Sardo & Sardo
[2023] FedCFamC2F 1015
•14 August 2023
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Sardo & Sardo [2023] FedCFamC2F 1015
File number(s): MLC 7555 of 2022 Judgment of: JUDGE A. HUMPHREYS Date of judgment: 14 August 2023 Catchwords: FAMILY LAW – EVIDENCE – application for leave to adduce evidence from an adversarial expert as to value of former family home – application filed shortly before final hearing – application dismissed
FAMILY LAW – PROPERTY – assessment of contributions over relationship of 23 years – initial contributions – gifts from family – significant inheritance at the end of the parties’ relationship – assessment of matters relevant pursuant to section 75(2) – parties’ children (aged 14 and 19) live with the father
Legislation: Evidence Act 1995 (Cth) s. 140
Family Law Act 1975 (Cth) ss. 75, 79
Family Law Rules 2004 (Cth) r. 15.64
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) r.7.02, 7.08, 7.11, 7.25, 7.26, 7.31
Cases cited: AJO & GRO (2005) FLC 93-218; [2005] FamCA 195
Babett & Falconer (2015) FLC 98-067; [2015] FamCAFC 124
Dickons & Dickons (2012) 50 Fam LR 244; [2012] FamCAFC 154
Gosper & Gosper (1987) FLC 91–818; [1987] FamCA 43
In the marriage of C & C (2005) FLC 93–220; [2005] FamCA 429
Moretto & Cosola [2022] FedCFamC1F 433
Neales & Neales (2022) FLC 94–079; [2022] FedCFamC1A 41
Norbis v Norbis (1986) 161 CLR 513; [1986] HCA 17
Palumbo & Mandel (2019) FLC 93–929; [2019] FamCAFC 228
Perrin & Perrin (No 2) [2018] FamCAFC 122
Salmon and Ors & Salmon [2020] FamCAFC 134
Stanford v Stanford (2012) 247 CLR 108; [2012] HCA 52
Wallis & Manning (2017) FLC 93-759; [2017] FamCAFC 14
Division: Division 2 Family Law Number of orders: 198 Date of last submission/s: 9 May 2023 Date of hearing: 8 & 9 May 2023 Place: Melbourne Counsel for the Applicant Ms Matson Solicitor for the Applicant Hargreaves Family Lawyers Counsel for the Respondent Mr Dunlop Solicitor for the Respondent Fair Family Law ORDERS
MLC 7555 of 2022 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MS SARDO
Applicant
AND: MR SARDO
Respondent
ORDER MADE BY:
JUDGE A. HUMPHREYS
DATE OF ORDER:
14 AUGUST 2023
THE COURT ORDERS THAT:
Suburb C property
The payment
1.Subject to order 3, the husband pay to the wife the sum of $336,400 (“the payment”) within 60 days of the date of these orders (“the date”).
2.Contemporaneously with the payment
(a)The wife do all such acts and things and sign all documents as may be required to transfer to the husband at the expense of the husband (“the transfer”) all of her right title and interest in the real property situate at and known as B Street, Suburb C, in the state of Victoria, being the whole of the land better particularised in certificate of title volume … folio … (“the Suburb C property”); and
(b)The husband do all such acts and things and sign all documents as may be required to pay out the joint home loan owing to Westpac Banking Corporation and discharge the mortgage (dealing …) registered against the title of the Suburb C property (“the Suburb C mortgage”).
Election to sell
3.Within 14 days of the date of these orders, the husband may elect to sell the Suburb C property (“the election”), the election to be conveyed in writing via the parties’ lawyers, in which case orders 1 and 2 be discharged.
The sale
4.Upon the election to sell the Suburb C property or in the event the whole of the payment is not made by the date, each of the husband and the wife do all such acts and things and sign all documents as may be required to sell the Suburb C property (“the sale”) upon such terms and conditions as agreed between the parties, and failing agreement:
(a)Within 14 days, the wife nominate three potential selling agents and three potential conveyancers, and the husband select the agent (“the selling agent”) and the conveyancer (“the conveyancer”) from the list provided within seven days of the wife’s nominations;
(b)If the wife fails to provide nominations in accordance with order 4(a), the husband select the selling agent and the conveyancer;
(c)If the husband fails to comply with order 4(a), the wife select the selling agent and the conveyancer from the list she has provided;
(d)The sale be by way of public auction and if passed in at auction, as otherwise recommended by the selling agent;
(e)The reserve price be as recommended by the selling agent;
(f)The husband or his nominee be at liberty to bid to purchase the Suburb C property at auction;
(g)The husband comply with all reasonable recommendations of the selling agent as to the presentation of the Suburb C property, including keeping the property clean and neat and maintaining it in good order and repair;
(h)The husband make the Suburb C property available for inspection at times reasonably requested by the selling agent; and
(i)The parties otherwise have liberty to apply in relation to the terms and conditions of the sale.
5.Upon settlement of the sale of the Suburb C property to a purchaser other than the husband or his nominee, the proceeds of sale be applied:
(a)First, to pay all costs associated with the sale including the conveyancer’s fees and disbursements and the selling agent’s costs and commission (“the sale costs”) but not the parties’ independent legal costs;
(b)Secondly, to discharge the Suburb C mortgage; and
(c)Third, to pay an amount to the wife being the dollar equivalent of “X” in the following equation:
X = [67.5% of (A + W + H)] – W
Where:
“A” is the net proceeds remaining from the sale after the payments made pursuant to each of orders 5(a) and 5(b)
“W” is the value of property retained by the wife pursuant to these orders fixed in the sum of $1,633,103
“H” is the value of property retained by the husband pursuant to these orders fixed in the sum of $29,520; and
(d)Finally, the balance then remaining to the husband.
Husband successfully bidding at auction
6.In the event:
(a)The husband makes the election to sell the Suburb C property; and
(b)The husband is the highest bidder at the conclusion of the auction; and
(c)The Suburb C property has reached the reserve price recommended by the selling agent,
the parties do all such acts and things and sign all documents as may be required to remove the Suburb C property from the market for sale and within 30 days of the date of the auction (“the second date”) the husband pay to the wife the dollar equivalent of “Y” in the following equation (“the adjusting payment”) being:
Y = [67.5% of (B - M + W + H)] – W
Where:
“B” is the husband’s successful bid at auction
“M” is the balance of the home loan(s) secured by the Suburb C mortgage at that date
“W” is the value of property retained by the wife pursuant to these orders fixed in the sum of $1,633,103
“H” is the value of property retained by the husband pursuant to these orders fixed in the sum of $29,520
and the husband be responsible for and indemnify the wife in respect of the sale costs as defined in order 5(a) as may be incurred by the parties, including in respect of the auction.
7.Contemporaneously with the adjusting payment:
(a)The wife do all such acts and things and sign all documents as may be required to transfer to the husband at the expense of the husband (“the transfer”) all of her right title and interest in the Suburb C property; and
(b)The husband do all such acts and things and sign all documents as may be required to refinance into his sole name or pay out the joint home loan owing to Westpac Banking Corporation and discharge the Suburb C mortgage.
8.In the event the husband fails to make the whole of the adjusting payment or discharge the Suburb C mortgage by the second date, each of the husband and the wife do all such acts and things and sign all documents as may be required to sell the Suburb C property in accordance with order 4, save that the husband is prohibited from bidding on the Suburb C property at auction, and the sale proceeds be divided between the parties in accordance with order 5.
Pending the transfer or sale
9.Pending the transfer or settlement of the sale of the Suburb C property:
(a)The husband have sole use and occupation of the Suburb C property;
(b)The husband and the wife each be restrained by injunction from selling, transferring, further encumbering (including by drawing against the loan(s) secured by the Suburb C mortgage) or otherwise dealing in any way with their interest in the Suburb C property without the consent in writing of the other;
(c)The parties hold their respective interests in the Suburb C property upon trust pursuant to these orders;
(d)The husband pay as and when they fall due and indemnify the wife in respect of:
(i)All home loan repayments (principal and interest) in respect of the loan(s) secured by the Suburb C mortgage;
(ii)Property and water rates;
(iii)Home insurance; and
(iv)All taxes and other outgoings with respect to the Suburb C property including but not limited to telephone, internet, gas, water and electricity.
Chattels
10.Within 30 days from the date of these orders, the husband make available for collection by an agent nominated by the wife, the following items from the Suburb C property:
(a)Table from upstairs on which a statute from the wife’s great grandmother previously sat; and
(b)Ornament that previously sat on the occasional table.
11.Contemporaneously with her agent’s attendance at the Suburb C property pursuant to order 10, and otherwise within 30 days from the date of these orders, the wife arrange for an agent nominated by her to deliver to the husband, any keys or remote controls in her possession or control for the Suburb C property, including for the garage door (if any).
Motor Vehicle 1
12.Within fourteen days of these orders, each of the husband and the wife do all such acts and things and sign all documents as may be required to transfer the Motor Vehicle 1 (registration …) to the wife, at the expense of the wife.
Assets to be retained by the wife
13.The Wife otherwise retain to the exclusion of the husband, the following assets:
(a)Her interest in the Ms Sardo Testamentary Trust and the Estate of her late father, Mr D;
(b)All funds standing in any bank account in her sole name;
(c)Her personal effects, furniture and contents in her possession;
(d)Her shareholdings;
(e)Her superannuation entitlements, subject to these orders.
14.The wife remain liable for and indemnify the husband and keep him indemnified against all personal liabilities of the wife, including but not limited to personal loans, credit cards and taxation liabilities.
Assets to be retained by the husband
15.The Husband otherwise retain to the exclusion of the wife the following assets:
(a)All funds standing in any bank account in his sole name;
(b)His personal effects, furniture and contents in his possession save for such items to be retained by the wife pursuant to order 10;
(c)His shareholdings;
(d)The Motor Vehicle 2; and
(e)His superannuation entitlements subject to these orders.
16.The husband remain liable for and indemnify the wife and keep her indemnified against all personal liabilities of the husband, including but not limited to personal loans, credit cards and taxation liabilities.
Superannuation
Split of husband’s superannuation interest
17.Orders 18 to 21 of these orders are binding on the Trustee, Super Fund 1 (“the husband’s trustee”), being the trustee of Super Fund 2 (“the husband’s fund”).
18.In accordance with
paragraphsection 90XT(1)(b) of the Family Law Act 1975 (Cth) (the Act):(a)The wife (or her administrators, executors, beneficiaries, heirs or assigns) is entitled to be paid the specified percentage out of the husband’s interest in the husband’s fund;
(b)The husband’s entitlement in the husband’s fund is correspondingly reduced by force of this order; and
(c)The percentage specified for the purposes of this order is 50%.
19.The husband’s trustee of the husband’s fund do all such acts and things and sign all documents as may be necessary to:
(a)Calculate, in accordance with the requirements of the Act and Part 6 of the Family Law (Superannuation) Regulations 2001 the entitlement awarded to the wife in the immediately preceding clause of this order;
(b)Pay the entitlement whenever the trustee makes a splittable payment from the husband’s interest in the husband’s fund.
20.Order 18 has effect from the operative time and the operative time is four business days from the date of service of a sealed copy of these orders on the husband’s trustee of the husband’s fund.
21.After service of the payment split notice in accordance with the Superannuation Industry (Supervision) Regulations 1994 (“the SIS Regulations”), the parties shall do all such things and sign all documents as may be necessary, including but not limited to exercising the wife’s request in accordance with the SIS Regulations, for the rollover or transfer of the wife’s interests in the husband’s fund.
Split of wife’s superannuation interest
22.Order 23 to 26 of these orders are binding on the Trustee, Super Fund 3 (“the wife’s trustee”), being the trustee of the Super Fund 3 Trust (“the wife’s superannuation fund”).
23.In accordance with sub-section 90XT(1)(b) of the Family Law Act 1975 (Cth) (“the Act”):
(a)The husband (or his administrators, executors, beneficiaries, heirs or assigns) is entitled to be paid the specified percentage out of the wife’s interest in the wife’s fund;
(b)The wife’s entitlement in the wife’s fund is correspondingly reduced by force of this order; and
(c)The percentage specified for the purposes of this order is 50%.
24.The wife’s trustee of the wife’s fund do all such acts and things and sign all documents as may be necessary to:
(a)Calculate, in accordance with the requirements of the Act and the Family Law (Superannuation) Regulations 2001 the entitlement awarded to the husband in the immediately preceding clause of this order;
(b)Pay the entitlement whenever the trustee makes a splittable payment from the wife’s interest in the wife’s Fund.
25.Order 23 has effect from the operative time and the operative time is four business days from the date of service of a sealed copy of these orders on the wife’s trustee of the wife’s fund.
26.After service of the payment split notice in accordance with the Superannuation Industry (Supervision) Regulations 1994 (“the SIS Regulations”), the parties shall do all such things and sign all documents as may be necessary, including but not limited to exercising the husband’s request in accordance with the SIS Regulations, for the rollover or transfer of the husband’s interests in the wife’s fund.
Other property, liabilities and superannuation
27.Unless otherwise specified in these orders and save for the purpose of enforcing any monies due under these or any subsequent orders:
(a)Each party be solely entitled to the exclusion of the other to all other real and personal property (including choses-in-action) in the ownership or possession of such party as at the date of these orders;
(b)The parties forthwith do all such acts and things necessary and sign all documents as may be required to close the joint xx…23 account, with any balance remaining to be retained by the husband;
(c)Insurance policies and income protection policies remain the sole property of the owner named therein;
(d)Each party hereby foregoes any claims they may have to any superannuation benefit or other employment-based entitlements belonging to or owned by the other;
(e)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; and
(f)Any joint tenancy of the parties in any real or personal estate is hereby expressly severed.
Procedural
28.All extant applications be dismissed.
AND THE COURT NOTES THAT:
A.Pursuant to section 81 of the Act, these orders are intended to finally determine the financial relationships between the parties to the marriage and avoid further proceedings between them.
B.Orders 18 and 19(a) are amended pursuant to rule 10.13(f) of the Rules with the consent of the parties following a request of the trustee of Super Fund 2.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE A. HUMPHREYS
This is an application for alteration of property interests under section 79 of the Family Law Act 1975 (Cth) (“the Act”). Both parties seek orders by way of property adjustment after the breakdown of their marriage. The period of their cohabitation was approximately 23 years. The period from the commencement of cohabitation until the final hearing is approximately 24 years.
An application was made by the husband seeking to adduce evidence from an adversarial expert in relation to the value of the former family home at B Street, Suburb C in the state of Victoria (“the Suburb C property”). That application was heard on the first day of the final hearing and dismissed with brief reasons given at the time. More fulsome reasons for that decision are provided in this judgment.
BACKGROUND
The wife is aged 47. The husband is aged 49. They commenced a relationship in 1995. The parties lived together for six months in 1995, at least for two or three days each week. They then each returned to live with their parents. They began living together permanently in 1999, married in 1999 and separated in January 2022. They are not yet divorced.
I refer to the applicant as the wife and the respondent as the husband for convenience, without intending any disrespect to either of them.
There are two children of the marriage:
(a)Mr E, is now an adult, aged 19. He completed a certificate of study and has this year commenced graduate studies. Mr E has experienced mental health issues, attends upon a psychologist and is prescribed anti-depressant medication. He does not have a job and does not yet have a driver licence.
(b)X, is aged 15. She is in year 9 at F School. X has been diagnosed with a sensory processing disorder. The wife contended X has learning difficulties as a result of her sensory processing disorder which was denied by the husband. He deposed she is doing well at school. X has previously experienced anxiety and attends upon a psychologist.
Both children live with the husband in the Suburb C property. Their relationship with the wife is fractured. The wife and X have attended some family therapy together. Mr E and X each spend time with the wife in accordance with their wishes, arranged directly between them. The husband gave unchallenged evidence X has stayed overnight with the wife on only three occasions since separation and Mr E only once.
The parties separated when an intervention order was made upon application by the husband and the wife was required to leave the Suburb C property. Those proceedings were resolved by an undertaking given by the wife, without admissions, which expires in early 2023.
After separation, the wife initially stayed in hotels. She has subsequently lived in rental accommodation.
There is no evidence before the court that either party has re-partnered or lives with any other person.
The wife holds qualifications as an allied health worker and works with G Company. At the time of the final hearing, she was “working up”, undertaking a temporary role as a professional which was due to end in mid-2023. In that role she earned an income of $116,617 including superannuation. She was then due to return to her regular fixed-contract role as a professional, and an income of $108,224 per annum including superannuation.
The husband holds qualifications in the construction sector. He is employed as a professional for a construction company on a full time basis and earns approximately $170,000 per annum including superannuation.
The husband receives $200 per week in child support from the wife in accordance with an administrative assessment, equating to approximately $10,400 per annum.
The wife deposed to the stress and anxiety she has experienced in the context of their relationship breakdown and these proceedings but there was no evidence before me this impacted her income, earning capacity or health costs. The parties otherwise each deposed they are in good health.
At the time the parties began living together permanently in 1999, the husband owned a block of land in Suburb H (“the Suburb H property”) and had savings. The parties purchased the Suburb C property in 2002, as vacant land and then constructed a home on it. The net proceeds from the sale of the Suburb H property were among the monies applied to the purchase of the Suburb C property.
The wife received substantial monetary gifts from her family during the parties’ relationship, most significantly between 2020 and 2021. The husband also received a gift of money from his parents in 2007.
The wife’s father died in 2021, very shortly before the parties’ separated. The wife had an entitlement under his Will, via testamentary trust. Significant sums have already been distributed to her via the trust. The estate is yet to be finalised and other entitlements are yet to be paid to the trust. I will refer to these entitlements collectively as “the wife’s inheritance”. The parties have agreed these entitlements can be quantified and are to be included as an asset on the balance sheet, with an agreed value of $1,573,253.
The wife commenced these proceedings by way of an Initiating Application filed on 11 July 2022.
PARTIES’ POSITIONS
Two pool approach
The parties join in seeking a “two-pool” approach be taken, with superannuation and non‑superannuation assets to be considered separately.
The Full Court has made it clear that the court may treat superannuation as an asset pool separate from the parties’ pool of non-superannuation assets and that it is often preferable to do so.[1] This allows the court to give separate consideration to the distinct characteristics of superannuation.
[1] In the marriage of C & C [2005] FamCA 429.
I agree a two pool approach is appropriate, given the different nature of superannuation from the parties’ other assets and their ages (the parties are aged 48 and 49), which means they will not be able to access their superannuation for some time.
Superannuation
The parties each seek an equalisation of their superannuation, by way of a percentage superannuation splitting order (of 50%) applied to each of their superannuation interests.
Non-superannuation assets
The wife
The wife relies on a valuation of the Suburb C property undertaken by a jointly appointed single expert.
The wife contends the gifts from her father and her inheritance represent a significant contribution made on her behalf to the acquisition of the parties’ non-superannuation assets. If it were not for those matters, she submits the parties’ contributions would be equal. In her case outline she emphasises her inheritance makes up approximately 53% of the non-superannuation asset pool.
The wife submits the parties’ contributions to their non-superannuation assets should be assessed as 77% in her favour and 23% in the husband’s favour. Acknowledging the husband’s greater caring responsibility for the children, she submits an adjustment of 5% to 7% per cent is appropriate pursuant to section 75(2) of the Act. Consistently with this submission, the minute of final orders presented on behalf of the wife contended for an adjustment of non‑superannuation property interest of 70% in her favour and 30% to the husband, so a differential of 40%. If the single expert valuation for the Suburb C property is adopted, the total value of the parties’ non-superannuation assets is $2,917,794, so she would receive assets valued at approximately $2,042,455 and the husband would receive assets valued at approximately $875,338. That would see a differential in the value of property received by each of them of 40%, equating to approximately $1,167,118.
The husband
The husband challenged the evidence of the single expert valuer, contending the Suburb C property is worth considerably less than $1.6 million. He sought to adduce evidence from another expert engaged by him, who valued the Suburb C property at $1.3 million. That application was refused.
In relation to the parties’ contributions, the husband emphasises the wife’s inheritance must be considered in the context of all of the other contributions made by the parties over the course of their lengthy marriage, including his contribution made to the purchase of the Suburb C property in 2002, his non-financial contributions to the construction of the family home, and his financial and non-financial contributions made after separation. In his case outline, the husband asserts contributions should be assessed at 60% to the wife and 40% to him. Pointing to his caring responsibilities for the children, the husband submitted an adjustment of 5% in his favour pursuant to section 75(2) of the Act is appropriate. This would see the wife receive 55% of the parties’ non-superannuation assets and the husband 45%, so a differential of 10%.
At trial, the husband departed from his application and case outline and his counsel advocated for an outcome which would see the wife receive 60% of the parties’ non-superannuation assets and the husband 40%. If the value of the Suburb C property is accepted at $1.6 million this would see the wife receive assets valued at approximately $1,750,676 and the husband approximately $1,167,117. The differential of 20% equates to approximately $583,559 in dollar terms.
The husband seeks he make a payment to the wife to achieve this outcome, she transfer her interest in the former family home to him and he refinance the home loan to discharge the existing mortgage. He also seeks the option to elect that the Suburb C property be sold and that he be permitted to bid at the auction. The wife agreed to this in principle, provided the reserve price is set on the recommendation of the agent.
THE ISSUES
The first issue requiring determination was if the husband should be permitted to rely on the evidence of an adversarial expert in respect of the value of the Suburb C property. This was determined as a preliminary issue on the first day of the final hearing.
From the parties’ filed court documents, the evidence and submissions of counsel, I identified the following issues then required determination:
(a)The value to be attributed to the Suburb C property;
(b)Assessment of contributions, with particular consideration as to the weight to be given to the husband’s initial contributions, gifts received by the wife from her family during the relationship and the wife’s inheritance, in the context of all other contributions made by the parties during a long marriage;
(c)Assessment of relevant section 75(2) factors;
(d)A minor dispute in respect of chattels from the Suburb C property; and
(e)Minor issues in respect of the terms of sale in the event the Suburb C property is sold.
APPLICATION TO ADDUCE EVIDENCE FROM ANOTHER EXPERT
On 3 May 2023, three business days prior to the final hearing, the husband filed an Application in a Proceeding seeking to appoint an expert other than the single expert (an adversarial expert) in relation to the value of the Suburb C property. He sought the following orders:
1.That this Application in a Proceeding be listed for hearing on the first day of the final hearing commencing 8 May 2023.
2.That the husband have leave to rely on the valuation of [the Suburb C property] prepared by [J Company] dated [early] 2023.
3.That the husband be permitted to rely on paragraphs 10 and 11 of his Trial Affidavit filed 24 April 2023 and Affidavit of [Mr K] filed contemporaneously herein in support of this Application.
Accompanying this application was an affidavit of Mr K, a certified valuer from J Company, annexing a valuation report for the Suburb C property dated early 2023. Mr K’s opinion of the value of the Suburb C property was $1.3 million. The value attributed to the Suburb C property by the single expert, Mr L of M Group, was $1.6 million.
The husband’s counsel informed the court that the husband was seeking that Mr L and Mr K confer. He advised a request had been made by the husband’s lawyers the previous week for a conference of experts pursuant to rule 7.25 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (“the Rules”). I put it to the husband’s counsel that the application to rely on Mr K as an expert witness first needed to be determined before I could consider making an order for a conference of expert witnesses. He submitted the Rules provide for a conference between experts where parties “intend to adduce evidence from different expert witnesses” and referred me to the Full Court decision of Salmon and Ors & Salmon.[2]
[2] [2020] FamCAFC 134.
In Salmon, a conference was contemplated under rule 15.64B of the Family Law Rules 2004 (Cth). The equivalent rule under the Rules is rule 7.25 which provides the parties may confer with a single expert for the purpose of clarifying the single expert’s report. As noted in Salmon, a conference with a single expert might include the attendance of another expert.[3] Such a conference can be arranged by the parties or ordered by the court and may be followed by questions asked of the single expert pursuant to rule 7.26.
[3] at [38].
It is rule 7.31 which provides for the conference of expert witnesses. In particular, that rule provides for the compulsory conference of experts in a proceeding where parties intend to adduce evidence from different expert witnesses about a question, at least 28 days prior to the first day of trial, with the aim of a joint statement being prepared in relation to particular matters identified in the Rules. Given rule 7.08(1) prohibited the husband from adducing evidence from Mr K without the court’s permission, he could therefore not intend to adduce evidence from Mr K without permission first being granted for him to do so. In my view it was therefore necessary to first determine his Application in a Proceeding before a conference of expert witnesses could be considered (putting to one side for the time being, the late proposal for a conference of experts).
The parties agreed to me determining the husband’s Application in a Proceeding as a preliminary issue. I had by then read the parties’ trial material, including the affidavits of Mr L and Mr K.
Background to adversarial expert application
By way of a joint letter of instruction dated 23 June 2022, the parties engaged M Group as a single expert pursuant to the Rules to undertake a valuation of the Suburb C property.
In mid-2022, Ms N, a certified practising valuer of M Group, inspected the Suburb C property and prepared a report (“the initial M Group valuation”) valuing the former family home at $1,655,000. The initial M Group valuation was undertaken using a “Market Approach (Comparable Transactions Method) and checked by the Cost Approach (Summation Method)”. The report was filed with an affidavit of Ms N on 24 August 2022.
Whilst not apparent from the husband’s evidence or case outline, the letter of instruction to Mr K annexed to his valuation report indicated that he had undertaken a previous valuation of the Suburb C property dated in late 2022. Neither the earlier valuation report nor the letter of instruction engaging Mr K to prepare that report were before the court.
The Certificate of Readiness filed by the husband on 7 February 2023 recorded, “Updated property valuation will need to be done closer to the trial date and can be arranged once the trial date is known.”
Trial directions made on 15 February 2023 provided for an updated valuation of the Suburb C property to be completed by M Group at the wife’s expense.
By way of a joint letter dated 27 February 2023, M Group were again instructed as a single expert, to undertake an updated valuation of the Suburb C property.
In early 2023, Mr L, a certified practising valuer from M Group, inspected and valued the Suburb C property at $1.6 million. That report was filed on 2 May 2023, annexed to an affidavit of Mr L. The updated M Group valuation was undertaken by Mr L using a “Market Approach (Comparable Transactions Method)”. Mr L provided the following summary in his report:
9.1.1 Market Approach (Comparable Transactions Method)
…
Recent comparable sales considered within the immediate area range between $1,320,000 and $1,850,000, depending on factors such as; the size, condition, and appeal of the dwelling; the size, shape and contour of the allotment; the level of ancillary improvements; the location and date of the sale.
We have also considered common units of comparison with the most comparable sales within the immediate area showing an improved land rate range of between $1,265/m2 and $1,850 m2, depending upon factors such as; the size, condition and appeal of the improvements; the size, shape and contour of the property; the level of ancillary improvements; the location and the date of the sale. The assessed value of $1,600/m2 lies within this range.
On 5 April 2023, the husband’s lawyers sent a letter of instruction to Mr K, engaging him to undertake an update to his previous valuation dated late 2022.
In early 2023, Mr K inspected the Suburb C property and issued a valuation report valuing the Suburb C property at $1.3 million. In determining the value of the Suburb C property “regard [was] given to the direct sales comparison approach”. Mr K provided the following summary in his report:
Valuation Summary – Direct Comparison
After analysis of the sales evidence together with the positive and negative attributes of the property and in particular the current state of the dwelling and current market conditions, we consider an appropriate value range for the property to be $1,275,000 to $1,325,000. In assessing value, we have adopted the midpoint of the value range, $1,300,000.
Additionally, the sales evidence indicates a value rate range of $1,264 to $1,850 psm of land (as improved). Our assessment of value indicates a value rate of $1,300 psm of land (as improved). This is at the lower end of the range, however, is considered appropriate having regard to the sloping and irregular shaped nature of the land, current state of the dwelling and current market conditions.
On 20 April 2023, the husband’s lawyers sent a letter to Mr L asking questions about his report, to clarify four matters. On 28 April 2023, Mr L responded to answer the husband’s questions.
Husband’s position
On 3 May 2023, the husband filed his Application in a Proceeding, seeking to adduce evidence from Mr K as an adversarial expert.
In support of his application, the husband relied upon paragraphs 10 and 11 of his trial affidavit in which he deposed:
I dispute the valuation of the [Suburb C] property. I do not believe this valuation appropriately reflects comparable sales. I have numerous further concerns going to the integrity of the valuation. For example, it is entirely unclear why the valuer uses an improved land value higher significantly higher than the average in the local area. Further, the Report contains reference to two laundry areas, but the home has only one laundry. Further again the Report contains reference to a tiled lounge area, but the only lounge room is carpeted. I am concerned the Report contains fundamental errors of fact and is unsafe.
If the house were to be sold, I anticipate the following repairs would be required prior to sale:
a.Repair retaining wall and landscaping with mulch, top soil, planting, drainage as so on;
b.Repair cracks to external render;
c.Repair loose paving around the swimming pool and repair pool interior finish which is missing in patches (this requires the pool to be drained and re-filled);
d.The pergola support beam is rotten and needs to be replaced and then painted;
e.Replace window and door frames. They have extensive damage;
f.Replace two of the boundary fences. I have repaired them to the best of ability and they are now beyond repair;
g.Repaint interior and exterior, including repainting external rendered walls, window frames and doors, garage door and so on;
h.Replace faulty downlights and transformers;
i.Replace cracked tiles in bathroom shower;
j.Attention required to damaged joinery in the kitchen.
k.Carpet in the lounge room needs to be replaced as it has deteriorated, particularly from sun exposure;
l.Steam clean carpet in the other carpeted rooms;
m.Ensuite shower window to be replaced with aluminium due to damage and prevention of mould, will also require re-tiling and waterproofing.
n.General caulking throughout the property.
The husband also relied on the affidavit of Mr K.
The husband’s counsel submitted I should find it was “necessary in the interests of justice” (being one of the expressed purposes of Part 7.1 of the Rules relating to experts), to grant permission for the husband to adduce evidence from Mr K. He submitted that if I did not, and he was able to successfully challenge Mr L’s evidence in cross-examination, there would be a vacuum in the evidence as to the value of the Suburb C property. He referred to the following explanation provided by Justice Riethmuller in Moretto & Cosola:[4]
Concerns as to potential injustice if parties are confined to a single expert witness, where there were considerable differences in the amounts in relevant valuations, were the basis of decisions permitting evidence from another expert in Pitt & Pitt [2009] FamCA 620, Verdon & Verdon (2020) 62 Fam LR 573, Jess & Garvey [2021] FedCFamC1F 189, and Carolan & Lawler [2021] FedCFamC1F 239. Although, in other decisions, even large differences in the valuation amounts have not been sufficient, on their own, to persuade the court to permit evidence from another expert: see, for example, Keevers & Keevers [2021] FedCFamC1F 338; and Padnall & Padnall (No 3) [2014] FamCA 904. However, as the Full Court noted in Neales & Neales [2022] FedCFamC1A 41 that it is erroneous to refuse leave when focusing only upon the difference in values: at [42]. Whilst these cases appear to indicate a diversity of judicial opinion, they may be better explained by reference to the reasons of Watts J in HRBH &IABH [2009] FamCA 1131, where his Honour noted the potential practical difficulty that may arise where the single expert’s evidence on an important factor is so undermined by cross-examination that there would then be “a vacuum in the evidence”: at [8].
An evidential “vacuum” is to be avoided, if possible, particularly in valuation cases where the effective alternative of forcing a sale, even if it is open to the court, is a far from desirable option if one party wishes to retain a property. […]
[4] [2022] FedCFamC1F 433 at [10]–[11].
Directly relevant to this case, Riethmuller J made the following observations in relation to differences in opinion of expert real estate valuers based on a comparable sales method[5]:
In cases where the valuation is based upon the comparable sales method this distinction can be a fine one, however it must be recalled that the expertise of the valuer (which goes beyond a non-expert or real estate agent providing an appraisal) is in making a nuanced assessment of which sales are truly comparable and then forming a view as to a valuation after weighing the different comparable sale prices. Where the values for which each of the parties contend fall within the ambit of a broad range that the single expert identifies, cross-examination would ordinarily be a sufficient tool to avoid injustice. Where the value contended by the party challenging the single expert is outside of the range identified by the single expert (after making use of the right to send questions to the expert and a conference between experts) the interests of justice would tend to weigh in favour of allowing evidence from the other expert, provided that such evidence is not obviously flawed and the difference involved is not out of proportion to the likely additional costs of permitting the evidence to be adduced.
[5] at [15].
Counsel for the husband submitted, as was found in Moretto & Cosola, there was in this case “another special reason for adducing evidence from another expert witness”, meeting the requirement of rule 7.08(2)(c).
Wife’s position
The wife had not filed a Response to the husband’s Application in a Proceeding, which was understandable given the timing of that application. Via her counsel, she opposed the application to adduce evidence from Mr L as an adversarial expert.
Counsel for the wife submitted none of the criteria in rule 7.08 of the Rules had been met, to support the appointment of a single expert. She also pointed to the chronological background outlined above, the previous report obtained by the husband from Mr K and the husband’s representations at the Compliance and Readiness hearing that the matter was ready to proceed save for the updated single expert valuation. Counsel for the wife also submitted that some of the matters raised by the husband had been addressed by Mr L in his answers to the questions asked of him by the husband, but others were new and had not been put to Mr L under the Rules. Those new matters she submitted could be addressed by cross-examination of Mr L.
Rules applying to the appointment of adversarial experts
In respect of an application to appoint another witness where a single expert has been appointed, rule 7.08 of the Rules provides [emphasis added]:
(1)If a single expert witness has been appointed to prepare a report or give evidence in relation to an issue, a party must not tender a report or adduce evidence from another expert witness on the same issue without the court’s permission.
(2)The court may allow a party to tender a report or adduce evidence from another expert witness on the same issue if it is satisfied that:
(a)there is a substantial body of opinion contrary to any opinion given by the single expert witness and the contrary opinion is or may be necessary for determining the issue; or
(b)another expert witness knows of matters, not known to the single expert witness, that may be necessary for determining the issue; or
(c)there is another special reason for adducing evidence from another expert witness.
When considering whether to permit a party to tender a report or adduce evidence from an expert witness, rule 7.11(3) provides the court may take into account the following:
(a) the purpose of this Part (see rule 7.02);
(b)the impact of the appointment of an expert witness on the costs of the proceeding;
(c) the likelihood of the appointment expediting or delaying the proceeding;
(d) the complexity of the issues in the proceeding;
(e)whether the evidence should be given by a single expert witness rather than an expert witness appointed by one party only;
(f)whether the expert witness has specialised knowledge, based on the person’s training, study or experience:
(i) relevant to the issue on which evidence is to be given; and
(ii) appropriate to the value, complexity and importance of the proceeding
In considering the husband’s application to adduce evidence from Mr K, I also had regard to the purpose of Part 7.1 of the Rules outlined in rule 7.02, including:
(a)to ensure that parties obtain expert evidence only in relation to a significant issue in dispute;
(b)to restrict expert evidence to that which is necessary to resolve or determine a proceeding;
(c)to ensure that, if practicable and without compromising the interests of justice, expert evidence is given on an issue by a single expert witness;
(d)to avoid unnecessary costs arising from the appointment of more than one expert witness;
(e)to enable a party to apply for permission to tender a report or adduce evidence from an expert witness appointed by that party, if that is necessary in the interests of justice.
Consideration of adversarial expert application
Rules 7.08(2)(a) and (b)
This was not a situation where the husband pointed to a substantial body of opinion contrary to that given by the single expert. The Full Court has made clear the phrase “substantial body of opinion” refers to more than a mere difference in opinion between experts.[6] Here, both experts had undertaken their valuations using a comparable sales method.
[6] Salmon and Ors & Salmon [2020] FamCAFC 134 at [35]; Neales & Neales [2022] FedCFamC1A 41.
There were not matters that were known to Mr K that were not known to Mr L.
Rule 7.08(2)(c)
A significant difference in the value attributed to a real property by the two experts does not of itself warrant the leave being granted to adduce evidence from another expert on the same subject matter.[7] However, a significant difference in value in combination with other circumstances may be another special circumstance,[8] as was found by Riethmuller J in Moretto & Cosola.
[7] Neales & Neales [2022] FedCFamC1A 41.
[8] Neales & Neales [2022] FedCFamC1A 41.
In relation to rule 7.08(2)(c), I was not convinced there was “another special reason” for adducing evidence from Mr K, including arising from the considerations identified by Riethmuller J in Moretto & Cosola.
In this case, Mr K’s opinion of the market value of the Suburb C property was $1.3 million, falling just below the broad range identified by the single expert, of $1,320,000 to $1,850,000. There was overlap in the properties identified by them as comparable sales. The improved land rate range identified by Mr L from comparable sales evidence (of between $1,265/m2 and $1,850 m2) was consistent with the range provided by Mr K ($1,264 to $1,850 psm). Mr K was of the opinion the improved land value for the Suburb C property was $1,300/m2 at the very bottom of that range, compared with Mr L’s value equating to $1,600/m2 in the middle of that range.
Accordingly, I was not persuaded there would be a vacuum in the evidence if Mr L was successfully cross-examined. Mr L could be asked to provide an alternate opinion as to value of the Suburb C property if errors were identified in his report during cross-examination or if he made other concessions as to the foundations for his opinion, including in respect of his assessment of comparable sales and the weight to be given to those sales. The range of values Mr L provided did not preclude him from shifting his opinion and adopting a value at the lower end of that range upon the testing of his evidence in cross-examination, or for me to form my own view based on all of the evidence after the testing of Mr L’s evidence.
Other considerations
Even had I been satisfied there was “another special reason” for granting permission for the husband to adduce evidence from Mr K, I determined I would not have exercised my discretion to do so taking the following matters into account:
(a)The property had been the subject of two single expert witness valuations undertaken by two valuers at M Group, in mid-2022 and early 2023. There was not a significant difference in the values attributed to the Suburb C property in the two single expert valuations;
(b)The husband’s engagement of Mr K in late 2022 indicated there was a potential issue in relation to the valuation of the Suburb C property in his mind, yet he did not seek permission to adduce evidence from Mr K at that time;
(c)The initial letter of instruction provided to Mr K and his first valuation report were not put in evidence by the husband;
(d)A potential valuation dispute was not flagged with the court when the matter was prepared for trial, including in the husband’s Certificate of Readiness;
(e)The husband consented to an order for M Group to be re-engaged as a single expert to provide an updated valuation. M Group was jointly instructed by both parties’ lawyers;
(f)In her affidavit filed on 17 April 2023, the wife deposed the husband disputed the value ascribed to the Suburb C property by the single expert. She noted he had not made any application to seek to adduce adversarial evidence in relation to the value of the Suburb C property and that she would oppose any late application made by him to do so;
(g)Questions were put to Mr L on behalf of the husband on 20 April 2023, including in respect of errors identified in his report, and were answered by Mr L on 28 April 2023;
(h)Matters raised by counsel for the husband not canvassed in those questions, including errors identified in Mr L’s valuation report, to the extent not already addressed in the answers provided by Mr L, could be put to him in cross-examination. (I also observed apparent errors in Mr K’s report which I brought to the attention of counsel for the husband, including an outdated market commentary, for example, referring to market figures from August and to the approaching spring selling season.);
(i)The husband indicated he did not agree with the single expert valuation in his affidavit filed on 24 April 2023, yet his application to adduce evidence from Mr K was filed on 3 May 2023, only three business days before the final hearing;
(j)Neither party sought the final hearing be adjourned;
(k)One of the expressed purposes of the Rules is to avoid unnecessary costs arising from the appointment of more than one expert witness;
(l)A large part of the first day of the hearing was taken up dealing with the husband’s Application in a Proceeding. If permission was granted to the husband to adduce adversarial evidence from Mr K, further time would be taken up with evidence from two experts rather than one. If the matter took longer than the two days it was listed, there would be an impact on other litigants awaiting hearing;
(m)The prejudice to the wife at that very late stage that if permission was granted for the husband to adduce evidence from Mr K, as she would be without the opportunity to engage another expert to assist her. She would be left only with the single expert; and
(n)The single expert, Mr L, had informed the parties he was on annual leave and his availability was already problematic, including to attend the final hearing, and had not yet been resolved. His availability to review Mr K’s evidence and/or confer with Mr K was not known.
I also had regard to the ambit of the dispute, being $300,000, which I acknowledge is significant. Nevertheless, weighing all of the above considerations, I was not satisfied I should exercise my discretion to permit the husband to adduce evidence from Mr K and the trial proceeded on that basis.
I add that during the course of the final hearing, the wife advised via her counsel that she agreed to an order providing the husband may elect to sell the Suburb C property and bid on it at auction.
I now turn to consider the parties’ substantive applications for an order altering their interest in property.
THE EVIDENCE
The parties each set out in their case outlines the documents they relied upon at the final hearing.
A number of documents were tendered as exhibits, including:
(a)A jointly prepared, combined balance sheet (Exhibit J-1);
(b)A minute of final orders sought by the wife (Exhibit W-2);
(c)A minute of final orders sought by the husband (Exhibit H-4);
(d)Questions put on behalf of the husband to Mr L, by way of a letter from his lawyers dated 20 April 2023; and Mr L’s answers to those questions by way a letter in reply dated 28 April 2023 (Exhibit H-2);
(e)O Bank loan application signed by the parties in 2002 (Exhibit H-3); and
(f)Correspondence confirming procedural fairness had been afforded to the trustees of the parties’ superannuation funds, in respect of the superannuation splitting orders sought (Exhibit W-1).
I have read the material relied upon by each of the parties carefully. I had the benefit of hearing their evidence and the evidence of Mr L, given in cross-examination, and observing the demeanour of the parties over a final hearing of two days.
I do not rely on the affidavit of Mr K given I declined the husband’s application to adduce expert evidence from him.
It has not been possible to include every aspect of each of the parties’ evidence. However, I have taken all the evidence into account. Just because I have not mentioned something in these reasons does not mean I have not considered it.
Section 140 of the Evidence Act 1995 (Cth) sets out that the standard of proof in these proceedings is to a balance of probabilities.
The husband
I found some aspects of the husband’s affidavit evidence was lacking in detail. For example, in relation to the sale of the Suburb H property and application of the sale proceeds. This could perhaps be explained by the length of time that has passed but other aspects of his evidence from long ago was quite detailed. For example, in relation to his contributions to the construction of the home on the Suburb C property.
The husband was cross-examined only briefly. He answered the questions put to him in a direct and forthright manner.
Whilst there were gaps in the husband’s evidence, I have no reason to doubt the evidence he did give.
The wife
The wife demonstrated a reluctance to answer some questions put to her by counsel for the husband in cross-examination.
For example, the wife was asked about the O Bank loan application signed by the parties in 2002 (Exhibit H-3), which the husband relied upon in support of his evidence about the parties’ initial contributions. She gave evidence she was not familiar with the document but when it was put to her that information from her affidavit in reply had been drawn from it, she reluctantly conceded she “would have scanned through it.” When pressed about this, she answered it was “inconsequential to me because I followed the instructions of my lawyer”.
She answered some questions with questions of her own and at times was combative in her responses. For example, when asked if she had read the loan application she answered, “Which [documents] are you referring to? Let’s get them out if you’d like. Let’s not make generalisations”. I had to direct the wife to be polite to the husband’s counsel and to answer his questions put to her.
In contrast and of significance, when asked about the payments she identified as gifts from her father, when she realised she made an error categorising one of those payments, she apologised to the husband from the witness box.
Notwithstanding my observations about some aspects of the wife’s evidence in cross‑examination, I ultimately found her generally a credible witness.
Mr L
As noted above, Mr L is a certified practising valuer from M Group who was engaged as single expert to provide an opinion as to the value of the Suburb C property, in the form of an updated valuation.
Mr L’s expertise was outlined in his report. His qualifications, expertise and experience as an expert witness were not challenged.
Mr L was on leave at the time of the hearing and there was initially concern about his availability. He nevertheless attended the hearing at a convenient time, by way of video, and was cross-examined by both parties’ counsel.
Mr L was cross-examined in respect of his valuation including in respect of errors identified in his valuation, comparable sales evidence relied upon in his report, and repairs the husband submitted may impact the value of the Suburb C property. Mr L readily admitted the errors in his report, as he had done in his answers to the questions put to him by the husband’s lawyers. He answered all questions put to him in cross-examination, patiently and responsively.
I found Mr L’s evidence to be considered, logical and persuasive. For these reasons and those later outlined, I accept his opinion as to the value of the Suburb C property
LEGAL PRINCIPLES
Before making any order altering the interests of the parties to a marriage in property, section 79(2) of the Act requires that I must be satisfied, in all the circumstances, it is just and equitable to do so.[9]
[9] Stanford v Stanford [2012] HCA 52.
If I am so satisfied, I then have power under the Act to make such order as I consider appropriate, after considering the matters set out in sections 79(4) and 75(2), insofar as they are relevant.
The Full Court has emphasised the nature of the task required by section 79 is “in essence, a broad discretionary assessment, which is neither an accounting nor mathematical exercise and effectively requires a "broad-brush approach".”[10]
[10] Babett & Falconer (2015) FLC 98-067 at [44]; cited with approval in Perrin & Perrin (No 2) [2018] FamCAFC 122 at [57]–[58] referring in turn to Dickons & Dickons [2012] FamCAFC 154.
In order to consider if it is just and equitable to make an order, I must first identify the existing legal and equitable interests of the parties in property according to common law and equitable principles.[11]
PARTIES’ PROPERTY INTERESTS
[11] Stanford v Stanford at [37].
Assets and liabilities
As reflected in the jointly prepared combined balance sheet (Exhibit J-1), the parties agreed they had the following legal and equitable interests in property at the time of the final hearing:
Assets and liabilities Ownership Value Suburb C property (former family home) Joint In dispute Home loan secured by mortgage Joint ($344,829) Wife’s inheritance (distributions received via testamentary trust and anticipated further entitlements) Wife $1,573,253 P Company shares Wife $4,300 P Company shares Husband $1,720 Motor Vehicle 2 Husband $27,800 Motor Vehicle 1 Husband $49,040 Value of the Suburb C property
Mr L was cross-examined at length and in detail by counsel for the husband, in respect of his opinion of the value of the Suburb C property at $1.6 million.
Mr L confirmed that when preparing his updated report, he read the previous valuation report prepared by Ms N of M Group. He gave evidence he referred to that report but did not rely on it.
He admitted sections of Ms N’s report had been transposed into his report and that he had not checked them sufficiently thoroughly to identify errors. Those errors included twice listing the laundry when describing the internal configuration of the home at the Suburb C property. He confirmed the valuation had been undertaken on the basis of having only one laundry. In relation to a description of the lounge being tiled, Mr L confirmed the lounge is carpeted and the walkway to the left is tiled and the valuation had been undertaken on that basis. These answers were consistent with the written answers already provided to questions put to him by the husband’s lawyers. He readily admitted the errors and explained they had not impacted his opinion of the value of the Suburb C property.
Mr L also made a further correction when giving evidence, giving his opinion that the property should be described as having four bedrooms and three bathrooms, rather than “three bedrooms plus study/4th bedroom, two bathrooms” as described in his report. When questioned by the husband’s counsel about this categorisation he maintained the study could properly be described and utilised as a bedroom rather than a study or studio even though it does not have built in robes. He acknowledged this was a subjective opinion. The absence of robes was the only reason put to Mr L that the room should be characterised as a study or studio rather than a bedroom. When cross-examined by counsel for the wife, he elaborated that the Suburb C property has other living areas, so to market that room as an additional study or studio area rather than a bedroom would not make sense. I accept Mr L’s evidence that the home could be presented and marketed as a four bedroom home notwithstanding the room is currently used as a study does not have built in robes.
Mr L was cross-examined extensively by counsel for the husband in relation to his use of comparison properties and his opinions in respect of those properties in comparison with the Suburb C property, including specific features of those properties in comparison with the specific features of the Suburb C property. Mr L was familiar with each of the properties and he gave detailed and logical explanations as to why he considered all but one of the comparison properties to be inferior to the Suburb C property.
By way of example only, Mr L was cross-examined at length in respect of a property at Q Street, Suburb C (“the Q Street property”) which sold for around $1,500,000 in late 2022 equating to an improved land value of $1,531/m2. (The Suburb C property having a value in his opinion of $1.6 million, equating to an improved land value of $1,600/m2.) Mr L explained and then elaborated on the comparison provided in his report, including as follows:
(a)He acknowledged the Q Street property had superior external appeal, superior street appeal, had a larger garage and was a newer build. However, he maintained his opinion that the smaller overall living area and the inferior land composition and ancillary improvements made the Q Street property inferior to the Suburb C property;
(b)He acknowledged both blocks were irregular in shape and topography but explained his opinion that the shape of the Q Street property made it more difficult to design a dwelling and as a result there was a lot of “dead space” which could not be utilised for ancillary improvements and outdoor areas that were unusable. He explained this is undesirable to families for example, who prefer to be able to see their children outside from the kitchen window. In this regard, he considered the Suburb C property superior;
(c)He gave evidence that whilst he had not inspected the Q Street property personally, he had relied on photographs available online, subscription data bases and aerial imagery of the allotment. He also emphasised that looking at the floor plan, the Q Street property was two thirds smaller and whilst it had four designated bedrooms, they were smaller than those in the Suburb C property;
(d)Counsel for the husband put to Mr L that given recent interest rises and escalating costs of construction (both factors accepted by Mr L) that purchasers will pay more for a smaller, superior, newer, “turnkey” home that does not require renovating or updating, such as the Q Street property compared with the Suburb C property. Mr L agreed that Q Street was a well presented newer home but was also of the view that the Suburb C property was well presented and would not require significant updating works before moving in. He maintained his opinion the Suburb C property was overall superior to the Q Street property, supporting his opinion of the value of the Suburb C property.
Counsel for the wife put to Mr L the repairs the husband identified in his affidavit as being required to the Suburb C property. Mr L was asked if repairs required to the pool would change his opinion of the Suburb C property, including if the pool had loose paving around it requiring repair and the interior finish of the pool was missing in patches. Mr L explained the pool was clean and had water in it when he inspected the property so he made an assumption it was in working order. He explained he would require a building inspection report to determine the extent of loose paving or other areas that required renovating or upkeep. He acknowledged if it was deemed that “significant” works are required this may affect the value of the property but it would depend on a lot of factors which were beyond the scope of his valuation. He provided a similar response in relation to repairs that may be required to a retaining wall, confirming his opinion would depend on the scope of work required. He explained that when he refers to “significant” works, he means structural issues that would require a significant sum of money to repair.
There was no evidence before the court as to the work required to the repair the pool and retaining wall save for the husband’s evidence as follows
If the house were to be sold, I anticipate the following repairs would be required prior to sale:
a. Repair retaining wall and landscaping with mulch, top soil, planting, drainage as so on;
…
c. Repair loose paving around the swimming pool and repair pool interior finish which is missing in patches (this requires the pool to be drained and re-filled);
There was no evidence as to the cost of those repairs if required to be undertaken.
I note the husband’s affidavit evidence given in his trial affidavit in relation to construction of the retaining walls at the Suburb C property, including, “I constructed all of the retaining walls with the exception of the masonry retaining wall” and “my brother-in-law, [Mr R] assisted me with the construction of the sleeper retaining wall.” It is therefore unclear if the repairs to the retaining wall identified by the husband can be attended to by him or would require specialist tradespeople. Either way, there was no evidence as to the extent and cost of work required.
Otherwise, the other repairs identified by the husband were not in Mr L’s opinion significant works that would impact his valuation.
With the benefit of Mr L’s evidence being tested and the above explanations, among others, I accept Mr L’s expert opinion of the value of the Suburb C property at $1.6 million.
Add-back
The parties agreed to include $6,510 characterised as an “add back” in the wife’s name for legal fees paid from joint funds.
The “adding back” of funds expended prior to trial is exceptional and falls into three categories: where the parties have expended money on legal fees; where there has been a premature distribution of matrimonial assets; and waste or wanton, negligent, or reckless dissipation of assets.[12]
[12] AJO & GRO (2005) FLC 932-218; [2005] FamCA 195 at [30].
I find it is appropriate for the sum of $6,510 to be included for consideration alongside the parties’ present interests in property, given the wife’s use of joint funds to meet her legal costs.
The wife deposes she has applied approximately $116,390 from distributions made to her by the testamentary trust to meet legal fees. That sum forms part of the value of the wife’s inheritance included on the balance sheet, so has in effect also been added back.
The parties did not otherwise seek legal fees be added back, which is appropriate if the balance of their costs were met from income, loans or resources other than joint resources.
Financial resources
Neither party disclosed or asserted financial resources beyond the entitlements of the wife from the estate of her late father, via the testamentary trust, which has been included in the agreed value of the wife’s inheritance on the balance sheet.
Adjusted balance sheet
Given my findings as to the value of the Suburb C property and accepting the agreed add back of legal fees expended by the wife from joint finds and the agreed value attributed to the wife’s inheritance, the balance sheet showing assets available for distribution between the parties, including the agreed add back is as follows:
Assets and liabilities Ownership Value Suburb C property (former family home) Joint $1,600,000 Home loan secured by mortgage Joint ($344,829) Wife’s inheritance (distributions received via testamentary trust and anticipated further entitlements) Wife $1,573,253 P Company shares Wife $4,300 Add back (wife’s legal fees paid from joint funds) Wife $6,510 P Company shares Husband $1,720 Motor Vehicle 2 Husband $27,800 Motor Vehicle 1 Husband $49,040 Total $1,662,623
Setting aside the jointly owned Suburb C property with a net value of $1,255,171, the wife currently has non-superannuation assets (including the agreed add back) valued at $1,584,063. The husband currently has non-superannuation assets valued at $78,560.
The wife has continued to drive Motor Vehicle 1 registered in the husband’s name after separation. It is agreed it will be transferred to her, making the value of non-superannuation assets she will retain, other than in respect of the Suburb C property, $1,633,103. With the transfer of Motor Vehicle 1 the husband will retain assets other than the Suburb C property, valued at $29,520.
Superannuation
The parties also have the following interests in superannuation:
Superannuation Member Value Super Fund 3 Wife $126,834 Super Fund 2 Husband $483,723 Total $610,557
The total net value of the parties’ assets, including the agreed add back and superannuation is therefore $3,528,351.
IS IT JUST AND EQUITABLE TO MAKE AN ORDER?
In this case, the most valuable of the parties’ assets is the Suburb C property which I have found is valued at $1.6 million, subject to a joint loan of $344,829 secured by mortgage. That property is jointly owned and until separation was occupied and used by both parties and their children as the family home. The separation brought an end to the parties’ common use of property. Both parties ask the court to make orders to alter their interests in their property.
On this basis, I find the requirements of section 79(2) are satisfied and it is just and equitable for there to be an alteration of property interests between the parties.
NON-SUPERANNUATON ASSETS
Contributions
In exercising my discretion to make an order which is in all the circumstances just and equitable, sub-sections 79(4)(a), (b) and (c) of the Act, being the provisions relevant to this case, require me to consider the following matters:
(a)the financial contribution made directly or indirectly by or on behalf of a party to the marriage … to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(b)the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the marriage … to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(c)the contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage …, including any contribution made in the capacity of homemaker …
The classification of contributions by reference to terms such as “initial contributions”, “contributions during the relationship”, and “post-separation contributions” can be helpful when undertaking this task. However, in determining what orders are to be made, I am required to approach the assessment of contributions holistically, by analysing the nature, form and characteristics with reference to the particular circumstances of the particular relationship.[13] This should be done without “over-zealous attention to the ascertainment of contributions.”[14] The process the court is required to undertake by section 79 of the Act “…is the exercise of a wide discretion, not the performance of a mathematical or accounting exercise”.[15] All contributions are to be weighed collectively, not compartmentalised with some contributions weighed against others.[16]
[13] Dickons & Dickons [2012] FamCAFC 154 at [21].
[14] Norbis v Norbis [1986] HCA 17 at [17].
[15] Dickons & Dickons [2012] FamCAFC 154 at [25].
[16] Jabour & Jabour [2019] FamFAFC 78 at [73]–[87]; Benson & Drury [2020] FamFAFC 303 at [35].
The wife gave evidence at trial that the parties lived together for six months in 1995 in City S. The husband gave evidence she spent only two or three nights per week with him in his rental property during that time. The wife conceded in cross-examination that they did not begin their “joint endeavours” until they resumed living together in 1999.
At that time, in 1999, the wife had savings of approximately $10,000. The husband owned a block of land located in Suburb H, which he deposed was sold, realising approximately $55,000. When cross-examined, the wife said it was likely the husband’s evidence about the sale of Suburb H was correct but she could not say. The husband also gave unchallenged evidence he had approximately $25,000 in a cash management account and an additional $7,000 in a savings account. The husband deposed these monies, along with the proceeds from the sale of the Suburb H property, amounting to $87,000, were applied to the purchase of the Suburb C property in 2002.
In 2002, the parties purchased the Suburb C property, then vacant land. The wife initially deposed to a purchase price of $125,000. In response, the husband deposed the purchase price was $210,000, which is consistent with the information in the O Bank loan application tendered by him (Exhibit H-3). In her affidavit in reply, the wife deposed they purchased the property for $205,000 plus stamp duty of approximately $8,000 and conveyancing fees.
The O Bank loan application signed by the parties in 2002 disclosed the husband’s gross annual income at $75,000 and the wife’s at $23,000. It also disclosed they had the following assets and liabilities at that time, along with their personal effects:
(a)The husband:
(i)Savings: $87,000; and
(ii)Superannuation: $19,810;
(b)The wife:
(i)Savings: $10,000;
(ii)Motor vehicle: $9,000; and
(iii)Superannuation: $9,500.
By that time, the parties had been in a relationship since 1995 and married and living together since 1999. The wife agreed when cross-examined the husband was at that time earning approximately three times what she was earning and was paying their rent. However, she deposed she was meeting other costs.
The husband was engaged in full time employment throughout the parties’ relationship.
Until 2010, the wife worked in a business operated by her family. She worked on a full-time basis until Mr E was born in 2003 and then on a permanent part-time basis. From around 2011 to 2014, the wife studied full time and obtained her health care qualifications. She commenced employment with the G Company in 2015. From 2016 to 2018, the wife completed further studies at university. She has worked full-time since 2018. The husband alleged “there were a few years during which [the wife] did not work or study” but did not provide details in respect of that claim or contend she was not contributing in other ways during periods she was not working in paid employment.
The parties’ income was paid to a joint account from 2002 and applied from there to expenses.
The husband deposed to bonuses and pay-outs he received during the relationship. He did not contend any of those payments related other than to his employment during the parties’ relationship. The wife also deposed that she received bonuses when working for her family’s business.
A home was constructed on the Suburb C property between 2003 and 2004. The wife deposed works were undertaken to the property funded by a Westpac loan but did not provide particulars. The husband deposed the costs were met from saved income. Neither party adduced evidence of the amount borrowed in 2002 to fund the purchase of the Suburb C property or of any further funds borrowed to fund construction of the home. It is agreed the balance owing on the home loan is now $344,829 but neither party gave evidence as to the sum initially borrowed, of further borrowings since that time, and to what extent the loans have been paid down and from what source(s). It matters not as neither party makes submissions in respect of contributions to which that information would be relevant.
The wife deposed the parties moved in to the home on the Suburb C property in 2003, when Mr E was approximately six months old and the home was at lock up stage.
The husband deposed that he applied his skills as a tradesperson to the construction of the home on the Suburb C property. His evidence included that he completed the sketch designs and built the home as an owner-builder. He project-managed, appointed, organised, co-ordinated and met with all of the tradespeople on the construction of the home. He attended the construction each morning and evening and spent most weekends working on the home, and provided details of the work undertaken by him. His father provided assistance and paid for materials. Other members of the husband’s family and friends also provided assistance. The wife did not deny the contributions asserted by the husband and agreed they were assisted by the husband’s father, who was a tradesperson by trade and by mutual friends, with work on the Suburb C property. However, she gave evidence that she cared for Mr E and assisted as much as possible. She gave evidence, as an example, that while the husband set up the retaining wall structure, she ferried buckets of rocks to fill them.
The husband gave unchallenged evidence that he received a gift of $11,000 in 2007 from his parents, derived from the estate of his father’s sister. He did not give evidence as to how those monies were applied.
The wife deposed in her trial affidavit that her father made gifts of significant sums to their family, paid to the parties’ joint account as follows:
Date Amount 2010 $15,000 2015 $5,000 2016 $20,000 2019 $5,000 Late 2020 $15,000 Mid-2020 $65,000 Early 2021 $20,000 Late 2021 $20,000 Late 2020[17] $50,000 Total $215,000.00 [17] It appears from the wife’s submissions and the chronological listing of these payments, this date should be Late 2021.
When cross-examined, she admitted that in an earlier affidavit she initially deposed to payments of over $100,000. However, she had been to the bank, obtained copy statements and identified the above payments from those statements.
When cross-examined, the wife gave evidence she had lost one of the copy statements obtained from the bank which recorded a payment of $15,000 she asserted was gifted to her in 2010. She gave evidence she had subsequently been unable to obtain a duplicate statement from the bank. Without the statement, she could not be sure this payment was a gift from her father, although she thought it was and that it had been applied to book an overseas trip as a Christmas surprise in 2011.
The wife also conceded there was a mistake in the list of payments she had identified as receiving from her father in respect of $15,000 she deposed was gifted in late 2020. She recalled this payment may have been from her grandmother in reimbursement of expenses paid when the parties were assisting with the sale of her grandmother’s home and move into a retirement village. When asked to concede there could be other mistakes in the list of gifts asserted by the wife she answered it was “unlikely”.
It is not in dispute the wife received significant gifts from her father during the parties’ relationship. The husband admitted in cross-examination it could be “$150,000 or $160,000, in that range”. When asked if it could be more, he answered “I don’t know.”
In around mid-2020, the wife also received a gift of $5,000 from her aunt. The wife was unsure if this was included in the total sum of money she asserted was made in gifts by her father. I note it was identified separately in her trial affidavit and a copy of the cheque annexed (Annexure S-5).
The wife was primarily responsible for the children’s care while they were young. While the wife was working and studying, the children attended child care, accompanied her to work and were cared for by her mother. From 2017, the husband was primarily responsible for taking X and Mr E to and from school each day. He deposed that he also made X breakfast and lunch, took her to sports training, match days and to and from hobby classes. The wife denied the husband took X to hobby lessons and gave unchallenged evidence she had always done so since X was aged three. The husband acknowledged the wife was primarily responsible for taking the children to school before 2017 as he worked earlier, but he assisted when needed.
The wife deposes that she also undertook the majority of home duties, including cooking, cleaning and “keeping the home.” The husband deposed that he attended to internal and external maintenance, including gardening. The wife deposed that she also took pride in their garden and that she tended to and maintained it. She did not deny the contributions deposed to by the husband in respect of maintenance and gardening.
I find the wife was primarily responsible for parenting and home maker responsibilities prior to separation and the husband assisted her more when the children were older. I find the husband was primarily responsible for home maintenance but note the significant list of repairs he deposes are presently outstanding at the Suburb C property. I find they both contributed to gardening to some extent.
The wife’s father died in 2021, shortly before the parties’ separated. Probate was granted in respect of the wife’s father’s estate in 2022 and in or around late 2022, the wife became entitled to receive one third of her late father’s estate, by way of a testamentary trust settled for her benefit (“the testamentary trust”). She has so far received distributions from the testamentary trust of $145,000 as follows:
(a)$40,000 in late 2022;
(b)$15,000 in late 2022;
(c)$35,000 in early 2022;
(d)$35,000 in early 2023; and
(e)$20,000 in early 2023.
The parties agree the total value of the wife’s beneficial entitlement pursuant to her late father’s estate, via the testamentary trust, including the funds already received by her from the trust, is $1,573,253 and to this value being included on the balance sheet with the assets available to be divided between the parties.
The wife deposed to her father’s intention, as expressed in his letter of final wishes annexed to her trial affidavit, that a large part of the corpus of the testamentary trust be preserved for the benefit of the wife and the children. The wife deposed she wishes to abide by her father’s wishes to the extent she is financially able to do so. She nevertheless agreed to include the total agreed value of entitlements under the trust, on the balance sheet, as an asset available for distribution between the parties.
The husband has serviced the parties’ home loan after separation. He has also paid rates, insurances and outgoings for the Suburb C property since separation. He has also had benefit of occupying the Suburb C property with the children since separation while the wife has been meeting the cost of short term and then rental accommodation.
The husband also paid various expenses for the wife’s benefit for a period of time after separation, including private health insurance premiums, car expenses, mobile phone and road tolls. He asserted these sums totalled $3,796 and initially sought they be added back. He appropriately did not pursue that at trial. The wife also deposed to her dental repair surgery costs met by the husband after separation of $3,000.
In March 2023, the parties each withdrew just over $32,000 from their joint accounts which they have applied for their own benefit. The wife deposed she applied those funds to meet the cost of bond and six months of rent in advance (which was required given she didn’t have a rental history), the connection of utilities and to purchase furniture, whitegoods and household items to establish a home for herself. That expenditure is consistent with the parties’ evidence of the circumstances of their separation and in my view reasonable. She deposed that to her knowledge, the husband applied the funds withdrawn by him towards his credit card balances. The husband agreed he paid off the joint credit card and deposed the balance included costs incurred by the wife after separation. He did not provide particulars, so I do not take that into account.
The husband deposed to the wife engaging in disruptive and offensive behaviour when she attended at the home to collect items, which was not denied by her. This is not a matter I take into account when considering the parties’ contributions, only when considering the wife’s application to access the Suburb C property to nominate further items she may seek to retain.
Whilst I have set out my consideration of the parties’ evidence in respect of their contributions in categories for convenience, referring to initial contributions and post-separation contributions for example, my assessment of their contributions is a holistic one. I have weighed and assessed the contributions of all kinds and from all sources made by each of the parties throughout the period of cohabitation, as the Full Court in Wallis & Manning made clear, is the task of a trial judge.[18] My holistic assessment of the parties’ contributions has extended to the period after separation.
[18] (2017) FLC 93-759 at [20].
I have taken into account the timing of the respective contributions and as to how the contributions were applied.
In respect of the husband’s savings at the commencement of cohabitation, derived in part from the sale of the Suburb H property, it is not disputed those funds were applied to the acquisition of the Suburb C property which is among the most valuable of the assets the parties have today. Whilst I take into account how those monies were applied and give this contribution some weight, I take care not to do so in a way that undervalues the myriad of other contributions, both financial and non-financial, made by the parties to the Suburb C property and the parties’ other assets and to the welfare of their family over the 21 years since the Suburb C property was purchased.
I also give weight in my holistic assessment to the contributions made by the wife, by way of the gifts from her father. Even if those gifts amounted to $150,000 or $160,000 as admitted by the husband rather than $200,000 as contended by the wife,[19] the gifts were significant. The assessment of contributions does not require a mathematical accounting, so it is not necessary for me to precisely quantify the value of the contribution to take it into account. A large proportion of these gifts (approximately $155,000 on the wife’s evidence) were received later in the parties’ relationship, in 2020 and 2021, which I consider gives these contributions greater significance. As conceded by the husband’s counsel it matters not that the monies were gifted to the parties jointly. It is open to the court to look at the actuality and treat such a gift as a financial contribution made directly on behalf of the wife, via her father,[20] and I do so. Whether these monies were applied to the acquisition, conservation or improvement of assets along with other funds from the parties’ joint account or expended on holidays and other expenses, they were applied for the benefit of the family. I also take into account the husband’s unchallenged evidence of a gift of $11,000 from his family in 2007, although I consider that contribution to be of less significance given the amount of the gift and where it was made approximately 16 years ago.
[19] being $215,000 identified in her affidavit, less the error she acknowledged when cross-examined of $15,000.
[20] Gosper & Gosper [1987] FamCA 43; (1987) FLC 91–818 at [76,168].
I do not put weight on the contribution made by the husband’s father on his behalf by paying for materials for work undertaken to the Suburb C property in the absence of at least some evidence as to the quantum of those costs and where that contribution was made some 20 years ago.
I do not put weight on the non-financial contributions made by family and friends to work at the Suburb C property in the absence of more detailed evidence in respect of those contributions and where that work was undertaken some 20 years ago in the context of many other non‑financial contributions made by and on behalf of the parties.
I accept the husband’s evidence in respect of the non-financial contributions he made in the construction of the parties’ home on the Suburb C property. However, those contributions also need to be considered in the context of the myriad of other contributions each of the parties made at that time and over the parties’ relationship. This includes contributions made by their employment and their contributions to home maker and parenting responsibilities, including the wife caring for Mr E as a young baby at that time and the children generally.
In assessing the parties’ contributions over their lengthy relationship, I attribute most significance to the contribution made by the wife by way of the wife’s inheritance, with an agreed value of $1,573,253. The wife’s father died shortly prior to the parties’ separation. In putting significant weight on this contribution, I am mindful the husband has also continued to make financial and non-financial contributions since the death of the wife’s father, including after the parties’ separation, and not to undervalue those contributions by in effect quarantining the wife’s inheritance from my holistic assessment of contributions.
The husband’s parenting contributions made in the period after separation in circumstances where X spends only occasional time with the wife is a contribution that must be given weight.
I take into account the modest financial contribution made by the husband to the wife’s expenses after separation but noting he had the benefit of living in the family home and she had the cost of re-establishing herself and rental accommodation. I accept the husband’s unchallenged evidence that he has been servicing the home loan since separation, but he did not adduce evidence of a reduction in the loan principal from the date of separation to the date of trial, to enable me to assess that contribution.
Having considered the totality of the parties’ evidence as to the contributions they each made during a long marriage and the above matters in particular, I assess the contributions of the parties to their non-superannuation assets to be 75% to the wife and 25% to the husband. That reflects a differential of 50% between the parties in respect of their contributions. Where the total value of non-superannuation assets is $2,917,794, this differential equates to approximately $1,460,000 in round terms, which I consider appropriate, reflecting the parties’ respective contributions.
Impact on earning capacity
Section 79(4)(d) of the Act requires me to consider the effect of any proposed order upon the earning capacity of either party to the marriage. Both parties work in paid employment. They will each retain a car. The orders contemplated do not have an impact on the earning capacity of either party.
Matters relevant pursuant to section 75(2)
In considering what order should be made under section 79, subsection 79(4)(e) requires me to take into account the matters referred to in section 75(2) so far as they are relevant.
I refer to the background set out earlier in my reasons regarding the parties’ ages, health, employment and income.
The husband has a greater income than the wife and will likely continue to earn more than her, at least for the short to mid-term. This would be the case even if the wife was able to secure a permanent role of the nature she has recently undertaken on a temporary basis. This is a matter I take into account pursuant to section 75(2)(b) of the Act.
Mr E and X live with the husband. Their relationship with the wife is fractured and they spend only occasional time with her. This means the husband shoulders responsibility for their physical care and support, largely without assistance from the wife.
The husband is financially responsible for X, but he does receive meaningful child support from the wife, presently in the amount of $200 per week. He gave unchallenged evidence the wife’s child support payments are regularly made late although the wife deposed she has brought her child support up to date.
The husband acknowledged the wife also contributes to other costs for X, including out of pocket medical costs for her psychologist appointments (and for Mr E), but deposed the wife has only contributed occasionally to these expenses, to a minimal extent. He deposed he pays for most of Mr E and X’s psychologist sessions, being $250 each session. There was no evidence he had applied for a change of child support assessment based on X’s high medical costs. The wife deposed she occasionally takes X shopping and purchases clothing and other items but I do not have evidence before me to suggest those occasional purchases contribute meaningfully to X’s financial support.
That the husband has the full time care of X is a matter I give weight to, pursuant to section 75(2)(c).
I am satisfied the wife meets her child support obligations as assessed for X and I take this into account pursuant to section 75(2)(na). However, I find the father continues to bear the predominant financial responsibility for X and will likely continue to do so.
Section 75(2)(c) relates only to the care of children under 18. Neither party has a legal obligation to provide financial support to Mr E by way of an adult child maintenance order. The wife acknowledged Mr E’s tertiary studies and his mental health difficulties and did not challenge the husband’s evidence that Mr E is not currently able to work in paid employment. In these circumstances I find Mr E is likely to continue to require financial and non-financial support from the husband until he finishes his university studies. This is a matter I take into account pursuant to section 75(2)(o), consistently with the approach endorsed by the Full Court confirmed in Palumbo & Mandel.[21]
[21] [2019] FamCAFC 228 at [54]–[62].
I find the above section 75(2) factors balance one another out and would not on their own warrant an adjustment to my contribution-based assessment.
Pursuant to my contribution-based assessment, the wife would retain non-superannuation assets valued at approximately $2,188,345 and the husband $729,000, with a differential of approximately $1,460,000 (rounded). Having regard to the disparity in property to be retained by each of the parties, I consider an adjustment of 7.5% is appropriate pursuant to sub-sections 75(2)(b) and (n). This differential pursuant to my section 75(2) adjustment is 15%, which equates to approximately $437,670.
SUPERANNUATION
Given a two pool approach is to be taken, it is necessary for me to consider the direct and indirect contributions of the parties to their superannuation interests and those matters in section 75(2) of the Act as are relevant to their superannuation.
Neither party gave evidence that they had disparate superannuation balances as at the commencement of their relationship. The O Bank loan application form recorded that in 2002, three years after the parties married, the husband had $19,810 in superannuation and the wife $9,500. They each made contributions to their superannuation via their employment and indirect contributions to the superannuation of the other through the support they provided to one another and their family during their marriage. Accordingly, I find their contributions to superannuation equal.
Whilst the wife earns less than the husband and her employer will therefore contribute less to her superannuation moving forward, they each have a strong capacity to earn income and contribute to their superannuation. The parties are of a similar age. Having regard to these matters, I find no adjustment is warranted to the contribution-based assessment made in respect of the parties’ superannuation pursuant to section 75(2).
Copy correspondence was tendered to demonstrate the trustees of both parties’ superannuation funds have been afforded procedural fairness in respect of the agreed superannuation splitting orders.
Accordingly, I consider the orders agreed by the parties to equalise their superannuation are appropriate and may be made binding the trustees of the parties’ superannuation funds.
CONCLUSION
Just and equitable order
Pursuant to the above assessment, I consider it just and equitable for the parties’ interests in property, including the total agreed value of the wife’s inheritance and legal costs added back treated as if they were property available for division, to be altered such that non‑superannuation assets are apportioned between the parties as to 67.5% to the wife and 32.5% to the husband.
The total net value of the parties’ non-superannuation assets is $2,917,794. To achieve this outcome, the husband is to retain non-superannuation assets valued at $948,283. If the husband is to retain the Suburb C property (with a net value of $1,255,171), as he will be retaining a car and shares valued at $29,520, I will require him to make a payment to the wife of $336,400 to make up her entitlement. The wife will retain a car and shares valued at $53,340, her inheritance with an agreed value of $1,573,253 and the addback of legal fees of $6,510, totalling $1,633,103.[22] With the payment of $336,400 from the husband, she will have assets (including add backs) with a total value of $1,969,503. The difference in the value of assets they will each retain equates to approximately $1,021,200 (rounded) in real dollar terms, or 35% of the total net value of their non-superannuation assets including the add back.
[22] The values identified in bold are values correspond with the value of assets retained by each of the husband and the wife in the orders I make.
Each party will receive superannuation valued at $305,279.
Considered globally, this equates to the wife receiving 64% of the parties’ property and superannuation and the husband receiving 36%.
I consider this to be a just and equitable outcome, in percentage and actual terms, consistent with my holistic assessment and weighing of the parties’ respective contributions and those matters relevant pursuant to section 75(2) in the context of a 23 year marriage and a separation of approximately 1.5 years at the time of trial.
I consider the configuration of the property settlement proposed by the parties, in terms of items of property and superannuation to be retained by each of them, and the order I propose to make is just and equitable.
Option for husband to retain the Suburb C property
It is agreed the husband will be given an option to retain the Suburb C property, in which he lives with the children.
The husband deposes that he can borrow approximately $600,000 in order to refinance the home loan and make a payment to the wife. To refinance the existing loan of $344,829 and make a payment to the wife of $336,400, the husband may need to borrow in the vicinity of as much as $681,229. His borrowing capacity is not a matter I take into account given this sum falls outside my determination of a just and equitable alteration of property interests between the parties. The husband made it clear in cross-examination he would not be willing to receive a greater proportion of non-superannuation assets in lieu of less superannuation so I have not considered that as an alternative, to reduce the cash payment he is required to make to the wife.
In default of payment the Suburb C property will be sold and the husband will be permitted to bid on it at auction. Via his counsel, the husband acknowledged that if he is the successful bidder, it is appropriate for him to meet such costs as the parties may incur in respect of the sale. I will make an order to that effect. The husband can take those costs into account when deciding if he will bid on the Suburb C property at auction.
In the event of the sale of the Suburb C property, the wife sought an order requiring the parties to “equally pay the costs of any and all such works as the Selling Agent may reasonably recommend to prepare the property for sale and as may be agreed between the parties up to a maximum cost of $20,000.” In closing submissions, her counsel indicated this did not include building rectification works. Given the evidence of Mr L that the repairs identified in the husband’s affidavit did not in his opinion affect the value of the Suburb C property, I will not make an order to this effect. This does not preclude the parties agreeing to work being undertaken on the advice of the agent or otherwise.
Default provisions
If the husband elects for the Suburb C property to be sold or defaults in making the ordered payment, the Suburb C property will be sold on terms and conditions set by the orders unless otherwise agreed.
In the event of a sale, the parties agreed the reserve price should be as recommended by the agent.
The orders sought by the wife provide for her to nominate three potential selling agents and conveyancers. The husband proposes he nominate three. It matters little either way, but given the husband is in occupation of the home, I will make an order for the wife to nominate three potential selling agents and the husband can elect from that list who is to be engaged, primarily because he is in occupation of the home and will be dealing with the agent to arrange inspections and so on. I will make a consistent order in respect of the conveyancer. I will also make a default provision in the event the wife does not provide the required nominations or the husband does not make a selection from her nominations.
I will provide liberty to apply in respect of the terms and conditions of sale in the event there is a dispute that cannot be resolved by reference to the orders.
Chattels
The husband seeks an order requiring the wife to make available for collection by him the garage door remote and garden tools. This aspect of the husband’s application was not addressed at trial. I make an order for any keys or remote controls for the Suburb C property to be provided by the wife to the husband, given the husband is in occupation of the Suburb C property and will be retaining the Suburb C property or facilitating its inspection for sale pursuant to these orders. I make no order in relation the garden tools in the absence of any evidence about it.
The wife seeks that she receive the following items from the Suburb C property:
(a)[The wife’s] chest of drawers from the master bedroom;
(b)Table from upstairs on which a statute from [the wife’s] great grandmother previously sat;
(c)[Ornament] that previously sat on the table.
The husband seeks to retain the chest of drawers from the master bedroom and gave evidence the drawers are part of a suite of coordinating bedroom furniture. The wife deposed that among the items she has taken from the Suburb C property, she took two chests of drawers. Her counsel could not point me to any evidence that the wife required another chest of drawers or this particular chest of drawers. Accordingly, I find it is appropriate for the husband to retain the chest of drawers from the master bedroom at the Suburb C property, which are used by him and form part of a suite of bedroom furniture it is otherwise agreed he will retain.
During the course of the final hearing the husband conveyed via his counsel that he agreed to the wife receiving the table and ornament. I will provide for those items to be made available for collection by an agent of the wife, but not by the wife herself. I consider this appropriate given her conduct when previously attending at the Suburb C property and to avoid the potential for further conflict, including in X’s presence which may adversely impact her already fractured relationship with the wife.
The wife also seeks an order as follows:
Within 14 days of the sale of the [Suburb C property], the parties will each provide to the other a list of chattels that they wish to retain from the [Suburb C property] and for the purpose of this order, on 48 hours written notice from the wife, the husband will grant the wife access to the [Suburb C property] to nominate any items that she may seek to retain.
Neither party adduced expert evidence as to the value of the contents of the parties’ homes and of their personal belongings. The wife did not give evidence in respect of any particular items she seeks to retain from the Suburb C property save for as outlined above. The wife acknowledged she has previously attended the Suburb C property on at least three occasions to collect items. She did not dispute the allegations that her attendances at the Suburb C property have been problematic. I am not satisfied it is appropriate for the wife to attend at the Suburb C property to identify further items she may wish to retain or that a further order regarding the distribution of chattels is required to achieve a just and equitable alteration of property interest between the parties. For these reasons, I decline to make an order for the further distribution of chattels between the parties beyond the items already identified.
Other matters
In the minute of orders sought by the wife, she seeks an order that “each party foregoes any claim they may have to any inheritances or compensation payments to which the other party is entitled to either presently or in the future”.
Neither party has disclosed any present entitlement to an inheritance or compensation payment, save for the wife’s interest in the testamentary trust. Part L of each of their financial statements does not disclose any other financial resources. Accordingly, I will not make this order.
ORDER
I make a final order as set out at the commencement of these reasons, which I consider appropriate and, in all the circumstances, to be just and equitable.
I certify that the preceding one hundred and ninety-eight (198) numbered paragraphs are a true copy of the Reasons for Judgment of Judge A. Humphreys. Associate:
Dated: 14 August 2023
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