consequences is clearly in my view relevant under s 75(2)(o) to applications for settlement of property instituted under the provisions of s 79.
65.The parties did not settle a joint balance sheet but I understand the issues left to be determined are:
The Value of the husband’s interest in NPA Company
66.The single expert is Mr E. He was chosen by the parties and is appropriately qualified. He puts the value of the entity at nil. That is his opinion based on future maintainable earnings and on the adjusted partnership net equity. Mr E was cross-examined and was not successfully challenged. There is no valuation evidence other than that of Mr E. That should be the end of the issue but, albeit belatedly, it is a matter take up on behalf of the wife and is important to her case so I will discuss the arguments made.
67.Mr E says that the winding up of the enterprise would leave a debt. He says that if he made no allowance for partners’ remuneration, the goodwill would be between $2,100,000 and $2,200,000 and even then the net equity would have a negative value (sic) of between $200,000 and $400,000.
68.In his report Mr E notes other two matters that are inconsistent with his opinion. They are:
· The books of the partnership record a value of the interest of the Sanders Family Trust in the partnership of $1,769,421 as at 30 June 2007 and 1,773,161.88 as at 30 June 2008; and
· The effect of a buy out of partners in 2006, an apparently arms length transaction, was to record a notional value of $1,290,000 for the partnership. That amount is calculated from the payout to the departing partners. By extrapolation, this would put the Sanders Family Trust interest at $748,200 at 58% (or, I interpolate $903,000 for its 70% interest). However, Mr E opines that for that value the goodwill would need to be $3,525,000 which in turn would require Estimated Future Maintainable Earnings $800,000 - $900,000 greater than the amount calculated for the partnership by Mr E.
69.In cross-examination Mr E said that neither of those matters changed his opinion that the business had no value. In relation to first matter, Mr E’s response was to the effect that the recorded value is plainly wrong. As to the buy out, he was asked about his use of the description “apparently arms length transaction”. He said that he had doubted the applicability of that term when he used it in his report. Whatever the phrase might mean, there is unchallenged evidence from the husband about the fact that he and two other partners acted in 2006 to remove the other three partners who were considered to be under-performing. One could imagine that those circumstances could affect the price offered and lead to a distortion of the value of the business extrapolated from that price. Whatever that impact might be, Mr E does not accept that the treatment in the accounts of the 2006 buyout is a basis for changing his opinion about current value.
70.The valuation of the business takes into account future maintainable earnings to arrive at a value. The resultant value represents a figure, for example, that a purchaser might pay for the business. A purchaser would normally be interested in whether the business consistently generates a return, over and above the costs of the business. Importantly those costs include a proper remuneration to the principals of the enterprise. The accounts record the partner’s salaries for 2008 at $234,032. For the purposes of his report, Mr E assumed that the value of the salaries they had taken. In fact the partners’ remuneration was $580,000 for that year. In cross-examination he revealed that he was not aware that they had in fact received the higher figure. However, he made his calculation of value by reference to the higher figure. On that basis he came to a figure of -$221,260 as the average adjusted earnings before interest, rent and tax 2005 to 2008. As it is a negative figure he did not proceed to apply any multiplier to that figure. However, in his report Mr E went on to say:
“Even if I were to add back the whole adjustment I have made for partner’s remuneration of $580,000, the partnership Goodwill would be valued at between $2,100,000 and $2,300,000 and the adjusted partnership Net Equity would still be negative value (sic) of between $400,000 and $200,000.”
71.Thus, for the purposes of pool of assets in these proceedings, the business has no value.
72.The second aspect to the valuation of the business was an argument made on behalf of the wife that the debt of about $1.8M to the National Australia Bank is double counted in the husband’s case. The argument on behalf of the wife is that it is and therefore, once the business is valued, whether at nil or another figure, based in part on that debt, it would be double counting to also take that debt into account when identifying the equity in the V property.
73.The argument on behalf of the husband and the evidence of Mr E is to the effect that that these are two different issues. The business is not valued on a net asset backing basis. Whatever value it has, there is no sense in which the debt is taken up in arriving at that value. Irrespective of the value of the business, the V property is encumbered with a debt to the National Australia Bank of $1.8M.
74.The latter approach must be the correct one. There was an attempt on behalf of the wife to put to Mr E and to me that the bank might or might be persuaded to release its security over the V property, without its debt being paid out or being fully paid out, and would be satisfied with a right to claim for its debt on the business. In my view that is completely unrealistic.
75.A purchaser would not be interested in the debt of the current partners, let alone in taking on the debt or paying it out. It is true that the costs of the business do take into account an allowance for the cost of borrowing. As I understand Mr E’s evidence, that cost would be substantially unchanged by the discharge of the National Australia Bank debt. As Mr E said, if the National Australia Bank debt is discharged on the sale of V, the parties will then stand in the shoes of the bank. The business still has a debt to service.
76.For the purpose of identifying the net assets, the debt to the National Australia Bank is not double counted.
The Value of the husband’s interest in the Sanders and A Family Trust
77.It is argued for the wife that the trust has a value of $400,000. As I understand the argument that is based on a compromise figure for the offices at R Street, of between $700,000 and $900,000. Then the argument goes that certain debts of the trust should be ignored.
78.The husband agrees with the single expert.
79.The single expert puts the value of the Trust at $82,845 based on assets including the offices at R Street, a loan owing by NPA Company and some cash and liabilities including debts to the trustee and to the A Family Trust and the Sanders Family Trust. He opines that the husband has 50% of the shares in the trustee company and therefore his interest is valued at $41,422.
80.There is no valuation of the R Street premises. The husband told Mr M, who told Mr E that the property had a value of $700,000. The husband conceded in cross-examination that he had suggested a value of $900,000 some years ago. The wife was on notice from a letter to her solicitors of June 2008[3] that the husband contended the offices had a value of $700,000. There is no valuation evidence. The $700,000 figure has been relied on by the expert without complaint on behalf of the husband until the trial. The offices have a value of $700,000.
[3] Exhibit 1
81.As I understand the arguments made on behalf of the wife no additional harm is done to her case if I do so but in any event I make a finding in accordance with the single expert.
The Value of the interests of the parties in The Sanders Family Trust No. 1
82.It is agreed that the trust has a value of $32,133.
The Value of the interests of the parties in The Sanders Family Trust
83.Depending on the valuation of the goodwill in the business, the submission on behalf of the wife is that the trust represents a net deficit of -$400,000. The submission on behalf of the husband is that the trust has no value.
84.Mr E discusses a number of permutations, depending on the value of the business. If the business is found to have no value he puts the value of the trust at a value of -$523,468.67. He says the practical effect of that would be that the creditors (W, the husband, N Holdings Pty Ltd and Y Company Pty Ltd) would only receive 45.61% of the value of their debts and the trust would have a nil value.
Motor vehicles
85.There is no agreed list of assets and liabilities in this case. I have been left to pick through inconsistent documents prepared and variously amended on behalf of each party. The wife has a motor vehicle with and agreed value of $35,000. The debt associated with that vehicle has been paid out. On that basis I will include that vehicle in the list of assets. There are a number of other vehicles, including the Mercedes driven by the husband and two Hyundai motor vehicles. The approach suggested on behalf of the wife is that the value of those vehicles and the associated debts are taken up in the value of the business. On the other hand the husband has included the vehicles in his lists of assets and liabilities. He attributes a value of $218,000 and a debt of $161,361 to the vehicles. It may be that the wife’s vehicle is included in the asset figure. Given that uncertainty I will adopt the approach proposed on behalf of the wife but note that the husband has the use of a luxury motor vehicle through the business.
Paid legal fees
86.The wife has paid no legal fees for these proceedings. The husband has paid $41,262.52. The payment has been made from the husband’s income. In accordance with the approach in In the Marriage of DJM and JLM (above) I will read back that sum into the list of assets.
87.I find that the assets are:
Assets Value V property $3,250,000 Sanders Family Trust No. 1 $32,133 Sanders & A Family Trust (interest of the parties) $41,422 Sanders Family Trust (share of value of NPA Company) $0 Superannuation H $70,430 Y Company Cheque Account $10,044 Paid legal fees (H) $41,262.52 NAB Investment Account (W) $24 Wife’s motor vehicle $35,000 Wife’s jewellery $2,500 Wife’s Life Insurance policy $200,000 Superannuation W $58,000 Total $3,740,815.52
Liabilities:
88.The parties agree about the main liabilities. The issues are:
Income tax
89.There is no evidence of assessments made by the ATO. In those circumstances I will make no provision for this item. The parties will ultimately be assessed.
Capital Gains Tax
90.This is a matter yet to be assessed. I will make no allowance in this regard. The liability will be dealt with by the Tax Office and the parties will be assessed in accordance with their circumstances.
Costs of sale of V property
91.The husband has incurred a debt of $11,244 in relation to the sale of the V house. He has proposed that the debt be dealt with by it being paid out in priority from the sale proceeds. I have adopted a different approach and have left the debt with the husband but have included it in the joint debts for which he has responsibility in coming to his current net position. No harm is done by my approach.
92.The husband includes in his list of liabilities an estimate of $65,000 for sale costs. There is no agreement about that figure. There is a complicating factor in that the parties’ son is the sellers’ agent and that is likely to have a (positive) bearing on the costs. The costs will be met out of the sale proceeds. Without agreement I will not include any figure for this cost.
Parties’ Visa card debts
93.As I indicated to counsel in final submissions I propose to include the parties’ current credit card debts. As I have referred to above, one of the husband’s debts relates directly to the marketing of the V property and is a joint debt in any event. The general position is that I should identify and value assets at the date of the hearing. It often pleases parties to property proceedings to exclude post separation consumer debt from the pool of assets and liabilities. There is no such concession here and I will include both debts.
94.I find that the liabilities are:
Liabilities Amount Mortgage secured on V property $1,858,859 Husband and wife Overdraft $499,929 Husband’s Visa NAB $10,350 Husband’s Visa NAB (property sale expenses) $11,244 Wife’s overdraft – NAB $70,407 Wife’s overdraft – NAB $249,990 Wife’s Visa NAB $25,882 Total $2,726,661.00
Net assets
95.The net assets have a value of $1,014,154.52 ($3,740,815.52 - $2,726,661).
Financial Resources
96.The parties disclose no financial resources.
Contributions
97.The obligations placed on the Court by s 79 call for an assessment of the respective contributions of the parties. The manner of assessing contributions has been the subject of previous decisions. The contributions of a parent and homemaker are to be assessed, not in any merely token way, but in terms of their true worth to the building up of the assets[4]. There are said to be risks in taking an overly technical approach to the assessment of the respective contributions of the parties in that the Court can become involved in questions of the quality of contributions which go far beyond the real world expectations of parties[5].
[4] Mallett v Mallett (1984) 9 Fam LR 449; In the Marriage of Ferraro (1992) 16 Fam LR 1
[5] In the Marriage of Shewring (1987) l2 Fam LR 139
98.As to whether the Court should apply the considerations in section 79(4) to the assets globally or asset by asset, the authorities have it the latter approach is preferred, in appropriate circumstances either approach is permissible and sometimes the asset by asset approach is best. See In the Marriage of Lenehan (1987) 11 Fam LR 615; In the Marriage of Norbis (1986) 10 Fam LR 819; FLC 91-712; In the Marriage of Zyk (1995) 19 Fam LR 797.
99.In the Marriage of Coghlan (2004) 33 Fam LR 414 the Full Court allowed that superannuation may be included in the list of property drawn up as “the first step” in the determination of proceedings under s 79, whether or not a splitting order is sought in those proceedings. The Full Court suggests that that:
“… approach could be adopted where the parties agree that it should be adopted, or where the court is satisfied that the superannuation interest is indeed property within the meaning of the definition of property contained in s 4(1), or if the interest is not within that definition, but is of relatively small value in the context of the value of the other assets in the case, or there are features about the interest which leads the court to conclude that this would be an appropriate approach.”
100.Here the case has been argued on a global basis and I will deal with the assets in a similar way.
Contributions
101.It is agreed between the parties that contributions were equal to the date of separation. The wife argues that contributions were equal overall. The husband contends that his contributions were greater than those of the wife after separation. On the basis of their agreement I will deal very briefly with the categories of contribution made by the parties during the marriage.
Section 79(4)(a) Contributions
102.Financial contributions, both direct and indirect were made by each of the parties.
103.The husband made the overwhelming financial contribution. The parties each had paid employment but in the wife’s case her employment was for a few years. She worked in a food shop and then managed a clothing shop. She says her income in the latter position was about $40,000. The wife undertook work for NE Group and for the husband’s sister. She performed work both at home and at the office and was paid on an hourly basis. She cleaned her sister-in-law’s home.
104.The husband worked for a bank, a recruitment business and then in partnership, in his own enterprise. His annual income grew from about $60,000 to in excess of $200,000 over the period since the commencement of the marriage.
105.On 18 February 2008 the parties consented to orders including an order requiring the husband to pay the wife $400 per week by way of spousal maintenance pending final further order.
106.In August 2008 the husband paid out the lease on the wife’s Mercedes motor vehicle.
Section 79(4)(b) contributions
107.This provision deals with direct and indirect non-financial contributions other than those made in the form of parent and homemaker contributions. The husband undertook renovations to several properties:
· Renovations were undertaken at the B property in 1987. The husband painted, installed light fittings and window dressings, did carpentry, repairs and maintenance and hung paintings.
· In 1989 renovations were undertaken to the D property. The husband did painting, paving, timber cladding, carpentry repairs and maintenance and gardening and planting, making and fitting windows, hanging doors, installing lights and fittings and hanging blinds, curtains and paintings.
· At the E property in 1990 the husband did painting, carpentry, repairs and maintenance, decking, put bitumen on the drive way, laid blue metal, did pool maintenance, demolished a kitchen and garage, excavated and filled after the installation of a swimming pool, gardening and planting, making and fitting windows, hanging doors, installing lights and fittings and hanging blinds, curtains and paintings. In addition the husband supervised tradesmen who installed a new kitchen, bathroom, pool and carport.
· In 1996 at the property at H the husband says he painted, did carpentry, installed a new kitchen, polished floor boards and installed blinds, curtains and some new doors. The husband says the renovations cost $50,000. That seems an enormous expense for materials and prime cost items. I assume therefore that the husband did not do all of the work associated with those renovations.
· In 1997 further renovations were undertaken to the H property. The husband painted, undertook general handyman work, repairs and maintenance, planted and gardened, hung blinds curtains and paintings and did pool maintenance. The major component of the renovations was undertaken by contractors. The property partially collapsed during the renovations and that added to the costs.
108.The wife says she designed and organised the renovations and the tradesmen.
Section 79(4)(c) contributions
109.This provision deals with contributions to the family including contributions in the form of homemaker contributions and contributions to children of the marriage.
110.I am satisfied that the wife undertook the main parenting and homemaker role.
111.The parties arranged their affairs so that it was the wife who had time away from paid employment to care for the children and manage the household.
112.The parties’ two children are now adults. W was allergic to protein and was asthmatic. He would break out in hives with any minor contact with certain foods. His asthma worsened in winter. He used a Ventolin machine and was on a vegetable and mother’s milk diet for 1 ½ years. He then needed calcium tablets and was allergic to all diary products and all meat.
113.The wife’s home duties included washing, ironing, cleaning, cooking, mowing the lawns, gardening, and chopping wood when extra chopped wood was required.
Conclusion on Contribution
114.It is agreed between the parties that contributions were equal to the date of separation. It is argued for the husband that the contributions were made as to 55% by him and 45% by the wife because of his greater contributions after separation. Since February 2008 the husband has supported the wife with spouse maintenance payments of $400 per week. In August 2008 the husband paid out the lease on the wife’s Mercedes motor vehicle. On the other hand the husband has had the use of the former matrimonial home and met outgoings.
115.This was a long marriage involving very considerable contributions. Although this is not a mathematical exercise, the difficulty for the husband is that, as a matter of logic, it is hard for the events of the 18 months after separation to cause a 5% adjustment in contributions made over 24.5 years. A 10% differential in the context of this case represents over $97,000. The husband does not suggest that he contributed that sort of sum from his own resources over that 18 month period. To the extent that the $400 per week in maintenance and the payout of the car lease came from matrimonial funds or borrowings reflected now in the list of liabilities that go to make up the net pool of assets, the wife also contributed to those payments. To put it another way if there is a dollar for dollar adjustment for those payments in the assessment of contributions, then the husband paid no interim spousal maintenance and the wife contributed to her own support.
116.I find that the various contributions of the parties would properly be acknowledged by a finding that they were made in equal proportions. The events since separation may reflect an imbalance in contributions but not one that can be safely given significance in the context of this long marriage.
The other matters in Section 79
117.Once contributions have been assessed, the other factors in section 79(4) need to be considered. They are:
Section 79(4) (d)
118.Pursuant to s 79(4)(d) I am required to take into account the effect of any proposed orders on the earning capacities of the parties. To the extent that the wife might have relied on her capital to provide for her future income, these orders have a bearing on her earning capacity but otherwise, there is no relevant effect.
Section 79(4)(e) - Section 75(2) Factors
119.The relevant matters in Section 75(2) would seem to be paragraphs (a), b), (d), (j), (k) and (m).
(a) the age and state of health of each of the parties;
120.First, as to the age and state of health of each of the parties. The parties are 48 years of age. Both parties have suffered poor health during the marriage. The wife suffered back problems. She injured her back in 2000. The husband suffered from kidney stones and other problems. There is no current evidence about the health of either party.
(b) the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment;
121.The husband receives $5,292 each week made up of $4,519 in wages as a Director of NE Group and $773 per week in rent. The husband has the use of a Mercedes motor vehicle, through the business. Through the business, the parties have provided their sons with motor vehicles. The husband lives with W and F. W has an income of $300 per week and G earns $730 per week. They pay nothing for the husband’s benefit but the husband pays $474 per week towards their petrol, registration and insurance for motor vehicles, food, clothing, medical, education and motor vehicle repairs and maintenance. It is not clear why the husband would need to provide support to G, but there it is. I take it that W and G might also benefit from the provision of accommodation, utilities etc at the V home.
122.The husband puts his expenditure as follows:
Expense Amount Income tax $752.00 Summit Master Trust superannuation (AXA/National Mutual) $230.00 Rates council and water V property $65.00 Life insurance premiums – Summit Master Trust superannuation (AXA/National Mutual) $96.00 Other insurance premiums – home & contents Chubb; motor vehicles Daimler Chrystler, Lumley & NRMA $217.00 Motor vehicle registration Mercedes Benz A…, Mercedes Benz B… Hyundai A… and Hyundai B… $448.00 Hire purchase lease payments – NAB Mercedes Benz $1,376.00 3 Overdrafts - National Australia Bank $1,374.00 Visa / Mastercard repayments NAB $150.00 Payment to wife $400.00 Other expenses including food, gas, electricity, telephone, Foxtel, internet, tolls, security, education costs for W, entertainment, petrol, clothing, medical, house repairs and maintenance. $1,255.00 $6,363.00 123.$448 per week for motor vehicle registration seems like a very high figure and is not explained in the husband’s case. It is likely to overstate the cost to a considerable extent.
124.It is not suggested that the husband is not exercising his earning capacity.
125.The wife has made no real effort at financial disclosure. Her income is recorded in her Financial Statement as ‘unknown’. She receives $400 per week from the husband. She says that she benefits from rent paid by herself ($230 per week) and by Ms GD ($200 per week) and a further $33 per week paid by her for storage rent. She spends $430 per week on rent and $127 per week on Visa card payments. Otherwise she does not know what her expenses are. The net effect of that evidence would seem to be that the wife spends $357 per week made up of $230 per week on rent and $127 per week on Visa Card payments.
126.The wife lives in Queensland. She gives no evidence about her living arrangements. I was told in final submissions that evidence would be available that the wife lives with her cousin.
127.Evidence about the wife’s assets and liabilities is set out earlier in these reasons.
128.The wife does not have paid employment. This issue is explored in more detail later in these reasons but I should say something about it here. Save in relation to teaching sports, the wife does not refer to the impact of any medical condition on her capacity for paid employment. The wife had a qualification to teach sports but considers that her bad back would prevent her from meeting the requirements of that job.
129.The wife did a sales course in 2008. Although the evidence does not refer to any particular application, I take her evidence to be that she has applied for a number of jobs in real estate and retail sales. The wife has not obtained paid employment since separation. The wife had two brothers and has a son, in the sales industry. She has not been able to obtain work experience. The wife says that the sales climate is poor but there are signs of recovery. She says that she could only afford to work in sales in a salaried position. She could not afford the petrol and telephone and living costs of a commission job. In cross-examination the wife did not concede that she expected to secure (any) paid employment. The wife is 48 years of age and is not confident about making a return to paid employment.
130.The effect of that is - the wife does not currently have paid employment and is unlikely to take up paid employment in the short term. When she does secure employment the highest level at which she is likely to obtain work would seem to be in Real Estate. Cleaning or other retail sales positions are unlikely to be better remunerated than a Real Estate position.
(c) whether either party has the care or control of a child of the marriage who has not attained the age of 18 years;
131.The parties’ children are over 18 years of age.
(d) commitments of each of the parties that are necessary to enable the party to support:
(i) himself or herself; and
(ii) a child or another person that the party has a duty to maintain;
(e) the responsibilities of either party to support any other person;
132.I have set out the evidence in relation to the parties’ expenses. The boys are adults and although support is given, neither of the parties has a duty to maintain them.
(f) subject to subsection (3), the eligibility of either party for a pension, allowance or benefit under:
(i) any law of the Commonwealth, of a State or Territory or of another country; or
(ii) any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia,
and the rate of any such pension, allowance or benefit being paid to either party;
133.Neither of the parties receives a Centrelink benefit. The parties have interests in superannuation funds.
(g) where the parties have separated or the marriage has been dissolved, a standard of living that in all the circumstances is reasonable;
134.The parties apparently enjoyed a good standard of accommodation during the marriage. They both drive Mercedes Benz motor vehicles. The boys were educated at a private school and W was assisted to go on to tertiary study. The family had a world trip in 2004. Otherwise, there is little evidence in relation to the standard of living of the parties.
(h) the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income;
135.There is no evidence of either party planning further study or intending to set up in business (or in the husband’s case, in another business).
(ha) the effect of any proposed order on the ability of a creditor of a party to recover the creditor’s debt, so far as that effect is relevant;
136.This is not a significant aspect of the case.
(j) the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party;
137.The wife undertook the main parenting role and that allowed the husband to maintain employment on a full-time basis.
138.The wife undertook courses in sports teaching and First Aid. It appears that neither course will now enhance her earning capacity.
(k) the duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration;
139.The parties’ arrangement had the wife taking the main parenting role and leaving the husband to pursue full-time employment. It is likely that the marriage restricted the wife’s earning capacity in the sense that she was not able to build a career and presumably lost the benefits of a long history of full-time employment such as long service leave and opportunities for promotion.
(l) the need to protect a party who wishes to continue that party's role as a parent;
140.This is not relevant.
(m) if either party is cohabiting with another person — the financial circumstances relating to the cohabitation;
141.I have set out above, what there is of that evidence.
(n) the terms of any order made or proposed to be made under section 79 in relation to the property of the parties;
(na) any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage; and
142.There is no child support.
(o) any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account;
143.Nothing comes to attention here.
(p) the terms of any financial agreement that is binding on the parties.
144.There was no binding agreement made between the parties.
Section 79(4)(f)
145.Apart from the interim order of 18 February 2008, there are no other relevant orders made under the Family Law Act 1975.
Section 79(4)(g)
146.There is no child support.
Conclusion
147.It is agreed that there should be an adjustment to the wife. Based on the findings I have made about the pool of assets, the wife seeks an adjustment as much as 40%. The husband seeks an adjustment of 10%. The relevant matters arising from the remaining elements of s 79, which include the s 75(2) factors referred to above are:
ØThe husband has a strong history of well paid employment. The wife has no job and her return to the paid workforce may take some time and is likely to be at a relatively modest income level;
ØThe husband’s income could only be improved by the discharge of various business related debts on the sale of the V property;
ØThe wife’s income earning position has to some extent resulted from the marriage and her role at home has assisted the husband build a successful and well paid career;
ØThe parties will receive a similar property settlement based on contributions alone;
148.These matters call for a substantial adjustment in favour of the wife. The 10% adjustment sought by the husband is not adequate. This is one of those cases where the most valuable ‘asset’ of the marriage is the husband’s earning capacity. The dollar effect of an adjustment is just as important as the percentage figure. By the same token a 40% adjustment makes no proper allowance for 25 years of contributions by the husband. It is not the purpose of this provision to even up the financial circumstances of the parties.
149.I will make an adjustment of 20%. In the context of this case that represents about $203,000 and a differential between the parties of about $406,000. That is a substantial sum but one that is likely to be made up by the husband over several years.
Just and Equitable
150.The net assets have a value of $1,014,154.52 ($3,740,815.52 - $2,726,661).
151.A division in the proportions 70% to the wife and 30% to the husband would leave the wife with about $709,908 and the husband with about $304,246.
152.The parties both seek that the husband retain the business and business related entities and assets. Neither party presses for a superannuation split.
153.Thus the wife will have or has had the benefit of :
Assets Value NAB Investment Account (W) $24 Wife’s motor vehicle $35,000 Jewellery Wife $2,500 Life Insurance policy Wife $200,000 Superannuation (W) $58,000 Wife’s Visa NAB -$25,882 Total $269,642.00
154.In order to bring her to 70% she should receive $440,266 from the proceeds of sale of the V property. The wife will owe any other current personal debts, including her legal fees.
155.That would leave the husband with the following assets:
Assets Value Sanders Family Trust No. 1 $32,133 Sanders & A Family Trust (interest of the parties) $41,422 Sanders Family Trust (share of value of NPA Company) $0 Y Company Cheque Account $10,044 Superannuation H $70,430 Paid legal fees (H) $41,262.52 Balance of the proceeds of sale of the V property $130,549 Husband’s Visa NAB -$10,350 Husband’s Visa NAB (property sale expenses) -$11,244 Total $304,246.52
156.As is mentioned above, the business provides benefits to the husband over and above his salary, including the use of a valuable motor vehicle.
157.For the purposes of those calculations the net equity of the V property is identified in this way:
Assets Value V property $3,250,000 Mortgage secured on V property -$1,858,859 Husband and wife Overdraft -$499,929 Wife’s overdraft – NAB -$70,407 Wife’s overdraft – NAB -$249,990 Total $570,815.00
158.Those calculations ignore the costs of sale and the potential for the property to sell for a figure greater or less than the agreed value of $3,250,000. In order for those matters to be fairly taken into account I will express the division of the net proceeds in percentage terms. In that way the parties will share in the benefit of any windfall or the detriment of a lower net return.
159.The ratio 440,266 : 130,549 represents about 77% to the wife and 23% to the husband.
160.The orders I propose give the wife the lion’s share of the parties’ assets. Nevertheless, in my view those orders represent a just and equitable settlement of the parties’ property.
Conclusion under Section 79
161.This was a long marriage involving very significant contributions by each of the parties. They acquired assets and provided a secure home for their sons. In the course of 23 years of cohabitation and since, the parties shared the work of the family in different ways but overall the contributions were equal. A significant adjustment is required to the wife because of the difference in the parties’ income earning abilities.
162.In relation to the mechanism for the sale of the V property, the parties have the benefit of their son as the selling agent. It is agreed that in the event that the parties are unable to agree in relation to the marketing program and price, those matters will be referred to the President of the Real Estate Institute.
The approach in proceedings for Spouse Maintenance
163.Sections 72 and 74 of the Family Law Act 1975 provide as follows:
[s 72] s 72 Right of spouse to maintenance:
72
(1)A party to a marriage is liable to maintain the other party, to the extent that the first-mentioned party is reasonably able to do so, if, and only if, that other party is unable to support herself or himself adequately whether:
(a)by reason of having the care and control of a child of the marriage who has not attained the age of 18 years;
(b)by reason of age or physical or mental incapacity for appropriate gainful employment; or
(c)for any other adequate reason;
having regard to any relevant matter referred to in subsection 75(2).
(2)The liability under subsection (1) of a bankrupt party to a marriage to maintain the other party may be satisfied, in whole or in part, by way of the transfer of vested bankruptcy property in relation to the bankrupt party if the court makes an order under this Part for the transfer.
[s 74] s 74 Powers of court in spousal maintenance proceedings
74
(1)In proceedings with respect to the maintenance of a party to a marriage, the court may make such order as it considers proper for the provision of maintenance in accordance with this Part.
(2) If:
(a)an application is made for an order under this section in proceedings between the parties to a marriage with respect to the maintenance of a party to the marriage; and
(b)either of the following subparagraphs apply to a party to the marriage:
(i)when the application was made, the party was a bankrupt;
(ii)after the application was made but before the proceedings are finally determined, the party became a bankrupt; and
(c)the bankruptcy trustee applies to the court to be joined as a party to the proceedings; and
(d)the court is satisfied that the interests of the bankrupt’s creditors may be affected by the making of an order under this section in the proceedings;
the court must join the bankruptcy trustee as a party to the proceedings.
(3)If a bankruptcy trustee is a party to proceedings with respect to the maintenance of a party to a marriage, then, except with the leave of the court, the bankrupt party to the marriage is not entitled to make a submission to the court in connection with any vested bankruptcy property in relation to the bankrupt party.
(4)The court must not grant leave under subsection (3) unless the court is satisfied that there are exceptional circumstances.
(5) If:
(a)an application is made for an order under this section in proceedings between the parties to a marriage with respect to the maintenance of a party to the marriage; and
(b)either of the following subparagraphs apply to a party to the marriage (the debtor party ):
(i)when the application was made, the party was a debtor subject to a personal insolvency agreement; or
(ii)after the application was made but before it is finally determined, the party becomes a debtor subject to a personal insolvency agreement; and
(c) the trustee of the agreement applies to the court to be joined as a party to the proceedings; and
(d)the court is satisfied that the interests of the debtor party’s creditors may be affected by the making of an order under this section in the proceedings;
the court must join the trustee of the agreement as a party to the proceedings.
(6)If the trustee of a personal insolvency agreement is a party to proceedings with respect to the maintenance of a party to a marriage, then, except with the leave of the court, the party to the marriage who is the debtor subject to the agreement is not entitled to make a submission to the court in connection with any property subject to the agreement.
(7)The court must not grant leave under subsection (6) unless the court is satisfied that there are exceptional circumstances.
(8)For the purposes of subsections (2) and (5), an application for an order under this section is taken to be finally determined when:
(a) the application is withdrawn or dismissed; or
(b) an order (other than an interim order) is made as a result of the application.
164.The relevant effect of those sections in the context of these proceedings is that if the wife is unable to adequately support herself from her own resources for any adequate reason, I can order the husband to provide that support to the extent of his reasonable capacity to do so. In relation to all of the issues addressed in section 72 & 74 the legislation requires reference to the matters set out in section 75(2). The provisions of section 75(2) have been set out earlier in these reasons.
165.The wife’s maintenance application appears as an after-thought. She did not seek maintenance in her Response. In the minute of orders provided during the hearing, she now seeks:
14. In the event that the property of the parties net of liabilities is found to be less than $1M, and in any event until payment by the husband in accordance with either order 2 or orders 3 and 4 above, then, by way of spousal maintenance, there be assigned to the wife the entitlement of the [Sanders] Family Trust to the rent received from the [R Street] Units.
166.Thus the claim is quantifiable but not quantified. The reference to the rent on the R Street offices, leads to the evidence from the husband’s Financial Statement which puts the rent at $773 per week.
The Need
167.Here the wife contends that she is unable to support herself adequately from her own resources because she has not been able to secure paid employment. For the purposes of this application the only income received by the wife is $400 by way of interim spousal maintenance. I gather that evidence would be available to the effect that she lives with a cousin. There is no evidence about the financial arrangements in relation to that cohabitation save in respect of rent and storage. The effect of the wife’s evidence is that she spends $357 per week made up of $230 per week on rent and $127 per week on Visa Card payments. Otherwise her expenses are unknown. She does not, as she is required to do, itemise her living expenses. It is submitted for the wife that the husband has a healthy income stream and has paid the interim maintenance without complaint. I am invited in the wife’s Case Outline document and in oral submissions to identify an appropriate award on the basis of those facts.
168.In M v M (2006) 36 Fam LR 97 the Full Court summarised the authorities in relation to the threshold proposition, in particular Mitchell v Mitchell (1995) 19 Fam LR 44; 120 FLR 292; (1995) FLC 92-601, as follows:
….
The question whether an applicant can support his or herself “adequately” is not to be determined by reference to any fixed or absolute standard but by having regard to the matters referred to in s 75(2): Mitchell (above at Fam LR 59; FLR 308; FLC 81,995).
[32] The question is not to be determined upon a “subsistence level” but upon consideration of whether the applicant can support himself or herself “adequately” importing a standard of living reasonable in the circumstances: Mitchell (above); Evans and Evans (1978) FLC 90-435; Brady and Brady (1978) FLC 90-513 at 77,701; Gamble and Gamble (1978) FLC 90-452; Wilson and Wilson (1989) 13 Fam LR 205; FLC 92-033 and Bevan and Bevan (1993) 19 Fam LR 35; (1995) FLC 92-600.
[33] It is not necessary for an applicant for maintenance to use up all of his or her assets and capital in order to satisfy the requirement that he or she is unable to support him or herself “adequately”: Mitchell, above.
[34] The court is entitled to consider the “notorious circumstance” that there is (Mitchell at Fam LR 61; FLR 308; FLC 81,997):
[A] significant gap between theory and reality for employment, especially for people in middle age, lacking experience and confidence, and who have been out of the skilled work-force for many years, and in the context of current high unemployment. Loss of security, missed promotion opportunities, loss of retraining in developing skills in an increasingly skilled work-force with the loss of confidence which this brings, particularly in times of high unemployment, are notorious circumstances of which the court must take notice and apply in a realistic way.
169.In M v M the Full Court went on in relation to the appeal before it:
[35] Thus in our view the trial judge was required to consider:
(a) whether employment was available to the wife having regard to the practical realities of her age, experience and confidence having been out of the workforce for a number of years; and
(b) if so, the level of income the applicant might earn from such employment and whether in the circumstances of this case such income fell below adequate support and thus met the requirements of s 72.
170.The only specific expense identified by the wife is her rent. The effect of the wife’s evidence is that she spends $357 per week made up of $230 per week on rent and $127 per week on Visa Card payments. Otherwise her expenses are unknown. If the $127 credit card payment relates to living expenses, the wife provides no detail of those expenses.
171.As to the reasonableness of those expenses, taking a broad view of the circumstances of this family during the marriage and the husband’s circumstances since, the wife’s expenses cannot be said to be excessive. Her expenses cannot be measured against those of the husband as his Financial Statement did not provide the detail of his living expenses. He cannot be criticised for that as the wife’s claim for spousal maintenance, which triggers the obligation to detail living expenses, was first raised in the wife’s case outline document prepared in the days prior to the hearing.
172.As to the future, I do not know what the wife’s expenses will be. That will be greatly influenced by the extent to which she commits capital to the purchase of accommodation and the type of accommodation she buys. Following the sale of the V property, the property orders will leave her with about $700,000 before she pays her legal fees. Given the standard of accommodation the parties enjoyed during the marriage, it would not be remarkable if most if not all of the funds available to the wife were applied to the purchase of accommodation for herself. With the receipt of the proceeds of sale of the V property the wife may be relieved of the need to rent but she is likely to have outgoings related to any accommodation.
173.In all the circumstances I am satisfied that the wife has a need for $357 per week, at least until she has a further short opportunity to secure paid employment.
The Reason
174.There must be an adequate reason for the need for support. The examples given in section 72 are: having the care and control of a child of the marriage who has not attained the age of 18 years; or being at an age or having physical or mental incapacity for appropriate gainful employment. Beyond that the legislation gives no assistance in relation to what might characterise an adequate reason. I am not aware of any case law on the point.
175.This part of the wife’s case on spousal maintenance is also poorly prepared and supported. It is her case that she has looked for paid employment and cannot secure a job. She is 48 years of age and is not confident about making a return to paid employment.
176.Almost in as many words, the wife’s written evidence is:
· In late 2007 the wife says she looked for a job in the local area and there was none to be found. She started a repair business and it did not succeed.
· She later went to the Gold Coast and completed a sales course in the middle of 2008. She says by the time she was qualified, sales was bad and it still is.
· She began looking in the papers and walking around all the ships and handing out her CV and looking on the internet and applying for jobs there as well. She has had a lot of interviews.
177.In cross-examination she said that she had not earned any income since separation nor had she stopped looking for a job. Despite completing a sales course, the wife considers that she is under a disadvantage being without relevant experience. The parties’ son works in Real Estate and both the wife’s brothers have been involved in sales. The wife was not able to have work experience with her brother who had a rural agency in Queensland. The wife gave somewhat contradictory evidence about the state of the sales market. I think that could be summarised as: the market has been down since she completed her course but is showing signs of picking up. In any event the wife does not feel equipped to enter the sales field other than in a salaried position. She could not afford the petrol and telephone and living costs of a job paid largely or exclusively by commission.
178.The wife feels she cannot return to sports instruction because of her damaged back.
179.Although she gives no detail, I gather that the wife has applied for jobs in sales in relation to jewellery, clothing and furniture. I gather she considered or applied for a job selling sun glasses and watches. I gather she enquired at and perhaps applied to Myer and Freedom and Hoyts.
180.I am satisfied that there is an adequate reason for the need for support, relating to the need to re-enter the workforce.
The Capacity
181.The husband receives $5,292 each week made up of $4,519 in wages as a Director of NE Group and $773 per week in rent. Once the V property is sold the mortgage be paid out and through the trust, that should improve the husband’s income.
182.The husband puts his expenditure at $6,363 including $400 to the wife, an unlikely $448.00 per week to register four cars, superannuation contributions of $230 per week and living expenses, including support for W at $1,255. On the other hand he will have accommodation costs once the V property is sold.
183.The husband has been paying $400 per week under an interim order. As the wife did not complete her Financial Statement in relation to the details of her living expenses, neither did the husband. It is likely that he will have the capacity to provide spousal support.
Conclusion in relation to Spousal Maintenance
184.Minds will differ about the wife’s case for spouse maintenance. One can discern a case from the background facts rather than the available, detailed evidence. The fact of the interim order suggests that the threshold issue is made out.
185.Through his counsel the husband allowed for the concept of an award for a short finite period. To be fair I have no record of any firm concession reaching beyond the date of judgment. However learned counsel for the husband expressly agitated that any prospective award not be linked to the completion of the sale of the V property. I gather that the husband is concerned that the wife may not co-operate in a timely sale if her support terminated on that event. Without commenting on the validity of the concerns raised on behalf of the husband in relation to the motivation for selling the V property, I will not tie the direction to the sale of that property.
186.The property pool is such that the wife’s entitlement will not satisfy her needs for appropriate accommodation and an adequate income. She has had paid employment in the past, during the marriage she exercised skills that are rewarded in the paid workforce, albeit some at a low paid level such as cleaning. The wife has a recent qualification for returning to paid employment. On the other hand she is 48 years of age. We do not live in times of full employment and the dislocation and distractions that followed the separation may have inhibited a focus on securing appropriate employment. The wife has a need for maintenance of $357 per week. She has a proper reason for that need and the husband has the capacity to provide support. On any view, as her case was made, the wife cannot succeed other than on the basis of a short term order. I will make an order for 6 months.
I certify that the preceding one hundred and eighty six (186) paragraphs are a true copy of the reasons for judgment of Judicial Registrar Ian Loughnan.
Associate:
Date: 29 May 2009
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