Sardi and Sardi
[2018] FCCA 2394
•30 August 2018
FEDERAL CIRCUIT COURT OF AUSTRALIA
| SARDI & SARDI | [2018] FCCA 2394 |
| Catchwords: FAMILY LAW – Property proceeding – difference in approach between parties where the Husband essentially seeks (somewhat selectively) an arithmetical accounting of all monies expended or received, whereas the Wife seeks, in accordance with authority, an “accounting” that generally reflects the proper treatment of contributions on a “holistic basis” and proper consideration of factors under s.75(2) of the Family Law Act1975 – post the hearing the Wife applied to adduce further evidence in relation to the Husband’s non-payment of school fees in circumstances where the Husband is employed in the (employment omitted) and earns a significant income and where he gave no notice to the Wife of his intention to cease such payments – Application to adduce further evidence granted – just and equitable considerations. |
| Legislation: Family Law Act 1975, s.75(2) |
| Cases cited: Dickons v Dickons (2014) 50 Fam LR 244 Fields & Smith (2015) FLC ¶93-638; (2016) 53 Fam LR 1 Fontana & Fontana [2018] FamCAFC 63 Grier v Malphas (2017) 55 Fam LR 107 In the Marriage of Hickey (2003) 30 Fam LR 355 Marsh & Marsh (2014) FLC ¶93-57 Norbis v Norbis (1986) 161 CLR 513 |
| Applicant: | MR SARDI |
| Respondent: | MS SARDI |
| File Number: | CAC 325 of 2015 |
| Judgment of: | Judge Neville |
| Hearing dates: | 5 - 6 March 2018 |
| Date of Last Submissions: | 17 April 2018 & 22 August 2018 |
| Delivered at: | Canberra |
| Delivered on: | 30 August 2018 |
REPRESENTATION
| Counsel for the Applicant: | Mr Mould of Counsel (until 5 March 2018) |
| Solicitors for the Applicant: | Direct brief |
| Solicitor/Advocate for the Respondent: | Ms D Simpson |
| Solicitors for the Respondent: | Dobinson Davey Clifford Simpson |
ORDERS
The nett non-superannuation pool shall be divided whereby the Wife shall receive 55% and 45% to the Husband.
Within 42 days of the Orders, being by 11 October 2018, the Husband do all things necessary to transfer to the Wife, all of his right title and interest in the property at Property A (“the Property A property”).
Upon the transfer of the Property A property, the Wife pay all monies necessary to obtain the discharge of the Bank 1 mortgage secured over the Property A property and the Husband sign all documents necessary to give effect to the discharge and thereafter, the Wife indemnify the Husband and keep him indemnified with respect to all monies owing under the mortgage and with respect to all outgoings of and associated with the Property A property.
Within 42 days of the orders, being by 11 October 2018, the Wife do all do all things necessary to transfer to the Husband, all of her right title and interest in the property at Property B, (“the Property B property”).
Upon the transfer of the Property B property the Husband is to:
(a)pay to the Wife $52,188
$87,400;and(b)pay all monies necessary to obtain the discharge of the Bank 1 mortgage secured over the Property B property and the Wife sign all documents necessary to give effect to the discharge and thereafter, the Husband indemnify the Wife and keep her indemnified with respect to all monies owing under the mortgage and with respect to all outgoings of and associated with the Property B property.
Within 14 days of the date of these Orders, being by 13 September 2018, Wife shall provide to the Husband written authority for him to make all enquiries necessary to obtain information about the shareholding of the parties in Company A and thereafter, the Husband shall, with the Wife’s written authority (to the extent such authority is required), do all things necessary to sell the Company A shares and to pay to the Wife an amount equal to 50% of the nett sale proceeds of those shares.
The superannuation pool is to be divided equally and accordingly the Husband is to pay a sum of $464,303.00 from his superannuation fund to the Wife.
In accordance with section 90MT(1)(a) of the Family Law Act 1975, whenever a splittable payment within the meaning of section 90ME of the Act becomes payable to or on behalf of Mr Sardi from his interest in the Super Fund 1 (the Super Fund 1), Ms Sardi is entitled to be paid (by the Trustee of the Super Fund 1) the amount calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001, using a base amount of $464,303.00 and there is a corresponding reduction in the entitlement Mr Sardi would have had but for these Orders.
The Wife otherwise retain all property in her possession including her interest in the Company B (and Company B Pty Ltd), her car, her bank accounts and her furniture and personal effects.
The Husband otherwise retain all property in his possession, including his car, his bank accounts and his furniture and personal effects.
Absent any agreement in writing between the parties, the parties are to each pay half of the children’s school fees.
The Husband is to pay the Wife’s costs in relation to the Application in a Case filed 2 August 2018, either as agreed or taxed.
All extant Applications are dismissed and the matter is now finalised and will be removed immediately from the docket.
IT IS NOTED that publication of this judgment under the pseudonym Sardi & Sardi is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
AND IT IS NOTED THAT these Orders have been amended pursuant to Rule 16.05(2)(e) of the Federal Circuit Court Rules 2001.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT CANBERRA |
CAC 325 of 2015
| MR SARDI |
Applicant
And
| MS SARDI |
Respondent
REASONS FOR JUDGMENT
Introduction
Sensibly, at the commencement of the hearing, the parties and the Independent Children’s Lawyer confirmed that parenting Orders had been agreed by consent. Final Orders were then made that reflected this agreement.
In relation to the Application regarding the distribution of the property of the parties, the Applicant Husband’s Counsel said he agreed that the scope of the dispute was quite narrow, boiling down to a contest regarding (a) aspects of the accountant’s valuation of the Wife’s Company B, and (b) the amount of the superannuation split to be made.[1] It might be as well to record here that, contrary to long-established authority (noted later in these reasons), the Husband sought very often that there be, as precise as possible, an “accounting” for pretty much everything during, and post, the relationship.[2] That said, this strict accounting was applied somewhat selectively, as noted later in these reasons.
[1] See Transcript (6th March 2017) p.45. Hereafter “T” followed by the page number.
[2] I simply note here that Counsel for the Husband was retained by direct brief only for the hearing. Thereafter the Husband has been self-represented.
There are multiple recent Full Court authorities which confirm that a “holistic approach” is to be taken in the “weighing” of contributions during and after the relationship. Similarly, the Full Court (and indeed the High Court in Norbis, which is noted below) has cautioned against “overzealous attention to the ascertainment of the parties’ contributions.”
For example, in Fields v Smith, the Full Court (Bryant CJ and Ainslie-Wallace J) said, at [168] (emphasis added):[3]
… the task is to consider the contributions holistically over the whole period from the commencement of cohabitation to trial and the analysis requires the court to weight all of the contributions of all types prescribed by s 79(4) made by both parties across the entirety of the relationship until the time of hearing, including the post-separation period.
[3] Fields & Smith (2015) FLC 93-638; (2016) 53 Fam LR 1.
To similar effect are the following comments by a differently constituted Full Court, in Dickons v Dickons, at [20] – [26]:[4]
[20] Put another way, consistent with authority, the s 79 discretion involves as a necessary requirement that “... trial Judges weigh and assess the contributions of all kinds and from all sources made by each of the parties throughout the period of their cohabitation and then translate such an assessment into a percentage of the overall property of the parties or provide for a transfer of property in specie in accordance with that assessment.” (In the Marriage of Aleksovski (1996) FLC 92-705 at 83,437). In Aleksovski, Kay J outlined the well-known “gold bar” analogy and said “[w]hat is important is to somehow give a reasonable value to all of the elements that go to making up the entirety of the marriage relationship” (at 83,443).
[21] Those same principles can be expressed as saying that the requirements of the section are met by approaching the assessment of contributions holistically and by analysing the nature, form, characteristics and origin of the property currently comprising that to which s 79 applies, and, in turn, analysing the nature, form and extent of the contributions (of all types) contemplated by s 79). That task is also undertaken by reference to the nature and form of the particular marriage partnership manifested by the particular circumstances of this particular marriage. Is it, for example, a relationship, as Deane J put it in Mallett at 640-641 “...where the parties have adopted the attitude that their marriage constituted a practical union of both lives and property...” or is it, for example, a union where parties lived very separate domestic and financial lives?
[22] The analysis just referred to might, obviously enough, also involve an examination of when contributions were made and the use made of contributions. But that is quite different to attributing to, or searching for, a necessary causal connection between contributions and the available property as a requirement for a particular contribution having significance in the overall assessment of what is just and equitable.
[23] We wish also to refer to the approach of the Federal Magistrate in attributing percentages to differing periods within the relationship, or types of contribution made. There is in our view little to be gained, and much to be said against, approaching the task of assessing contributions by attaching percentages to components of it. (The same, it might be said, applies to attributing a percentage to each of the relevant s 75(2) factors).
[24] There can be little doubt that the classification of contributions by reference to terms such as “initial contributions”, “contributions during the relationship”, and “post-separation contributions”, can be helpful as a convenient means of giving coherent expression to the evidence in a s 79 case and to giving coherence to the nature, form and extent of the parties’ respective contributions. However, the task of assessing contributions is holistic and but part of a yet further holistic determination of what orders, if any, represent justice and equity in the particular circumstances of this particular relationship. So much is clear from the terms of s 79 itself and, in particular, s 79(2). The essential task is to assess the nature, form and extent of the contributions of all types made by each of the parties within the context of an analysis of their particular relationship.
[25] Doing so is also consistent with the demands of authority that the ultimate assessment of contributions should be made without “...giving over-zealous attention to the ascertainment of the parties’ contributions...” (Norbis v Norbis (1986) 161 CLR 513 at 524) and the well-established recognition in the authorities (acknowledged specifically by her Honour in this case) that the process required of the Court by s 79 is the exercise of a wide discretion, not the performance of a mathematical or accounting exercise.
[26] The necessarily imprecise “wide discretion” inherent in what is required by the section is made no more precise or coherent by attributing percentage figures to arbitrary time frames or categorisations of contributions within the relationship. Indeed, we consider that doing so is contrary to the holistic analysis required by the section and, in the usual course of events, should be avoided.
[4] Dickons v Dickons (2014) 50 Fam LR 244. Similar comments are found in Marsh & Marsh (2014) FLC¶93-576 at [60], [64] and [75] (Ainslie-Wallace J), and at [99], [104], [106] – [107], and [120] (Murphy J).
And again by reference to recent Full Court authority, the comments by the Full Court in Grier v Malphas should be taken to assist both parties, properly instructed, and the Court, in the just and equitable determination of the property division in the current matter. In their poignant judgment, at [129], Murphy and Kent JJ said (internal citations omitted; emphasis added):[5]
[129] As the Chief Justice points out, with those principles in mind, the trial judge adopted a broad-brush approach to the parties’ respective expenditure. No error is established by reason alone of that approach; authority eschews “overly pernickety analysis” and s 79 demands neither an audit nor an exercise in accounting. However, when significant sums of money are said by one party or the other to have been “wasted” or to amount to a unilateral “premature distribution of property” and the evidence is suggestive of either or both, an analysis of the relevant sums and their use is needed.
[5] Grier v Malphas (2017) 55 Fam LR 107.
In the present matter, there is no allegation of “waste” by either of the parties in relation to the asset pool. But there are “suggestions” by the Husband that he has paid very close attention to what he says he is “owed” by the Wife. Curiously, he has paid somewhat less attention to what he owes her.[6]
[6] Among a number of places, see the questions to and answers by the Husband at T 52, 53 & 54.
For the reasons that follow, in my view, the Orders proposed by the Respondent Wife, with a modest adjustment to them, achieve a “just and equitable” distribution of the asset pool of the parties.
Minute of Orders Sought on behalf of Applicant Husband
As set out in the Husband’s Case Outline, filed 27th February 2018, his Orders Sought were as follows:
1) That within 30 days of the date of this Order:
a) The Husband shall transfer to the Wife all of his right title and interest in and to the property located at Property B (more properly described as Property B ) in the Australian Capital Territory, provided the Wife contemporaneously refinances and indemnifies the Husband in relation to the mortgage encumbering the property.
b) That the Wife shall transfer to the Husband all of her right title and interest in and to the property located at Property B (more properly described as Property B) in the Australian Capital Territory provided the Husband contemporaneously refinances and indemnifies the Wife in relation to the mortgage encumbering the property.
2) That save and except for the property dealt with herein, the Wife shall retain as her own property absolutely all assets in her power or possession including:
a) Her Motor Vehicle A;
b) Her superannuation entitlements;
c) Her bank accounts;
d) Her furniture and personal effects;
e) Her jewellery; and
f) Her shareholding in Company B Pty Ltd.
3) That save and except for the property dealt with herein, the Husband shall retain as his own property absolutely all assets in his power or possession including:
a) His Motor Vehicle B;
b) His superannuation entitlements;
c) His bank accounts; and
d) His furniture and personal effects.
4) That the Husband shall pay to the Wife within seven (7) days the sum of $5,330 from the children’s trust accounts which sum is to be held in trust for the children by the Wife until the children reach the age of majority.
5) That within 30 days, the Wife and Husband shall do all acts and things, and sign all documents necessary to sell any shareholdings in Company A held by the parties jointly or by each party, the proceeds of which shall be divided equally between the parties.
Splitting Order:
a) That Orders (b) to 6(f) inclusive are binding on the trustee of The Super Fund 1
b) That a superannuation splitting order be made in relation to the interest of the Husband in the Superannuation Fund.
c) That the base amount of $177,978 be allocated to the Wife out of the interest of the Husband in the Superannuation Fund (Base Amount).
d) That whenever a splittable payment in respect of the superannuation interest of the Husband is payable in the Superannuation Fund:
e) Under section 90MT(1)(a) of the Family Law Act 1975 (Cth), the Wife be entitled to be paid an amount calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001 (Cth) using the Base Amount; and
f) There be a corresponding reduction in the entitlement of the person to whom the splittable payment would have been made but for this order.
g) That order 6(d) has effect from the Operative Time.
h) That for the purpose of Order 6(e) the Operative Time is four (4) business days after the date of service of these orders on the Trustee of the Superannuation Fund.
6) That each party be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these Orders.
7) That each party be responsible for all outstanding liabilities that may currently held in their respective names; shall release each other from all liability with respect thereto, and these Orders shall serve as an indemnity by each party to the other with respect to any such outstanding liability.
8) That in the event that the parties or either of them refuse or neglect to comply with the provisions of any of these Orders a Registrar or Judge of the Federal Circuit Court of Australia at Canberra are hereby appointed to execute all deeds and documents in the name of the parties and do all acts and things necessary to give validity and operation to the said Order/s.
9) Evidence or proof of refusal or neglect in referred to in the above Order/s may be by the filing of an Affidavit of a legal practitioner deposing to such fact.
10) That the Wife pay the Husband’s costs of and incidental to this Application.
11) Such other Order as this Honourable Court deems meet.
Minute of Orders Sought by the Respondent Wife
The Respondent Wife’s Orders Sought, filed 5th March 2018, were as follows:
1) The net non-superannuation property of the parties be divided as to 62% to the wife and 38% to the husband, as follows:
a) Within 42 days of the orders, the husband do all things necessary to transfer to the wife, all of his right title and interest in the property at Property A (“the Property A property”);
b) Upon the transfer of the Property A property, the wife pay all monies necessary to obtain the discharge of the Bank 1 mortgage secured over the Property A property and the husband sign all documents necessary to give effect to the discharge and thereafter, the wife indemnify the husband and keep him indemnified with respect to all monies owing under the mortgage and with respect to all outgoings of and associated with the Property A property;
c) Within 42 days of the orders, the wife do all do all things necessary to transfer to the husband, all of her right title and interest in the property at Property B, (“the Property B property”);
d) Upon the transfer of the Property B property:
i.The husband pay to the wife $87,400;
ii.the husband pay all monies necessary to obtain the discharge of the Bank 1 mortgage secured over the Property B property and the wife sign all documents necessary to give effect to the discharge and thereafter, the husband indemnify the wife and keep her indemnified with respect to all monies owing under the mortgage and with respect to all outgoings of and associated with the Property B property;
e) the wife otherwise retain all property in her possession including her interest in the Company B (and Company B Pty Ltd), her car, her bank accounts and her furniture and personal effects;
f) save for the orders below, with respect to the division of superannuation, the husband otherwise retain all property in his possession, including his car, his bank accounts and his furniture and personal effects;
2) Within 14 days of these orders, the wife shall provide to the husband written authority for him to make all enquiries necessary to obtain information about the shareholding of the parties in Company A and thereafter, the husband shall, with the wife’s written authority (to the extent such authority is required) do all things necessary to sell the Company A shares and to pay to the wife an amount equal to 62% of the net sale proceeds of those shares;
3) In accordance with section 90MT(1)(a) of the Family Law Act 1975 (the Act), whenever a splittable payment within the meaning of section 90ME of the Act becomes payable to or on behalf of Mr Sardi from his interest in the Super Fund 1 (the Super Fund 1), Ms Sardi is entitled to be paid (by the Trustee of the Super Fund 1) the amount calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001, using a base amount of $464,303 and there is a corresponding reduction in the entitlement Mr Sardi would have had but for these Orders.
4) The operative time for Order 1 is four business days after the service of these orders on the Trustee.
It is Noted:
The parties note that this Order, and payments made as a result, will be affected by the Superannuation Legislation Amendment (Family Law) Act 2004 which came into effect on 18 May 2004, the Family Law (Superannuation) Regulations 2001 and the Super Fund 1 Trust Deed which together may provide for a separate superannuation interest to be created for the non-member spouse and for consequential effects on payments.
The asset pool asserted by the Wife was set out in her Case Outline, and repeated in her Written Submissions, which had the following table annexed:
| Property | Ownership | Value |
| Property B | Joint | $730,000 |
| Property A | Joint | $880,000 |
| Motor Vehicle A | Wife | $35,625 |
| Motor Vehicle B | Husband | $ 8,600 |
| Bank Accounts | Wife | NA |
| Bank Accounts | Husband | NA |
| Bank accounts held on trust for the children (balances retained by the husband) | X Y | $1,740 $8,392 |
| Company A shares | Wife/husband | N/K |
| Shares in Company B | Wife | $13,626 |
| Total | $1,677,973 |
Liabilities
| Property | Ownership | |
| Property A home loan (Bank 1) | Joint | $633,600 |
| Property B home loan | Joint | $469,980 |
| Bank 1 Visa Credit Card | Husband | $NK |
| Motor Vehicle A personal loan (car) | Wife | $ 7,400 |
| Loan from Company B | Wife | $63,540 |
| Total Liabilities | $1,661,324 | |
| Net non-superannuation property | $ 503,453 | |
| Superannuation | ||
| Super Fund 2 (based on i-Estimator dated 25 January 2018) | Ms Sardi | $ 51,192 |
| Super Fund 3 (19 February 2018) | Ms Sardi | $ 23,782 |
| Super Fund 4 (23 January 2018) | Ms Sardi | $ 42,273 |
| Super Fund 5 (23 January 2018) | Ms Sardi | $ 4,837 |
| Super Fund 6 (valuation as at 25 January 2018) | Mr Sardi | $1,050,691 |
| Total Superannuation | $1,172,775 |
The Husband’s Evidence
In no critical way, in general terms I found the oral evidence of both parties not infrequently less than illuminating in relation to the discrete items that were, and which remain, in dispute. Moreover, both parties provided more than ample material in their respective trial Affidavits.
Be that as it may, the Husband’s limited evidence was as follows.
The first part of the Husband’s cross-examination spent not insignificant time seeking to clarify what had, and what had not, been disclosed by each party, as well as the attempts by Mr Sardi to track down the application of certain funds that he had discovered in bank statements relating to the parties’ joint bank account. It is also reasonable to say, without being unduly critical, that Mr Sardi found it difficult on many occasions to give simple or straightforward answers to questions. Instead, he often sought to explain and or justify his position in relation to any particular issue.
Also without being unduly critical, Mr Sardi was often at pains to make sure that the Respondent Wife paid her “half share” of any particular account. For example, Mr Sardi was insistent that Ms Sardi pay half the cost associated with replacing the screen of the parties’ daughter, Y’s IPad. Despite the cost being approximately $100, Mr Sardi was nevertheless rather insistent that Ms Sardi pay half. (e.g. for the replacement cost of the parties’ daughter, Y’s, IPad).[7] The Husband stated on a number of occasions during the hearing that there was a verbal agreement between the parties that they both pay half of all relevant expenses.[8] Curiously and unfortunately, there is no reference to this “verbal agreement” in the Husband’s Affidavit.
[7] T 55 – 56.
[8] T 58.
There is no doubt that the parties continued to use, to varying degrees, a joint bank account for some period after separation. This meant that, at least from the Husband’s perspective, any funds withdrawn from that joint account by the Respondent Wife had to be accounted for in every respect.
The Wife’s solicitor questioned the Husband at some length about a sum of $52,000 which was withdrawn from the joint account by the Wife. The Husband had difficulty accepting, or acceding to, the proposition that $52,000 was exactly half of the balance of the joint account as at the date of separation.[9]
[9] T 58; see also T 64 ff.
Notwithstanding the Husband’s insistence on proper and detailed accounting by the Wife, in certain respects there was no similar standard applied to him. For example, he received an income tax refund in the sum of $11,962.02 and which covered the last part of the relationship. He did not share any of this tax refund with the Respondent Wife.[10]
[10] T 60.
Somewhat begrudgingly, the Husband accepted that, for the periods when he was posted overseas on active service, all parenting responsibilities fell to the Respondent Wife. Likewise when he was in Brisbane, and the children spent school holidays with him in Queensland, he was reluctant to concede that, otherwise, the full-time parenting responsibilities fell to the Respondent Wife.[11] His reluctance to accept these obvious facts was both surprising and unhelpful.
[11] T 62 – 63.
There was significant discussion about the Property B property. In particular, again the Husband was somewhat reluctant to acknowledge that, for a period of time, without his knowledge, the Wife was in fact paying the mortgage on that property. For reasons that are not completely clear, when he was checking bank statements he did not notice that this was occurring, merely checking that there were sufficient funds to cover the mortgage repayments in the account.[12] Given his scrupulosity, I was surprised that he did not check some bank statements and other financial records as thoroughly as he did some others. It almost bordered on a selective attention (and inattention) to some financial matters and not others. Why this was so was not explained.
[12] T 67 – 68; Bank 1 bank statements in relation to the Property B mortgage became Exhibit “B”; see also further discussion at T 74 – 76.
The Husband said that he did not raise the withdrawal of funds with the Wife directly, and that he did not do this as a “gesture of goodwill.” As just observed, the fact that it was not checked in the detail that one might or would usually expect, either by him or with the Wife’s solicitors, was a particularly curious approach given how careful and particular he is, or seems to be, in relation to all other financial matters. For my part, a “gesture of goodwill” was not a sufficient explanation.
There was some discussion with Mr Sardi regarding his payment of school fees for the children, including whether or not he contributed to the costs of extra-curricular activities. He confirmed that, thus far, he had not agreed to enter into a Binding Child Support Agreement with respect to the payment of school fees.[13] He said that he had “significant concerns” about his ongoing ability to meet the payment of the children’s school fees. Mr Sardi made this, and similar comments, on the basis that he contended, on a number of occasions, his employment with the (employer omitted) might be regarded as somewhat problematic. When questioned about this, he confirmed that he had been given no formal notice, or anything else, to suggest that his services with the (employer omitted) were surplus to requirements.[14] For my part, there was no evidence of any sort that could suggest that there was any concern about the Applicant’s ongoing employment with the (employer omitted), and at the significant salary, plus superannuation, which he currently enjoys.
[13] T 78.
[14] T 79 – 81.
It is of some moment, especially in the light of some events after the hearing concluded, to record that there were (and are) no Orders sought by the Husband in relation to either the payment (or non-payment) of school fees, or in relation to any change of school for either of the children.
The parties formerly owned a property in Property C, Queensland. The Husband thought the sale of the property was going to lose money and require some injection of funds. He sought that injection of funds from the Respondent Wife; an amount of approximately $5,500. In the end, however, the parties made money on the sale of the property but the $5,500 that was paid by the Wife to the Husband, ostensibly to make up a shortfall, has never been repaid to her. It is illustrative to record the exchange over this incident:[15]
[15] T 82.
MS SIMPSON: …Yes. And it’s quite clear, isn’t it, as Ms Sardi says in her affidavit, that there wasn’t, in fact, a shortfall on the sale of Property C, was there?‑‑‑Ma’am, I reiterate my answer to this earlier in the day that the first sale, which was the basis of the email – I believe the note I transparently provided to your client, that fell through and the real estate agent very soon after was able to secure a second purchaser and, thankfully, for a higher price. I understand that there was a bidding war.
And you retained the benefit of the payment that Ms Sardi paid you in July ’14 of $5500, didn’t you?‑‑‑That wasn’t transferred back. Yes, ma’am.
And you didn’t advise her, “Ms Sardi, I got it wrong” or “There has been another buyer step in. There hasn’t been a shortfall. I owe you $5500.”?‑‑‑That’s ‑ ‑ ‑
You didn’t do that, did you?‑‑‑That’s absolutely incorrect, ma’am. I ‑ ‑ ‑
And you ‑ ‑ ‑?‑‑‑ ‑ ‑ ‑ provided your client with an updated information – all along the path here including calls at the time that the sale has fallen through but we’ve got another buyer. That was all transparently ‑ ‑ ‑
And you ‑ ‑ ‑?‑‑‑ ‑ ‑ ‑ declared.
‑ ‑ ‑ retained her $5500 and, indeed, still have it, don’t you?‑‑‑I – I believe we’ve already looked at evidence that that money was transferred into a joint account.
No. Your proposing about a proposition for the future. You haven’t returned the money to her, have you?‑‑‑There was no additional transaction into – from the joint account into your client’s sole account.
HIS HONOUR: So the answer is, “No, there has been no transfer back”; correct?‑‑‑There – there has been no physical transfer, your Honour. There was certainly communication at the time.
The Husband conceded that he had not informed the Court, or the Respondent that, in relation to his currently up to date child support payments, he was seeking to reduce his payment of same through non-agency payments.[16]
[16] T 84.
The Husband confirmed, again with some reluctance, that he retained the children’s bank account balances after separation. He confirmed that he took the money from their account without notice to the Respondent Wife and that he did this because he did not trust her not to take the money from those accounts. I find such an assertion and view in relation to Ms Sardi alarming and without foundation. The Husband’s evidence in this regard was as follows. In my view, it speaks for itself:[17]
[17] T 85.
You have retained the balances of the children’s bank accounts since separation, haven’t you?‑‑‑Yes, ma’am.
And you took that money from their accounts without notice to Ms Sardi, didn’t you?‑‑‑No, ma’am.
And you say in your evidence that you did that because you didn’t think she could be trusted not to take the money from those accounts?‑‑‑They’re your words, not mine, ma’am.
Well, you say something to that effect in your affidavit, don’t you?‑‑‑Something to that effect ‑ ‑ ‑
Yes?‑‑‑ ‑ ‑ ‑ yes, ma’am.
Do you think that – and I withdraw that, your Honour. And at this stage you haven’t returned to Ms Sardi any portion of those savings made on behalf of the children, have you?‑‑‑In my ‑ ‑ ‑
And following an adjournment he was re-examined on this topic by his Counsel, Mr Mould:[18]
MR MOULD: Sir, the children’s trust accounts, they were in Ms Sardi’s name prior to separation?‑‑‑Prior to separation they were ‑ ‑ ‑
HIS HONOUR: Sorry. Could I have a, “Yes”, or, “No”. “Yes”, or, “No”?‑‑‑Yes.
MR MOULD: And who deposited funds into those trust accounts?‑‑‑I arranged the automatic allotment.
From what account?‑‑‑From a joint account.
Okay. And it’s not controversial that you withdrew those funds, as you indicated in cross-examination; what did you do with those funds?‑‑‑The funds were transferred, in totality, to other trust accounts that I continued to contribute to.
HIS HONOUR: So why did you remove them, as it were, from – these are my words – the care and control of Ms Sardi? Did you not trust her to look after the trust funds?‑‑‑No, your Honour.
Why?‑‑‑Because of her unilateral withdrawal of the $52,000 on 16 June 2014, from another ‑ ‑ ‑
So you made a link between that withdrawal, from a joint fund, to the children’s trust funds?‑‑‑Yes, your Honour.
[18] T 89 – 90.
The Wife’s Evidence
The Wife confirmed that she has a loan to her business in the sum of $63,540. She rejected the proposition that this loan was taken in order to keep down the tax payable by the company running the business.[19] She confirmed that all relevant details regarding the business were conducted by either her accountant or another employee of hers. To a significant degree, this explained why, reasonably frequently, she was unable to give detailed answers to questions regarding the finances of the Company B. She confirmed, however, that the loan was set up at the time the business was purchased. She could not recall a precise date.[20] I might mention here that it was said, without the Wife being present in Court at the time, that the questions regarding the loan from the Company B was, from the Husband’s perspective, relevant to the valuation of the Company B.
[19] T 96.
[20] T 96.
In a similar vein, there were many questions put to the Respondent Wife in relation to various credit cards, but again she could not recall particular details regarding each of the cards; for example, which was a personal credit card and which related to the Company B. The Wife was challenged about the extent of disclosure in relation to these credit cards and relevant statements. To this, the Wife said simply that she left all such matters to her lawyer.
Again with the Wife absent from the Courtroom, her lawyer confirmed that significant disclosure had been made in relation to all matters, including credit card statements. However, she had the impression that Mr Sardi, with whom she was dealing directly most of the time, was seeking to have essentially ongoing disclosure of statements “on a rolling basis” right up until the date of the Hearing.[21]
[21] T 100. 3 Bank 1 credit card statements of Ms Sardi were marked for identification (MFI1).
Next, the Respondent Wife was challenged about the nature and extent of travel expenses that were claimed against the business. This included, she said, a conference dealing with “(business” which was held in (country omitted), and that she travelled on to (country omitted) and went to (country omitted).[22]
[22] T 103 – 104.
Ms Sardi confirmed that in her view, her Company B has very little goodwill.[23] She noted that she paid [only] $5,000 for the business when she bought it.[24]
[23] T 104.
[24] T 107 – 108.
She confirmed that she had some Company A shares, which were held in the joint names of the parties. She did not know the value of them. She said that she was content for them to be sold and the proceeds of sale to be divided equally.
She confirmed that the Husband purchased for her a diamond ring out of a Super Fund 1 benefit paid to the Husband in 2009, which amounted to approximately $60,436. She confirmed that she still had the ring but also said that he could have it back if he wished because she did not attribute any value to it.[25]
[25] T 110.
There was some discussion about the trading of cars in 2015. In my view, nothing turned on this.[26]
[26] See T110 – 111.
The Wife said that at the commencement of the relationship, she had a superannuation fund (she now has 5 different funds). She rejected the proposition put to her that, when she was in a (business omitted) in the Northern Territory, the Husband contributed $20,000 to this. She also disagreed with the proposition that her (qualifications omitted) took 6 years; she said that it took 4. She confirmed that she was not in paid employment when she was studying (studies omitted). She confirmed that Grandparents on both sides of the family assisted significantly with parenting while she was studying for her (qualifications omitted).
The Wife said that she could not be certain of the exact amount of time that the Husband spent overseas on (employment omitted). She said during that time there was a cleaner who assisted at home but no other assistance was provided.
The Wife confirmed that she had not contributed to the cost of the children’s travel to Queensland to visit the Husband from the period of separation in 2014 to approximately the present time. The Wife did not know the exact figure of these travel costs.[27] She confirmed that the Husband was paying the children’s private health insurance; she agreed that he had recently paid for school uniforms for the first time in 5 years.[28]
[27] T 120.
[28] T 121.
Next, there was some discussion with the Wife regarding the extent of repairs and renovations to the property in Property A. The Wife maintained that the repairs were necessary because the previous tenants had damaged the property. A list of improvements and repairs in relation to this property became Exhibit G.
The Wife said that she has yet to see the Husband’s latest tax return because he had not yet provided it.[29] She confirmed that her income was increasing every year.
[29] T 123.
Evidence by Mr R
Mr R is an accountant who does work for Ms Sardi’s Company B. There was a series of written questions provided to Mr R prior to him giving evidence. Those questions were as follows:
Please answer the following questions in relation to your affidavit filed in these proceedings affirmed on 23 February 2018 (“your affidavit”) in the expectation that you will be required to give such answers on oath or affirmation:
1) In relation to Point 14 of Annexure “B” on page of your Affidavit, where you make provision for income tax of the Company B as at 25 January 2018 of $4,157:
a) This provision was not included as a consequence of any invoice rendered by the ATO?
b) The provision is subject to a variety of factors that may affect the company eg. The company loaning Ms Sardi further monies?
2) Ms Sardi is capable of claiming from her business improvements and repairs made to the property at Property A as a consequence of it being her home office?
a) If so, has she made such a claim for such expenses?
b) If so, what amount has been claimed to date in relation to such expenses?
c) If not, what amount in your opinion is claimable in relation to such expenses?
3) In relation to the Balance Sheet you provided at Annexure “C” on page 9 of your affidavit:
a) Please specify the Business Cheque Account you refer to.
b) Were you aware that the Bank 1 Business Cheque Account of the Company B had a balance of $29,890.45 as at 5 February 2018?
c) You have provided for accumulated depreciation in relation to the business of almost 100% of the furniture and equipment of the (business).
i) This is a permitted book value of that furniture and equipment?
ii) Do you accept that the actual value of that furniture and equipment would exceed $2,589.67?
iii) A more appropriate depreciation rate more equivalent to the market value of the furniture and equipment would be 30% would it not?
iv) Do you agree that the proper valuation of the furniture and equipment is more like $28,431.70?
d) You make provision for income tax of the Company B as at 25 January 2018 of $7,433.53:
i) This provision was not included as a consequence of any invoice rendered by the ATO?
ii) Again, the provision is subject to a variety of factors that may affect the company eg. The company loaning Ms Sardi further monies?
e) Please specify the Business Credit Card you refer to.
i) What is the source of the valuation you assert?
4) In relation to the Profit and Loss you provided at Annexure “C” on page 10 of your affidavit:
a) What are “Business Incentive Payments”?
Who pays the business these payments?
What is the basis of such payments?
b) Do the motor vehicle expenses pertain to Ms Sardi’s Motor Vehicle A loan?
c) What portion of the salaries and wages claimed pertain to drawings, salary or wage of Ms Sardi?
d) What do you therefore project Ms Sardi’s drawings, wages or salary to be this financial year?
e) In relation to telephone and internet expenses, can you verify that such claims are business related?
f) In relation to international travel claimed, can you verify that such claims are business related?
g) Do you agree that the projected Net Profits of the (business) will be approximately $41,400 this financial year?
h) The $63,540 loan from the company to Ms Sardi arose from gross profits of the company in one year as well?
5) In relation to your letter dated 31 January 2018 referred to at Annexure “D” on page 12 of your affidavit:
a) Have you since provided a formal valuation of the value of the business?
i) If so, please provide a copy.
b) Appreciating that your letter only forms a preliminary view of the value of the goodwill of the (business):
i) What is the basis upon which you reached the fair market remuneration of Ms Sardi?
1)Do you accept that the (omitted) Enterprise Agreement 2013-2017 is an appropriate market guide for Ms Sardi’s remuneration?
2)Do you accept that the remuneration of a (occupation omitted) equivalent to Ms Sardi is approximately $220,000 including superannuation under that Agreement?
ii) You are not suggesting that the goodwill of the (business) prior to Ms Sardi acquiring it was $Nil are you?
iii) Did you taken into account in your letter regarding the business that the business acquired by Ms Sardi was established for many years in the same location?
iv) Did you take into account that the (business) is well known to locals?
v) Did you take into account that Property A is an older suburb with an older population?
vi) Did you take into account that there are new developments built in Property A?
vii) Did you accept that Property A is an attractive place to set up a (business)?
viii) Assuming that there are surplus maintainable earnings of the (business), do you accept that the (business) could be attributed an amount for goodwill?
ix) Once a business has future maintainable earnings, the common practice in your profession is to then apply a capitalisation multiplier to those earnings in order to ascertain the value of the goodwill?
x)Having regard to the circumstances about which you were aware of the business before and since you formed your preliminary view, do you accept that the correct such multiplier would be 1.5?
6) Did you complete Ms Sardi’s 2016 Income Tax Return?
a)Do you recall that the travel and accommodation claimed on that return was $28,886?
b)Assuming you completed that return, did you verify before completing that return whether such expenses were business related?
c)Do you agree that such expenses are excessive?
Mr R’s brief evidence in relation to these questions was as follows.
First, he said that the loan from the business to Ms Sardi was not an exercise in tax avoidance or minimisation because “the loan itself is not an expense or a deduction to the business. It’s an asset to the business.”[30] In relation to any tax deductibility for an office at her residence in Property A, Mr R simply said that there is a concession allowed by the Australian Tax Office on a “cents per hour basis for home office claim.” He also confirmed that such matters were covered in her personal tax return, not within the company’s financial records or its tax return.
[30] T 128.
Secondly, Mr R made comments in relation to depreciation regarding furniture and office equipment which I need not recount here.[31]
[31] T 129 – 130.
Thirdly, he was asked to extrapolate in general terms on the likely income of Ms Sardi operating in her own (business). He said that in his experience, such persons could earn income upwards of $300,000, but it would be less if (occupations) were not the business owners. He also said that he had never been asked to do a formal valuation of the business.[32] Then he explained a range of variables that might impact upon income, as well as general value of the business, such as the size of the (business) (noting here that Ms Sardi is the only (occupation omitted) in the (business) who is generating an income). Other factors would include if there was any other (business) established in the same general area.[33]
[32] T 131 – 133.
[33] See T 134 – 135.
Submissions by the Applicant Husband
The Applicant Husband’s Submissions, filed 3rd April 2018, were as follows:
1) GENERAL OBSERVATIONS
The Husband has set out in methodical detail the arguments for his case that you find in his favour. The Husband is an engaged, responsible and active father who has been, and continues to be, significant in the lives of the Children. He now resides back in Canberra and has again taken a prominent role in the lives, development and well being of the Children.
In determining a ‘fair and equitable’ distribution of property between the parties, there are three key factors before the Court, firstly; the Super Fund 1 of the Husband, which was earned as a consequence of his (occupation omitted) service. Secondly; the proven earnings capacity of the Wife as a (occupation omitted) —skills she acquired during the marriage and while supported by the Husband. And thirdly, assessing the fair market value of the Company B.
The Wife’s non-disclosure, delay in submitting material, legal strategizing and mischief, are also factors. The Wife’s evidence in cross-examination was vague and she led the Court to believe she was forgetful. The Husband was forthright, candid, detailed and concessionary.
The Husband has, on many occasions, attempted just and equitable distribution to conclude these protracted proceedings. He requires the assistance of the Court in facilitating this outcome.
2) THE ASSET POOL IS AS FOLLOWS:
NON-SUPERANNUATION ASSETS
| Description | Owner | Source | Date | H’s Value | W’s Value |
| Real Estate Property | |||||
| Property at Property A | Joint | Valuation Report for Settlement | 9/3/16 | $880,000 | $880,000 |
| Property at Property B | Joint | Valuation Report for Settlement | 11/3/16 | $730,000 | $730,000 |
| Business Interests | |||||
| Shares in Company B Pty Ltd *a conservative mid-point based on Mr R’s testimony of 6 March 18 | W | Affidavit of the Wife sworn | 23/2/18 | $375,000* | $13,616 |
| Bank Accounts (personal bank accounts & trust accounts disregarded) | |||||
| Shares | |||||
| Company A* | Joint | $NK | $NK | ||
| Motor Vehicles | |||||
| Motor Vehicle B | H | Redbook Valuation | 30/1/18 | $8,600 | $8,600 |
| Motor Vehicle A | W | Redbook Valuation | 30/1/18 | $35,625 | $35,625 |
| Furniture and Effects | |||||
| Furniture and effects | H | Financial Statement of H | 12/2/18 | $8,000 | $8,000 |
| Furniture and effects | W | Financial Statement of W | 23/2/18 | $16,000 | $16,000 |
| TOTAL ASSETS | $2,045,225 | $1,691,841 | |||
SUPERANNUATION ASSETS
| Superannuation | |||||
| Super Fund 1 and Benefit Scheme Fund | H | Campbell & Co Lawyers valuation | 25/1/18 | $1,050,691 | $1,050,691 |
| Super Fund 4 Fund | W | Financial Statement of W | 23/2/18 | $42,273 | $42,273 |
| Super Fund 3 Fund | W | Benefit Quote | 19/2/18 | $23,782 | $23,782 |
| Super Fund 2 | W | i-Estimator | 19/2/18 | $51,192 | $51,192 |
| Super Fund 5 | W | Financial Statement of W | 23/2/18 | $4,839 | $4,839 |
| TOTAL SUPERANNUATION ASSETS | $1,172,787 | $1,172,787 | |||
LIABILITIES
| Description | Owner | Source | Date | H’s Value | W’s Value |
| Property Mortgages | |||||
| Bank 1 Home Loan | Joint | Internet Banking Review | 20/2/18 | ($636,207) | ($636,207) |
| Bank 1 Home Loan | Joint | Internet Banking Review | 20/2/18 | ($468,916) | ($468,916) |
| Credit Card Debt - disregarded | |||||
| Loans | |||||
| Unsecured Personal Loan | H | Loan Contract | 20/2/18 | ($22,760) | ($22,760) |
| Motor Vehicle A Loan | W | Financial Statement of W | 23/2/18 | ($7,000) | ($7,000) |
| TOTAL LIABILITIES | $1,134,883 | $1,134,883 | |||
NETT POOL
| NON-SUPERANNUATION | $910,342 | $556,958 |
| SUPERANNUATION | $1,172,787 | $1,172,787 |
| TOTAL POOL | $2,083,129 | $1,729,745 |
| 50% of Pool | $1,041,564 |
The Company B
1) The valuation of this significant matrimonial asset is contested.
2) A lack of disclosure by the respondent Wife, legal strategizing, and a failure to cooperate in multiple attempts by the Husband to undertake a joint market business valuation, has made the fair market valuation of this asset prior to Final Hearing impossible.
3) Mr R confirmed no formal business valuation was requested by the Wife, or by her counsel. Further, in candid, honest and insightful verbal testimony Mr R called into question the veracity of the earlier Affidavit. Specifically, Mr R stated ‘No. No. haven’t been requested’. Accordingly, the Court should place little weight in this late and misleading affidavit, which was filed on 26 February 2018.
4) Rather, the Court should place significant weight in Mr R’s verbal testimony of 6 March 2018, in response to written questions.
5) If the Court finds that the business is an income stream only, it is nonetheless a financial resource, and a significant resource at that. Mr R explained that the Wife’s 2017 financial year remuneration of $294,995 would grow. ‘My experience is it’s, you know, upwards of $300,000, when describing a principal (occupation omitted). This is not crystal balling, but expert testimony from an accountant with full access to financial documents and after he has given due consideration to all relevant factors.
6) If the Court finds that the business is an asset, then Mr R’s testimony about ‘maintainable earnings … around the market remuneration for Ms Sardi to determine a fair market valuation of the business, is invaluable. When cross-examined, Mr R indicated that a multiple of 1.5 against earnings to calculate business valuation ‘it’s possible’. Expanding on his answer, Mr R stated ‘The business has only been operating under Ms Sardi’s guidance for 18 months, and at this point it’s not a big business. And at this point … a large portion of the income is being generated by one (occupation omitted), so they’re all sort of risks and factors that we would also consider in whether or not 1.5 or 1 would be an appropriate multiplier, but, as I said, that’s not something that I’ve given the full consideration’.
7) Based on the Wife’s earnings and profit from the 2017 financial year, the current value of the business would be approximately $300,000 to $450,000. A mid point of $375,000 has been used. This figure is conservative, noting the significant non-recurring expenses of the business such as the rapid repayment of the Wife’s Motor Vehicle A, purchased in 2015 for in excess of $60,000 and now owing less than $7,000, business fit-out and other start up costs.
Personal bank accounts
8) The Wife proposed and the Husband agrees that all bank balances and credit cards of the parties should not form part of the property pool.
Wife’s Loan to the Business
9) A ‘loan’ referred to in the Wife’s Affidavit should be discounted as it is not supported by any source document.
WHETHER THERE SHOULD BE AN ADJUSTMENT FOR THE CONTRIBUTIONS OF THE PARTIES
During the marriage
10) The Wife undertook full time study (studies omitted) from 2005 to 2008 with considerable support provided by the husband and third parties.
11) The Wife was obviously not providing sole parenting while she was studying.
12) The Wife then undertook training over the period 2009 – 2011, save 3 months unpaid maternity leave in 2010, while supported by the Husband.
13) The Wife then undertook her training while concurrently establishing her professional reputation as a (occupation omitted) in Canberra from 2012 to date of final separation, all the while supported and enabled by the Husband.
14) The Husband provided considerable financial and non-financial contributions such as emotional, domestic and parenting support; in order to allow the Wife to undertake full time study, noting that [Y] was born during the first year of study.
15) The Wife developed expertise, skills and associations during the marriage; which have caused her to advance her earnings capacity during and after separation.
Since Separation
16) The Husband continued to make significant non-financial and parental contributions post separation, including caring for the children for 55% of the time between February 2014 and November 2015. This included care of the children while the Wife undertook post-graduate study.
17) Over the period 2016 – 2017 the Wife outsourced much of the care of the children to au paires—emphatically demonstrated by her billable hours and earnings.
18) Much ado has been made of Wife’s payment “to the Husband” of $5,573.35 to cover an anticipated loss on the Property C property, the ultimate proceeds of sale “the Husband retained” in the sum of $554, the, $52,163 unilateral withdrawal of the Wife from the Bank 1 joint account on 16 June 2014, the $11,500 tax refund the Husband received for the 2014 year and the $20,000 upgrade of the Wife’s furniture by the Husband.
19) Conceding that the Husband’s credit card was paid from that joint account, the resolution of all of these issues is a simple exercise. It is simple because all of these transactions are specifically referable to the joint account; an analysis of which demonstrates that the Wife removed from the account some $90,533 than the Husband. Annexed hereto and marked with the letter “A” is a true copy of a schedule described by the Husband in verbal testimony and provided to counsel for the Wife.
20) The Husband has maintained child support pursuant to an administrative assessment and paid $7,200 for the children’s travel to spend time with him, their private health insurance of $1,915 per year, [X]’s child care unmatched ($16,722 between February 2014 and February 2015) and half of their tuition, uniform and extra curricular fees (except 2017). The Husband also significantly contributed to the clothing and personal effects of the children and day-to-day general expenses.
21) The Wife says that she spent $103,225.97 from her income on repairs and improvements to the Property A property. Upon an analysis of the table a number of these components are attributable to wear and tear. Further “In considering the weight to be attached to the initial contribution, in this case of the husband, regard must be had to the use made by the parties of that contribution”. In this regard, there is no evidence that the Wife’s expenditure translated into any increased value in the Property A property. Further, because the property is a home office for the Wife, the Wife could thereby reduce her taxable income through such expenditure. Mr R agreed with this proposition.
22) The Husband’s Super Fund 1 has increased by some $332,077 ($718,614 as at date of separation to $1,050,691 now). This amount should not be minimised. It was well earned, deserved and geared towards accommodating the future needs of a (occupation omitted) for 24 years.
23) There is no evidence that the Wife made any superannuation contribution in the 30 months from final separation till she acquired the Company B despite earning significantly more than the Husband during this period.
24) The Wife has earned significantly more than the Husband every year since final separation.
25) As reflected in Marsh v. Marsh, Section 79(4) requires the court to consider the entirety of the parties’ contributions, financial and non-financial, contributions to the welfare of the family and to the acquisition, conservation and improvement of assets. The Husband’s significant and sustained financial and non-financial contributions, either side of final separation, favour the Husband in this regard.
26) As reflected in Smith v. Field, a 50 % / 50 % split of the adjusted pool is appropriate such that each party receive $1,041,564 nett of assets.
27) It seems uncontentious that from the nett adjusted pool that the Husband would take:
a) Property B property $730,000
b) Less Bank 1 mortgage ($468,916)
c) Motor Vehicle A $8,600
d) Half the Company A share $NK
e) Furniture and effects $8,000
f) Loan ($22,760)
g) His Super $786,640
h) Total $1,041,564
28) Accordingly, an adjustment using this approach would involve the Husband paying to the Wife the sum of $256,060 from his Super Fund 1.
4. WHETHER THERE SHOULD BE AN ADJUSTMENT FOR THE FUTURE NEEDS OF THE PARTIES
29) The Husband is vulnerable by virtue of his (employment omitted). The Family Report Writer observed “of Mr Sardi’s mental health, Mr Sardi reports her belief he has undiagnosed Post Traumatic Stress Disorder. It seems uncontentious to observe that the psychological wounds, and future needs, of the Husband as a consequence of his (employment omitted) far exceed the Wife.
30) The annual earnings of the Wife has almost double that of the Husband: $294,995 v. $165,157 and it is important that due regard is paid to the disparity of income in assessing s 75(2) factors relevant to this marriage.
31) The Wife has no future needs that cannot be amply met by her self-employment.
32) The Wife’s income has the potential to increase given she has a relatively new business, the Husband has returned to Canberra to spend more time with the children, and the children are becoming more independent.
33) Although the Husband has accepted that he would take promotion if offered, this is unlikely, his continued (omitted) employment does not hold security. Nor do the (omitted) skills he has developed necessarily reflect in an ability to attain commensurate remuneration in Canberra, which he is seeking to maintain proximity to the children.
34) The Wife’s suggestion that the Husband has subsidized accommodation now through the (employer omitted) is incorrect. His pay slip annexed to his affidavit attests to the truth.
35) The Husband is not only paying child support pursuant to an administrative assessment but has established significant trust accounts for the children.
36) If the Husband’s loan taken out by him to pay the children’s school fees of $22,760 is not included in the asset pool, it must nevertheless is a future need.
37) Having regard to Mr R’s evidence that the Wife’s business is likely to grow in the future, the Wife’s business constitutes a “financial resource” to be considered under s.75(2) for the difference between its current and projected value.
38) If the court agrees with this proposition, there should on balance be a swing to the Husband of 5 to 7% for future needs. This adjustment would see the Husband paying the Wife between $110,241 and $151,904 of his Superannuation.
39) Otherwise there should be no further adjustment.
The Husband annexed to his submissions a document that purports to be an “aide-memoire” regarding the transactions from the [former] joint bank account of the parties. Because it was the subject of a successful objection during the trial I have had no regard to it for the purposes of these reasons.
Submissions for the Respondent Wife
The Respondent Wife’s submissions, filed 17th April 2018, were as follows:
Summary of Issues
1) These submissions address the final property and financial orders sought by the Respondent wife (“the Respondent”). Final orders were made by consent on the first day of the trial, with respect to the parenting arrangements for the parties’ two children, [Y] (aged 13) and [X] (aged 7).
2) The children live with their mother and [X] spends time with his father for 9 days in a month and for half of school holidays. [Y] will spend time with her father subject to her views - it is acknowledged that she is expected to spend time with her father (but the extent of this is unspecified).
3) The impact of the parenting orders as to the financial circumstances of the parties, is discussed further below.
Orders sought by the Respondent
4) The Respondent seeks the Orders as set out in a Minute of Orders Sought filed with the Court at the commencement of the hearing, which would result in the Respondent receiving 62% of the non-superannuation pool and 50% of the superannuation pool.
Comment on the submissions filed by the Applicant
5) The Applicant makes a number of assertions about matters not in evidence and makes impermissible attempts to construct evidence not otherwise before the court.
6) The document which the Applicant purports to annexe to his submissions is not in evidence (an attempt at tender was made, which was the subject of successful objection). All references to that document and conclusions which the Applicant asserts should be drawn from it (including in paragraph 19 of his submission and Annexure A) should not be read.
7) Generalised submission and criticism of the Respondent is expressed in paragraph 1 of the Applicant’s submission – some of which are highly prejudicial and are made without evidentiary foundation.
8) Particular impermissible submissions are made about certain evidence (including with respect to Mr R’s evidence).
9) The Applicant appears to advocate for final orders to be made on the basis of a combined pool of non-superannuation and superannuation property. Noting the nature and characteristics of the various types of property owned by the parties, including their superannuation, to do so would create an injustice for the Respondent. Where the parties are young, treating the superannuation property in a separate pool better enables a just and equitable division of property, taking into account the nature and characteristics of that property.
10) While the Applicant makes reference to two Full Court decisions in his submissions[34], the purpose of the reference is not clear. It is not agreed that those decisions could be considered “comparable cases” (which might properly assist the Court in the manner supported by recent Full Court authority).[35]
[34] Smith & Fields [2017] FamCAFC 251 and Marsh & Marsh [2014] FamCAFC 24
[35] Including Wallis & Manning(2017) FLC 93-759
11) Regrettably, it remains unclear as to the final orders being sought by the Applicant.
The evidence and matters addressed at the trial
12) The Court did not have evidence from the Applicant’s partner, Ms T or the Applicant as to the financial circumstances of their cohabitation (an affidavit by Ms T was read as to parenting matters). The Court is disadvantaged consequently, but will find that Ms T represents a financial resource to the Applicant.
13) While the Applicant asserts alternate theories as to the “value” to be attributed to the Respondent’s business he did not produce expert evidence about this issue. The Court has the evidence of Mr R, the accountant for the wife and his opinion, as expressed in his affidavit, was not altered, as a result of cross examination. The value to be attributed to the wife’s shares in the business is included in the statement of Assets and Liabilities, at Annexure A.
14) Your Honour commented on more than one occasion about the difficulties created by the uncertain and then shifting position of the Applicant about his Orders sought (at one point his counsel suggested that the property division ought to be calculated by reference to asset values at the date of separation, despite no evidence before the court about such).
15) Consistent with the Applicant’s Case Outline, significant focus in cross examination of the Respondent related to the Respondent’s business interests, and claimed expenses, and other elements (apparently) informing the evidence of her accountant.
16) Similarly, particular attention was directed in the Case Outline to how the Respondent applied her available income (in the post separation period). This included submissions by the Applicant’s counsel, about the mother’s “failure” to apply her income to the accumulation of superannuation, among other things. Cross examination of the Respondent about her business expenses (including attending an international conference) was indicative of the Applicant’s attitude – a disproportionate interest in how the Respondent spent her money, 4 years after separation between them. That approach did not assist the court in the task to be undertaken.
17) Where the evidence of the parties is in conflict, the Court will prefer the evidence of the Respondent. The Respondent was an impressive witness, forthright and candid. When being cross examined about particular detail relating to credit cards of her business, when few identifying particulars of accounts or other information was provided to her, she quite appropriately indicated she could not answer without more information. Similarly, the Respondent quite appropriately deferred to her accountant, about matters and tasks about which she relies upon his advice and expertise.
18) The Applicant was not an impressive witness and his defensiveness in response to questions resulted in a reluctance to be responsive and to answer directly. Intervention by your Honour on more than one occasion was required to encourage responsiveness.
19) Three matters by way of example support the submission that the Applicant is not a truthful witness and highlight the adverse attitude held by the Applicant about the Respondent, and which informs his approach to the Court:
a) The Applicant mislead the Respondent about the sale price of the Company C and did not return to her the funds which she had paid to him, at his direction (Respondent’s Aff 192 and ff);
b) The Applicant was not truthful when he asserted belief that the Respondent had wrongly taken approximately $52,000 from their joint account in June 2014. This assertion was a belated and opportunistic attempt to discredit the Respondent, noting:
i.It was not raised in the first affidavit of the Applicant filed on 10 July 2015;
ii.It was not referred to in any email communications to the Respondent, exchanged between them between 2014 and February 2015 (Ex B) and
iii.It was not included in his primary trial Affidavit; and
iv.he conceded in cross-examination that the sum withdrawn represented half of the balance in the joint account at separation.
c) The court will accept that when the Applicant considers the Respondent owes him money, he readily communicates to that effect, evidenced by example, by the request for payment of money for Property C, the request for payment of 50% of the costs of a new screen for an iPad and other requests for payment of asserted debts relating to the children.
d) Finally, the Applicant untruthfully asserted in his trial affidavit at paragraph 89(c) that the Respondent had taken $36,720 from his mortgage account and “emptied this account and re-mortgaged” the Property B property. He asserted in his affidavit being “shocked” when becoming aware of this from his bank. He said in cross-examination that he was aware of this, from the bank, in August 2017 but did not communicate with the Respondent or her advisors about this (until the assertions in his trial affidavit of February 2018). In response to your Honour’s questions as to “why?” the Applicant said it was a “gesture of goodwill” in this “protracted litigation” and he could see “no benefit” in “expensive correspondence” before the trial.
e) The Applicant was unconvincing in his evidence to the effect that he did not pay sufficient regard to his bank accounts to appreciate (in the relevant period during 2016 and 2017) that his account was not being debited by the usual mortgage payment (resulting in surplus funds of more than $3,000 each month). He persisted, unconvincingly, in that evidence, despite being shown and cross examined about his own bank account that “established the automatic allotment from” for payment of the Property B mortgage. The Applicant admitted to a range of transactions, made by him, from that account, to other accounts (not being automatic payments) and identified additional irregular deposits to that account (including a tax refund and an AusGov Families payment). The evidence establishes frequent, particular engagement by the Applicant with the account (see Ex D) (to be read in conjunction with the statements for the mortgage account Ex E).
f) Having had the Respondent’s affidavit from Saturday 23 February 2018, the Applicant suggested in his oral evidence that he had since “realised” the Respondent’s account of these matters was accurate. He denied changing his evidence or making up the explanation to deflect from his untruthful assertions in his affidavit.
g) Your Honour asked the Applicant if he “looked to see if there were enough funds in the account, not the actual transactions” to which he agreed. However, if he was not reducing his account balance by more than $3,000 each month (for mortgage payments), that would have been evident to him (even on his own version of how he transacted on the account) as the funds balance must have increased or shown available funds, in excess of that which would be there, if the mortgage instalment had been paid.
h) The explanations were entirely unbelievable.
20) The Applicant’s evidence around his financial support of the children and his failure to pay school fees for them in 2017 is important as it informs the Court about his attitude to financial support of the children and the Courts’ consideration of the Order sought by the Respondent about this (that is, he should pay 50% of these fees plus child support):
a) the Applicant had initially declared in these proceedings, that he would continue to pay the school fees for the children;
b) In April 2016, the Applicant declared he would not pay school fees for 2017 and ceased doing so (paragraphs 58 to 64 Applicant’s aff and Annexure BB). The burden of those costs fell to and were met by the Respondent, along with the additional expenses she meets for the children absent any contribution by the Applicant (Respondent’s Aff paragraphs 88 and 95);
c) In cross examination, despite the assertion that he could not afford the school fees, in 2017, the Applicant retained savings in his 3411 bank account of $8,739 at January and on 18 September 2017, $17,069 (Ex D).
d) The Applicant had sought (without prior discussion with the Respondent) Non Agency Payment credits from 2016 (Aff of Respondent 91 and ff) and again, within days of paying funds towards the school fees in first term 2018, sought a further NAP credit from the CSA – without notice to the wife and evidence about which he did not include in his Affidavit;
e) The applicant conceded (eventually) in cross examination that the child support assessment (which provides he is to pay around $70 per week) was based upon an income figure less than his actual income at the time of the assessment (December 2017).
21) The cross examination of Mr R warrants some further consideration. As the Applicant did not have evidence of the value, if any, to attribute to the Respondent’s business, some effort was made to either discredit Mr R, or extract from him some concession as to value, to assist the Applicant’s case. Neither endeavour was successful. It was clear from that cross examination that the Applicant did not understand the nature of and impact of the loan by the business to the Respondent (an asset of the business and a liability of the Respondent).
22) That misunderstanding is maintained in the submissions made by the Applicant when he suggest the loan should be “disregarded” – the court has ample evidence of this asset/liability. It was not put to the Respondent or Mr R that the loan did not exist or was somehow (if this is being submitted inferentially) a sham or construct.
23) The court will accept Mr R’s evidence and the treatment, accordingly, of the wife’s interest in the business, as expressed in the statement of Assets and Liabilities of the Respondent (noting the business was acquired by the wife for $5,000 and operated entirely in the post separation period
The Court’s Task
24) Following the High Court’s decision in Stanford v Stanford[36] the parties and the court must identify and value the existing legal and equitable interests of the parties in the property of the parties to the marriage. These matters are not controversial in this case and the real property, in both instances, is presently jointly owned. Transfer of ownership is sought by each party with respect to each property and each party seeks superannuation splitting orders. While there is still some debate about whether the “four step” process is preferred, it remains commonly utilised and was neither approved nor disapproved by the High Court in Stanford.
[36] (2012) FLC ¶93-518.
25) That approach can be summarised as follows:
a) identify and value the asset pool of the parties and any resources available for distribution;
b) assess the parties’ respective contributions during the marriage;
c) consider whether a further adjustment is required due to the impact of s75(2); and
d) consider whether the proposed orders are otherwise just and equitable under s79(2)
The property pool of the parties
The property of the parties is set out in a table at Annexure “A”. It is not controversial.
Contributions assessment
26) The assessment of contributions should consider the totality of contributions of all types made by each of the parties not only during their cohabitation but also, where relevant, before and after cohabitation[37].
[37] Anson and Meek [2017] FamCAFC 251, Murphy J, para 29
27) The Applicant appears to concede, in his submissions, that the Court will find contributions to be equal during the relationship and cohabitation of the parties.
28) The Respondent agrees that contributions, until separation, will be assessed as equal. The Respondent refers to the analysis of these matters in the Case Outline document and notes that in particular, the parent and homemaker contribution of the Respondent, during the marriage was significant, while she in addition made an important direct and ongoing financial contribution by the allocation of her income. There was only limited cross examination of the Respondent about these matters and no impact upon her sworn evidence follows.
29) The Applicant conceded in his oral evidence the long hours worked by him outside the home and his extended absences on deployment (when the parenting and family responsibilities fell entirely to the Wife) (though at one stage suggesting the Wife’s claims were “suped up”). He expressed gratitude for the role undertaken by the wife.
30) However, the exceptional events in the post separation period (of 4 years at the time of trial, which is almost equal to a third of the total period of cohabitation) and the particular contributions made by the Respondent in that time, require further assessment and adjustment in her favour.
31) After separation, the Respondent cared for the children, in Canberra, when the Applicant was posted to Queensland. The consequences of that in terms of the Respondent’s additional role in caring for the children are clear and significant.
32) In addition to the increased actual care of the children undertaken by the Respondent, she also assumed further financial burdens given the Applicant’s abandonment of his commitment to pay school fees, applying her income to meet the needs of the children, save for the child support paid by the Applicant.
33) It is also undisputed that in this period, the respondent applied $103,000 of her own funds, to the renovation and improvement of the Property A property. The Respondent’s evidence was unshaken in cross examination and she confirmed the improvements and renovations were necessary because the home “was in a state of disrepair” and that she “had to renovate it for my children”. That post separation direct financial contribution (which represents 20% of the net non-superannuation pool) cannot be ignored.
34) In the same period, the Applicant retained, to his exclusive benefit, all rental income derived from the Property B property and he conceded that he understood, in the same period, the Respondent was paying tax on 50% of the rental income for that property. Again, the Respondent has contributed to the benefit of the Applicant (notionally reducing assessable income in his hands and reducing his taxation obligations).
35) The Applicant retained for his benefit a tax refund of $11,969.02 received in August 2014 (noted in Ex A being the joint account ending) and he agreed that at 30 June 2014, the Respondent was assessed as owing tax of $27,380 (Notice of Assessment, Ex C). This obligation has been met by the Respondent in the post separation period without contribution by the Applicant, despite he (and the family) having the benefit of the relevant income. He did not share his tax refund with the Respondent.
36) The Applicant also retained more than $5,000 paid after separation by the Respondent (when he sought these funds for the “predicted” shortfall on the sale of the Property C property) (and without later adjustment to her).
37) The Applicant’s post-separation contribution to his superannuation is a product of his continuing employment and arises in circumstances where the Respondent’s support of his employment is manifest by her care of the children. The Respondent’s continuing indirect contribution to the accumulation of superannuation by the Applicant, in the post separation is not controversial on the facts, or as a matter of legal principle.
38) These matters summarised above, would result in a contribution based adjustment of not less than 7% in the favour of the Respondent (which amounts to only $35,241 in cash terms).
Future needs assessment
39) The assessment of “future needs” requires a degree of “prediction” by the Court, “… it must consequently be open to a primary judge to make predictions as to the future based on evidence as to the past and the present and inferences drawn from it” and “those inferences and predictions must be seen to have an evidentiary basis in past and present facts”[38].
[38] Ibid, paragraphs 70 and 71
40) It is not disputed that the Respondent is able to support herself and will be required to meet the bulk of the day to day needs of the children (both as a product of the actual care arrangements for the children but also as a consequence of the modest child support being paid, presently $70 per week);
41) The Applicant’s income is presently more than $165,000. Despite attempting to suggest in his affidavit material some future employment uncertainty, in response to questioning by your Honour, he conceded there was no present suggestion he would not be employed and he spoke of colleagues who had left the (employer omitted) and were remunerated at a higher level than he (but he suggested he would not be able to pursue such given his “caring responsibilities” for the children). The Court will have regard to paragraphs 185 to 190 and 220 of the Respondent’s affidavit as to how she manages her greater caring responsibilities for the children while working full time.
42) The income differential between the parties is not the only future consideration and should not distract the Court from a careful consideration of other matters, including:
a) The age of the parties (the Applicant is 7 years younger than the Respondent) and will have more years working to “restore” his financial position, including superannuation;
b) The Applicant is living with Ms T and has not provided the court with evidence about the financial circumstances of their cohabitation. The Applicant has shown an inclination to live with a partner in all of the time since separation. The court will accept that Ms T represents a present financial resource to the Applicant, and that he is likely to continue to have such a resource into the future;
c) The Applicant will continue to receive the benefit of a generous superannuation scheme and employer contributions which will ensure that he “recovers” his superannuation in a manner which will not be matched by the Respondent who must make her own superannuation contributions;
d) The Applicant’s posting to Canberra is until early 2020. The past deployment record of the Applicant suggests further deployment out of Canberra is probable and this is the expectation of the Respondent. The Respondent’s responsibilities to the children will increase in those circumstances;
e) The costs of caring for the children fall disproportionately to the Respondent and the Applicant has shown himself ready to seek further reductions to his child support obligations;
f) If the court does not order the Applicant to pay 50% of school fees for the children, it is likely the applicant will abandon that commitment should he determine his financial circumstances do not support it.
43) All of these considerations will lead the Court to make a future needs adjustment, in favour of the Respondent of around 5%.
Orders sought – just and equitable
44) The Orders sought will result in each party retaining a home, with a mortgage (the Applicant is required to also make a payment to the Respondent of around $87,400) and each will have superannuation resources. This approach takes into account the relative youth of the parties and the particular nature and characteristics of superannuation and allowing the proper allocation of currently available property between them.
45) The orders sought will not affect the earning capacity or income of either party.
Orders sought – school fees
46) Pursuant to section 116(1)(b) of the Child Support Assessment Act 1989, the Respondent seeks orders with respect to payment of school fees by the Applicant in addition to an administrative assessment of child support from time to time.
47) While counsel for the Applicant queried the jurisdictional pathway for this part of the Respondent’s case, no objection was pressed, no discussion occurred and the Court’s power to make the order sought is not controversial.
48) The evidence supporting the making of the order is also clear – despite the Applicant’s stated willingness to pay 50% of the (tuition) fees, his past conduct indicates he will abandon this if he considers it “necessary”. The Applicant refuses to enter into a Binding Child Support Agreement about payment of school fees. The Respondent should be shielded, by Court order, from risk of the Applicant changing his mind again.
Evidence & Procedural Matters
Before getting to the “nuts and bolts” of the “steps” in determining what Orders are “just and equitable”, I need to comment briefly on the evidence of the parties.
In general terms, I prefer and accept the evidence of the Wife to that of the Husband. This is primarily because she was, in my view, candid and straight-forward in her evidence. On the other hand, the Husband was (without any malice or mala fides) rather more calculating and proceeded on the basis that every single cent required to be accounted for between the parties. But, at the same time, as already mentioned, on certain occasions he did not apply the same strict standard to himself as he did to the Wife. To give only two examples (as earlier noted) among others: (a) he did not reimburse the Wife the funds she had advanced to him in relation to the Property C property; (b) nor did he “account” to her in relation to his income tax refund which covered a period of the relationship.
In a similar way, the Husband was regularly much more critical of the Wife, and any evidence on her behalf (e.g. the evidence of the accountant, Mr R), and certainly much more critical than he should have been. In my view, it was improper to canvass with the accountant various matters about which there was no relevant evidence in order to challenge Mr R’s evidence. It is one thing to ask clarifying questions of an expert; it is quite another to imply or hint that there may have been some improper use of funds (e.g. for beneficial tax purposes) by the business. Moreover, there seemed to be a fundamental mis-understanding regarding the loan from the business to the Wife. This loan was an asset to the business and a liability to the Wife. From time to time it seemed that the Husband viewed it the other way around – hence the curious way in which it is treated in the Husband’s balance sheet/asset pool document.
Further, in the absence of any relevant evidence to the contrary from the Husband, I find that the accountant’s evidence (oral and his Report) was properly supported. I accept his evidence.
I should also mention here that I accept the Wife’s submission that, in the absence of evidence from the Husband’s partner, Ms T, or by the Husband about her income and or financial position, the Court can properly and reasonably regard her as a “financial resource” to the Husband. There is plainly no evidence before the Court to contradict such an inference.
One additional matter needs to be addressed here. It relates to the payment of school fees.
On 3rd August 2018, the Wife filed an Application in a Case in which she sought Orders that leave be granted to adduce further evidence (plus costs), noting that final submissions were filed, following the hearing, on 17th April. Her Affidavit, filed at the same time as the Application, deposed that (a) after a brief hiatus, the Husband had resumed paying half the school fees at the beginning of Term 1 in 2018, and (b) in the course of a recent conversation with the Finance Officer at the children’s school, the Wife was advised that the Father had notified the school on 20th June that, from the beginning of term 2 he would no longer pay school fees for the children. The Wife confirmed that she had no prior notice from the Husband of this course of action.
The Wife also confirmed that she sought agreement with the Husband to contact the Court jointly regarding school fees. Copies of the relevant correspondence between the parties are annexed to the Wife’s Affidavit. The Husband did not agree; hence the Application in a Case. Upon the matter being re-listed, the Husband was granted 14 days to put on any material in response to the Wife’s recent Application.
The Husband’s material in Response (filed 22nd August 2018) simply confirmed that he did not wish to continue to pay the children’s school fees and that, as he asserted during the trial, he could not afford to continue to pay the school fees. As noted earlier, his income is in excess of $160,000 per annum. Absent relevant evidence, and given his substantial salary, it is completely unclear how or why the Husband maintains such an assertion of his inability to pay the children’s school fees. Put another way, how and why he claims to be financially burdened in the light of his significant income is completely unclear. His recent Affidavit evidence goes to some length to set out how much he has paid for school uniforms, school shoes, orthodontic treatment for [Y], and some problems with an “unserviceable” heater at the Property B property. Respectfully, such matters, to varying degrees, might reasonably be characterised as among the ordinary expenses of daily life.
It was his decision (without notice to the Wife) not to continue to pay his share of the children’s school fees. There is no Application before the Court by the Husband to change the children’s school, or that there be a specific Order to absolve him from his responsibility to pay for his children’s education. In such circumstances, I agree with and accept the Wife’s contention that there should be an Order, absent any other agreement in writing between the parties, requiring both parents to pay equally for their children’s education.
Notwithstanding the Husband’s submission (set out in his Affidavit, filed 22nd August 2018) that he has attempted (he always stresses that he acts “in good faith”; there is no suggestion that anyone in the present matter has acted otherwise) to resolve all these matters, in my view, it is appropriate to grant the Wife’s Application to adduce the limited further evidence, and that she should have her costs for having to do so.
Consideration & Disposition
I turn then to the usual “steps” in determining the “just and equitable” Orders of the Court.
The first, and usual, step in property proceedings, is to determine the asset pool. I accept the property pool as proposed by the Wife for the following reasons:
(a)It accounts for the children’s funds held on trust, which the Husband’s proposal does not;
(b)It accounts more accurately for (i) the shares in the Company B, and (ii) the loan from that business to the Wife (which is rejected by the Husband; its existence, however, was readily acknowledged and accepted by the accountant, Mr R. As earlier noted, I accept Mr R’s evidence); and
(c)To accept the Husband’s submission regarding the “valuation” of the business, given that Mr R said specifically that he was not asked to provide a valuation of it, would be to risk “double-counting.” This is to say that the Husband’s “valuation” of the business is predicated upon the income of the Wife. That same “income” is a factor under s.75(2). The same “income” cannot be used twice but for different purposes.
Contributions
In this regard I simply recall the comments of the Full Court decisions noted at the commencement of these reasons. I need not, and will not, repeat them. I will, however, note the following comments from a very recent decision of the Full Court.
In Fontana & Fontana, the Full Court said, at [25] – [27] (internal citations omitted; emphasis added):[39]
[25] As noted in the decision of Coleman J in Steinbrenner & Steinbrenner [2008] … at [234]:
a) Given that the evaluation of contribution based entitlements inevitably moves from qualitative evaluation of contributions to a quantitative reflection of such evaluation, there will inevitably be a “leap” from words to figures. That is the nature of the exercise of discretion ...
[39] Fontana & Fontana [2018] FamCAFC 63.
[26] This is not a case where the “leap” is so great as to render the reasoning process defective.
[27] Contrary to the husband’s submissions, there is no requirement for the primary judge to particularise percentages for contributions at each stage of the relationship. Indeed, the authorities are consistent in finding that assessing contributions is not an accounting exercise but a holistic one …
The relationship in the current matter commenced in late 2000 and ended in early 2014. Accordingly, it was a relationship of not insignificant length. During the relationship there were distinguishing features from many other relationships, notably the Husband (employment omitted), (country omitted) (during which the Wife had the sole care of the household in every respect), and the Husband also being posted, after separation, to Queensland. The children spent holiday time with him during that posting, at the expense of the Husband, but otherwise their day to day care and the costs thereof remained (and remain) with the Wife.
Another distinguishing feature of the relationship was that for a period of approximately four years the Wife studied (studies omitted). Obviously during that time she was not in paid employment. Doubtless some extra financial responsibility fell to the Husband during that time. But it was also acknowledged that the Grandparents on both sides very much aided the parties during this time. And there was a cleaner employed to assist further.
Both parties essentially agree that contributions during the relationship should be considered to be equal. As I read the Husband’s submissions, he contends that an equal assessment of contributions, post separation, should also occur. He also suggests, at par.22 of his submissions, that the contributions to his superannuation “… should not be minimised. It is well earned, deserved and geared towards accommodating the future needs of a (occupation omitted) for 24 years.”
Giving every allowance for a degree of hyperbole from a self-represented litigant, and accepting the immense and important job done by (occupations omitted), there is no specific criteria under the Act to give some preferential treatment to the superannuation of such personnel.
For her part, the Wife seeks an allowance or adjustment in her favour for post-separation contributions for the following reasons. Summarised, she says that:
(a)she bore the complete parenting responsibility for the children upon the Husband’s posting to Queensland (save for school holidays);
(b)she bore full financial responsibility for the children in addition to their day to day care (accepting that the Husband paid child support);
(c)she paid for the complete renovation and improvement of the Property A property, post tenants, amounting to $103,000. The Husband disputes this claim;
(d)while she was paying for this renovation to what has become the family home for herself and the children, the Husband retained the full rental income from the Property B property. At the same time, the Wife continued paying tax on 50% of that rental income;
(e)the Husband retained the full tax benefit of $11,969.02 for a period that embraced the relationship;
(f)the Husband also retained approximately $5000, being a sum paid by the Wife to the Husband in relation to a foreshadowed, but ultimately not realised, deficit of the Property C property.
For these matters, the Wife seeks an adjustment in her favour of 7%. I agree with and accept the matters she identifies. For my part, without quibbling too much, I think an adjustment of 5% is appropriate in all the circumstances.
Section 75(2) Factors
As at the date of the trial (April 2018) the Husband was aged 41 years, and the Wife 48 years. There are no health issues to speak of.
Both parties enjoy significant income, the Wife certainly more so than the Husband. That said, the Husband has significant superannuation paid on his behalf by the (employer omitted), which will continue into the future, while the Wife does not have superannuation paid on her behalf. I note too that the Husband is 7 years younger than the Wife, and therefore he will have more “funding years” within which to quite readily recoup a superannuation split.
I do not accept the Husband’s claim, regularly made during the trial, that for unexplained reasons there is some cloud hanging over his employment. There is no evidence to support such a claim. Indeed, there is every likelihood that he will continue to be employed in the (employer omitted), regardless of promotion and or further deployment, both of which are unknown - but they are possibilities.
Orders have now been made, by consent, in relation to parenting. They provide for [X] to spend very regular and significant time with his Father. There remain a range of delicate issues regarding [Y] spending time with her Father. Otherwise, she lives with her Mother.
Another somewhat curious factor is the Father’s partner or companion, Ms T. She provided an Affidavit in relation to parenting matters, but nothing in relation to property issues. Whether that was/is an oversight or otherwise the Court is not able to speculate. It is certainly unfortunate that the Court has nothing from her on this account. The Court may, albeit with some diffidence, take some due account of her being a possible “financial resource” for the Husband (doubtless she is much more than this) in the absence of any relevant information to the contrary. In making such statements, which may seem somewhat crass to non-lawyers, I hasten to assure the Husband (and Ms T) that no offence is intended.
In all of the circumstances, in my view, there should be no adjustment for the factors under this section of the Act.
Conclusion
In relation to the Company A shares, they should be sold and the nett proceeds of sale should be divided equally between the parties.
Having regard to what is, in the result, “just and equitable”, in my view, and using the Wife’s Orders Sought as the reference point, the following Orders should be made:
(a)The superannuation pool should be divided equally. This will result in a payment to the Wife from the Husband’s superannuation of $464,303, as per the Wife’s Minute of Orders;
(b)The nett non-superannuation pool shall be divided whereby the Wife shall receive 55% and the Husband 45%; and;
(c)Otherwise the Orders Sought by the Wife should be made in relation to the transfer of each of the properties
I also make an Order, for more abundant caution, as sought by the Wife in relation to the equal payment by the parties of school fees for both children. In my view, both parents should equally bear the financial burden of the educational costs for their children.
Regrettably, because of the sudden and without notice action of the Husband to stop paying his share of the school fees, which resulted in the Wife having to bring an Application, he should pay the costs of that Application either as agreed or taxed.
I certify that the preceding seventy-nine (79) paragraphs are a true copy of the reasons for judgment of Judge Neville
Date: 30 August 2018
Key Legal Topics
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Family Law
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Equity & Trusts
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