SAUNDERS & SAUNDERS
[2019] FCCA 350
•15 February 2019
FEDERAL CIRCUIT COURT OF AUSTRALIA
| SAUNDERS & SAUNDERS | [2019] FCCA 350 |
| Catchwords: FAMILY LAW – Property – where both parties seek orders for final property distribution – where the date of separation is in issue – where lack of disclosure by parties a significant issue – where husband seeks that jewellery disposed of by the wife post-separation be treated as an “addback” – discussion of relevant legal principles regarding “addbacks” – where the Court is not satisfied that justice and equity require the dissipated jewellery to be added back – where dissipation of jewellery taken into account as a s.75(2) factor – where husband made greater initial contribution – where wife makes allegations of family violence against the husband – where the wife argues that the husband’s conduct made her contributions more arduous – where the Court satisfied the husband’s conduct made the wife’s contributions more arduous. |
| Legislation: Family Law Act 1975 (Cth), ss.75, 79, 80, 81, 117 |
| Cases cited: Bevan & Bevan [2013] FamCAFC 116; (2014) 49 Fam LR 387 |
| Applicant: | MR SAUNDERS |
| Respondent: | MS SAUNDERS |
| File Number: | SYC 3009 of 2015 |
| Judgment of: | Judge Harper |
| Hearing dates: | 9 & 10 April 2018 and 12 June 2018 |
| Date of Last Submission: | 17 August 2018 |
| Delivered at: | Sydney |
| Delivered on: | 15 February 2019 |
REPRESENTATION
| Counsel for the Applicant: | Mr D |
| Solicitors for the Applicant: | G Lawyers |
| Counsel for the Respondent: | Mr E |
| Solicitors for the Respondent: | H lawyers |
ORDERS
For the purposes of the following orders:
(a)the value of the parties’ net assets is $189,231.00, excluding the value of Property A, NSW (hereinafter referred to as Property A) (“value of parties’ net assets”);
(b)The respondent’s deficit of assets over liabilities is $36,193.00
That within 42 days the applicant pay to the respondent the sum of $500,316.
Notwithstanding Order 2, within 42 days the parties may agree in writing a value for Property A (“agreed value”) in which event in lieu of the amount specified in Order 2 the applicant shall pay the respondent a sum calculated in accordance with the following formula:
A + (0.36 * (B + C))
A = the respondent’s deficit of assets over liabilities
B = the value of the parties’ net assets
C = the agreed value
In default of Order 2 or 3, that within 14 days of such default the applicant do all acts and things and sign all necessary documents to list the property known as and situate at Property A for sale by public auction with an agent determined by him in accordance with the following sub-clauses:
(a)The applicant shall notify the respondent of the Agent he has appointed and provide her with a copy of the Agency Agreement within 24 hours of executing the said Agreement;
(b)The applicant will do all such things and sign all documents so as to authorise the auctioneer to sell the property by auction for the best price reasonably obtainable and the auction period shall be not less than 8 weeks from the date the Agency Agreement is signed by the applicant and not later than 16 weeks from the date the Agency Agreement is signed by the applicant unless otherwise determined by the real estate agent and the applicant shall inform the respondent as to the date of the Auction;
(c)The applicant shall be responsible for meeting any upfront costs of the Agent and/or Auctioneer and shall be reimbursed such costs from the proceeds of sale as provided for in these Orders;
(d)The applicant shall nominate a reserve price 10 days prior to the auction after consultation with the agent as to the market value of the property, and notification to the respondent, and adopt the market value advised by the agent as the reserved price; and
(e)The applicant shall provide all necessary directions and instructions to cause the proceeds of sale, as may be held by the Agent, to be disbursed in accordance with these Orders.
That in the event Property A fails to sell at the auction or within 72 hours following the auction that the property immediately be listed for sale by private treaty at a list price as nominated by the applicant in accordance with the recommendations of the Agent and not less than 5% below the reserve price at the auction.
That upon completion of the sale of Property A in accordance with these Orders the applicant shall do all acts and things and execute all documents necessary to cause the proceeds of sale to be paid as follows:-
(a)The payment of all agents commission and auctioneer expenses (if any) and solicitors/conveyancers costs referrable to the sale;
(b)The payment of all adjustments of municipal and water rates;
(c)The payment to the applicant of the costs paid by him in relation to any upfront agent’s expenses in accordance with Order (4)(c) above;
(d)In payment of the balance then remaining (“net balance”):
(i)to the respondent, according to the following formula
A + (0.36 * (B + C))
A = the respondent’s deficit of assets over liabilities
B = the value of the parties’ net assets
C = the net balance
(ii)the remainder to the applicant.
That within 28 days of the making of these orders, the applicant do all such acts and things and sign all necessary documents so as to transfer to the respondent free of encumbrances 50 ordinary shares in the company B Pty Limited.
That in the event that either party refuses or neglects to execute any deed or instrument, the Registrar of the Court be appointed pursuant to section 106A of the Family Law Act 1975 (Cth), to execute such deed or instrument in the name of such party and to do all acts and things necessary to give validity to the operation of the deed or instrument.
That the applicant and the respondent do all acts and things and give all consents and execute all documents and writing necessary to give effect to the orders made herein.
If any party seeks an order for costs, an appropriate application to the Court may be made within 28 days of today’s date (supported by any documentary material) to be filed and served within that time period and a copy forwarded to my Chambers. If no such application is made within the time period specified, no order will be made as to costs.
THE COURT NOTES THAT:
A.Any application as to costs will be dealt with by way of written submissions, unless the parties request to be heard orally.
B.The Court notes that the parties have for the purpose of finally determining the financial relationships between them and to avoid further proceedings between them agreed as follows:
(i)Subject to the approval of the Supreme Court of New South Wales pursuant to the legislation relating to the release of the rights to apply for a family provision order, the applicant and the respondent each releases his or her rights to make an application in relation to the estate of the other pursuant to such legislation;
(ii)The applicant and the respondent each gives that release in consideration of the other terms of this agreement;
(iii)The applicant and the respondent acknowledge that it is to his and her advantage in the light of the terms of this agreement to grant the release;
(iv)The applicant and the respondent acknowledge the terms of this agreement and that they have taken into account the position of the other in the event of the death of the other;
(v)The applicant and the respondent accept that for the purposes of the Act the provisions of this agreement including this release are fair and reasonable;
(vi)At any time after the execution of this agreement the applicant or the respondent or his/her legal representative may request the other party or his/her legal representative to join in at the cost of the one requesting an application to the Court for the approval of this agreement to relinquish all claims under the Act. If such a request is made the other covenants to comply with such a request and to do all things reasonably necessary to obtain the approval of the Supreme Court at the cost of the one requesting.
IT IS NOTED that publication of this judgment under the pseudonym Saunders & Saunders is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT SYDNEY |
SYC 3009 of 2015
| MR SAUNDERS |
Applicant
And
| MS SAUNDERS |
Respondent
REASONS FOR JUDGMENT
Introduction
These are property proceedings between the applicant husband, Mr Saunders (“the husband”) and the respondent wife, Ms Saunders (“the wife”) whereby each party is seeking orders for property distribution after the break down of their marriage.
Background
The husband was born … 1961 and is presently 57 years of age.
The wife was born … 1964 and is presently 54 years of age.
The parties commenced their relationship in 2006 and married on … 2007.
The husband contends the parties separated on 8 May 2013. The wife contends the date of separation to be 1 February 2014.
There are no children of the relationship however both the husband and wife have an adult child from a previous relationship.
Procedural history
The husband filed his Initiating Application on 13 May 2015.
On 27 August 2015, the wife filed her Response.
On 16 September 2015, the husband filed an amended Initiating Application, as well as an Application in a Case.
The matter was originally in the docket of Judge Sexton and first came before her on 7 August 2015 in a duty list.
Thereafter the matter returned before Judge Sexton on 3 December 2015 and was referred for a Conciliation Conference.
A Conciliation Conference took place on 4 April 2016 however the matter did not settle.
On 14 July 2016, the wife filed an Application in a Case seeking spousal maintenance and exclusive possession of a property at Property A (“Property A”).
On 18 August 2016, a Divorce Order was granted, becoming final on 19 September 2016.
On 1 December 2016, Orders were made by consent by Judge Sexton dismissing the wife’s Application in a Case filed 14 July 2016 and granting the wife exclusive occupation of Property A.
On 30 March 2017, the husband filed an Application in a Case.
The matter was subsequently transferred to my docket and first came before me on 17 May 2017. On this occasion the matter was listed for Final Hearing on 30 April 2018 for an estimated two days’ hearing time.
On 7 July 2017, due to changes in the judicial calendar, I made orders in Chambers vacating the Final Hearing dates of 30 April 2018 & 1 May 2018 and listed the matter for Final Hearing on 9 & 10 April 2018 instead.
On 16 March 2018, the husband filed a further amended Initiating Application.
The Final Hearing took place on 9 & 10 April 2018 however was not concluded and was adjourned part-heard to 12 June 2018.
The matter returned before me on 12 June 2018 and the hearing was completed. I made directions for the parties to prepare a joint Balance Sheet to be filed and served with any written submissions of the husband by 3 July 2018, with the wife to provide any written submissions in response by 17 July 2018, and thereafter the husband to provide any written submissions in reply by 24 July 2018.
No joint Balance Sheet or written submissions of the husband were filed by 3 July 2018. At the request of the wife’s solicitor to Chambers, the matter was relisted for mention on 23 July 2018.
On 23 July 2018, I made orders extending time for compliance with the Orders made 12 June 2018, specifically I extended the time for compliance for the preparation and filing of the joint Balance Sheet to 27 July 2018. I also extended the time for compliance for the husband to file and serve any written submissions by 3 August 2018, and thereafter the wife was to file and serve any written submissions in response by 17 August 2018. In relation to any written submissions in reply of the husband, I discharged the previous Order made for the husband to provide written submissions in reply to those of the wife by 24 July 2018, and in lieu thereof made the following Order:
4. Any application for the Submissions in reply may be made to Chambers within 3 business days after the respondent has complied with order 4 made on 12 June 2018 as extended by the Court today.
On 27 July 2018, the joint Balance Sheet and husband’s written submissions were provided to Chambers. The joint Balance Sheet was marked Exhibit Court 1.
On 17 August 2018, the wife’s submissions were provided to Chambers.
No written submissions in reply were received from the husband. Consequently, Judgment was reserved as at 17 August 2018.
It is necessary to record here that the husband contacted my Chambers on 23 October 2018 noting that provision of his written submissions in reply had been delayed due to a dispute between him and his legal representatives and raising the possibility that submissions in reply may be submitted in due course. In the circumstances, delivery of Judgment was delayed to give the husband the opportunity to resolve said dispute and make application, if so advised, to provide submissions in reply on a later date. No such application was made and no submissions in reply were received as at 31 December 2018. The Court therefore proceeded to complete its judgment.
Material relied upon
The husband relied upon:
a)His ‘Summary of Argument Document’ filed 4 April 2018;
b)His written submissions dated 27 July 2018;
c)His amended Initiating Application filed 16 March 2018;
d)His Financial Statement filed 12 March 2018;
e)His Affidavit filed 2 April 2018;
f)His Affidavit filed 7 June 2018. I note here that this Affidavit was read on 12 June 2018, after the husband had been cross examined; it was allowed to be read on the basis that the wife would take no Brown v Dunn[1] point by reason of the husband not being cross examined on its content and subject to certain specific objections; and
g)Affidavit of Ms C (“the husband’s mother”) filed 16 March 2018.
[1] Brown v Dunn (1893) 6 R 67
The husband and his mother, Ms C, were cross-examined.
The wife relied upon:
a)Her ‘Outline of Case’ dated 4 April 2018;
b)Her written submissions dated 16 August 2018;
c)Her Response filed 27 August 2015;
d)Her Financial Statement filed 28 March 2018; and
e)Her Affidavit filed 28 March 2018.
The wife was cross-examined.
The following documents were tendered and placed into evidence:
Exhibit Label
Document
Tendered by
A
Email from Westpac Bank, undated
Husband
B
Photos of wife, posted on social media
Husband
C
Email from Ms Saunders to Mr Saunders dated 2 June 2013
Husband
D
Distribution Agreement (various countries)
Husband
E
Westpac Business One statements in name of Company C Pty Ltd (Acc No: …) for the period 24 November 2017 - 26 February 2018
Husband
F
Email from Ms Saunders to Mr Saunders dated 13 October 2013
Subject: Our love story…Husband
1
Loan agreement between Ms C ATF the Saunders Testamentary Trust AND Mr Saunders dated 4 July 2011
Wife
2
Letter from Accountant to G Lawyers dated 5 April 2018 enclosing schedule of requests and receipt of financial disclosure
Wife
3
Westpac Business One Duplicate Statement in the name of Company B Pty Limited (Account No: …) for the period 4 April 2013 to 4 July 2013
Wife
4
Westpac Classic Plus Account statement in the name of Mr Saunders (Acc No …) for the period 24 May 2013 to 25 June 2013
Wife
5
Westpac Term Deposit Renewal Advice in the name of Mr Saunders (Acc No: …) dated 5 February 2014
Wife
6
Indicative Loan Offer
Wife
7
ASIC Current Organisation Extracts for: The Company B Group Pty Ltd, Company D Pty Ltd, Company E Pty Ltd, Company F Pty Ltd, Company G Pty Ltd, Company H Pty Ltd, Company J Pty Ltd, Company K Pty Ltd, Company L Pty Limited, Company M, Company N Pty Ltd, Company O Pty Ltd
Wife
The following documents were also marked for identification (“MFI”):
MFI No
Document
Tendered by
1
Draft Balance Sheet
2
Account Statement for account no …
Husband
3
Westpac Transaction Listing for account no …
Husband
Competing proposals
By way of his amended Initiating Application filed 16 March 2018, the husband sought orders as follows:
1. That the Wife within 42 days vacate all that the property of the Husband known as and situate at Property A in the State of New South Wales, being more particularly described in Folio Identifier Folio Identifier … (“the Unit”)
2. That the Husband thereafter retain the Unit for his own use and benefit absolutely.
3. That the Husband within 42 days as and by way of alteration of property interests:-
a. Pay to the Wife the sum of $120,000.
b. Do all things and sign all documents necessary to transfer to the Wife all that his interest in Company B Pty Ltd
4. That the parties each retain such other property, including shares, bank accounts, monies, motor vehicles, household chattels, jewellery and superannuation entitlement as may currently stand in their respective names or be in their respective possessions or control.
5. That in the event that either party fails neglects or refuses to sign any document or do anything necessary to give effect to these orders, then the Registrar of the Sydney Registry of the Federal Circuit Court (“the Registrar”) is hereby appointed to sign such document or do so such thing on behalf of the defaulting party and for that purpose the signature of the Registrar shall be deemed for all purposes to be the signature of the defaulting party.
By way of her Response filed 27 August 2015, the wife sought orders as follows:
1. That the applicant husband take all necessary steps and execute all necessary documents to cause the property situated at Property A and described in Folio … to be sold at auction at the earliest possible date at a price to be agreed between the parties and failing such agreement to be determined by the president of the NSW Division of the Australian Property Institute or his nominee.
That the proceeds of the said sale are distributed as follows:-
1.1.1 Payment of agent’s commission and advertising expenses and legal expenses of the sale.
1.1.2 Payment to the respondent wife of a sum to effect an overall property distribution between the parties whereby (excluding superannuation) the respondent wife receives 50% of the net assets of the parties including assets held jointly or individually by the parties.
1.1.3 Payment of the balance to the applicant husband.
2. That until the payment to the respondent wife pursuant to Order 1 hereof, the applicant husband be restrained from selling the Property A property or dealing with his Westpac account or any other bank accounts in any way which would reduce the balance thereof.
3. That until the settlement of the sale of the Property A property pursuant to Order 1 hereof, the applicant husband is to meet all outgoings in respect of the said property including all payments in respect of the mortgage, rates, taxes, charges, insurance and expenses in relation to the repairs and improvements and any other suns [sic] due or accruing in respect of the said property and to indemnify the respondent wife against any liability in relation to the same.
4. The respondent wife is to receive or retain the furniture, contents and chattels particularised in the Schedule marked ‘A’ hereto and the applicant husband is to receive or retain the furniture, contents and chattels particularised in the Schedule marked ‘B’ hereto, and each of the parties is to make available for collection by the other (or any nominee) any item to which the other is entitled pursuant to the relevant Schedule within insert time period or date, at any reasonable time requested by the other, and pending collection of the items the person in whose possession the items are held, shall properly maintain such items.
5. In the event that either of the parties and/or their nominee fails to collect the furniture and chattels on or before the due date ownership shall pass to the other party.
6. That other than as otherwise set out in this agreement, the parties have the sole right, title and interest in any other property which is at the date hereof in their possession, title or name and they shall be solely liable for and indemnify the other against any personal liabilities.
7. That, in accordance with paragraph 90MT(1)(b) of the Family Law Act 1975:
a. The respondent wife is entitled to be paid the specified percentage out of the applicant husband’s interest in the fund;
b. The applicant husband’s entitlement in the fund is correspondingly reduced by force of this order; and
c. The percentage specified for the purposes of this order is 50%.
8. That the trustee of the 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 Family Law Act 1975 and the Family Law (Superannuation) Regulations 2001 the entitlement awarded to the respondent wife in the immediately preceding clause of this [sic] orders; and
b. Pay the entitlement whenever the trustee makes a splittable payment from the applicant husband’s interest in the fund.
9. That this order has effect from the operative time and the operative time is the beginning of the day upon which this order is made.
10. That, after service of the payment split notice in accordance with the Superannuation Industry (Supervision) Regulations 1994 (the regulations) the applicant husband shall do all such acts and things and sign all such documents as may be necessary, including but not limited to exercising the respondent wife’s request in accordance with the regulations for the transfer or rollover of the non-member spouse’s interest in the applicant husband’s name in the fund.
11. That, the Court notes:
a. The value of the non-member spouse interest is calculated in accordance with the SIS Regulations; and
b. Any payments from the applicant husband’s superannuation interest in the Fund made after the trustee has created a new interest in the respondent wife’s name in the fund are not splittable payments in accordance with the requirement of the Family Law (Superannuation) Regulations 2001.
12. Paragraphs 7 – 11 of the orders are binding on the trustees of the Kinetic Super superannuation fund (the fund).
13. There be liberty to each party and the trustee of the fund to apply regarding the implementation of these orders affecting the interests of the applicant husband and the respondent wife in the fund.
14. That the applicant husband and respondent wife do all acts and things and give all consents and execute all documents and writings necessary to give effect to the orders made herein.
15. That within 28 days of the making of these orders, the respondent wife do all such acts and things and sign all necessary documents to transfer to the applicant husband free of encumbrances 1 ordinary share in the company G.
16. That within 28 days of the making of these orders, the applicant husband do all such acts and things and sign all necessary documents so as to transfer to the respondent wife free of encumbrances 50 ordinary shares in the company B.
17. That in the event that either party refuses or neglects to execute any deed or instrument, the Registrar of the Court be appointed pursuant to section 106A, to execute such deed or instrument in the name of such party and to do all acts and things necessary to give validity to the operation to the deed or instrument.
18. That the applicant husband and the respondent wife do all acts and things and give all consents and execute all documents and writing necessary to give effect to the orders made herein.
19. The Court notes that the parties have for the purpose of finally determining the financial relationships between them and to avoid further proceedings between them agreed as follows:
(a) Subject to the approval of the Supreme Court of New South Wales pursuant to the legislation relating to the release of the rights to apply for a family provision order, the husband and the respondent wife each releases his or her rights to make an application in relation to the estate of the other pursuant to such legislation;
(b) The applicant husband and the respondent wife each gives that release in consideration of the other terms of this agreement;
(c) The applicant husband and the respondent wife acknowledge that it is to his and her advantage in the light of the terms if this agreement to grant the release;
(d) The applicant husband and the respondent wife acknowledge the terms of this agreement and that they have taken into account the position of the other in the event of the death of the other;
(e) The applicant husband and the respondent wife accept that for the purposes of the Act the provisions of this agreement including this release are fair and reasonable;
(f) At any time after the execution of this agreement the applicant husband or the respondent wife or his/her legal representative may request the other party or his/her legal representative to join in at the cost of the one requesting an application to the court for the approval of this agreement to relinquish all claims under the Act. If such a request is made the other covenants to comply with such a request and to do all things reasonably necessary to obtain the approval of the Supreme Court at the cost of the one requesting.
20. The applicant husband pays for the costs in these proceedings.
The Law
Part VIII of the Family Law Act 1975 (Cth) (“the Act”) sets out the legislative provisions relating to property orders that may be sought when parties are or were married. The central provision is s.79 of the Act which gives the Court power to make such orders for alteration of property interests as it considers appropriate.
Section 79(2) of the Act provides that:
The court shall not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.
Section 79(4) of the Act set outs the factors to be taken into account in considering what order, if any, should be made (these will be discussed in detail below).
Section 80 grants specific powers to the Court to adjust property interests. Specifically s.80(1) is in the following terms:
The court, in exercising its powers under this Part, may do any or all of the following:
(a) order payment of a lump sum, whether in one amount or by instalments;
(b) order payment of a weekly, monthly, yearly or other periodic sum;
(ba) order that a specified transfer or settlement of property be made by way of maintenance for a party to a marriage;
(c) order that payment of any sum ordered to be paid be wholly or partly secured in such manner as the court directs;
(d) order that any necessary deed or instrument be executed and that such documents of title be produced or such other things be done as are necessary to enable an order to be carried out effectively or to provide security for the due performance of an order;
(e) appoint or remove trustees;
(f) order that payments be made direct to a party to the marriage, to a trustee to be appointed or into court or to a public authority for the benefit of a party to the marriage;
(h) make a permanent order, an order pending the disposal of proceedings or an order for a fixed term or for a life or during joint lives or until further order;
(i) impose terms and conditions;
(j) make an order by consent;
(k) make any other order (whether or not of the same nature as those mentioned in the preceding paragraphs of this section), which it thinks it is necessary to make to do justice; and
(l) subject to this Act and the applicable Rules of Court, make an order under this Part at any time before or after the making of a decree under another Part.
Section 81 of the Act is also relevant, although the Full Court has held it is neither a ‘head of power’ nor an absolute requirement; it reflects a policy of making Orders which finally determine the financial relationship between the parties and avoid further proceedings, but this is only to be taken ‘as far as (is) practicable’: In the Marriage of Crapp and Crapp (No.2) [1979] FamCA 17; (1979) 5 Fam LR 47; (1979) FLC 90-615. Section 81 is in the following terms:
In proceedings under this part [i.e. Pt VIII], other than proceedings under section 78 or proceedings with respect to maintenance payable during the subsistence of a marriage, the court shall, as far as practicable, make such orders as will finally determine the financial relationships between the parties to the marriage and avoid further proceedings between them.
The approach to be taken
Prior to the High Court of Australia’s decision of Stanford v Stanford [2012] HCA 52, parties routinely relied upon the “4 step process” set forth in Hickey & Hickey & Attorney General for the Commonwealth of Australia [2003] FamCA 395; (2003) FLC 93-143 in the determination of an Application under s.79.
The Full Court of the Family Court of Australia in Bevan & Bevan [2013] FamCAFC 116; (2014) 49 Fam LR 387 has held that the decision in Stanford (supra) has not overruled the 4 step approach, it neither approved nor disapproved such an approach. Rather Stanford (supra) serves as a reminder that the 4 step process “merely illuminates the path to the ultimate result” being “no more than a shorthand distillation of the words of a statute which has but one ultimate requirement, namely not to make an order unless it is just and equitable to do so.”: at [61] to [63], [65].
More recently, after consideration of Hickey, understood in the light of Stanford, and taking account of the commentary by the Full Court in Bevan and subsequent decisions, Judges of this Court have articulated a “five step” process. In Giles & Giles & Anor [2018] FCCA 194 at [35], his Honour Judge Monahan, citing the decision of her Honour Judge Bender in Rockman & Rockman [2014] FCCA 1966 at [84] set out the five steps as follows:
(a) firstly, what is the parties’ legal and equitable interests in property;
(b) secondly, is it just and equitable to make an order adjusting the parties legal and equitable interests in that property;
If the answer to (b) is in the affirmative:
(c) thirdly, identify and assess the contributions of the parties within the meaning of ss.79(4)(a), (b) and (c) of the Act and determine the contribution-based entitlements of each party as a percentage of the net value of the property of the parties;
(d) fourthly, identify and assess the relevant matters referred to in ss.79(4)(d), (e), (f) and (g) and s.75(2) of the Act and determine the adjustment, if any, that should be made to the contribution-based entitlements of each party as a percentage of the property of the parties; and
(e) fifthly, given s.79(1) empowers the court to make such orders affecting the parties’ interest in the property as are appropriate, determine what orders, if any, altering the parties’ interests are “appropriate” to enable the parties’ entitlements as determined pursuant to steps (c) and (d) to be achieved.”
If a four step process merely illuminates the path to the ultimate result, for the same reasons so does a five step process. It is not necessary to choose between them. I will broadly follow the five step process in conjunction with the relevant legislative framework, discussed in light of the facts of this case in the course of these reasons.
The Full Court in Bevan (supra) at [73] also summarised three “fundamental propositions” laid down by the High Court of Australia in Stanford to provide “useful guidance to trial judges in approaching the task under s79” as follows:
1.Determination of a just and equitable outcome of an application for property settlement begins with the identification of existing property interests (as determined by common law and equity);
2.The discretion conferred by the statute must be exercised in accordance with legal principles and must not proceed on an assumption that the parties’ interests in the property are or should be different from those determined by common law and equity;
3.A determination that a party has a right to a division of property fixed by reference only to the matters in s 79(4) and without separate consideration of s 79(2), would erroneously conflate what are distinct statutory requirements.
In relation to the just and equitable requirement, the Full Court in Bevan (supra) emphasised that although the pre-condition to making any order for property adjustment is a finding that it is just and equitable to do so in accordance with s.79(2) of the Act, such a finding does not form a threshold issue nor must the requirements of s.79 be followed in a particular order.
In Stanford at [41] and [42], the High Court held that the very fact of separation and the termination of the relationship affects assumptions about property during the existence of a marriage or de facto relationship and may lead to the ready satisfaction of just and equitable requirement. In Chapman & Chapman [2014] FamCAFC 91; (2014) FLC 93-592; 51 FamLR 176, the Full Court, when commenting on Stanford, observed at [21]-[22] that “satisfaction of the s 79(2) requirement can be inferred, at least in part, from the issues joined and, importantly, not joined, between the parties.” Similarly, Thackray CJ, said in Fielding and Nichol [2014] FCWA 77 at [43]:
… in most cases the court will not need to discuss the s 79(2) issue, because the cases will be conducted on the basis of acceptance by the parties that it is just and equitable to make some form of adjustment. In those cases, matters arising under s 79(4) will require discussion only when determining the way the adjustment is to be effected.
A positive finding that alteration of property interests is just and equitable may arise by necessary implication from the totality of the trial judge’s reasons for judgment: Hearne & Hearne [2015] FamCAFC 178 at [71], [72] (per Strickland J).
Here the parties accept it would be just and equitable to make some form of adjustment. The just and equitable requirement in s.79(2) has been satisfied by the issues joined and the way the case was conducted.
I will approach the determination of this matter by first identifying the assets and liabilities of the parties, then by dealing with s.79(4) factors, including s.75(2).
The parties
In cross-examination the husband gave the impression of being reasonably frank. However, his evidence generally about his business dealings, including those in Country 1, left his overall financial position somewhat obscure. I treat his evidence with some caution.
The wife generally gave her oral evidence frankly. However, there was either no or very inadequate evidence about a number of items on the Balance Sheet, claimed by the wife. I will refer to these in more detail later in these reasons.
Lack of disclosure was raised by both parties as a significant issue in these proceedings. Both parties alleged against the other failure to disclose financial material in breach of their duty of disclosure. Exhibit 2 contained a schedule which summarised the position regarding non-disclosure by both parties. This was prepared by the solicitors for the wife. Its accuracy was generally accepted. The consequences of the lack of disclosure will be discussed in more detail later in these reasons. However, I record here that inadequate disclosure severely hampered the Court in forming clear views about a number of aspects of the parties’ financial positions. One glaring example is the paucity of evidence from the wife about her liabilities. Another was the absence of disclosure by the husband regarding a number of entities and his financial position after 2016.
It is relevant to observe also that the husband, although the applicant, took the undesirable approach of waiting until the wife had filed a Trial Affidavit on 28 March 2018 before filing his Affidavit. The Affidavit which he did file on 2 April 2018, was in the form of an Affidavit in reply. This approach did nothing to enhance the credibility of his evidence generally.
Generally the evidence of both parties was inadequate and unsatisfactory in places. The wife submitted that the husband’s evidence should be rejected where it conflicted with hers, and should only be accepted where it was supported by genuine contemporaneous records. I do not accept this submission. The husband, who clearly had considerable financial experience and acumen, had surprising deficiencies in his evidence. But so did the wife. The details of this will be discussed later in these reasons.
Further relevant facts
Additional facts will be referred to, and factual findings made, as necessary in the course of these reasons.
Assets, liabilities and financial resources at the date of the hearing
As noted above, the first step requires identification of parties’ property, liabilities and financial resources at the date of the hearing. The question whether it is just and equitable to make an order “is not to be answered by assuming that the parties’ rights to or interests in marital property are or should be different from those that then exist”: Stanford (supra) at [39].
The most significant asset in the asset pool is Property A. The parties agree its value is $1,100,000. The husband is the registered proprietor of this property.
There were numerous other items on the Balance Sheet asserted by each party, about which there was no agreement. The commentary on the joint Balance Sheet included submissions by the husband about numerous items including liabilities of the wife. I will discuss these further later in these reasons. Accordingly it will be necessary to make a series of findings about the disputed items.
The submissions of the parties were not particularly helpful in analysing the evidence of assets and liabilities. Both parties relied upon assertions of non-disclosure to advocate for their respective conclusions about assets and liabilities.
The Company B Group Pty Ltd
The parties are both shareholders in a company called Company B Group Pty Ltd (“Company B Group”). The wife is presently the only director. The registered office is Property A.
According to the wife she organised the incorporation of Company B in 2012, and the husband became a shareholder then a director for credit reasons in about August 2012. His presence as a shareholder and director assisted Company B in applying for a line of credit. It appears from the ASIC search in Exhibit 7 that the husband ceased to be a director in November 2014. The wife gave evidence that the company had a bank account from which each party withdrew money from time to time. According to the husband the purpose of Company B was to market Products in Australia. He gave evidence that he put in $47,000 by way of seed funding.
The husband states in his Affidavit that the payment of $47,000 was made as a loan. At separation there was approximately $18,000 in the Company B Group account, from which the husband withdrew $13,000 in part repayment, he says, of his loan of $47,000. However, in his Financial Statement filed 12 March 2018, he lists $22,500, as an investment in Company B Group, being $5,000 in equity and $20,000 as a loan. It is not easy to understand how the figure of $22,500 was reached, since it bears no clear relationship to either $5,000 or $20,000. Nor can his evidence of an initial loan of $47,000 be reconciled with his Financial Statement. For her part the wife gives a Nil value for her Company B Group shareholding in her Financial Statement filed 28 March 2018.
The immediate question is what value, if any, do the shares in Company B Group currently have? On the Balance Sheet, the wife gave the shares a value of $1.00 and the husband a value of $22,500.
It appears from the evidence of the wife that she now conducts business activities through Company B Group and other entities which I will refer to later in these reasons. According to the wife, the business is essentially the distribution of products.
No financial statements of Company B Group were put in evidence by either party, although they are both shareholders. Exhibit D is a copy of a distribution agreement entered into between the Company B Group and an entity called “Company D”. This is a brand of products. The wife gave evidence that she also entered into an agreement to sell products through Company E at about the same time. Between 2014 and 2015 the wife said these business activities operated in Country 2 and generated $60,000 which was mostly applied to the running of the businesses. There is however no evidence of the assets or liabilities of Company B Group except the initial loan alleged to be made by the husband and Exhibit D.
The evidence about Company B Group is clearly incomplete and unsatisfactory. The husband may be owed a debt by Company B Group. If so, this would presumably diminish the value of the shareholding. The wife’s evidence supports a conclusion that Company B Group is a trading entity, but without more disclosure about its activities and financial position, no more specific conclusion can be reached. On the evidence, the business activities of Company B Group, such as they are, seem to amount to little more than the sporadic personal exertions of the wife. I am not satisfied the evidence has established any value for the shares in Company B Group. I give them a Nil value.
The Husband’s Assets and Liabilities
The husband was cross-examined at some length about his possible interests in a number of companies. One was Company D Pty Limited which the husband deposes at paragraph 14 of his Affidavit was established to receive his share of the partnership profits from Employer, which he joined as a professional in 2007. I return to this later in these reasons. An ASIC search of this company in Exhibit 7 shows it was deregistered as at 13 January 2016. This is consistent with the husband’s evidence in paragraph 14 of his Affidavit. The Husband confirmed this in cross-examination. The evidence shows it was of no value, as at the date of hearing.
Another company was Company E Pty Ltd. The ASIC search in Exhibit 7 shows the husband as sole director and shareholder, with one issued ordinary share. In cross-examination the husband said he had been a director of this company for about 10 years. He gives no evidence about it in his Affidavit. There was no evidence showing whether this company does or ever did engage in commercial activities. The husband was not cross-examined about its activities. Consequently, I attribute no value to the husband’s shareholding in this company.
The husband was also cross-examined about a number of companies which had “Company F Group” or similar in their names, of which the husband was a director and his mother, Ms C, was a shareholder. Ms C was also cross-examined about investments she has made in relation to at least one of these companies, apparently in the amount of $300,000. I am satisfied that Ms C made these investments for herself, on the advice of individuals other than the husband, and the husband does not hold some undisclosed interest in any such companies, disguised by his mother’s involvement. Apart from making general submissions about deficiencies in the husband’s disclosure, the wife did not submit otherwise.
It is not necessary to mention the other entities canvassed in cross-examination. The husband made no concessions that he had any interest in any of them. There was no other evidence that he did. Unless otherwise stated in these reasons, I am not satisfied the husband has an interest in any of the other companies put to him in cross-examination.
There was little evidence about the husband’s bank accounts, Westpac #..., value $6,176, and Bank, value $2,958. The wife did not agree these values, but accepted the correct values were no less than these amounts. With regard to Westpac #..., no bank statements were produced by the husband. No cross-examination was directed to this bank account. There was no evidence to suggest the credit balance may be greater than $6,176. In relation to the Bank account, the supporting documentation was in Country 1. Again no cross-examination was directed to this bank account. I accept the values put forward by the husband.
The husband has some shares in Shares 5 and Shares 6. He values them at $10,289. The wife accepts the value is not less than $10,289 but points to a lack of any disclosure by the husband as to their value. No cross-examination was directed to this value. I accept the figure of $10,289.
The husband has a MasterCard liability of $4,593 which the wife accepts.
He also claimed a liability owed to his mother of $146,989. Ms C gave evidence and was cross-examined. She gave evidence that she paid levies, water, rates, gas and other expenses for the husband. Her Affidavit sworn 14 March 2018 supports a total loan of $96,989.
The husband also claimed that he had paid legal fees of $68,209.33, with $50,000 borrowed from his mother and $18,209.33 paid from his own resources. He argued the $50,000 borrowed from his mother took his total liability to her to $146,989. He did not make clear whether the amount of $18,209.33 came from post-separation resources. I will return to the question of paid legal costs below.
The Wife’s Assets and Liabilities
I refer to the discussion of Company B Group above.
Apart from Company B Group, since July 2015 the wife gave evidence that she has conducted a business through “Company G” for about one year with a person called Mr E (Paragraph 81, wife’s Affidavit filed 28 March 2018). She gave evidence that this business generated no income and ceased after 12 months.
The wife incorporated Company C Pty Ltd in August 2015 to conduct the … products business in Australia. Her evidence was she is sole director and shareholder with one share issued at $1.00.
In August 2016, the wife incorporated Company H Pty Ltd also to distribute … products. Her evidence was she is also sole director and shareholder with ten shares issued at $1.00. She stated she received no income from Company H. It did not rate a mention in her Financial Statement. In cross-examination she said this was because it owned nothing and did nothing.
Like Company B Group, Property A is the registered office of Company C and Company H.
In her Financial Statement, the wife disclosed $450 per week income from Company C and Nil income from Company B Group. No up-to-date details of this income stream were provided by the wife in evidence at the Hearing. In her Affidavit, the wife stated she is “currently attempting to become financially independent” through Company C and Company B Group’s business interests in … products.
Like Company B Group, referred to above, I am unable to form any view as to whether the wife’s shareholding in Company C has any value or what the value would be. I make the same finding in respect of Company H. I am satisfied this is because of the absence of adequate disclosure by the wife.
I propose to treat both companies as a financial resource of the wife, even though the evidence does not permit any view to be formed about the value of her shareholding in either company.
The wife claimed jewellery of $7,000 as an asset. The husband accepted this value as at the date of hearing. However, he also claimed that $44,100 should be included as an “addback” because the wife had disposed of $44,100 worth of jewellery post-separation. He reaches this conclusion on the basis of the wife’s Financial Statement filed 27 August 2015 which claimed jewellery valued at $51,100, while in her Financial Statement filed 28 March 2018 this value had dropped to $7,000. In submissions the wife conceded this jewellery is no longer available to her and “in difficult circumstances [she] had to sell jewellery. It is not an add-back but was a contribution at the start of the relationship by her.”
There is scant evidence justifying the value of $51,100. In her Affidavit the wife stated she had jewellery worth approximately $30,000 at cohabitation, including a 1.47 carat diamond solitaire and diamond cross necklace and diamond hoop earrings (paragraph 15(b), wife’s Affidavit filed 28 March 2018). The husband’s Affidavit sworn 2 April 2018, which adopted the approach of responding to specific paragraphs of the wife’s Affidavit, did not dispute this. The wife also gave evidence that during the marriage the husband gave her additional jewellery (paragraph 57, wife’s Affidavit filed 28 March 2018). The husband agreed, saying he purchased, for example, the engagement ring for $35,000.
It seems clear that the wife has been disposing of jewellery since separation. In cross-examination the wife said she had sold the engagement ring, insured for $35,000, but which realised only $15,000. She also gave evidence in cross-examination, as I understood it, that she had also pledged jewellery, including the diamond solitaire necklace as security for a personal loan from Finance Company. The outstanding balance of this loan is said to be $8,167. I note here that I accept this amount. Exhibit 6 supports it.
The husband’s submissions about the jewellery raise the issue of addbacks. It is convenient to set out the relevant legal principles regarding addbacks at this point.
In Omacini & Omacini [2005] FamCA 195; (2005) FLC 93-218 the Full Court held that addbacks fall into “three clear 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. The husband argues that the wife’s disposal of jewellery fell into the second category. I did not understand him to submit there had been waste, or wanton dissipation of assets.
In Omacini (supra) the Full Court made clear that an addback does not arise whenever “a party has expended money realised from the disposition of assets that existed as at the date of separation”, the parties do not “go into a state of suspended economic animation” after separation: M & M [1998] FamCA 42 at [2.11].
The Full Court has recently revisited the guidelines relating to addbacks in Trevi & Trevi [2018] FamCAFC 173; (2018) FLC 93-858 at [27]-[42]. The Full Court used “guidelines” advisedly so as to distinguish them from “binding principles of law”. “Adding back” is a discretionary exercise. When the discretion is exercised in favour of adding back, it reflects a decision that, exceptionally, in the particular circumstances of a case, justice and equity requires adding back. The Full Court confirmed “reasonably incurred expenditure does not usually come within accepted categories of addback”: Trevi (supra) at [29]. As a corollary to this, in cases that are not “exceptional”, justice and equity can be achieved, not by adding back, but by the exercise of a different discretion, usually by treating the “addback” as a relevant s.75(2) factor, which may be technically more correct than adding back to the list of existing interests in property: Trevi at [30]. Another approach is that premature expenditure might be taken up in the assessment of contributions, as for example “by a party making a disproportionately greater indirect contributions to the existing property by reason of other property having been dissipated” Trevi, fn 9 referring to Watson & Ling [2013] FamCA 57; (2013) FLC 93-527 at 86,924 [33]. In Grange & Grange [2018] FamCA 30 Kent J said at [222]:
Prior to specifically discussing this issue, relevant to this and subsequent like issues concerning what is asserted by one party against the other concerning the post-separation period, it bears emphasis that the husband and wife finally separated as long ago as 2008. By way of overview, it is well settled that it is unreasonable to conduct some kind of microscopic examination of each aspect of the parties’ post-separation conduct or expenditure with a view to determining notional assets to be brought into account; nor to likewise characterise provision of modest amounts by parents to their adult children. The notional adding-back of assets occurs only where circumstances are proven, and can be demonstrated to show, that it would be unjust and inequitable not to take those matters into account (see, for example, Gollings & Scott (2007) FLC 93-319 and Cerini & Cerini [1998] FamCA 143).
The wife gave no evidence of any specific sale of jewellery in her Affidavit or how she spent any proceeds of such sale. She said in cross-examination that she sold some jewellery to fund an overseas trip to Country 2 for her business Company G.
I am not satisfied the wife’s dealings with jewellery since separation could be called “exceptional”. As the Full Court said in Edgehill & Edgehill [2007] FamCA 1102 at [60]: “we do not consider it was incumbent on her, or realistic to expect, that the wife should provide a precise audit of every item of her expenditure post separation” The evidence, such as it is, favours a conclusion that the expenditure made from the sale of jewellery or its use as security for a personal loan was likely to have been reasonably incurred and I am not satisfied justice and equity requires the dissipated jewellery to be added back as property in the Balance Sheet. The dissipation of jewellery can be taken into account later as a s.75(2) factor.
In her Financial Statement and in the Balance Sheet the wife asserted a range of liabilities including gas and electricity bills, accountant’s fees and legal fees. These were said to total $255,927. This figure also included total personal loans from family members totalling $71,266.
In Biltoft and Biltoft [1995] FamCA 45; (1995) FLC 92-614 at pp 82,124-5; 19 Fam LR 39 at pp 91-92 the Full Court said concerning liabilities:
A general practice has developed over the years that, in relation to applications pursuant to the provisions of s. 79, the Court ascertains the value of the property of the parties to a marriage by deducting from the value of their assets the value of their total liabilities. ...
The Full Court then went on to cite the following passage from the judgment of Evatt CJ in Prince & Prince; General Credits Australia Limited (Intevenor); Attorney-General for the State of Queensland (Intervening); Attorney-General for the Commonwealth of Australia (Intervening) [1984] FamCA 7; (1984) FLC 91-501 at p 79,076:
The assessment of debts and liabilities is not necessarily arrived at by a strictly mathematical or accountancy approach in all cases. While some liabilities are charges upon the property which can be accurately assessed at a certain date, others are at large, or have not been precisely determined, e.g. tax liabilities (Kelly and Kelly (No. 2) (1981) FLC 91-108 p. 76,801 ). In some cases the amount of the liability can only be estimated generally (Albany and Albany (1980) FLC 90-905), p.75,717). The Court can make an allowance for a particular liability if appropriate to do so. In some cases there are sufficient uncertainties as to the alleged liability to lead the Court to disregard it entirely or partly (e.g. a loan from a parent of the party not likely to be enforced. (Af Petersens and Af Petersens (1981) FLC 91-095; Quirk (1983) unreported). In other cases the Court may take the view that because of the circumstances surrounding the incurring of the liability it ought in justice and equity to be wholly or partly disregarded in determining the appropriate order to make under Section. 79 as between the parties to the marriage. Such a result could be reached where a spouse had incurred a liability in deliberate or reckless disregard of the other party's potential entitlement under Section 79 (Kimber and Kimber (1981) FLC 91-085; Kowaliw and Kowaliw (1981) FLC 91-092; Antmann and Antmann (1980) FLC 90-908 ; Af Petersens (supra)). Complex issues can arise in regard to liabilities to third parties (see, e.g. Pockran and Crewes; Pockran (1983) FLC 91-311 ).
Of course, the Court cannot ignore the fact that there is or may be a liability; the effect is simply that it does not consider that the other spouse should be called upon to in effect “contribute” to the liability by having that spouse's fair share in the parties' property reduced by virtue of its existence. The effect may be that the party who has incurred the liability will be left to meet it out of whatever funds remain to that party after satisfying the property order made under Section 79 (Af Petersens (supra)).
These judicial statements regarding liabilities have been cited and followed many times, eg, Z & Z [2005] FamCA 996; 34 Fam LR 296 at [18], [127]; Pillai & Doshi [2012] FamCAFC 173.
Apart from a loan by Finance Company, which is attested by Exhibit 6, and loans by relatives which I consider later in these reasons, none of the asserted liabilities were supported by documentary material or even referred to in the wife’s Affidavit. No other detail was given. They were not accepted by the husband, although he directed no cross-examination to them.
The wife’s liabilities include $867 for gas and $1,253 for electricity. These are not implausible. I accept them.
Several others appear to be loans associated with Company C or Company B Group. Why they were included as liabilities of the wife was not explained. The husband argued that in relation to these items the wife had simply failed to make disclosure. I disregard these loans as too vague and uncertain.
It may be that the wife has some other liabilities but the evidence is not available to form any view about them, if they exist. The absence of any documentary material and absence of disclosure must result in findings adverse to the wife about these liabilities. Unless otherwise stated in these reasons, I am not satisfied any of the wife’s liabilities should be included in the Balance Sheet.
Legal Fees
Among the liabilities claimed by the wife were unpaid legal fees. As just noted, there was no evidence from the wife supporting the amounts claimed.
In addition the husband argued that he had already paid legal fees from money loaned to him by his mother. I have already referred to this loan above. In NHC & RCH [2004] FamCA 633; (2004) FLC 93-204 the Full Court said at [58]:
If funds used to pay legal fees have been generated by a party post-separation from his or her own endeavours or received in his or her own right (for example, by way of gift or inheritance), they would generally not be added back as a notional asset; nor would any borrowing undertaken by a party post-separation to pay legal fees be taken into account as a liability in the calculation of the net property of the parties.
In Trevi (supra) at [32] the Full Court observed there can be little doubt that these statements “have been applied by trial judges ever since.” In Trevi the Full Court also observed that while “An order failing to addback legal costs is a pre-emptive decision about one party paying the other’s legal costs” (at [37]), in the circumstances of a particular case in exercising the discretion “adding back sums generated post-separation in the different manners suggested might create injustice as much as it might cure it” (at [42]).
The husband did not seek a finding that his paid legal fees be added back. But as already discussed above he did seek a finding that he owed his mother $146,989. However, since he conceded $50,000 of this amount was referrable to paid legal fees, following the guidelines in NHC & RCH cited above, only $96,989 should be included as a liability of the husband to his mother. The evidence of Ms Saunders supported the existence of her loan to the husband.
I am not satisfied any amount should be included in the Balance Sheet for the wife’s unpaid legal fees, nor should any amount be added back for legal fees paid by the husband.
Loans by relatives
The wife also gave evidence that she owes money to a number of siblings (paragraphs 91, 92, 93, 94 and 95 of her Trial Affidavit), totalling $71,266. The wife submitted these loans were unchallenged. This not quite accurate. Certainly, no cross-examination was directed to any of these asserted loans. But little detail is given, although more detail is given for these loans than other liabilities claimed by the wife. The wife sought to corroborate several of the loans by annexing emails from the siblings who lent the money (Annexures “B” and “C”). These were objected to by the husband and admitted on a limited basis, as only asserting what the wife says is owed. Annexure “C” was dated 25 March 2018 and appeared on its face to have been created for the purposes of the proceedings. Apart from the annexures, no supporting documentation, such as bank statements showing deposits, is provided for any loan, including those said to be made by siblings. Neither author of either Annexure “B” or “C” could be cross-examined. Although no questions were put to the wife in cross-examination about these loans, the husband did not accept them and argued the wife had failed to give full disclosure or any corroborating material in the joint Balance Sheet. However, by eschewing any cross-examination of these loans, the husband limited the extent to which he could call them in question. In my view, the circumstances of the wife since separation make it more probable than not that she would have needed support from family members, bearing in mind the modest income she receives from her business activities. On balance, while the evidence is unsatisfactory, such loans are not implausible, and I accept them as liabilities on the Balance Sheet.
Superannuation
The Full Court decision in Coghlan & Coghlan (2005) FLC 93-220 requires the Court, in the majority of cases, to consider the parties superannuation interest as a separate species of property, unless the parties consent to it not being treated separately. This allows the Court to assess the parties’ contributions to superannuation as well as other property. It is open however still to the Court to decide whether to treat superannuation interests as a separate list of assets, or as part of one asset list. The majority of the Full Court in Coghlan (supra) said there is no binding principle as to the exercise of the Court’s discretion in deciding whether a one list or a two list approach should be adopted. No submissions were made on this issue. I will include the superannuation entitlements of both parties in the one pool of assets.
In accordance with Orders made 12 June 2018 & 23 July 2018, the parties provided a joint Balance Sheet to Chambers on 27 July 2018. This document was not very helpful and left numerous items the subject of disagreement.
In light of the above findings, the assets and liabilities of the parties at the date of hearing are, as follows:
Assets | W/J/H | Value $ |
| Non-superannuation | ||
| Property A NSW | H | $1,100,000 |
| Motor Vehicle | H | $5,000 |
| Shares – 5 and 6 | H | $10,289 |
| Westpac Classic Plus Account #... | H | $6,176 |
| Bank Account | H | $2,958 |
| Household Furniture | J | $15,000 |
| Personal Westpac Account #... | W | $56 |
| Jewellery | W | $7,000 |
| Total | $1,146,479.00 | |
| Superannuation | ||
| Super | H | $295,083 |
| Super | W | $18,908 |
| Super | W | $2,984 |
| Super #... | W | $8,912 |
| Total | $325,887 | |
| Total Assets | $1,472,366.00 | |
| Liabilities | ||
| MasterCard | H | $4,593 |
| Loan from Mother | H | $96,989 |
| Gas | W | $867 |
| Electricity | W | $1,253 |
| Loans by relatives | W | $71,266 |
| Personal Loan from Finance Company | W | $8,167 |
| Total Liabilities | $183,135.00 | |
| Total Net Property | $1,289,231.00 | |
Percentages of net assets at hearing
Consequently, if there was no property adjustment, the husband would hold all of the parties’ net assets and the wife would have a deficit of assets over liabilities. Having regard to my assessment of contributions below, I am not satisfied such a result would be just and equitable. The parties agree some adjustment would be just and equitable.
I turn now to consider the application of Part VIII of the Act and the factors set forth in ss.79 & 75(2).
Contributions under section 79
I will deal first with s.79 of the Act. Section 79(4) of the Act sets out the considerations to be taken into account by the Court in considering what orders (if any) should be made under s.79 of the Act in property settlement proceedings.
Neither party submitted an asset-by-asset approach should be taken in assessing contributions. I take a global approach to the assessing the financial contributions of the parties: Norbis v Norbis (1986) 161 CLR 513.
In accordance with s.79(4) of the Act, the Court must consider all the contributions, both financial and non-financial to the acquisition, conservation and improvement of the parties’ assets as well as to the welfare of the family during cohabitation and after separation. The Court must consider the contributions in an overall sense: Norman & Norman [2010] FamCAFC 66; Hickey (supra); Kowalski and Kowalski (1993) FLC 92-342; G & G [2000] FamCA 1075. A broad approach is preferred, rather than reference to precise mathematical calculations: In the Marriage of Burke (1981) FLC 91-055 although an evaluation of each party’s respective contributions is necessary: JEL & DDF [2000] FamCA 1353; (2001) FLC 93,075. Assumptions about equality of contributions should not be made. Although the parties have been separated for nearly four years, separate assessment of matters occurring after separation is not necessary in arriving at an assessment of contributions: S & S [2004] FamCA.
Below is a discussion of the evidence and my findings in relation to the relevant contributions under s.79(4) of the Act. Here I note that ss.79(4)(f) &(g) of the Act are not relevant to the facts of this case.
(a) the financial contribution made directly or indirectly by or on behalf of a party to the marriage
Initial contributions
At the commencement of the relationship, the husband was employed as a professional at Employer. He gave evidence of a yearly income of approximately $230,000 (paragraph 3, husband’s Affidavit filed 2 April 2018). The wife put the husband’s income at $150,000 p.a (paragraph 9, wife’s Affidavit filed 28 March 2018).
The wife deposes to being employed as a professional at Employer, in receipt of a yearly income of approximately $110,000 (paragraph 8, wife’s Affidavit filed 28 March 2018). The husband does not dispute this.
The husband also owned a property in his sole name at Property J (“the Property J property”).
The wife contends that the parties commenced cohabitation in a unit in Suburb K, for which the lease was held in her sole name. The wife further contends that from cohabitation in … 2006 until … 2007, she solely met the rental payments for the Suburb K property, being $500 per week. She also contends she paid all household bills, utilities and expenses (paragraph 13, wife’s Affidavit filed 28 March 2018).
The husband disputes the parties commenced cohabitation at the Suburb K property in … 2006 as contended by the wife, but instead he resided at the Property J property and “over a period of some months slowly transitioned into the property leased by the Wife” (paragraph 6, husband’s Affidavit filed 2 April 2018). The husband concedes the wife solely paid the rent and household utilities for the Suburb K property, however denies she paid household bills, instead contending that he largely paid for all groceries and the costs of eating out (paragraph 7, husband’s Affidavit filed 2 April 2018).
At cohabitation, the husband gave evidence that he had the following assets (paragraph 9, husband’s Affidavit filed 2 April 2018):
a)the Property J property, valued at approximately $2,000,000, subject to a mortgage (see below);
b)Property A, valued at approximately $500,000, subject to a mortgage (see below);
c)Superannuation of approximately $150,000;
d)Motor vehicle, valued at approximately $12,000; and
e)household furniture, valued at approximately $25,000.
The husband says he made an investment of $164,641.20 in a business by Company M Limited on 31 March 2006. He further contends that in 2010, Company M Limited went into liquidation and he lost his investment (paragraph 9, husband’s Affidavit filed 2 April 2018). This was not disputed by the wife.
The husband deposes to having had the following liabilities (paragraph 10, husband’s Affidavit filed 2 April 2018):
a)mortgage on the Property J property of approximately $1,400,000. The wife alleges this mortgage to have been approximately $1,000,000 at this time;
b)mortgage on the Property A property of approximately $200,000; and
c)Westpac loan in respect of the company M Limited investment of approximately $150,000.
The wife deposes to having had the following asset (paragraph 14 & 15, wife’s Affidavit filed 28 March 2018):
a)furniture, valued at approximately $8,500;
b)large collection of designer clothes and shoes;
c)jewellery, valued at approximately $30,000;
d)bank accounts with a total balance of approximately $45,000; and
e)approximately $10,000-$15,000 in superannuation.
The wife deposes to having had a credit card liability of approximately $5,000 (paragraph 16, wife’s Affidavit filed 28 March 2018).
The use made of initial contributions is relevant: Pierce & Pierce [1998] FamCA 74; (1999) FLC 92-844 at [28]. An initial contribution has to be weighed against all the other relevant contributions of the parties: Pierce (supra) at [28]. I turn to consider those now.
The husband submits his initial contribution represents 92.97% of the net asset pool at cohabitation and the wife’s contribution represents 7.03% of the net asset pool. I accept the husband made the greater initial financial contribution. The evidence was clear on this point. However, I do not accept the husband’s precise percentage calculation is necessarily helpful.
Financial contributions during the relationship
In … 2007, the parties commenced residing at the Property J property.
The husband deposes that within the first two years of their relationship, the wife incurred credit card debt of $23,000, which the husband contends he transferred to a credit card in his name and paid off fully within a twelve month interest free period (paragraph 5, husband’s Affidavit filed 2 April 2018).
The wife deposes that in … 2007 she applied $25,000, being funds she received from settlement with her previous partner, towards the mortgage on the Property J property, of which both the mortgage and property were in the husband’s sole name. The husband concedes this (paragraph 4, husband’s Affidavit filed 2 April 2018). It is not clear whether the amount of $25,000 formed part of the $45,000 the wife held in bank accounts at cohabitation (see paragraph [125] above). However, I take account of this amount as a contribution to the Property J property.
According to the wife, in … 2007 the husband left his employment with Employer and commenced employment with Employer as a professional. The husband agrees he received an income of approximately $220,000 p.a, plus a share of the partnership profits (paragraph 14, husband’s Affidavit filed 2 April 2018), although he contends he received no partnership profits (see below). The wife did not dispute this.
In … 2007, the parties married.
In … 2008, the wife deposes to having commenced employment as a professional at Employer, in receipt of a yearly income of $90,000 (paragraph 27, wife’s Affidavit filed 28 March 2018).
In or about … 2008, the husband gave evidence that his contract with Employer was terminated and he received a payout of $250,000 (paragraph 15, husband’s Affidavit filed 2 April 2018), which he applied to the mortgage on the Property J property. The wife contends the husband received a payout of $200,000 (paragraph 32, wife’s Affidavit filed 28 March 2018). I accept the husband is likely to be more accurate in this regard. The husband further contends that during his time with Employer, he received no partnership profits as his contract terminated early (paragraph 14, husband’s Affidavit filed 2 April 2018). The wife did not dispute this.
In … 2008, the husband commenced a three-month role with Employer and received income of $40,000 (paragraph 16, husband’s Affidavit filed 2 April 2018).
In … 2009, it is agreed the wife was made redundant from her position with Employer and received a redundancy payout, which the wife contends was $15,000 and which she contributed “towards general household expenses and, for a period of time, sent $200 per month to” her daughter (paragraph 34, wife’s Affidavit filed 28 March 2018). Thereafter the wife deposes that between … 2009 and … 2010, she undertook a number of temporary assignments, estimating she was without employment for approximately four months during this period (paragraph 35, wife’s Affidavit filed 28 March 2018).
In … 2010, the wife deposes that she commenced employment with the Employer as a professional earning approximately $90,000 per annum (paragraph 37, wife’s Affidavit filed 28 March 2018). The wife contends she resigned from this position in … 2011 due to bullying and thereafter was unemployed for a period of four months (paragraph 39 & 40, wife’s Affidavit filed 28 March 2018).
Throughout the parties’ relationship, the husband contends the parties had separate bank accounts. He further contends that before separation, he paid for all accommodation costs, utilities, food, groceries and household supplies, dining out, entertainment and travel expenses, including a number of overseas trips for the parties. I accept this evidence as broadly correct.
In 2011, the parties renovated the Property A property. With respect to the renovations to the Property A property, the wife deposes:
41. In August 2011, Mr Saunders asked me to organise renovations to the Property A property. At around this time Mr Saunders said to me words to the effect of ‘You can renovate Property A so that we can live there’. Mr Saunders’ instructions to me for the renovations to the Property A property were that the works were to be completed six weeks prior to moving in. Mr Saunders gave me a budget of $50,000, which he funded. I completely renovated the apartment within the timeframe. For these renovations, I undertook, amongst other things, the following:
(a) Sourced suppliers and obtained all quotations and selected all trades;
(b) For the kitchen, I chose design material, negotiated the price for the bench tops and cupboards, and arranged the purchase of whitegoods;
(c) Designed the new bathroom;
(d) Chose ceiling fans and lighting;
(e) Installing plantation shutters and wardrobes;
(f) Supervised painting and polishing floorboards; and
(g) Organising double glazing on the windows.
42. For all of these tasks I was solely responsible for coordinating the work with the builders.
With respect to the renovations to the Property A property, the husband generally denies the contention of the wife that she was solely responsible for the renovations:
22. As to paragraph 41, I deny I asked the Wife to organise renovations on the Property A property. At the time, we were living in Property J and I had decided to sell it…The Wife said to me: “Property A [sic] Street needs work done on it before I can live in it.” or words to that effect. At that time I did not have any spare cash. I approached my mother for a loan and was successful in borrowing $50,000 from her. A loan agreement was drawn up…Thereafter, the Wife spent the following six weeks jointly doing the work necessary for us to move in. As to the following specific matters raised by the Wife in relation to such work I say as follows:-
(a) I deny the Wife sourced all suppliers and obtained all quotations and selected all trades. We discussed suppliers and quotations on almost a daily basis. We were each responsible for making contact with various suppliers or tradespersons. It was usually me who negotiated a price with suppliers and tradespersons, as the Wife was not skilled enough to do this effectively. It was invariably me who paid the suppliers and tradespersons from the $50,000 which I had borrowed from my mother.
(b) I deny that for the kitchen the wife chose design material, negotiated the price of the benchtops and cupboards and arranged purchase of the whitegoods. As to the design material, the wife and I looked at numerous catalogues and went and attended various suppliers and showrooms to see what was available. I invariable drove the Wife to the showrooms and suppliers. The Wife did not drive a motor vehicle and did not at any stage have a licence to do so. I negotiated the price for the benchtops and the cupboards. I recall meeting the supplier on site for that purpose. The Wife may well have been with me at the time, I cannot recall, but I certainly recall negotiating the price for the kitchen fit out. Similarly, I attended jointly with the Wife at various showrooms to select, purchase and pay for the relevant white goods.
(c) I deny that the Wife designed the new bathroom. We did so jointly. I recall driving her to Suburb N where we looked at numerous bathroom mock ups and bathroom fittings.
(d) I admit that I was not involved in choosing the ceiling fans and lighting…
(e) I deny that the wife installed plantation shutters and wardrobes. The Wife and I together chose the plantation shutters and wardrobes from a catalogue. Again, I paid for them. They were paid in a series of instalments. They were installed by a tradesperson who had been selected by the Wife and I and with whom I had negotiated an installation price. I recall attending one or more site meetings with the installers and being present during the period of installation.
(f) I deny the Wife supervised the painting and polishing of floorboards. I attended a site meeting with the relevant tradesperson. The floor boards needed to be sanded, painted and polished. I was also responsible for payment of same.
(g) As to organising the double glazing on the windows, I say that this was again done jointly. We both attended a site meeting to explain to the glaziers as to what had to be done. I paid the glaziers at the conclusion of the work.
23. As to paragraph 42, I deny that for all the above tasks the Wife was solely responsible for coordinating the work with the builders. This was very much a joint enterprise as described above.
In October 2011, the husband sold the Property J property. The wife contends she “helped prepare the house for openings by cleaning the house and making it look presentable for sale” (paragraph 43, wife’s Affidavit filed 28 March 2018). The husband submits the “preparation of the Property J property for sale was a joint activity which we [the husband and wife] shared equally” (paragraph 24, husband’s Affidavit filed 2 April 2018).
It appears that in late-2011, the parties commenced living in the Property A property.
I have already discussed Company B Group earlier in these reasons, and I refer to that discussion in relation to contributions. It is necessary to refer to additional facts regarding Company B Group. The wife submits she was the sole shareholder (paragraph 49, wife’s Affidavit filed 28 March 2018) but the husband submits the parties held equal shareholdings in the company (paragraph 26, husband’s Affidavit filed 2 April 2018). The wife further submits an agent assisted her to set up Company B Group, however the husband submits he set up the company for the wife online.
The husband contends it was his idea to establish the Company B Group. He deposes he provided $47,000 of his own funds as seed funding, which he contends was discussed between he and the wife to be a loan to be repaid on demand (paragraph 31, husband’s Affidavit filed 2 April 2018). Further, he deposes that it was he who negotiated a contract between the Company B for the sole distribution rights in various countries (paragraph 26, husband’s Affidavit filed 2 April 2018). On 17 August 2012, the husband became a director of Company B Group.
I accept both parties were involved in establishing the company and although the husband remains a shareholder, the wife alone derives income from it currently.
On 25 August 2012, the husband became director and secretary of Company J Pty Ltd, in which he held a 50% shareholding. He deposes this company was “a vehicle for what was in effect a partnership between Mr F and me for carrying out of business and exploration of business opportunities in Country 1” (paragraph 29, husband’s Affidavit filed 2 April 2018). According to the husband, he received approximately $30,000 from the operations of Company J Pty Ltd. He submits these funds were “utilised to offset my accommodation and business expenses in Country 1” (paragraph 25, husband’s Affidavit 2 April 2018). I accept this evidence as broadly plausible.
For a period of six months, the husband was employed as a consultant at Employer (paragraph 30, husband’s Affidavit filed 2 April 2018).
On 20 August 2013, the husband was appointed as Director (paragraph 30, husband’s Affidavit filed 2 April 2018). The husband gave evidence that his mother was an investor in Company Pty Ltd and he holds no beneficial interest. Both he and his mother were cross-examined about this investment. I accept the evidence of both in this regard, namely, that the mother made her own investment and the husband has no beneficial interest.
Throughout the relationship the parties went on a number of overseas trips, which the husband says he met majority of the costs of, which he sets out at paragraph 33 of his Affidavit filed 2 April 2018. The wife did not dispute this, but gave evidence, which the husband did not dispute, that she helped by ironing his clothes, accompanying him to meetings and dinners, preparing meals and socialising with business guests and associates.
Financial contributions post-separation
The husband submits the parties’ date of separation to be 8 May 2013 and annexes an email from the wife to his Affidavit filed 2 April 2018 in support of this contention (paragraph 36, husband’s Affidavit filed 2 April 2018). Alternatively, the wife submits the parties’ date of separation to be 1 February 2014, citing a telephone call between the parties where the husband said words to the effect of “We are separated. I am living here and you are living there” (paragraph 71, wife’s Affidavit filed 28 March 2018). I accept the wife’s final date of separation is more likely although the marriage was clearly in trouble by about May 2013.
The husband returned to Australia in July 2013. The wife contends the husband resided with her at the Property A property. The husband denies this, contending instead that he stayed with his mother and friends.
On the evidence, it appears the husband has been undertaking business activities in Country 1 since around late-2012. From this point, the wife remained living in the Property A property and deposes the husband provided her with $1,200 per month to pay household and living expenses. During this time the wife contends she was responsible for maintaining the property, including all housework. The wife conceded the husband also met the costs of the parties’ health insurance premiums, the wife’s gym membership and costs of her mobile phone (paragraph 60, wife’s Affidavit filed 28 March 2018).
As already noted, in 2013, the husband withdrew $13,000 from the bank account of Company B Group, which he contends he paid “to myself [the husband] by way of diminution of Company B Group Pty Ltd’s $47,000 indebtness to me” (paragraph 31, husband’s Affidavit filed 2 April 2018). I refer to this withdrawal later in these reasons under s.75(2)(o).
In May 2014, the wife, through Company B Group, entered a distributorship agreement with Company E to sell a range of products (paragraph 73, wife’s Affidavit filed 28 March 2018; paragraph 41, husband’s Affidavit filed 2 April 2018). The husband contends that he and the wife were on good terms at this time and, given he was still a Director of Company B Group, he “assisted her in the negotiation and subsequent drafting of the distributorship agreement” (paragraph 41, husband’s Affidavit filed 2 April 2018). The wife says she initially operated this business in Country 2 in 2014 and 2015 and generated earnings of $60,000, of which most funds “were attributed to the running of the business and very little came into my own pocket by way of income” (paragraph 73, wife’s Affidavit filed 28 March 2018).
On 12 November 2014, the husband resigned as a Director of Company B Group.
The wife contends that in April 2015 she went to Country 2 for approximately three months and whilst away the husband returned to Australia and asked to stay in the Property A property. The wife refused this request and alleges that in response the husband ceased paying for utilities for the Property A property and her gym membership (paragraph 79, wife’s Affidavit filed 28 March 2018). The husband does not deny this.
In June 2015, the wife contends the husband ceased paying all expenses for the Property A property (paragraph 82, wife’s Affidavit filed 28 March 2018). The husband denies this and deposes he continues to pay the council rates, water rates and strata fees for the Property A property (paragraph 45, husband’s Affidavit filed 2 April 2018). Beyond these assertions in their Affidavits, neither party provided supporting evidence that they had made the payments alleged in these categories. I find that both contributed to the costs of the Property A after separation.
Also in June 2015, the wife contends having ceased operating Company E in Country 2 (paragraph 80, wife’s Affidavit filed 28 March 2018).
In July 2015, the wife deposes having formed a business called “Company G” in partnership with Mr E which operated for approximately a year however received no income (paragraph 81, wife’s Affidavit filed 28 March 2018).
The wife deposes that in approximately August 2015, Company C Pty Ltd was registered, of which she is the sole director and shareholder. Company C Pty Ltd is used by the wife for sale of Company E in Australia (paragraph 83, wife’s Affidavit filed 28 March 2018).
The wife deposes that on 8 August 2016, Company H Pty Ltd was registered. She is the sole director and shareholder. The wife used Company H Pty Ltd to operate a stall in Shopping Centre from December 2016 to March 2017. She contends that from March 2017, she has earnt no income from Company H Pty Ltd (paragraph 84, wife’s Affidavit filed 28 March 2018).
The husband gave evidence that his activities in Country 1 have been “largely self-funding” but he borrowed a total of approximately $96,000 from his mother, of which $22,050 was used to meet rates, strata fees and utility payments for the Property A property post-separation (paragraph 25, husband’s Affidavit filed 2 April 2018).
The husband presently resides in Country 1. The wife continued to reside in the Property A property, however at the time of swearing her Affidavit had been residing in Brisbane for a period for business purposes.
The wife continues to operate her business, and as at 28 March 2018, being the date she swore her Financial Statement, she was receiving total income of $450 per week.
The husband notes his occupation as Business Consultant with Company E and as at the date he swore his Financial Statement, being 12 March 2018, was receiving a weekly income of $10.
(b) the contribution (other than a financial contribute on) made directly or indirectly by or on behalf of a party to the marriage
The wife submits her non-financial contributions, discussed earlier in these reasons at [150] and her support for the husband at work functions and dinners, “were a key and significant contribution” on her part: “She [the wife] contributed to the husband’s work as best she could in difficult circumstances accompanying him to events etc.” (wife’s submission dated 16 August 2018).
I accept these contributions were made by the wife. I accept these contributions were significant.
(c) the contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage and any children of the marriage, including any contribution made in the capacity of homemaker or parent
With respect to non-financial contributions, the wife deposes as follows:
68. Throughout our relationship, I did the majority of the housework. This included amongst other things, cooking, cleaning, washing, vacuuming, the dishes, maintenance of garden, ironing Mr Saunders’ work clothes and grocery shopping.
69. When Mr Saunders was home, he would remove the garbage and assisted with the laundry and grocery shopping.
The husband contends that household duties were performed equally: “when I [the husband] was in Australia with her [the wife], all housework was shared on an approximately equal basis with the exception of the occasions the respective deathsof [sic] my father and her mother” (paragraph 40, husband’s Affidavit filed 2 April 2018).
In … 2008, the husband’s father passed away. The husband agreed the wife did most of the household tasks without much assistance from him for the two months after his father’s death. He gave evidence that he returned the favour following the death of the wife’s mother (paragraphs 12 and 21, husband’s Affidavit filed 2 April 2018).
There are no children of the relationship.
Both parties have a daughter from previous relationships however their respective child did not reside with the parties during the relationship.
(d) the effect of any proposed order upon the earning capacity of either party to the marriage
I am satisfied the proposed orders will not affect the earning capacity of either party.
Assessment of contributions
I am satisfied that the husband made the greater financial contribution during the relationship. Both parties contributed their income to the relationship during its time and made contributions to the renovation of Property A.
The wife submits “the Husband’s obfuscation of income and receipt offshore since 2013 makes all matters thereafter incapable of analysis. As a result, it cannot be submitted or, with respect, found that the Husband made any direct financial contribution at least since 2013” (wife’s submission dated 16 August 2018). I do not fully accept that submission. It is true however that his evidence of activities since 2013 in Country 1, his earnings and sources of income remained sparse at the end of the Hearing. But there is some evidence of the husband’s contributions after separation. I am satisfied the husband made contributions to the ongoing costs of Property A and made payments in support of the wife, already discussed above.
In assessing contributions it is necessary to consider allegations of violence and abuse made by the wife. In my view it is appropriate to take account of these allegations here in assessing contributions rather than in relation to a s.75(2) factor. The wife gave evidence of numerous occasions when she was subjected to humiliating and violent behaviour at the hands of the husband, during the relationship (paragraphs 99 to 112, wife’s Affidavit filed 28 March 2018).
The wife accused the husband of becoming more and more possessive during the relationship with a pattern of flying into rages. The wife was cross-examined about most of the incidents alleged by her, and it was put to her directly that they did not happen. She agreed that she complained to no one about the husband’s behaviour, and called no corroborating evidence. The husband was cross-examined about these incidents and denied being repeatedly aggressive, saying he could not recall a single incident and the highest point of his aggressive conduct was holding the wife’s arms. However, the wife gave evidence of one incident in April 2012 during which the husband said “If you leave me I will kill you.” (paragraph 111, wife’s Affidavit filed 28 March 2018). In cross-examination the husband conceded that he did say this, but denied the wife would have taken it seriously.
In cross-examination, when it was put to the wife that by 2013 she was scared of the husband and felt she was in a “lousy marriage”, she agreed. She was then asked about an email dated 2 June 2013 (Exhibit C), which she sent to the husband. Although the parties differ on the date of separation, the relationship was clearly in trouble at this point. In Exhibit C the wife expresses her thanks to the husband for “helping me”. She calls the husband “the best” and says “I cannot thank you enough”. The wife promises to change and expresses her love to the husband several times. Exhibit F was an email, again from the wife to the husband, dated 13 October 2013, in which she expresses unconditional love for the husband and optimism for the future of their relationship, whilst acknowledging “turbulent times”. In cross-examination the wife said she sent these emails at a time when she had been convinced by the husband that she was responsible for the relationship failing, she was confused and felt abandoned by the husband because he had gone to Country 1. It was put to the wife that she made her allegations of abuse to “get back” at the person who abandoned her, which she denied.
The husband argued that the emails are not consistent with a wife who was scared and trapped in a lousy marriage, and her evidence about violence in the relationship should not be accepted. I am not convinced by this submission. The wife gives considerable detail of specific occasions which lends plausibility to her accounts. The husband conceded speaking to her in a violent manner on one occasion, when he said “I will kill you”. The emails (Exhibits C and F) show a woman who is in a heightened emotional state and clearly somewhat desperate about the state of her relationship. It is more probable than not that, rightly or wrongly, she felt responsible at the time for the relationship failure and blamed herself for something to which both parties had contributed.
In my view, the emails do not undermine the general credibility of her account of violent and humiliating behaviour, although the passage of time may have magnified or exaggerated her recollection of these events. The evidence satisfies me that the marriage was often volatile and fractious. Overall, I accept her evidence of some violent and humiliating behaviour by the husband.
The wife argued that this behaviour made her contributions more arduous. The authorities starting with In the marriage of Kennon [1997] FamCA 27; (1997) 139 FLR 118; 22 FamLR 1; (1997) FLC 92-757 make clear that the wife must establish that the violence or abuse had a “significant adverse impact” on her contributions: see G & G [2006] FamCA 877; Maine & Maine [2016] FamCAFC 270 at [47] to [52]; Loxley and Loxley & Anor [2017] FCWA 123; (2018) 58 FamLR 519 at [106] to [120]. The wife’s evidence did not explain directly how the behaviour of the husband made her contributions more arduous. However, it is clear in my view that most of the incidents took place in the context of the wife accompanying the husband to functions related to his work and I infer that the husband’s conduct created an atmosphere in the relationship which caused the wife to feel regularly destabilised and fretful. I infer that the husband’s conduct made the wife’s contributions more arduous and they should be given greater weight as a result.
Taking account of all the above considerations, I assess the husband’s contribution entitlement at 67% and the wife’s at 33%.
I now turn to s.79(4)(e) and the s.75(2) factors.
Section 79(4)(e) -75(2)
The Act requires me to take into account the matters referred to in s.75(2) of the Act, so far as they are relevant, when considering what orders should be made in these proceedings.
The relevant matters to be so taken into account on these facts are, as follows:
(a) the age and state of health of each of the parties;
The wife is 54 years old and there was no evidence to suggest she was not in good health.
The husband is presently 57 years of age and there was no evidence to suggest he was not in good health.
(b) the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment;
I have already discussed the income, property and financial resources of the parties earlier in these reasons.
Although I have been unable to place a value on the shareholding of the wife in Company B Group, Company C and Company H, on the basis of her evidence I accept they should be treated as a financial resource of the wife, as shares in a company through which she intends to generate income. In the absence of better disclosure, I am satisfied the level of income generated is likely to be modest (see paragraph 90, wife’s Affidavit filed 28 March 2018).
Similarly, although the husband’s disclosure about his business interests in Country 1 was unclear, I accept he has business interests in Country 1 which should be treated as a financial resource. The history of earning capacity and the obfuscation surrounding his activities in Country 1 satisfied me that the husband’s earning capacity is likely to be greater than that of the wife.
Both parties have retained their earning capacity. The wife gave evidence of an intention and ability to earn in the future. The husband agreed in cross-examination that he was not unemployable.
(c) whether either party has the care or control of a child of the marriage who has not attained the age of 18 years;
Both parties have adult daughters who are independent.
(d) commitments of each of the parties that are necessary to enable the party to support:
(i) himself or herself; and
(ii) a child or another person that the party has a duty to maintain;
If Property A is sold both parties will be required to find alternative accommodation. The husband gave evidence that at the date of swearing his Affidavit he lived in Country 1. He may continue to do so. His proposal assumes that he will retain Property A.
The wife gave evidence that it is her preference to move to the Region X, where she will rent premises for around $450 per week.
(e) the responsibilities of either party to support any other person;
On the facts of this case, this is not relevant.
(f) subject to subsection (3), the eligibility of either party for a pension, allowance or benefit under:
(i) any law of the Commonwealth, of a State or Territory or of another country; or
(ii) any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia;
and the rate of any such pension, allowance or benefit being paid to either party;
On the facts of this case, this is not relevant.
(g) where the parties have separated or divorced, a standard of living that in all the circumstances is reasonable;
The standard of living which the parties enjoyed while the relationship remained intact has been diminished. Their standard of living in the future will be circumscribed by the available resources after division of their assets in accordance with this Judgment.
In light of the available assets, both parties will probably have to accept a lower standard of living.
(h) the extent to which the earning capacity of a party would increase by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income;
On the facts of this case, this is not relevant.
(ha) the effect of any proposed order on the ability of a creditor of a party to recover the creditor's debt, so far as that effect is relevant;
I refer to the discussion earlier in these reasons concerning liabilities of the parties. The evidence about liabilities was very unsatisfactory. However, I am satisfied that, if anything, the proposed orders will make repayment of any debts more possible for each party.
(j) the extent to which a party has contributed to the income, earning capacity, property and financial resources of the other party;
I refer to the earlier discussion of contributions. I am satisfied the wife made contributions to the maintenance and renovation of Property A as set out earlier in these reasons. The husband helped the wife establish her business interests.
(k) the duration of the marriage and the extent to which it has affected the earning capacity of a party;
The marriage lasted for about seven years. The wife’s evidence did not directly connect violent and demeaning behaviour by the husband, discussed earlier, with her job performance. Her evidence shows that, for example, she suffered redundancy and workplace bullying which was unrelated to the husband. The wife continued during the marriage, and presently continues, to earn.
The evidence does not suggest the husband’s earning capacity was adversely affected in any degree by the marriage. If anything it was enhanced through the support of the wife.
(l) the need to protect a party who wishes to continue that party's role as a parent;
On the facts of this case, this is not relevant.
(m) if either party is cohabiting with another person--the financial circumstances relating to the cohabitation;
Neither party deposed to having repartnered. On the facts of this case, this is not relevant.
(na) any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage; and
On the facts of this case, this is not relevant.
(o) any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account
I have already discussed the sale of jewellery by the wife to raise money after separation. I take account here of my earlier reasons concerning the sale of the jewellery.
The $13,000 withdrawn by the husband from the Company B Group account after separation should be taken into account as a financial resource in which both parties had an interest, since both remain shareholders of that company, even if the bank account from which it came was owned by Company B Group.
I also refer to my earlier findings concerning the wife’s liabilities. I accept it is likely the wife has some liabilities but her evidence prevented any accurate quantification.
Assessment of section 75(2) factors
The wife submitted that the Court would attribute an adjustment in her favour for s.75(2) factors. She argued that she was frail and had a greater future need than the husband who asserted “no needs and no debts that are not sympathetic” (wife’s submissions dated 16 August 2019).
The husband submitted that there were no s.75(2) factors favouring either party.
The difficulty with the wife’s argument is that her evidence about debts and future earning capacity is not clear or adequate. I have discussed her liabilities and the absence of evidence about them above. Moreover, the husband has a liability to his mother. However, I accept that the wife’s earning capacity will be less than that of the husband, and her access to business opportunities may be less than his.
On weighing these factors, I am satisfied the wife should receive an adjustment of 3% in her favour. Accordingly, the assets of the parties will be divided 64% to the husband and 36% to the wife.
The net value of the property owned by the parties is $1,289,231.00, inclusive of superannuation. This figure is based upon an agreed value for Property A of $1,100,000. Therefore, on the basis of a 64/36 division, the husband would be entitled to receive assets with a value of $825,108 and the wife assets with a value of $464,123.
The husband presently has net assets of $1,325,424 inclusive of superannuation. His assets would exceed his entitlement by $500,316.
The wife presently has a deficit of assets of -$36,193, inclusive of superannuation. Her current net assets would fall short of her entitlement by an amount of $500,316.
Are the orders just and equitable?
Section 79(2) of the Act provides that:
The court must not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.
The Full Court of the Family Court of Australia in Manolis & Manolis(No.2) [2011] FamCAFC 105 considered the relevant provisions of the Act in relation to this requirement in a stepped process, in that case the four step process. At paragraphs [65] and [66] the Full Court made the following observations, which I adopt and follow:
It can be seen that power to make orders in regard to property is not exhausted after the third step. It is not until orders are made that the power is exhausted. The exercise of power pursuant to s 79 of the Act remains subject to the overarching requirement of justice and equity imposed by s 79(2) until it is exhausted…The section does however oblige the court to “stand back” from its preliminary determination, and consider its impact. So doing may inform the terms of the orders appropriate to produce a just and equitable outcome in those terms. It may result in a re-consideration of s 79(4) and or s 75(2) factors, and a different outcome. Whatever the scope of s 79(2), the court’s determination with respect to it cannot be dependent upon findings or conclusions which are irreconcilable with those recorded in the context of a consideration of s 79(4) or s 75(2).
The High Court of Australia in Stanford (supra) commented at [36] on the meaning of “just and equitable” as follows:
The expression “just and equitable” is a qualitative description of a conclusion reached after examination of a range of potentially competing considerations. It does not admit of exhaustive definition. It is not possible to chart its metes and bounds.
I also take account of the caution expressed in Stanford (supra) at [40] that to conclude that making an order is "just and equitable" only “because of and by reference to various matters in s 79(4), without a separate consideration of s 79(2), would be to conflate the statutory requirements and ignore the principles laid down by the Act”.
The husband’s proposal was for him to retain Property A and pay the wife $120,000. The wife’s proposal sought an equal division of assets including an equal split of superannuation.
The property pool in this matter is relatively modest, comprised primarily of the value of Property A and superannuation. As noted several times, the agreed value of Property A was $1,100,000. Based on this value for Property A the husband should pay the wife $500,316. The husband will be ordered to pay this amount to the wife in the first instance.
However, the market value of Property A may be less or more than $1,100,000. Its value can only be ascertained by inquiry or by testing the market. It is a just and equitable outcome that if the husband cannot pay the wife $500,316 the property be put to auction. Since the husband wishes to retain Property A, the orders will however give the parties an opportunity to reach agreement on the value of Property A without the expense of an auction or subsequent sale by private treaty, in which case the parties’ assets can be divided in the percentages according with these reasons. Orders will be made to that effect.
I take account of the fact that if a superannuation splitting order is made the husband would have to make a smaller payment from the proceeds of sale of Property A. I also take account of the fact that the wife will have to pay off some liabilities from her share of the assets. In my view, this makes a superannuation splitting order less just, because the wife will also have to accommodate herself and has need of available funds. If Property A is sold the husband will also have to accommodate himself, but it is likely he will be able to access his superannuation some years before the wife.
On a 64/36 percentage division, the husband and wife will have the assets and liabilities, as set out in the below table.
Assets and liabilities to be retained by the applicant husband
Value ($)
Property A
$1,100,000
Motor Vehicle
$5,000
Shares – 5 & 6
$10,289
Westpac Classic Plus Account #...
$6,176
Bank Account
$2,958
Household Furniture
$7,500
Super
$295,083
MasterCard
-$4,593
Loan from Mother
-$96,989
Payment to wife
-$500,316
Total:
$825,108
Assets and liabilities to be retained by the respondent wife
Value ($)
Payment from husband
$500,316
Household Furniture
$7,500
Personal Westpac Account #...
$56
Jewellery
$7,000
Super
$18,908
Super
$2,984
Super #...
$8,912
Personal Loan from Finance Company
-$8,167
Gas
-$867
Electricity
-$1,253
Loans by relatives
-$71,266
Total:
$464,123
Costs
Section 117 of the Act sets out that each party shall bear his or her own costs, subject to the considerations in s.117(2) of the Act.
Any order for costs must also be determined in light of the substantive judgment and the relative success or failure of the parties. This is naturally something that can only be addressed after judgment has been delivered.
The Court proposes to make the orders and directions in relation to any application for costs that might be made as set forth in the orders at the commencement of these reasons.
I certify that the preceding two hundred and twenty nine paragraphs are a true copy of the reasons for judgment of Judge Harper
Date: 15 February 2019
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