Sapienti and Bellomi
[2012] FamCA 849
FAMILY COURT OF AUSTRALIA
| SAPIENTI & BELLOMI | [2012] FamCA 849 |
| FAMILY LAW – PROPERTY – Where the amount of savings brought into the marriage by the husband is in dispute – Where a contribution finding is made in favour of the husband – Assessment of relevant s 75(2) matters – adjustment made in favour of the wife of 15 per cent pursuant to s 75(2) – just and equitable orders |
| Family Law Act 1975 (Cth): ss 75(2); 79; 79(4) |
| APPLICANT: | Ms Sapienti |
| RESPONDENT: | Mr Bellomi |
| FILE NUMBER: | SYC | 2786 | of | 2010 |
| DATE DELIVERED: | 5 October 2012 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | Stevenson J |
| HEARING DATE: | 6 July 2012 |
| WRITTEN SUBMISSIONS: | 20 July 2012, 14 August 2012 and 3 September 2012 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Jackson |
| SOLICITOR FOR THE APPLICANT: | J Kartsounis & Co |
| COUNSEL FOR THE RESPONDENT: | Mr Greenaway |
| SOLICITOR FOR THE RESPONDENT: | Barber Lawyers |
Orders
That, within two (2) calendar months of the date of these orders the husband pay to the wife a sum of $294,600.00.
That, simultaneously with such payment by the husband to the wife, both parties do all things and execute all documents required to effect the transfer to the husband of the whole of the wife’s right title to and interest in the property situate at and known as B Street, Suburb C in the State of New South Wales (“the Suburb C property”).
That, in the event of the husband’s default in compliance with Order (1), both parties do all things and execute all documents required to effect the sale of the Suburb C property for the best price reasonably obtainable and to distribute the proceeds as follows:
3.1In payment of agent’s commission and expenses.
3.2In payment of legal costs and expenses incidental to the sale.
3.3In payment of all monies necessary to discharge any mortgage registered on the title to the property.
3.4In payment to the wife of the sum of $294,600.00 plus interest in accordance with the Rules.
3.5In payment of the balance to the husband.
That both parties do all things and execute all documents required to effect the transfer to the husband of the whole of the wife’s interest in the company O Pty Ltd, including but not limited to shares and loan accounts.
That upon compliance by the husband with Order (1) or the sale of the Suburb C property in accordance with Order (3), the wife will return to the husband the Hyundai motor vehicle presently in her possession.
That both parties do all acts and execute all documents required to effect the transfer to the wife of the whole of the husband’s interest in the IAG shares.
That the husband indemnify the wife in respect of any liability arising as a consequence of her shareholding in the company O Pty Ltd.
That all existing interim orders herein in relation to financial matters stand discharged upon full execution of these orders.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Sapienti & Bellomi has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| FAMILY COURT OF AUSTRALIA AT SYDNEY |
FILE NUMBER: SYC 2786 of 2010
| Ms Sapienti |
Applicant
And
| Mr Bellomi |
Respondent
REASONS FOR JUDGMENT
The Proceedings
Mr Bellomi, (“the husband”) and Ms Sapienti, (“the wife”) were in dispute in respect of parenting orders and settlement of property, both of which issues were listed for trial to commence on 1 May 2012. On that day they agreed on arrangements for the care of their three children and final parenting orders were made by consent.
On 2 May 2012 the parties attempted unsuccessfully to resolve their dispute as to settlement of property. For reasons of no present relevance, that issue was adjourned for trial on 6 July 2012. Counsel for the parties elected to make written submissions, which were received on 20 July 2012, 14 August 2012 and 3 September 2012.
Background
The husband and wife, who are aged 40 and 36 respectively, married and commenced cohabitation on 1996. They first separated on 8 February 2010 but reconciled on 1 November 2010. They lived together for approximately three months until their final separation on 1 February 2011. They thus cohabited for approximately 14 years and three months.
The parties have four children:
· S born in November 1997 (14);
· L born in July 2000 (12);
· N born in October 2004 (7); and
· J born in July 2006 (6).
Pursuant to the consent orders of 1 May 2012 S lives with his father and L, N and J with their mother. The orders made no provision for S to spend time with his mother and, regrettably, their relationship is in difficulties at present. The orders provided that L, N and J spend time with their father each alternate weekend from Saturday morning until Sunday evening until he obtains his own accommodation. At that point the children will begin to spend time with him each alternate weekend from Friday afternoon until Sunday evening. The orders contain no provision for block periods during school holidays.
In 1994 the husband and his brother purchased a residential property at Suburb D. The husband’s uncontradicted evidence was that this property was transferred to his father on 25 January 1996 and that he and his brother each made a “profit” of $30,000.00. The wife agreed that the husband and his brother made a “profit” on this transaction, in an amount which she did not recall.
The husband maintained that he had savings of approximately $75,000.00 as at the date of marriage. His evidence as to the amount of his savings remained unclear at the end of the trial. In his affidavit filed 22 May 2012 he deposed that he had savings of $75,000.00 and in oral evidence he said that this sum consisted of $60,000.00 in cash and $15,000.00 being proceeds of sale of a Commodore motor vehicle. The husband also gave evidence that he received the sum of $30,000.00 from his father when the Suburb D property was transferred on 25 January 1996.
In her affidavit the wife conceded that the husband had savings of approximately $60,000.00 at the date of marriage and the same concession was made in the written submissions of her counsel. The husband produced no documents to verify that he had savings of $75,000.00 as at the date of the marriage.
Annexure “B” to the husband’s affidavit was a document which set out the result of a search of particulars of the purchase and sale of a property, E Street, Suburb F (“the Suburb F property”), which was the parties’ first marital home. It appears that they purchased this property jointly for $210,000.00 in late 1995.
The husband maintained that he contributed his savings to the purchase of the Suburb F property. The wife conceded that she made no financial contribution and suggested that the parties borrowed the whole of the purchase money. There was no evidence to corroborate the wife’s assertion.
A search annexed to the affidavit of the husband showed that the SuburbF property was sold for $345,000.00 in February 2000. As appears below, it is likely that the parties received net proceeds of approximately $200,000.00 on this sale. There was no suggestion of any lump sum payments in reduction of a mortgage on the property. It seems to me to be inherently unlikely that a profit of $200,000.00 could be generated in these circumstances after only four years of periodic mortgage repayments. It thus seems to me to be more probable than not that the husband made a lump sum contribution to the purchase of this property from his pre-marriage savings.
For these reasons, and in light of the concession of the wife that the husband possessed savings of approximately $60,000.00 at the date of the marriage, I find that he contributed that amount to the acquisition of the Suburb F property. It seems to me that it would be unsafe to accept the husband’s uncorroborated evidence that he possessed savings in the amount of $75,000.00.
The husband contended that his father provided a sum of about $40,000.00 to assist with the cost of unspecified renovations to the Suburb F property. The wife denied that the husband’s father made any contribution to the cost of renovations and maintained that this work was funded from the parties’ income.
The husband’s father swore an affidavit on 18 May 2012 in which he gave no evidence of any contribution by him to the cost of renovations to the Suburb F property. In these circumstances, I cannot be satisfied that the husband’s father contributed $40,000.00 or any other amount to the cost of this work.
As noted above, in February 2000 the parties sold the Suburb F property and received net proceeds of approximately $200,000.00. According to the husband, this money was “invested” by his father. The fate of these funds was unclear but it seemed to be common ground that an amount in excess of $200,000.00 was returned to the parties by the husband’s father. In her affidavit the wife deposed that the husband’s father paid a sum of $215,000.00 to the parties in 2006.
The wife maintained that the parties and their children, S and L lived with the husband’s parents for several months in 2000 and then occupied rented accommodation until 2003. The husband said that the family lived with his parents for almost three years between February 2000 and December 2002. On the available evidence it is impossible to resolve this factual dispute.
In December 2002 the parties purchased jointly the former matrimonial home at B Street Suburb C for $475,000.00. The wife contended that the parties borrowed the whole of the purchase money and the husband’s evidence was silent on this matter.
In 2006 the parties purchased jointly an investment property at M Street, Suburb G for $556,000.00, the whole of which sum they borrowed from a bank. They received no net profit when the property was sold for $595,000.00 in 2008.
In 2009 the parties installed a swimming pool at the former matrimonial home. The husband maintained and the wife denied that the total cost was $65,000.00. The wife conceded in her oral evidence that some of the work in relation to the swimming pool was not included in the contract price of $32,000.00. The evidence does not enable me to make a finding as to the precise cost of these works.
In December 2009 the parties purchased jointly an investment property at H Street, Suburb G for $306,233.00. This property was sold in late 2010 for $335,000.00, yielding no net profit to the parties.
It was common ground that the husband sold a boat which was registered in his name prior to the final separation. He maintained that the sale occurred for a price of $57,500.00 in July 2009 and that the funds were paid by a cheque for $37,500.00 and $20,000.00 in cash. According to the husband, this cash was used to meet some of the costs of the swimming pool work and for family holidays. The parties agreed that they kept cash in a safe at their home from time to time.
The wife alleged that the sale price of the boat was $60,000.00, on the basis that she saw some relevant documents. No such records were placed in evidence and, in cross-examination, the wife said “I know nothing about it” in relation to the sale of a boat.
It was common ground that the husband sold a jet ski late in 2009. He claimed that the sale price was $10,000.00, which he received in cash. The wife alleged that the purchaser, a cousin of the husband, paid him a sum of $22,000.00 in cash.
The wife alleged that the husband sold vintage games on eBay for $22,000.00 in 2009. In his affidavit the husband deposed that he made a “small loss” overall through the purchase and sale of various items on eBay. In cross-examination he said that $12,000.00 was “probably” the amount which he received from the sale of vintage games. He made this concession when taken to his Financial Statement sworn on 2 March 2010, where he deposed that he sold vintage games for $12,000.00.
After the parties reconciled in November 2010, they arranged for their company, O Pty Ltd, to sell a Toyota motor vehicle for $48,000.00. The husband’s uncontradicted evidence was that this money was used in part to pay $12,000.00 to Toyota Finance and to discharge loans amounting to $8,000.00 to the wife from her employer and her sister.
On 2 December 2010 the parties caused O Pty Ltd to purchase for $52,000.00 a Hyundai motor vehicle. When this vehicle proved to be defective the dealer refunded the purchase money. The company then purchased another Hyundai motor vehicle for $52,105.00 in January 2011.
The second Hyundai motor vehicle was used by the wife until March 2011, when the husband removed it from her possession. On 10 May 2011 the husband was ordered to return the vehicle to the wife.
On 19 December 2011 the husband was ordered on an interim basis to pay the mortgage instalments in respect of the former matrimonial home, with provision for a sale of a property in the event that he failed to do so. It seems that the husband has since made the mortgage instalments in respect to the Suburb C property.
The parties are equal shareholders in the company O Pty Ltd and the husband is its sole director. This company was incorporated in 2007 and acquired a business known as “Business H”, which the husband had operated throughout the marriage.
The evidence and witnesses
The applicant wife relied on the following affidavits:
a)Ms Sapienti sworn on 5 April 2012;
b)Financial Statement of Ms Sapienti worn on 10 April 2012;
c)Affidavit of Ms K sworn 5 April 2012;
d)Affidavit of Dr P sworn on 5 April 2012;
e)Affidavit of Ms I sworn on 12 April 2012.
Ms K, Mr P and Ms I were not required for cross-examination.
Ms K gave evidence which related primarily to parenting issues but corroborated the wife’s evidence as to her homemaker contribution. Ms I gave unchallenged evidence that she has loaned to the wife a total sum of $6,600.00, of which an amount of $6,400 is currently outstanding. The written submissions of counsel for each of the parties recorded this liability at $6,000.00, which is the figure which I will include in the balance sheet.
Dr P, who is the wife’s employer, gave unchallenged evidence that he has advanced to her a sum of $7,000.00, and that she has made no repayments. Ms I and Dr P each gave evidence that they expect the wife to repay these advances.
The respondent husband relied on the following affidavits:
a)Mr Bellomi sworn on 22 May 2012;
b)Financial Statement of Mr Bellomi sworn on 28 June 2012;
c)Affidavit of Mr H sworn on 18 May 2012.
Mr H was not required for cross-examination. He deposed that he is able to obtain a bank loan of approximately $300,000.00 to assist the husband in acquiring the wife’s interest in the former matrimonial home. He deposed further that he has loaned to the husband a sum of $40,000.00. Both of these propositions were unchallenged.
A single expert, Mr Q, valued the company O Pty Ltd at $69,676.00 as at 30 June 2010. He assessed the value of the interests of the husband and wife in the company at $48,376.00 and $21,300.00 respectively. Mr Q was not required for cross-examination.
Approach to these proceedings
According to guidelines established through a series of leading decisions, the Court is required to determine the following matters on the evidence:
· firstly, the assets, liabilities and financial resources of the parties to the marriage are to be determined;
· secondly, all relevant contributions of each of the parties, within the meaning of paragraphs (a) to (c) of s 79(4) must be identified and weighed against each other;
· thirdly, the matters in paragraphs (d) to (g) of s 79(4), particularly paragraph (e) which takes up by reference the provisions of s 75(2) must be considered and a determination made as to what, if any, alteration should be made to the entitlements of the parties earlier assessed on account of contribution;
· finally, an order under s 79 must not be made unless the Court is satisfied that, in all the circumstances, it is just and equitable to make the order.
Assets, liabilities and financial resources
Assets
The parties agreed that they have the following non-superannuation assets:
1 B Street, Suburb C (J) $ 780,000.00 2 IAG shares (J) $ 3,000.00 3 Commonwealth Bank Account (W) $ 10.00 4 NAB Account (H) $ 6,300.00
The wife contended that five amounts totalling $235,910.00 should be added back to the list of assets. These amounts were alleged to be as follows:
· Proceeds of sale of a boat - $57,500.00;
· Proceeds of sale of a jet ski - $22,000.00;
· Proceeds of sale of vintage games - $12,000.00;
· Money transferred from a joint account by the husband - $10,818.00;
· Money withdrawn from a joint bank account - $90,410.00.
In his written submissions, counsel for the wife conceded that a boat was sold in July 2009 for $57,500.00, which was paid by cash of $20,000.00 and a cheque for $37,500.00. It was submitted on behalf of the wife that there was “no independent documentation” to establish that a sum of $37,000.00 was deposited into Account …381, as claimed by the husband. In fact, statements in respect of this account were annexed to the wife’s affidavit and showed a deposit of $37,000.00 on 10 July 2009.
This amount of $37,000.00 was deposited into the joint account some seven months before the parties’ first separation. It is clear that they intermingled their finances during that period. For example, they purchased an investment property and the wife, N and J travelled to Europe. It thus seems to me that a finding is not open that the husband retained a sum of $37,000.00 for his own benefit, as submitted on behalf of the wife.
The wife contended that the husband retained for his own benefit $20,000.00 of the cash received from the sale of the boat. In oral evidence, however, she conceded that “money flowed pretty well and we had a pretty good standard of living”. The husband maintained that this sum of $20,000.00 was used to meet the cost of “extras” in relation to the swimming pool and family holidays. In oral evidence the wife conceded that the cost of the swimming pool exceeded the contract price. There was no issue that the wife and two of the parties’ children travelled to Europe after the husband received this money. I am inclined to accept the husband’s evidence, thus I find that he did not retain for his own benefit an amount of $20,000.00 in cash from the sale of the boat.
As noted, there was a dispute in respect of the sale price of the jet ski. In his affidavit of 22 May 2012 the husband deposed that he sold this item to his cousin for $10,000.00. In his Financial Statement sworn on 2 March 2010 the husband deposed that the jet ski was sold for $20,000.00. The wife maintained that the sale price was $22,000.00, on the basis that she saw the husband’s cousin hand him cash in that amount.
It seems to me to be more probable than not that the husband gave accurate evidence as to the sale of the jet ski in his Financial Statement of 2 March 2010, which was sworn about two months after the event. I thus find that the jet ski was sold for $20,000.00.
It does not follow, however, that this sum of $20,000.00 should be added back to the list of assets and treated as a premature distribution to the husband. It was common ground that the parties went on a holiday to the United States of America shortly after the sale of the jet ski. In her oral evidence the wife maintained that this holiday was financed by the proceeds of sale of jewellery. In her affidavit she deposed that the total cost of this trip was $11,000.00, to which she contributed $6,000.00 which she had saved from her income.
In her affidavit the wife deposed that she has worked part-time for Dr P from 2008 until the present time. Her 2010 tax return which showed a taxable income of $23,744.00. It seems to me to be unlikely that the wife could have saved $6,000.00 from her income, unless additional funds were available from the husband and/or O Pty Ltd.
The reality is that the parties reconciled in November 2010 and went on a family holiday to Fiji in January 2011. It was common ground that the husband met the cost of the wife’s airfare to Europe to visit her grandmother in July/August 2010. It thus seems to me that there was a degree of intermingling of the parties’ funds after the sale of the jet ski.
The wife annexed to her affidavit a photo of a bundle of cash which she claimed to have taken in January 2010. She produced a copy of an email to her sister dated 21 January 2010, to which this photo was attached. I consider that this photo provided no assistance to the wife in terms of quantification of cash held in the parties’ safe, nor of the use of these funds.
In these circumstances I am far from persuaded the husband retained any amount from the proceeds of sale of the jet ski for his sole benefit. It seems to me to be more probable than not that these funds were absorbed into the relatively extravagant lifestyle which the parties adopted during their relationship.
The wife alleged that the husband sold vintage games on eBay “on or about 2009”. The husband conceded that he traded on eBay but maintained that the overall result was “a small loss”. In his Financial Statement sworn on 2 March 2010 the husband deposed that he sold vintage games for $12,000.00 and adopted this figure as correct in oral evidence.
I am not persuaded that the husband retained the proceeds of sale of vintage games for his own benefit. The wife was unable to establish a time when this sale occurred but, on the basis of the husband’s Financial Statement of 2 March 2010, the relevant period was February 2009 to February 2010. The parties lived together for most if not all of that period. As noted above, I am of the view that the parties lived relatively extravagantly and used all funds available to them during their relationship.
The husband transferred a sum of $21,500.00 from the parties’ joint account to a new account in his sole name on 8 April 2010. The wife initially contended that the whole of this sum should be treated as a premature distribution to the husband. In his affidavit the husband gave a breakdown of his use of this money and the wife ultimately contended that sums only of $1,700.00, $800.00 and $8,318.00 should be added back to the list of assets.
The wife maintained that there was no evidence to verify that the husband applied the sum of $1,700.00 for the benefit of “[the wife] and the children”. On her behalf it was submitted that the husband’s own evidence was that he used $800.00 for his personal benefit and, clearly, this sum should be treated as an add-back. It was additionally submitted on behalf of the wife that the figure of $8,318.00 “is not traceable”.
I am not persuaded that any of these amounts should be treated as premature distributions to the husband. The wife did not dispute the husband’s explanation as to the fate of the sums of $1,700.00 and $8,318.00. The amount of $800.00 which the husband used for his personal needs did not seem to me to be excessive or unreasonable in the circumstances. I am mindful that the husband alleged that the wife withdrew $2,156.00 from an account of the parties or the company on 26 April 2011. The wife said that she “did not recall making withdrawals on 26 April 2011” but I am inclined to the view that she did so.
The wife contended that a sum of $90,410.00 should be added back and treated as a premature distribution to the husband. It was suggested that this sum was removed by him from the parties’ joint account between 13 July 2009 and 5 May 2010. Bank statements annexed to the wife’s affidavit certainly established that the balance of this account was reduced from $90,410.00 to $0.00 during that period but, in my view, there were a number of difficulties with this submission.
Firstly, part of the credit balance of $90,410.00 consisted of the deposit of $37,000.00 on 10 July 2009. I have found that this deposit consisted of part of the proceeds of sale of the boat and made findings as to the likely fate of this money. Secondly, there were numerous debits styled “repaid visa card” and “extra loan instalment” and “tax office payments” which appear to be legitimate expenses of the parties and/or O Pty Ltd. Thirdly, the reduction in the credit balance of this account occurred largely while the parties cohabited and indulged in their relatively extravagant lifestyle. For the above reasons I am not satisfied that a sum of $90,410.00 should be added back to the list of assets.
There was an issue as to the value of the company, O Pty Ltd. The husband did not dispute the accuracy of Mr Q’s valuation but maintained that “significant changes” have since occurred, such that his evidence should carry “little or no weight”. The fact is, however, that there was no updated valuation and Mr Q’s report remains the only evidence relevant to this issue. I thus find that the company, O Pty Ltd, has a value of $69,676.00. Pursuant to s 75(2), however, I will take into account the unfavourable trading results of the company for the last two years.
Liabilities
The parties agreed upon the following liabilities:
1 Debt to Dr P (W) $ 7,000.00 2 Debt to Ms I (W) $ 6,000.00 3 Debt for legal fees (W) $ 68,000.00 4 Debt for Legal fees (H) $ 29,000.00 The list of liabilities included in the written submissions of counsel for each of the parties included the wife’s NAB credit card debt of $9,871.00. For reasons which appear below, I will not include this debt in the balance sheet.
Mr Q noted in his report that the company had a liability of $46,156.00 as at 30 June 2010, which was secured by a second mortgage on the title to the Suburb C property. As at the date of the trial the agreed total mortgage payout figure was $399,166.00. It seems to me that the mortgage liability should be deemed to be $352,166.00 as submitted on behalf of the wife. Clearly, the liability of $46,156.00 was taken into account by Mr Q in his valuation of the company.
There was a dispute as to the husband’s alleged debt of $40,000.00 to his father. Mr H swore in his affidavit of 18 May 2012 that he loaned the husband $40,000.00 on account of his legal fees. He was not required for cross-examination. This evidence varied slightly from that of the husband, who deposed that he used $10,000.00 from the funds advanced by his father to meet mortgage instalments in respect of the Suburb C property and the balance for legal fees.
On behalf of the wife it was submitted that this sum of $40,000.00 should be treated as a gift, rather than a loan, to the husband by his father. As noted, the evidence of Mr H was unchallenged and the proposition that he would not require repayment was never put to him. In those circumstances, I find that the husband has a debt of $40,000.00 to his father.
The husband deposed in his Financial Statement of 28 June 2012 that he has a credit card debt ‘E$50,000.00’. In his Financial Statement of 2 March 2010 the husband deposed that he had no credit card liabilities. There was no documentary evidence in respect of the husband’s credit card debt and no explanation of the suggested increase of some $50,000.00 between March 2010 and June 2012. In these circumstances I will not include this alleged debt in the balance sheet. Similarly, I will not include the wife’s alleged credit card debt of $9,871.00 which, on her own evidence, has been incurred since February 2011 in unexplained circumstances.
The parties agreed as to their respective superannuation entitlements. The husband holds a benefit with R Super of $5,800.00 and the wife has $4,350.00 in a Flexible Lifetime Super Fund.
I thus find the parties’ assets, liabilities and financial resources to be as follows:
Non-superannuation assets 1 B Street, Suburb C (J) $ 780,000.00 2 IAG shares (J) $ 3,000.00 3 O Pty Ltd (J) $ 69,000.00 4 Commonwealth Bank Account (W) $ 10.00 5 NAB Account (H) $ 6,300.00 6 Tools and gold items (H) $ 3,000.00 7 Ring (W) $ $1,500.00 Sub-total $ 862,810.00 Superannuation assets 8 R Super (H) $ 5,800.00 9 Flexible Lifetime Super (W) $ 4,350.00 Sub-total $ 872,960.00 Liabilities 10 Mortgage (J) $ 352,166.00 11 Debt to Dr P (W) $ 7,000.00 12 Debt to Ms I (W) $ 6,000.00 13 Legal fees (H) $ 29,000.00 14 Debt to Mr H (H) $ 40,000.00 15 Legal fees (W) $ 68,000.00 Sub-total $ 502,166.00
Contribution
The husband made an initial contribution of approximately $60,000.00, in contrast to the wife who introduced no assets into the relationship. I have found that the husband applied these funds to the purchase of the Suburb F property shortly before the date of marriage. The amount of $60,000.00 constituted a significant proportion of the purchase price of $210,000.00.
The husband operated the transport industry business throughout the marriage and, essentially, he fulfilled the role of breadwinner for the family. The wife carried out the complementary role of principal homemaker and primary carer for the four children. She undertook paid employment for approximately the first year of the relationship and worked part-time from 2008 or 2009 until the final separation.
After the parties reconciled in November 2010 the husband repaid loans totalling $8,000.00 which the wife incurred on account of legal fees during the first separation. The husband paid the cost of the wife’s airfare to Europe to visit her grandmother during the parties’ first separation.
After the final separation the husband made mortgage repayments in respect of the Suburb C property until January 2011 and from February 2012 to the present time. He paid the children’s school fees and has been solely responsible for the financial support of the parties’ son, S, since September 2011.
Since February 2011 the children, L, N and J have lived with the wife in the former matrimonial home. The husband asserted that he paid total child support of $103.00 per week, whereas the wife claimed that the correct figure is $42.00 per week. In either event, it is clear that the wife has largely assumed responsibility for the financial support of the three younger children since the final separation.
Counsel for the wife conceded in his written submissions, that there should be an adjustment in favour of the husband on account of his initial contribution. He contended that the appropriate finding would be 53 per cent to the husband and 47 per cent to the wife as at the date of separation. Counsel for the husband maintained that a proper contribution finding in his favour would be in the range of 55 per cent to 57.5 per cent.
It seems to me that the concession as to contribution in favour of the husband was properly made on behalf of the wife. His injection of $60,000.00 into the purchase of the Suburb C property enabled the parties to receive net proceeds of sale of some $200,000.00 some four years later. Otherwise, it seems likely that the parties’ relatively extravagant pattern of spending would have impacted negatively on the size of the current net asset pool. The equity in the former matrimonial home largely comprises the present net property of the parties.
In my view the husband’s initial contribution of $60,000.00 justifies a contribution finding in his favour. I find that the contributions of the parties as at the date of trial should be assessed at 55 per cent to the husband and 45 per cent to the wife.
Section 75(2) factors
There can be no doubt that s 75(2) factors favour the wife and no suggestion to the contrary was put on behalf of the husband. She is responsible for the care of the three youngest children for all but one or two nights per fortnight and receives a very modest contribution to their financial support from the husband.
The financial statements for O Pty Ltd (Exhibit 10) indicate that the company has operated at a loss in 2011 and 2012 years. It may well be that the company’s fortunes will improve when these proceedings are completely concluded and the husband is able to concentrate fully on the business. The parties agreed that he has been a hard worker historically and, in my view, he is likely to resume his usual work pattern, once he is not distracted by the stress of the marriage breakdown and this litigation.
On behalf of the husband it was submitted that the wife “has the ability” to engage in full-time employment “if she so wishes”. In my assessment her childcare responsibilities significantly curtail her opportunity to increase her hours of work. The children in her care are aged 12, 7 and 6 years in comparison to S who is almost 15 years of age. As noted, the husband cares for the three youngest children for only one or two nights per fortnight.
On behalf of the wife it was submitted that the husband engaged in “a form of waste” in that he “failed to make any real effort in the period March to October 2010 to have the property located at [Suburb G] rented out”. In oral evidence the husband said words to the effect:
“I can’t recall if I made any effort to find tenants for [H Street, Suburb G] before October 2010”.
The wife was a joint owner of this property and there was no suggestion that she took any steps to arrange for the premises to be leased, other than to raise that issue with the husband. It seems to me that the wife cannot sheet home to the husband the entire responsibility for the financial failure of their investment in the M Street, Suburb G property.
Counsel for the wife sought an adjustment in her favour of 20 per cent on account of s 75(2) factors. Counsel for the husband conceded that the wife should receive an adjustment of 15 per cent.
Having regard to the wife’s much more onerous childcare responsibility and the consequent disparity in the parties’ income earning potential, I find that she should receive an adjustment of 15 per cent on account of s 75(2) factors. I am mindful also that the parties’ net assets have a value only of $370,794.00.
Result and outcome
I thus find that the net pool of property should be divided as to 40 per cent to the husband and 60 per cent to the wife. The husband should thus receive net property to the value of $148,318.00 and the wife $222,476.00.
The husband sought an opportunity to retain the former matrimonial home and the wife ultimately withdrew her opposition to that proposal. The husband’s father gave unchallenged evidence that he is able to provide funds “in the vicinity of $300,000.00” to assist him to retain this property. I see no reason why orders should not be structured as sought by the husband.
Neither party made a proposal for a particular distribution of assets between them, thus it seems to me that they should each retain the property and superannuation currently in their respective possession. Logically the husband should take the transport business which he has operated throughout the marriage. I will order that the wife receive the IAG shares, which she can retain or liquidate as she sees fit.
The husband will thus take the following assets and superannuation:
1 B Street, Suburb C $ 780,000.00 2 O Pty Ltd $ 69,000.00 3 NAB Account $ 6,300.00 4 Tools and gold items $ 3,000.00 5 R Super $ 5,800.00 Total $ 864,100.00
He will assume responsibility for the following debts:
1 Mortgage $ 352,166.00 2 Debt to Mr H $ 40,000.00 3 Debt for legal fees $ 29,000.00 Sub-total $ 421,166.00 The husband would thus hold net assets and superannuation to the value of $442,934.00, which exceeds his entitlement by $294,616.00.
The wife will thus take the following assets and superannuation:
1 IAG shares $ 3,000.00 2 Commonwealth Bank Account $ 10.00 3 Rings $ 1,500.00 4 Flexible Lifetime Super $ 4,350.00 Total $ 8,860.00
She will retain responsibility for the following debts:
1 Debt to Dr P $ 7,000.00 2 Debt to Ms I $ 6,000.00 3 Legal fees $ 68,000.00 Sub-total $ 81,000.00
The wife will thus hold assets and superannuation with a negative value of $72,140.00 and requires payment from the husband of $294,616.00, which will be rounded down to $294,600.00, to bring up her entitlement of $222,476.00.
With a relatively small net pool of property, I can do no more to achieve justice and equity between the parties. Essentially, the wife will receive cash and shares which, if sold, would give her access to liquid assets of about $298,000.00. The husband will retain the former matrimonial home and have the opportunity to rejuvenate the transport industry business.
The wife reasonably sought an order for sale of the Suburb C property in default of payment to her by the husband of $294,600.00. It is the husband’s responsibility to pay the mortgage instalments. I will thus order that the wife receive a sum certain, together with interest, from the sale proceeds, and that the husband take the balance.
I certify that the preceding eighty five (85) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Stevenson delivered on 5 October 2012.
Associate: EG
Date: 5 October 2012
Key Legal Topics
Areas of Law
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Family Law
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Statutory Interpretation
Legal Concepts
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Jurisdiction
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Remedies
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