Sawyer and Sawyer

[2013] FMCAfam 15

FEDERAL MAGISTRATES COURT OF AUSTRALIA

SAWYER & SAWYER [2013] FMCAfam 15

FAMILY LAW – Property – marriage of 8 years and 8 months – significant initial contributions made by the husband a millionaire before he met the wife – two personal injuries payout to husband during the marriage– wife received $400,000 in interim payments prior to trial, spent largely on legal fees – husband has s.75(2) factors of post traumatic stress disorder – limited income capacity – wife suspicious of husband and engages private detective to follow husband to Dubai – wife has child photograph documents from the husband – 3 children co-parenting arrangement on 5/9 split.

Family Law Act 1975, ss.75(2), 79

C & C (2005) 33 FamLR 414
Ferraro & Ferraro (1993) FLC 92-335
In the Marriage of Hickey (2003) FLC 93-143
Pierce & Pierce (1999) FLC 192-844
D and S [2006] FamCA 245
Williams & Williams [2007] FamCA 313
AJO v GRO (2005) FLC 93-218
In the Marriage of Farnell & Farnell (1996) FLC 92-681
In the Marriage of Townsend [1995] FLC 92-569
NHC & RCH (2004) FLC 93-204
M & M [1998] FamCA 1102 (unreported)
Edgehill & Edgehill [2007] FamCA 1102
Gollings & Scott (2007) FLC 93-319
Kowaliw & Kowaliw (1981) FLC 91-092

Applicant: MR SAWYER

Respondent: MS SAWYER

File Number: BRC 7102 of 2010

Judgment of: Willis FM

Hearing dates: 5, 6 and 7 November 2012

Date of Last Submission: 7 November 2012

Delivered at: Cairns

Delivered on: 31 January 2013

REPRESENTATION

Counsel for the Applicant: Mr Linklater-Steele

Solicitors for the Applicant: Biggs Fitzgerald Pike

Solicitors for the Respondent: Eaton Lawyers

ORDERS

1. The net pool of assets for division between the parties be constituted as follows:

Asset	Owner	Agreed value
1.    Sale proceeds of Property R, [N] (held in Biggs Fitzgerald Pike trust account)	Joint	$415,767
2.    Add-back (sale proceeds of Property R, [N], paid to wife and spent on wife’s legal fees)	Wife	$100,000
3.    Add-back – funds used to discharge mortgage Property R, [N], upon sale (loan funds used for wife’s legal fees drawn down)	Wife	$150,654
4.    Add-back – (part difference between single expert valuation of Property R, [N], of $720,000.00 - $750,000.00) and undervalue       $690,000.00	Wife	$60,000.00
5.    Property C, [N]	Husband	$500,000
6.    One-third interest in real property at Property L, [K]	Husband	$111,667
7.    Moneys paid by husband to wife in accordance with interim property order of FM Purdon-Sully 30 November 2010	Wife	$150,000
8.    Lifeplan Tax Minimiser Investment       Bond Policy no. [1]	Husband	$33,929
9.  Lifeplan Tax Minimiser Investment Bond      Policy no. [2]	Husband	$32,931
10.  Lifeplan Tax Minimiser Investment       Bond Policy no. [3]	Husband	$32,931
11.     Husband ANZ account	Husband	$1,000
12.    Standard Bank Chartered account in            Dubai	Husband	$4,777
13.    Interest in [A] Pty Ltd	Husband	Nil (possible future entitlement)
14.    Sawyer Family Trust	Wife	Nil

Superannuation:

15.    Interest in [S] Super	Wife	$32,300
16.    Husband’s member balance in Sawyer Superannuation Fund	Husband	$1,007,111
17.    Wife’s member balance in Sawyer Superannuation	Wife	$271,923

Less liabilities:

18.    Loan from Bankwest secured over property at Property C, [N]	Husband	$147,770 (used to payout the wife the interim payment of $150,000)
19.    Loan to husband from Mr P	Husband	AUD $48,700
20.    Loan secured over Property L, [K] (husband’s one-third share)	Husband	$108,000
TOTAL:	$2,600,520

1. The net assets of the parties referred to in Order 1 above be divided as to 74% thereof to the husband and 26% thereof to the wife.

2. To give effect to the division referred to in Order 2, the following provisions apply:

3. The net proceeds of sale of the real property at Property R, [N] currently held in the trust account of Biggs Fitzgerald Pike Solicitors be paid as follows:

   (a)To the wife, the sum of $183,181.00 (subject to the determination and satisfaction of any order for costs in favour of the husband arising out of these proceedings); and

   (b)To the husband, the balance thereof. 

4. The husband transfer to the wife and the wife retain for her sole use and benefit absolutely:

   (a)The portion of the wife’s share of the sale proceeds of Property R, [N], paid to the wife pursuant to Order 3 of Orders of 20 August 2012 ($100,000.00).

   (b)The wife’s interest in her [S] Super ($32,300.00).

   (c)Monies already paid to the wife by the husband pursuant to the Order of Federal Magistrate Purdon-Sully made on 30 November 2010 by way of interim property settlement ($150,000.00).

   (d)Funds to be regarded as add-backs to the wife paid in respect of the sale of the property at Property R, [N] being:

   (i)Funds required to discharge the National Australia Bank mortgage secured over the property, such funds having been already retained by the wife ($150,654.00);

   (ii)The loss on the sale of the property represented by the difference between the single expert’s valuation of the property at Property R, [N] and the under-valued sale price as determined in the final judgment ($60,000.00). 

5. The wife do all acts and things to transfer to the husband and the husband retain for his sole use and benefit absolutely the following:

   (a)The real property situated at Property C, [N] in the State of Queensland and the husband indemnify the wife and keep her indemnified in relation to the loan from Bank West to the husband secured by way of first bill of mortgage over such property;

   (b)The husband’s interest in the real property situated at Property L, [K] in the State of Queensland and the husband indemnify the wife and keep her indemnified in relation to the loan secured by way of first of bill of mortgage over such property;

   (c)The three (3) Life Plan Tax Minimiser Investment Bonds in the husband’s name bearing policy No’s [1], [2] and [3].

   (d)Monies standing to the credit of the husband’s ANZ bank account.

   (e)Monies standing to the credit of the husband’s account in Dubai held with Standard Charter Bank;

   (f)The husband’s interest in [A] Pty Ltd and the husband indemnify the wife and keep her indemnified in relation to all debts and liabilities of the business.

6. The husband is responsible for payment of and is to indemnify the wife and keep her indemnified in relation to the loan to the husband from Mr P in the sum of $48,700.00.

7. Forthwith upon the making of this order the wife do all things and sign all such documents as may be necessary to resign as Trustee of the Sawyer Family Trust.

8. Forthwith upon the making of this order, the wife (being a person who may, by succession, become appointer of the Sawyer Family Trust) do all acts and sign all such documents as may be necessary to resign or renounce the powers and authorities vested in her in accordance with Clause 22.3 of the Deed of Trust of the Sawyer Family Trust.

9. In accordance with section 90MT(1)(b) Family Law Act 1975:-

   (a)The husband is entitled to be paid the specified percentage of each splittable payment out of the wife’s interest in the Sawyer Superannuation Fund; and

   (b)The wife’s entitlement and the entitlement of such other person to whom a splittable payment may be made, to payment out of the wife’s interest in the Sawyer Superannuation Fund is correspondingly reduced by force of this order.

10. The specified percentage for the purposes of Order 10 above is 100%.

11. This order has effect from the operative time and the operative time for the purposes of this order is the date of this order.

12. That the Trustee of the Sawyer Superannuation Fund do all acts and things and sign all such documents as may be necessary to:-

    (a)Calculate in accordance with the requirements of the Family Law Act 1975 the entitlement calculated in accordance with Order 10 above; and

    (b)Pay the entitlement whenever a splittable payment becomes payable out of the wife’s interest in the Sawyer Superannuation Fund.

13. That the wife do all things and sign all documents as may be necessary to resign as Trustee of the Sawyer Superannuation Fund.

14. That any monies recovered by the husband or wife either prior to or following the date of these orders arising out of the transfer of the husband’s shares (or his interest in) the company [F] Pty Ltd (or any of its subsidiaries) (after the payment of legal costs and outlays expended in the recovery of such monies), be divided as to 74% thereof to the husband and 26% thereof to the wife.  To effect this division each party is to forthwith inform the other of the likelihood of or any discussions in relation to or negotiations of any kind in regard to this debt.  Each party is to forthwith upon receiving any funds (either in full or partial settlement) in relation to this debt advise the other party in writing as to the amount received and the whereabouts of those funds, such advice to be provided to the other party no later than 2 business days after receipt of the funds. 

15. Except as otherwise provided in this Order, the husband and the wife are entitled to be the sole legal and beneficial owners of all items of property including (but not limited to) money, motor vehicles, insurances, equities, superannuation entitlements and personal effects currently in the possession or control of each of them respectively.

16. The parties do all such acts and sign all such documents in a timely fashion necessary to give effect to the operation of these Orders within 14 days of being given such documents for signature. 

17. Should either party default in signing or executing such documents required to give effect to any and every provision of these Orders then a Registrar of the Federal Magistrates Court of Australia at Brisbane shall be empowered and is hereby empowered to sign and execute such documents in the name of the defaulting party pursuant to section 106A of the Family Law Act as amended.  An Affidavit filed by a party deposing to such failure will be sufficient evidence of non-compliance with this Order. 

Costs Application

1. The applicant for costs in this matter is directed to file and serve written submissions together with any additional affidavit material supporting their application, together with a schedule itemizing the costs claimed pursuant to the Federal Magistrates Court Schedule and Rules, within 7 days of today’s date.

2. The respondent to the costs application is to file and serve written submissions in response (together with any additional affidavit material) within 7 days of being served. 

3. Each party is to indicate whether they are content for the matter to proceed on the papers or if an oral hearing is requested. 

IT IS NOTED that publication of this judgment under the pseudonym Sawyer & Sawyer is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL MAGISTRATES
COURT OF AUSTRALIA
AT BRISBANE

BRC 7102 of 2010

MR SAWYER

Applicant

And

MS SAWYER

Respondent

REASONS FOR JUDGMENT

1.The parties in this matter are in dispute as to the division of property arising from the breakdown of their marriage. The property litigation has taken on epic proportions, and at the outset I should say that the issues which have been generated throughout the litigation have at the end of the day been largely based on the strongly held suspicions of the wife about the husband’s conduct. The wife has engaged five different law firms and has spent some $400,000.00 on legal fees. The wife spent funds hiring a private detective to follow the husband to Dubai, such is her mistrust of him.

2.In the midst of much forensic investigation and allegations by the wife, surprisingly, the facts in this matter are mostly agreed. 

Background

3.The husband was born [in] 1970 and is aged 42 and the wife was born [in] 1977 and is aged 35. The husband and wife met in January 2000 and whilst they had an intimate relationship they did not live together until May 2001 when the mother was about eight months pregnant with their first child, [X], born [in] 2001.  The parties married [in] 2002 and separated on 6 February 2010, or, according to the wife, in January 2010[1].  The parties’ cohabitation and marriage therefore occurred over a period of eight years and nine months.  The two other children were born after the parties married, being [Y] born [in] 2003, and [Z] born [in] 2008. 

[1] Paragraph 4 of the wife’s Affidavit filed 10 September 2010. 

4.After the parties separated on 6 February 2010, the husband commenced proceedings in relation to children’s matters on 2 August 2010.  The wife’s response on 10 September 2010 included orders for property settlement.  The children’s matters were resolved by way of final orders on 3 November 2011. 

5.At the time this trial commenced there were a number of contraventions of children’s orders filed by the father in an application in May 2012 outstanding.  At the conclusion of the trial the contravention applications were dismissed on the basis that the parties had discussions and amendments were made by consent to the consent orders in the hope that there would be no need to further litigate in regards to children’s matters.

6.The first property order in this matter was made by consent on 30 November 2010.  The order responded to an application by the mother for the father to pay her funds in order to prepare her litigation.  The mother sought a payment of $150,000.  The funds were intended to:

Meet my litigation expenses being the costs and disbursements associated with prosecuting my claim in these proceedings, including property and business valuations; further family reports, accountants’ fees and barristers’ fees.  I also seek to utilise those funds to discharge my credit card.

7.A further order was made about 12 months later on 14 September 2011, again at the request of the wife, transferring the matrimonial home at Property R, [N] to the wife. This was an interim property order. The wife urged the husband to transfer the property to her on the basis that it was the children’s home with which they were familiar, it had a purpose-built stand-alone studio which could enable the wife to operate a [omitted] business from home.  Upon the wife being transferred the home she promptly encumbered the property in order to raise a further $150,000.00 which the wife has paid primarily in legal fees. 

8.The matter was to proceed to a hearing on 20 August 2012 with trial directions being made on 11 April 2012 setting the matter down for trial. Those orders were subsequently amended, and on 26 April 2012 the matter was set down for a three-day hearing to occur on 20 August 2012. On that date Counsel for the mother fell ill and subsequently the trial was not able to proceed. The trial was then listed for a three-day hearing to commence on 5 November 2012. The parties each bore the costs thrown away on 20 August 2012.

9.At the hearing on 20 August 2012, information emerged that the wife had now sold the house which had been transferred to her through the interim orders. Prior to sale, the wife did not accept it was still worth it’s previous value at the time of transfer and the parties agreed to a single expert valuation to be conducted in reparation for the trial.

10.At that point in time the wife had spent $300,000.00 on legal fees.  An oral application was bought by the husband to limit the amount to be paid to the wife from the sale proceeds to the sum of $100,000.00 with the balance being paid into a trust account. The wife resisted the application. I made Orders on 20 August 2012 providing for the wife to receive the sum of $100,000.00 and the balance to be held on trust. The trial was relisted on that same day to start on 7 November 2012.

11.At the commencement of the trial on 7 November 2012 the wife applied for an adjournment and also a further interim payment for legal fees. The application was on the basis that after 20 August 2012 the wife and her then-solicitor had parted ways. The wife then decided to become self-represented for a period of time, however on or around 22 October she realised that was too difficult and engaged the services of Mr Earle, a solicitor. At the commencement of the trial, the wife was represented by Counsel and Mr Earle, and an application was sought for an adjournment on the basis that Mr Earle did not have time from 22 October 2012 until 5 November 2012 to prepare the trial.

12.The material relied on by the wife indicated other issues such as the wife having difficulty with her phone and email, and not being able to be contacted by her solicitor, and the wife having mechanical problems with her car such that she could not ferry boxes of documents to her solicitor. Having considered all of the relevant matters including the matters referred to in Aon Risk Services Australia Limited v Australian National University [2009] HCA 27 (5 August 2009), and the waste of the Court’s time and resources, the decision of the wife alone to change solicitors, and/or to wait until 22 October 2012 to re-engage solicitors, the inadequacy of simply providing an order that she would pay the costs thrown away, the need to maintain confidence in the justice system amongst matters, I refused the application for an adjournment. The matter had been fully ready for trial in August 2012, there was no further material filed by the mother, and I considered that in the interests of justice and finalisation of these matters which had been dragging on for over two years, that it was essential that the matter proceeded to trial.

13.After the application for an adjournment was refused, the solicitor, Mr Earle, who indicated he could not be ready to represent the mother, then represented the mother throughout the trial. 

14.The mother post-separation has been in two relationships, one of which involved her then-partner living in the former matrimonial home with her and the children.  Post-separation the wife has not worked in the paid workforce, though she is a qualified [omitted] and worked from home during her marriage and the home she occupied for some time had a purpose built addition for her use as a [omitted] so the wife could work from home as she did during part of the marriage. 

15.At the time of trial, the wife did not have a current partner and neither did the husband. The children’s orders provide for the children to live with the mother for nine days a fortnight, and the husband for five days a fortnight. At the time of trial, the husband was operating his own business in which he is primarily a [omitted]. The wife had not yet taken up any work in the paid workforce.

The Law

16.In this matter I am required to follow the approach to property division set out in various authorities and described as a four step process in cases such as C & C (2005) 33 Fam LR 414; In the Marriage of Hickey (2003) FLC 93-143 and Ferraro and Ferraro (1993) FLC 92-335. The four step approach is to first determine the pool of assets and liabilities, then evaluate each of the parties’ financial and non-financial contributions during the marriage and post separation, determine if that contribution figure requires adjustment in light of the relevant section 75(2) factors and finally to consider whether the proposed result is just and equitable in all of the circumstances having regard to the actual result in real terms.

17.One of the issues which has been central to the inability of the parties to reach their own property agreement in this matter, has been the weight to be given to the Husband’s initial contributions. 

18.The matter of Pierce & Pierce[2] stated:

“In our opinion it is not so much a matter of erosion of contribution but a question of what weight is to be attached, in all of the circumstances, to the initial contribution.  It is necessary to weigh the initial contributions by a party with all other relevant contributions of both the husband and the wife.  In considering the weight to be attached to the initial contribution, in this case of the husband, regard must be had to the use made by the parties of that contribution.”

[2] (1999) FLC 192-844.(Ellis, Baker and O’RyanJJ).

19.At paragraph 30 their Honours stated:

“There is an obligation on a trial Judge not only to identify the relevant contributions, but also to assess them.”

20.I also refer to the case of Williams & Williams[3] who stated at paragraph 26:

“We think that there is force in the proposition that a reference to the value of an item as at the date of the commencement of cohabitation without reference to its value to the parties at the time it was realised or its value to the parties at the time of trial, if still intact, may not give adequate recognition to the importance of its contribution to the pool of assets ultimately available for distribution towards the parties.  Thus where the pool of assets available of distribution between the parties consists of say an investment portfolio or a block of land or a painting that has risen significantly in value as a result of market forces, it is appropriate to give recognition to its value at the time of the hearing or the time it was realised rather than simply pay attention to its initial value at the time of commencement of cohabitation.  But in doing so it is equally as important to give recognition to the myriad of other contributions that each of the parties has made during the course of their relationship.”

[3] [2007] FamCA 313 (Kay, Coleman JJ).

21.In relation to the general notion of “add backs” I am referred to the various authorities by Mr Linklater-Steele, Counsel for the father, including AJO v GRO (2005) FLC 93-218; In the Marriage of Farnell & Farnell (1996) FLC 92-681; In the Marriage of Townsend [1995] FLC 92-569; NHC & RCH (2004) FLC 93-204 (quoting the unreported decision of M & M [1998] Fam CA 42. I have also had regard to Edgehill & Edgehill [2007] FamCA 1102; Gollings & Scott (2007) FLC 93-319. In particular I have had regard to His Honour Justice Baker, who stated:

“As a statement of general principle, I am firmly of the view that financial losses incurred by parties or either of them in the course of a marriage whether such losses result from a joint or several liability, should be shared by them (although not necessarily equally) except in the following circumstances:

(a)Where one of the parties has embarked upon a course of conduct designed to reduce or minimize the effective value or worth of matrimonial assets, or

(b)Where one of the parties has acted recklessly, negligently or wantonly with matrimonial assets, the overall effect of which has reduced or minimized their value. 

Conduct of the kind referred to in paras. (a) and (b) above having economic consequences is clearly in my view relevant under S75(2)(o) to applications for settlement of property instituted under the provisions of S79.”[4]

[4] Kowaliw & Kowaliw (1981) FLC 91-092 p76 at 644, Baker J.

22.The general principle in relation to add backs was expressed in Marker where Baker, Kay and Chisholm JJ said:

“It is well settled that save  in exceptional circumstances a trial judge should deal with the property as at the date of the hearing and make adjustments taking into account the various matters set out under s79”  and “ However the particular justice of the case may make it appropriate to notionally add back assets which have been demonstrated to have been dissipated either during the marriage or post separation.  Normally it is necessary to demonstrate an appropriate basis for doing so, for example by wastage such as gambling or extravagant living”

23.Their Honours continued;

“There seems to be no appropriate basis for notionally adding back moneys that existed at separation but which have been subsequently spent on meeting reasonably incurred necessary living expenses. Neither the Family Law Act nor the case law require that parties go into a state of suspended economic animation once their marriage breaks down pending the resolution of their financial arrangements. Parties are entitled to continue to provide for their own support. Whether any expenditure so incurred is reasonable or extravagant is a matter that can be determined by he trial judge.”

24.The parties in this matter are seeking orders relating to the breakdown of their marriage and the subsequent division of property. I am satisfied that it is appropriate and just and equitable in the circumstances pertaining to this matter for this Court to make orders altering the parties their interests and rights in their property and pursuant to section 79 of the Family Law Act to divide the property between the parties pursuant to the relevant provisions of the Family Law Act and to ensure that any division is just and equitable. The parties are requesting the Court to make such a determination as it has not been possible for these parties to reach an amicable agreement. 

25.I have had regard to all of the evidence and submissions made by each party. Unless indicated otherwise, a statement of fact represents a finding.

The Witnesses

The Husband

26.The husband is an articulate and intelligent man. In my view, he gave his evidence honestly and candidly. The husband has been accused by the wife and/or her father of all manner of fraud and/or hiding of assets and non-disclosure of his true financial position and hiding income. I am however satisfied that the husband has been honest in his dealings in the company of [F] Pty Ltd, and in his disclosure of financial matters in this litigation including his income derived whilst working in Afghanistan. 

27.He was prepared to make admissions against his own interests when it was appropriate to do so.  Perhaps not unsurprisingly given his occupation, the husband gave his evidence in a measured fashion. The wife made assertions in the witness box that the husband had not provided documents which were in fact attached to the husband’s affidavit material, and even when taken to these documents, the wife refused to admit that he had disclosed them. 

28.The wife has subjected the husband to ongoing allegations throughout this litigation including allegations that he has hidden income from her, allegations that he has been threatening her and allegations that he has a child with another woman. The wife forwarded to the husband’s solicitors in October 2012 prior to the November property trial, two emails enclosing long range, poor quality photographs allegedly of a child of the husband’s whom the wife believes he has fathered whilst working overseas. The timing of the wife forwarding these emails to the husband’s solicitors together with what has been observed about the wife’s overwhelming suspicions of much of the husband’s conduct satisfies me that this was an attempt to embarrass the husband likely with a view to obtaining strategic gain in her property matter.  The wife has also admitted to informing the parties’ children that they have another sibling despite the husband’s denials. The wife has also engaged as referred to elsewhere in these reasons in enlisting the support of the parties’ children to photograph the husband’s documents for her use in this litigation. 

29.The wife has referred to the husband’s requests to spend time with his children as “demands”. The wife has referred to the husband’s preparedness to issue proceedings against [F] Pty Ltd in order to be paid out a legitimate debt owing of $400,000.00, as some threat to destroy her family. The wife has overlooked the commercial reality involved in the husband’s (and hers) interest in [F], however, at the conclusion of the trial the wife seeks to retain 100% of the $400,000.00 debt.

30.Given all of these false allegations and the four occasions in which the wife sought to take out a Domestic Violence Order against the husband, none of which she saw fit to attend Court to prosecute, I consider that the husband has been subjected to a particularly difficult time through the conduct of the wife during this litigation.  

31.The husband has a keen eye on the property market and has demonstrated an ability to make significant capital gain through his own efforts.  The example of his purchase of a block of flats (prior to meeting the wife) and converting the flats into what amounts to a boarding house, resulted in an increase in annual income from rent and ultimately a capital gain from a purchase price of around $200,000.00 to a sale price of around $1.6 million. This has obviously been on enormous financial advantage to the marriage.  The husband has worked hard to provide for the wife and his family whilst they were together, despite his illnesses and injuries received through his work as a [omitted]. The husband has set out his particularly difficult time during his career as a [omitted], in which he has received various injuries and been subjected to incidents including being hit by a car. He was ultimately diagnosed with severe depression and some symptoms of post traumatic stress disorder. Upon [leaving employment omitted], the husband set about trying to maintain an income to support his wife and family, which he did. 

32.I found the husband to be an impressive and honest witness and wherever his evidence is contradicted by evidence of the wife, in the absence of any independent evidence, I prefer the evidence of the husband.

Mr M

33.Mr M gave evidence and was cross examined in relation to the contents of his Affidavit. Mr M had been the onsite manager at the boarding house which the husband owned at the commencement of the relationship and Mr M met the husband in mid 1999. From early 2000 he had been the onsite manager and his Affidavit sets out the duties he attended to on a regular basis, up until 2008. It is clear from the evidence that the husband was the person who regularly called at the boarding house and had dealings with Mr M. The only time Mr M ever saw the wife was when she was sitting in the car waiting for the husband to collect the rent. Mr M said he had seen the wife in the car on 5 or 6 occasions over 8 years and that the wife did not collect rents from him.

34.Mr M gave his evidence in an open and forthright manner and I accept him as a witness of truth.

The Wife

35.I found the wife to be a most unimpressive witness. The wife has been, in my view, obsessed with her quest to prove that the husband has been secreting moneys away overseas or that he has an illegitimate child, as can be seen in her evidence given in relation to property matters. The wife’s entire thinking is permeated with mistrust for the husband. Her father, Mr T, has the same attitude towards the husband. I formed the view she would literally say anything, at any time, to further her case. There are occasions when she told outright untruths and other occasions when her evidence was entirely implausible. When seeking an order for an adjournment of the trial the wife gave sworn evidence that she had mechanical problems with her car that prevented her from taking boxes of documents to her solicitor. When cross-examined, the wife said she thought that she did take the documents to her solicitor (which was contrary to her own solicitor’s evidence), however, significantly, the wife subsequently admitted she did not have any mechanical problems that ever stopped her from driving the car and that she had not been prevented from driving anywhere during the period referred to in her affidavit. Her affidavit in that regard was completely untruthful.

36.The wife’s assertions that her telephone has been intercepted and her emails are being intercepted impliedly by the husband are completely without foundation. 

37.Her evidence that the husband has not paid his Child Support payments is entirely false. Even when faced with documents evidencing payments, the wife simply shrugged off all suggestions that the husband had paid his Child Support saying words to the effect of, “That’s what you think.” The wife had not even read the annexures attached to the husband’s material from the Child Support Agency. The husband has paid thousands of dollars over his Child Support to support his daughter’s [omitted] activities, contrary to the evidence of the wife which is that the husband has not contributed to the extra curricular activities of the children.  The husband has nominated as an expected income in his new [omitted] business, the sum of $50,000.00 which is higher than he might otherwise have nominated. His annual income so far has been about $12,000.00 per year.

38.The wife was naïve in relation to the issue of the husband’s legal interest (and therefore her own) in the business of [F] Pty Ltd and did not show any understanding that the husband was legally entitled to request a payout of his interest in [F] Pty Ltd from the other owners, being her father and her brother.  The wife appeared to consider that this was some kind of abusive behaviour by the husband.

39.I reject the evidence by the wife that the husband has said repeatedly he would make sure that the wife got nothing. This is entirely inconsistent with the evidence including the interim payment by consent from the husband to the wife of $150,000.00, which was the first of the interim payments. This payment was intended to enable the wife to prepare her case and undertake whatever forensic enquiries she or her lawyers wished to do.  Following that payment, the husband made a second interim distribution to the wife at her request in which he transferred the former matrimonial home by consent to the wife at her suggestion.  The wife subsequently encumbered the former matrimonial home to the value of $150,000.00 and spent that money largely on legal fees. The wife had no means of paying the mortgage or redraw facility. The husband also agreed to pay the wife a further $100,000.00 cash from the sale proceeds of the former matrimonial home.  The wife has spent most of these funds on lawyers. 

40.The wife’s dishonesty was also seen in relation to a bank statement in which the wife had indicated to the husband that a particular bank transaction on 21 February 2011 represented funds spent on “car loan [Ms Sawyer]” in a response through solicitors correspondence. When queried by the husband’s solicitors (and again under cross examination) the wife admitted that this entry was false.[5] The truth of the expenditure was that the wife had made a car repayment on behalf of her then boyfriend, Mr L.

[5] Wife’s Affidavit filed 7 August 2012, paragraph 11c. 

41.I am satisfied that the wife has enlisted assistance from the children of this marriage to gather evidence of what she believes is the husband’s attempts to hide records to do with his earning capacity from the wife. I do not accept the wife’s explanation that she had no part in organising for a 12 year old child of the marriage to take photographs of some of the husband’s work documents during one of the children’s days with the husband. The wife’s explanation as to how this all came about was entirely unsatisfactory. I am satisfied that the wife involved the children in her own quest to discredit the husband in these proceedings. The wife admitted under cross-examination that once the photographs were given to her by the children that she straightaway sent them to her solicitor. The wife has also applied for no less than 4 domestic violence orders against the husband yet failed to attend Court or prosecute any of the applications. The wife’s explanations for her non-attendance at her own Court events, is to blame her solicitors for not telling her that the Court events were on. I have a strong impression that the wife has attempted to bolster her position in this litigation through this conduct.

42.The wife’s evidence about circumstances surrounding the sale of the former matrimonial home at [N] was entirely unsatisfactory, and in parts unbelievable and illogical.  Her actions in having a private detective hired to fly to Dubai to trace the husband’s conduct has no doubt been costly and has been a fruitless exercise. The wife’s efforts and conduct in attempting to have a “justices examination order” taken out on the husband during these proceedings which appears to have occurred for strategic purposes and was ill-conceived.

43.During the Court hearing in August 2012, when the trial could not proceed, I implored the wife to reconsider her conduct and to attempt to settle the matter without the need for any further legal fees. I asked the wife whether she had ever contemplated that her orders for 65 per cent might not be made and that an order might be made as sought by the husband, for her to receive 20 per cent. The wife said that that had never been in her contemplation.

44.During the course of the husband’s counsel’s closing submissions at the trial, the wife sobbed loudly when hearing descriptions of what remained in the property pool and the wife’s own conduct, so much so that at a point during the submissions the wife stood up and commenced leaving the courtroom with the assistance of her own father guiding her out, until such time as she was redirected to resume her seat, compose herself and listen to the other side’s case. 

45.Wherever the wife’s evidence contradicts that of the husband, in the absence of any independent evidence, I prefer the evidence of the husband. The wife’s evidence is unreliable and at times completely dishonest. 

The Wife’s Father – Mr T

46.Mr T gave evidence and was cross examined. 

47.Mr T attempted to attribute the current problems of [F] Pty Ltd solely to the husband, however there is no evidence to support these assertions. Mr T has unfortunately been involved in the cross fire of this marriage breakdown. Mr T said at one point, “We were going gangbusters, then the famous divorce came along and it’s all gone bad since then.” 

48.He was reluctant to make admissions or admit the failings of himself as a director of the company. He does not appear to appreciate or comply with his legal obligations as a director. He quarrelled with Counsel about not paying superannuation for employees as and when it fell due for payment, and suggested instead that it was simply a debt that he could pay back and that there was nothing unusual about owing money to employees for superannuation.  My impression was that he believed he had been left to work the business solely, that that he received little assistance from his son, also a co-owner of the business, and that he has allowed his love and affection for his daughter to cloud proper commercial considerations. 

49.I issued a section 128 certificate in relation to evidence that he gave surrounding his failure as a director as he acknowledged that his business was currently trading whilst insolvent. Mr T agreed that he owed the husband a significant capital amount of some $400,000.00 according to an agreement in which the husband was to be paid out his interest in [F] Pty Ltd.  These funds have not yet been paid to the husband as it is the evidence of Mr T that the business is already about to go into bankruptcy. Earlier in the proceedings the business was valued at a cost to the parties of $11,000.00, however, as can be seen in the current property pool, there is currently no value attributed to this asset.  It may be that, as submitted on behalf of the husband, this business is portrayed as being in a dire financial position each time the matter has been listed for trial and that when the litigation is concluded, the fortunes of the company will also be improved. It will be necessary to make orders providing for the division of any future proceeds received from the husband’s interest in [F] Pty Ltd. 

50.Mr T was, not unexpectedly, a partisan witness. He has been supporting his daughter through these proceedings. He and his wife have together paid some $14,000.00 for their oldest grand-daughter, being the child of this marriage, to fly to the United States of America with the mother in order to [omitted]. It seems that it is the intention of Mr T to pay a further sum of at least $10,000.00 to Mr Earle, the solicitor currently acting for the wife.

51.

It was clear that Mr T held grievances towards the husband and, in my view, his evidence was tailored to match his obviously long-held grievances. At a point in the trial, during the submissions,

Mr T arose from his seat in the gallery announcing to the Court, “I don’t have to put up with anymore of this rubbish” as left the courtroom. 

Step 1 – Determine the value of the assets – Including non superannuation assets and liabilities

52.The parties have agreed to a schedule of assets and liabilities (as shown in Annexure F3). The parties are disagreed as to the add-back referred to in items 3 and 5. The husband wishes to add-back the amount he says the wife lost on the sale of the former matrimonial home when comparing the most recent valuation of $750,000.00 with the sale price achieved by the wife, without reference to the husband, of $690,000.00.  The husband also seeks to add-back into the pool the amount of commission relating to the sale referred to at item 3 in the schedule. The wife’s position is that neither amount should be regarded as an add-back and that the home was hers to deal with as she saw fit.   

Asset	Owner	Agreed value
1.    Sale proceeds of Property R, [N] (held in Biggs Fitzgerald Pike trust account)	Joint	$415,767
2.    Add-back (sale proceeds of Property R, [N], paid to wife and spent on wife’s legal fees)	Wife	$100,000
3.    Add-back – commission paid upon sale of Property R, [N]	Wife	$20,889
4.    Add-back – funds used to discharge mortgage Property R, [N], upon sale (loan funds used for wife’s legal fees drawn down)	Wife	$150,654
5.    Add-back (difference between single expert valuation of Property R, [N], of 750,000 and undervalue sale price of 690,000	Wife	$60,000
6.    Property C, [N]	Husband	$500,000
7.    One-third interest in real property at Property L, [K]	Husband	$111,667
8.    Moneys paid by husband to wife in accordance with interim property order of FM Purdon-Sully 30 November 2010	Wife	$150,000
9.    Lifeplan Tax Minimiser Investment Bond Policy no. [1]	Husband	$33,929
10.   Lifeplan Tax Minimiser Investment Bond Policy no. [2]	Husband	$32,931
11.   Lifeplan Tax Minimiser Investment Bond Policy no. [3]	Husband	$32,931
12.   Husband ANZ account	Husband	$1,000
13.      Standard Bank Chartered account in      Dubai	Husband	$4,777
14.      Interest in [A]      Pty Ltd	Husband	Nil (possible future entitlement)
15.      Sawyer Family Trust	Wife	Nil

Superannuation:

14. Interest in [S] Super	Wife	$32,300
15.    Husband’s member balance in Sawyer Superannuation Fund	Husband	$1,007,111
16.    Wife’s member balance in Sawyer Superannuation	Wife	$271,923

Less liabilities:

17.    Loan from Bankwest secured over property at Property C, [N]	Husband	$147,770 (used to payout the wife the interim payment of $150,000)
18.    Loan to husband from Mr P	Husband	AUD $48,700
19.    Loan secured over Property L, [K] (husband’s one-third share)	Husband	$108,000
TOTAL:	$2,621,409

Husband’s interest in [F] Pty Ltd – and subsidiary companies

53.As referred to earlier, an asset which featured in the earlier financial statements and material of the parties is their interest in “[F]” and its subsidiary companies.  As can be seen in the parties material $11,000.00 was paid to a single expert valuer to value the parties interest in these companies.  The wife has initially asserted that their interest in [F] Pty Ltd was worth approximately $650,000.00; that their one quarter interest in [P] Pty Ltd was worth approximately $750,000.00.[6] 

[6] Paragraph 17, wife’s Affidavit filed 16 November 2010. 

54.It is noticeable that in the schedule of agreed assets and liabilities, that the parties interest in [F] Pty Ltd is absent from the asset pool.  Similarly a debt of around $400,000.00 now owing to the parties by [F] Pty Ltd does not appear. 

55.Since the single expert valuation was obtained (and post separation) [F] Pty Ltd appears to be on the brink of bankruptcy though still trading according to the evidence of the wife’s father Mr T who is a director of the company. 

56.

After he met the wife but before they commenced cohabitation, the husband was approached to enter into a business arrangement with the wife’s father and brother. It was agreed to set up a business under the name of “[F] Pty Ltd” which was to trade as “[F]”. The start date of the company was 19 September 2000. The original shareholdings included the husband as a one-half shareholder,

Mr T (his future father-in-law) as a one-quarter shareholder, and Mr S (his future brother-in-law) as a one-quarter shareholder.  The husband injected cash into the business and offered his property for security. 

57.The business was established and commenced to trade, and it [omitted]. In or around 2005 an agreement was reached for the husband to transfer his interest in the company over to Mr T in exchange for $400,000.00.  On an interim basis however, until the husband could be paid out, it was agreed that the husband would receive two cars and two phones which would be fully-funded by the company, together with a weekly wage of $1,390.00.  This was to be paid until such time as it was decided to sell the company which owned land and a building, and the business itself. I accept the husband’s evidence that he worked in the company for a period of time. 

58.Whilst there are varying versions of what was said it is clear that in 2005 the husband wanted a sum of $400,000.00 to leave the business and it was agreed by Mr T to pay this sum when the company could afford to. Mr T said at that time it was fairly well agreed that the business and its assets were worth about $1.2 million, and the $400,000.00 represented approximately one-third. The funds that the husband injected into setting up the business of [F] Pty Ltd primarily came from his assets owned prior to the commencement of his relationship with the wife. The wage of around $1,390.00 per week was paid up until April 2010, just following separation. Through income splitting it was paid to the wife as set out in the husband’s evidence.[7]

[7] Filed 8/10/12 paragraph 14 onwards. 

59.Mr T tried to attribute the alleged financial difficulties in the company to the husband however I am satisfied that this assertion is without foundation.

60.Mr T agreed that the company has been involved in four or five matters of dispute and at times litigation, and QCAT proceedings in relation to not paying the husband’s superannuation. Mr T said that the company had not paid superannuation for various other employees as they were required to do, and instead the company had retained those funds for its own use.

61.At the time of trial the company was being run by Mr T with one other person being the bookkeeper. To the extent Mr T sought to suggest he had no direct knowledge about litigation the company was involved in and debts, I found his evidence unsatisfactory. 

62.Mr T said he has been informed by his accountants that he is currently trading whilst insolvent, and despite that warning the company has not ceased trading. Mr T stated, as he said earlier when the matter was scheduled for a trial in August 2012, that he was going to see his accountants the week after the trial about the company’s financial position and that he had been told that the company was insolvent. 

63.The husband submits that the Court ought to make an order that in the event any sums are ultimately recovered from [F] Pty Ltd or their subsidiaries, in satisfaction of this debt that such sum be divided between the husband and wife in the proportions finally ordered in this matter. Submissions made on behalf of the wife request that any and all funds received in payment of this debt be paid entirely to the wife.[8] The email submission stated: 

“The enclosed proposed orders envisage all interest in the pool business being transferred to the WIFE rather than be divided between the parties. If there were to be any monies recovered that would benefit the wife at the end of the day.”

[8] This submission is contained in the email accompanying the draft Orders which were ordered to be filed as directed by the Court dated 12 November 2012. 

64.This submission fails to acknowledge the alteration that such a payment would have on the percentage division proposed by the wife.

65.The husband’s position at trial was that it was most unlikely that any funds would eventuate and that it was not cost effective to follow through with any litigation in this regard. 

The Husband’s home at Property C, [N] – Is there an add-back.

66.The husband has recently purchased a property at Property C, [N] out of the parties funds in order to have a place to live in with the children during the five nights and six days each fortnight that the children live with the husband. The husband has added a swimming pool and a shed and made other unremarkable improvements. The wife has had the opportunity to occupy the parties former matrimonial home which is described as quite a luxurious residence by the single expert. I do not accept the submission made on behalf of the wife that the husband has wasted funds in making improvements to the Property C residence or that he has recklessly spent money in doing so or that spending funds on a house means the funds spent are an add-back.

67.This property is not for sale and has not been sold. I am not satisfied that because the value of the property has dropped marginally since the purchase price that this suggests that the husband has wasted any funds.  The agreed value of this property is $500,000.00. I do not consider that the husband has acted negligently or recklessly in regard to this purchase.

Add-back – Wife undersells former matrimonial home - $60,000

68.One of the issues which has been ventilated in this matter is the wife’s conduct surrounding the sale of the former matrimonial home, which was transferred to her pursuant to interim orders of Purdon-Sully FM in November 2011.  It is submitted on behalf of the wife that she considered that his house was hers and hers alone to deal with, and that she ought not to be held responsible for any perceived loss in terms of her selling the home in July 2012.  The wife’s affidavit of 10 September 2010 refers to her own estimate of the value of the house being $750,000.00.[9]  The husband submits that the property settlement to the wife was an interim order and that the value of the property was always to be included in the asset pool at the final trial.  I accept this.  The husband submits that the wife has undersold the house and that the sale price of $690,000.00 is $60,000.00 short of the single expert valuation which arrived a week after the sale and which valued the property at $750,000.00.  The husband submits that the $60,000.00 ought to be an add-back and that the wife has effectively had the benefit of an asset worth $750,000.00 and wasted $60,000.00 in the sale.  The husband also submits that the wife ought to bear the cost of the commission of $20,889.00[10] which should likewise represent an add-back to the pool and be attributed as having been received by the wife.

[9] Wife’s Affidavit filed 10 September 2010, paragraph 67, item A.

[10] Item 3 of the asset pool. 

69.Subsequent to the transfer, the wife encumbered the home and raised additional funds for herself of $150,000.00. In the lead up to the final trial, the wife suggested to the husband in correspondence that the house (then in her possession) was no longer worth what had been previously agreed to. The husband then suggested that there be a single expert valuer appointed to re-value the home, and through correspondence this was agreed to by the wife. After this agreement, the wife without notice to the husband and whilst waiting for the single valuation, sold the home for $690,000.00.

70.The wife’s evidence was most unsatisfactory in relation to why it was that she needed to sell the property at all and specifically when she did. The wife gave evidence at trial that the house had a bad “vibe” since a break-in, and that she and the children were scared to live in the house.  The wife also said she could not cope with the upkeep, or more particularly, the mowing of the lawns as it was too much for her. Upon further questioning, the wife had to concede that she had purchased a ride-on mower for $3,000.00 or $4,000.00 especially to do the mowing.  Prior to that, the wife said she had been paying someone $50.00 every second or third week to do the mowing. Having purchased the ride-on mower, the wife then decided that it was too much for her. She agreed that she had not asked either of her live-in boyfriends to assist.

71.The wife also conceded that when she sought an order for the husband to transfer the former matrimonial home to her, she put forward to the husband that this was the home the children had always lived in and she wanted to keep it for their security and stability. The wife accepted that she had also put forward as a reason to transfer the home to her that the home was purpose-built with a separate area for a [omitted] for her to use if she wanted to set up a [business omitted]. 

72.The wife gave evidence that since the “break-in” she and the children were frightened. However, contrary to her initial evidence that a window had been broken in the break-in and that she was not able to afford to repair it. When questioned further the wife changed her evidence and admitted that there was no window broken in the alleged break in, and that in fact, a shower screen had been broken, not a window.  The wife’s evidence was that she came home from work one day and found the shower screen had shattered.  The wife said she immediately concluded that the [omitted] ought to be involved because she considered there had been an attempted break-in.  The wife did not seem to contemplate as was suggested to her that it would be an unusual thing for a burglar to break into a house and simply smash a shower screen.  It was clear that the wife suspected that the husband had broken into the house, and the wife suggested that this suspicion was well placed because one of the remote controls to the roller door had also gone missing.  However, on further questioning, the wife admitted that the remote control to the roller door had been missing well prior to the alleged break-in. I found the wife’s explanation as to her belief that a break-in occurred to be absurd. It illustrated however, very clearly, the wife’s almost pathological suspicion of the husband in this matter. 

73.The wife also gave evidence that there was a nice house behind the one that she owned, which was almost new and which she liked and which she would have liked to have bought in place of the former matrimonial home. The wife seemed very keen to buy the house. This seemed to me to be her prime motivation for selling the former matrimonial home. She denied that she was under pressure from her former solicitors to sell the house to pay for legal fees.

74.In relation to negotiations around the sale of the former matrimonial home, the wife gave evidence that there had been one offer on the house of $660,000.00, and that she managed to get the offer up to $690,000.00 and then contracted to sell the house. Her evidence is contrary to that of her own real estate agent, Mr J, who filed an affidavit of behalf of the wife. Mr H deposed that he was approached by the wife on 1 June 2012 to sell her property, it was placed on the market six days later on 7 June 2012. I note also that the wife would not allow any open houses on the property and that she requested this due to privacy and security reasons. I have no doubt that “the privacy” reasons were intended to prevent the husband knowing of the sale. 

75.Mr H said there was only one offer on the property, on 29 July 2012. It is apparent from the annexures to his affidavit that the wife signed a contract for sale, it seems, possibly even on the same day, for $690,000.00. There was only one exchange between the wife as vendor and the proposed purchaser wherein the first offer of $660,000.00 was increased to $690,000.00 which is $60,000.00 lower than the single valuation arrived a week after the sale of $750,000.00. At the time the wife signed the contract, she was obviously aware that she had agreed to the property being re-valued and that the valuation had not yet issued. The wife took no steps to contact the husband and inform him that she was about to sell the property for $690,000.00 and there is no evidence of her taking any steps to expedite the single expert valuation which was in the pipeline. 

76.It is submitted by the husband that the cost of the sale, being the commission of $20,889.00[11] ought to be an add-back. 

[11] Item 3 of the asset pool.

77.It is apparent from the updated single expert valuation that there were comparable sales around the area of inferior properties of $750,000.00.  In closing submissions on behalf of the wife, it was submitted that the wife’s line of thinking at the time she sold the house was that the property might have been worth less than $750,000.00.  However, the evidence of the wife in re-examination was that she had in her contemplation thought that the property would have been worth between $720,000.00 and $750,000.00.  The submission therefore is not in line with the evidence. 

78.The wife has sold the property for less than her own contemplations as to what the property might be valued at and less than the single expert valuation.  The former matrimonial home is a not inconsiderable residence, as can be seen in the description in the valuation, with two ensuites and a third bathroom, a media room, a swimming pool, a studio and significant grounds. 

79.The wife’s selling of the property is in my view premature and ill-advised.  It is clear that the wife was keen to sell the property quickly and without any reference to the husband or to the looming joint valuation.  The property has been sold following very limited negotiations with the first purchaser to make an offer and it seems as though, according to the documents, the whole negotiation occurred on one day.  I accept the submission that the wife was the custodian of that property until such time as final orders were made.  I consider that the wife’s conduct has likely resulted in the diminution of the value of an asset which was in the wife’s sole control.  This property was not hers alone to deal with.  It would have been prudent for the wife to have included the husband in the negotiations, or obtain his agreement to sale at the proposed price, given that the parties have not yet finalised their property settlement.  Justice Baker commented in the matter of Kowaliw & Kowaliw (1981) FLC91-092:

“As a statement of general principle, I am firmly of the view that financial losses incurred by parties or either of them in the course of a marriage whether such losses result from a joint or several liability, should be shared by them (although not necessarily equally) except in the following circumstances:

a) Where one of the parties has embarked upon a course of conduct designed to reduce or minimize the effective value or worth of matrimonial assets, or

b) Where one of the parties has acted recklessly, negligently or wantonly with matrimonial assets, the overall effect of which has reduced or minimized their value. 

Conduct of the kind referred to in paras. (a) and (b) above having economic consequences is clearly in my view relevant under S75(2)(o) to applications for settlement of property instituted under the provisions of S79.”[12]

[12] Kowaliw & Kowaliw (1981) FLC 91-092 p76 at 644, Baker J.

80.I consider that the wife has been reckless and negligent as referred to in paragraph (b) of His Honour Justice Baker and that the overall effect of her conduct has been to reduce the value of the asset pool. I consider that the wife acted prematurely and secretively. A reasonable course would have been for the wife to first consult with the husband about her proposed course of action and also to await the valuation which was received the week after the sale.  She should also have allowed the property to remain on the market for longer so as to ensure that as many potential buyers as possible could be canvassed.

81.I am urged by the husband’s Counsel, Mr Linklater-Steele, to have regard to this matter as an add-back. This short-sale could be addressed either as a direct add-back or at stage 2 of the property division. 

82.The valuation, which is not challenged, is what a willing but not anxious buyer would pay for this valuable property. I am satisfied the wife showed no regard to the diminution of the value of the property caused by her sole actions. Whilst there is no guarantee that the exact valuation amount would have been achieved at sale, likewise, it is also possible that with a more measured approach to the sale, a figure higher than the valuation may have resulted.

83.The amount claimed as an add-back is $60,000.00. I consider that it is appropriate that at least a portion of this loss be solely attributed to the wife for her ill-advised, negligent and commercially inept conduct. I do not intend to treat the commission as an add-back as this expense would have been payable at whatever price the home was sold for.

84.I will therefore adjust the agreed property pool appropriately so as to delete reference to the amount shown at what was item 3 (commission $20,889), the asset pool therefore is as follows:

Asset	Owner	Agreed value
1.    Sale proceeds of Property R, [N] (held in Biggs Fitzgerald Pike      trust account)	Joint	$415,767
2.    Add-back (sale proceeds of Property R, [N], paid to wife and spent on wife’s legal fees)	Wife	$100,000
3.    Add-back – funds used to discharge mortgage Property R, [N], upon sale (loan funds used for wife’s legal fees drawn down)	Wife	$150,654
4.    Add-back – (part difference between single expert valuation of Property R, [N], of $720,000.00 - $750,000.00) and undervalue $690,000.00	Wife	$60,000.00
5. Property C, [N]	Husband	$500,000
6.    One-third interest in real property at Property L, [K]	Husband	$111,667
7.    Moneys paid by husband to wife in accordance with interim property order of FM Purdon-Sully 30 November 2010	Wife	$150,000
8.    Lifeplan Tax Minimiser Investment Bond Policy no. [1]	Husband	$33,929
9.  Lifeplan Tax Minimiser Investment Bond Policy no. [2]	Husband	$32,931
10.  Lifeplan Tax Minimiser Investment Bond Policy no. [3]	Husband	$32,931
11.  Husband ANZ account	Husband	$1,000
12.    Standard Bank Chartered account in Dubai	Husband	$4,777
13.    Interest in [A] Pty Ltd	Husband	Nil (possible future entitlement)
14.    Sawyer Family Trust	Wife	Nil

Superannuation:

15. Interest in [S] Super	Wife	$32,300
16.    Husband’s member balance in Sawyer Superannuation Fund	Husband	$1,007,111
17.    Wife’s member balance in Sawyer Superannuation	Wife	$271,923

Less liabilities:

18.    Loan from Bankwest secured over property at Property C, [N]	Husband	$147,770 (used to payout the wife the interim payment of $150,000)
19.    Loan to husband from Mr P	Husband	AUD $48,700
20.    Loan secured over Property L, [K] (husband’s one-third share)	Husband	$108,000
TOTAL:	$2,600,520

Step 2 – The financial and non-financial contributions of each of the parties pursuant to Section 79(4)

Contributions:  (a) – the husband – financial

Initial Contributions

85.In this matter the husband has made overwhelming direct financial contributions both at the commencement of the marriage and during the marriage. At the commencement of their relationship the husband had already bought and sold various properties. He describes himself as a multi-millionaire when he met the wife and this is not contested. He purchased his first house when he was only 19 years old. The husband has spent much of his time outside of his [omitted] career in building up his real estate portfolio. The husband has shown an ability to make significant capital gains on properties he identified as being capable of renovation or being made into an alternate use. Prior to the marriage and at the time of meeting the wife, he owned a property at Property W (“the Property W boarding house”) for which he had paid some $220,000.00. The husband turned what had been flats into a re-configured boarding house with 21 separate rooms and ultimately made considerable capital gain.

86.The parties agreed to have a single expert prepare a historical valuation to determine the value of this property at the time the parties commenced living together. The husband at that point had owned the property for some four years, and all of the renovations undertaken by the husband were done well prior to his meeting the wife. The historical valuation shows a value of that property at the time the parties commenced living together as $780,000.00. That property was ultimately sold in February 2008 for a sum of $1,643,725.00. Most of these funds were directed into the Sawyer Superannuation Fund and the balance into the Sawyer Family Trust. There was no acquisition cost of this asset to the marriage as the husband owned it 4 years prior to cohabitation. This is a significant amount of money to be injected into the marriage and formed the financial basis for the current value of that fund.

87.During the course of the marriage the Property W boarding house was positively geared and resulted in another source of income for the parties up until the point it was sold. The property had a mortgage of $110,000.00 at the commencement of the relationship. This was reduced in 2001 through sale proceeds of another asset owned by the husband prior to cohabitation.  

88.The husband also prior to the commencement of the relationship owned a property at Property E, which he had owned from 1993 and which he subsequently sold in January 2001, and realised net sale proceeds of $65,000. Those moneys were invested in the company [F] Pty Ltd which had been registered in September 2000.

89.The husband had also purchased a property in January 2000 at Property M, [K]. That property was sold in 2001 and realised net sale proceeds of approximately $80,000.00. $60,000.00 was invested in [F] Pty Ltd, and $20,000.00 was used to reduce the loan on the Property W boarding house at the time.

90.The husband also owned a property at Property A, which he purchased with others in 1993. The property was sold in 2001, about three months after the parties commenced living together. The husband’s share of the net proceeds was between $10,000.00 and $20,000.00 which was injected into the relationship. 

91.The husband was a [occupation omitted] at the commencement of the relationship and he had superannuation with [omitted] Super of $80,387.83. The husband also owned a Holden Utility worth approximately $10,000.00 and had cash of $50,000.00. 

92.In summary, the value of the real estate brought into the marriage by the husband or shortly thereafter totalled around $1m being $975,387.00 up to $1,029,387.00 allowing for whether or not the mortgage is factored in and allowing for variations on $10,000.00 or $20,000.00 from the sale of the Property A property, as seen below:

a)$780,000.00 being the historical value of the Property W boarding house minus a mortgage of $110,000.00 which was however paid from both capital introduced by the sale of another property owned by the husband at the commencement of the relationship and its own  income;

b)$65,000.00 sale proceeds of Property E;

c)$80,000.00 sale proceeds of Property M, [K];

d)$10,000-$20,000.00 from the sale of Property A;

e)Cash of approximately $50,000.00;

f)a Holden Ute worth $10,000.00; and

g)$80,387.00 in [omitted] Super.

Contributions during the marriage – financial

Personal injuries payout – December 2007

93.In 2007 during the cohabitation the husband received a personal injuries claim as a result of an accident in September 1999, prior to meeting the wife. The claim took some years to resolve and a significant sum was received on 4 December 2007 of $344,337.77 after all expenses were deducted. The parties separated at the end of January or first week in February 2010, so these funds were received two years and two months prior to separation. These moneys were used to pay out loans including the mortgage on the Property W boarding house and loans on the house at Property S which had been acquired during the marriage. This considerable financial contribution late in the marriage is attributable solely to the husband.

Sale of Property W Boarding House – February 2008

94.The Property W boarding house, having been self supporting throughout the relationship and bringing in a positive income was subsequently sold for net $1,643,725.00. The purchase price of this property was not an expense for the marriage as it was purchased four years prior to the marriage.

95.I accept evidence of the income received from the Property W boarding house for the years 2002 to 2007 as set out in the husband’s affidavit.[13] The net income has fluctuated from around $3,500.00 in one year to $33,000.00 in another. The average of the figures suggests an additional net income of around $15,000.00 over the six year period

2^nd Personal Injuries payout - May 2009

[13] Filed 8 October 2012, paragraph 6 ii.

96.The husband also received a second payout from [employer omitted] as a result of being injured whilst working as a [omitted] in December 2007. The accident resulted in physical and psychological injuries, and ultimately resulted in the husband [leaving employment omitted]. The husband suffered from severe depression and symptoms of post traumatic stress disorder along with his physical injuries. The husband was paid out a sum in May 2009 of $594,050.68 from [employer omitted] to compensate him for his disabilities. This amount was received into the relationship approximately 8 months prior to separation.  $27,245.00 of these funds were placed into a joint bank account, and the balance of the funds, namely $566,805.68, was invested into the Sawyer Superannuation Fund.  This is solely the husband’s contribution. That payout represents the total of the funds in the Sawyer Superannuation Fund. The funds in the superannuation fund are, therefore primarily contributed solely by the husband.

97.The husband also received in addition to the amount referred to in the previous paragraph a disability claim pay out of $22,756.50 from WorkCover in June 2009. This brings the total of the second personal injuries payout to approximately $621,295.00 received within 8 months of final separation. 

98.Overall, the total of personal injuries payouts to the husband is close to $1 million ($344,000.00 and $621,295.00). The larger payout, $621,295.00 was received within 8 months prior to the end of the relationship. Neither of these actions have a Griffiths & Kerkemeyer component. 

Husband’s employment

99.Financial contributions were also made by the husband arising from his employment with [omitted] as shown in his material.[14]  As referred to earlier, an income was also derived through the husband’s interest in [F] Pty. Ltd paid by the husband to the wife. I regard the income earned during the marriage as being acquired through the joint efforts of the husband’s work and the wife’s contributions to the welfare of the family, enabling the husband to work.

[14] Paragraph 12, affidavit of 8 October 2012.

100.Only months after being discharged from the Police Service, following his forced retirement from the Police force, the husband set about determining how he could continue to earn an income to keep the family financially secure. I accept that he discussed his proposed overseas work with the wife and that she was initially supportive of this proposal.  I accept that the husband sent back his earnings to support his wife and family during the nine months that he was attempting to work overseas.  The husband’s difficulties in working overseas were in my view matched by the wife’s difficulties in remaining at home with the children doing most of the parenting.

Non financial contributions (husband)

101.As to the non-financial contributions during the relationship the parties moved into a property after they commenced cohabitation at Property H. This property was purchased during the marriage for $200,000. Whilst the husband was [occupation omitted] he did a course on being an owner-builder and did a large renovation work physically on the property for a period of more than three years.  Initially when the property was purchased it comprised of a shopfront and a two-bedroom dwelling. As a result of the renovations, during which the husband also used contractors for electrical work and plumbing work, the property was transformed into a five bedroom substantial family home with the shopfront facing the street, which the wife subsequently used as a [business omitted]. The profit on sale of this building was $250,000.00.

102.The husband set out the significant amounts of physical works done by himself during the renovation, which include: gutting the existing dwelling by removing all of the wall linings and lino flooring; hammering thousands of nails that were left in the framework in preparation for the plasterers; pulling out and dumping the kitchen and bathroom; building a block retaining wall and core filling it;  landscaping the entire property by levelling the yard, digging trenches, laying pipes, building gardens and laying grass; and providing his own labour to the various contractors on site by working alongside them in order to reduce the labour costs. I accept the husband’s evidence in this regard. The evidence strongly suggests to me that the planning and implementing of improvements or renovations carried out during the period of the marriage were dominantly performed by the husband.

103.After selling the property at Property H, the parties then moved ultimately into a property purchased at Property S near [omitted].  After the parties moved in the husband did landscaping to the garden and added a pool and completed significant hours of labour on the property.  After living in the property for only 12 months the property made a profit of some $150,000.00.  After the sale of the Property S property the parties moved into Property R, [N] which became the former matrimonial home which has subsequently transferred to the wife and sold by her in July 2012.

104.In terms of indirect contributions and contributions to the welfare of the family, I accept that the husband shared some of the duties around the home and that he was primarily the cook in the house.  I accept that the husband attended to other duties including collecting the children from school when he was available to do so, noting that this often occurred during times he was able to do shift work. The husband says that the wife did more cleaning than he did, and that although he assisted with the care of the children, and at times cared for them exclusively, he concedes that the wife was the primary carer for the children during the day or night, at times that he was working. At times the husband was available in the evenings and was able to assist with various aspects of parenting.  The parties regularly had family holidays which the father attended. I am satisfied that during periods when the husband was ill, that he was still able to assist with various aspects of the day to day running of the household, and the children’s arrangements. I am satisfied that the wife has had practical support from the husband at all times other than when he was absent on and off over a period of nine months. I accept that the husband has made contributions to the welfare of the family as stated by him in his sworn evidence.

Contributions – The wife - financial and non-financial

105.The wife arrived at the marriage with essentially no assets. The wife worked as a [omitted] and conducted her own business for a period of around 2 ½ years out of a [omitted] attached to the Property H property. The wife returned to work after the first and second child, however ceased working in the paid workforce when the parties moved out of their Property H home and into the Property S home. The husband gave evidence of fees earned by her during this time

106.The wife’s non-financial contributions have been as the primary carer of the parties’ three children.  The wife says it was agreed she would be a stay at home mother until the youngest child, [Z], commenced formal schooling which had not occurred at the time of trial 2012. The wife has adhered to that agreement, notwithstanding that the parties separated and that two homes had to be established and that, in her own evidence, she didn’t have money to pay even for a broken shower screen and was borrowing money from a boyfriend and her parents.

107.I accept that the wife attended and assisted in a small degree to some of the renovation work which occurred during the marriage as referred to elsewhere in these reasons, primarily in relation to the renovation of what was to become the wife’s [business omitted]. Generally though, I consider the wife has attempted to overstate her contributions, other than homemaking contributions. 

108.It is submitted on behalf of the wife that she has made financial contributions through her father, who:

…continued to provide an income by agreement to the husband after shares of the husband were transferred back into the pool company.

109.I reject this submission as it is not in accordance with the evidence.  The moneys paid to the husband were as a result of his legal interest in [F] Pty Ltd and the interim agreement entered into between Mr T and the husband that this sum would be paid until Mr T could afford to payout the husband the value of his interest, set at $400,000.00.

110.It is also submitted on behalf of the wife that there have been significant post-separation financial contributions made by the maternal grandfather towards the care and upbringing of the children. I do not regard this as a contribution upon which I could place any weight. I accept the evidence in relation to the father’s financial contribution to the children by way of Child Support which is abundantly clear from the Child Support records attached to the father’s material. The fact that the mother has requested her parents to, or her parents have paid for, a trip to the United States for an 11 year old to [omitted] I regard as a matter between the mother and her parents. As I said during the trial, some would regard this as a very extravagant trip, and I do not accept that it has been necessary for ongoing assistance from the grandparents for the financial support of these children at all, or such that it would be characterised as a financial contribution by the wife.

111.There was also a submission made that the wife’s father has made a significant contribution towards the wife’s legal fees.[15] I do not regard any assistance that the wife has received in paying legal fees as a financial contribution made on her behalf to the acquisition or preservation of assets in the marriage. As I understand the evidence, the wife’s father has paid $10,000.00 to her current solicitor to act for the wife and perhaps some funds earlier in the litigation. The wife has had sufficient funds by way of interim distributions to pay back such funds.

[15] Affidavit of the wife 22 July 2012, paragraphs 85 and 86.

112.I consider the wife has made indirect contributions to the Property W boarding house during the years 2001 until 2008 in the form of her contributions to the welfare of the family as did the husband over these years. The wife sought to make a case that she had been involved in managing or assisting with the collection of rent on this property. I reject the wife’s evidence. The wife ultimately stated she did not actually collect the rent, but on three or four occasions over 8 years attended upon the manager to ask him for the parcel with the rent monies in it, after which she would walk back to the car and hand it to her husband. As with so much of the wife’s evidence, her version of events is inconsistent with the evidence of other witnesses in this matter namely Mr M and the husband both of whose testimonies I prefer to the wife’s.

113.To the extent that the wife asserts that her contributions to the renovations and maintenance were made equally by both parties, the evidence does not support that submission. I accept, as I have said, that the wife attended on occasions from time to time at the Property H property or to do planting or assist on an occasion knocking out one wall and painting another wall. I do not however accept that her efforts were equal to those of the husband. I accept that she was primarily responsible for the children at a time when the husband would have likely been working on the properties. The wife’s contribution to the welfare of the family, in my view, is her primary contribution.

114.Whilst the husband has been committed to continuing to earn an income after he was retired from [omitted] by working away for the best part of nine months with only several visits home, the wife was primarily responsible for the children. I do not regard her contribution in this respect any greater than the husband’s efforts who at the time was providing an income for the family. Generally I have found the wife’s evidence to be overstated or false in relation to what she suggests she has done in relation to physically building and renovating or participating in the running of the boarding house.

115.Post separation, the wife has remained as the primary carer of the children, though certainly not the sole carer of the children. The parties have an arrangement wherein the children spend from Wednesday to Monday with the father each fortnight during the school term and with the mother for the remainder of the fortnight. The children also spend one half of the holidays with each party.

Evaluation of the parties respective contributions

116.In looking at the relevant contributions of each of the parties, it is apparent that the husband has made an overwhelming direct financial contribution of around $1,000.000.00 in assets at the commencement of the relationship. 

117.He has also contributed during the marriage a personal injury claim in 2007 of $344,337.77. In February 2008 the asset owned by the husband years prior to meeting the wife and which he alone converted from flats into a boarding house was sold and bought into the marriage a sum of $1,643,725.92. 

118.In July 2009 a further personal injuries claim resulted in a net sum of $594,050.68 being paid out to the husband and injected into the parties’ asset pool. The husband’s own contributions in personal injuries payouts during the marriage total $938,387.00. The asset owned by the husband prior to marriage and which also derived a positive income during the course of the marriage added a further $1.6 million to the asset pool. All of those contributions total $2.5 million. To the wife can be attributed indirect non-financial contributions towards the Property W boarding house for the period of the marriage at a time when the husband was also making direct and indirect contributions through his work and contributions to the welfare of the family. 

119.The property pool is approximately $2,600,520.00. In the wife’s outline, the wife contends that she should receive 65% of the property pool. It was not really explained to me how the Court would arrive at 65%, and I was not assisted with any submissions explaining the break-up of the 65%.[16]  The solicitor for the wife explained that he did not have instructions to make any submissions other than 65% to the wife; however, he conceded that the husband had made a significant and direct financial contribution.[17]

[16] Transcript 6/11/12, page 36, lines 12 onwards. 

[17] Transcript 6 November 2012, page 136, lines 15-25. 

120.The uncontested evidence about the overwhelming financial contributions of the husband is not consistent with a finding that the wife has contributed 65% of the property pool. 

121.I note when forwarding in a draft of the terms of orders sought (as the parties were ordered to do at the conclusion of the trial) the wife’s orders sought referred to a division of property based on 49.6% in her favour. This figure also in my view, fails to acknowledge the uncontested evidence of the husband’s financial and non-financial contributions. 

122.In addition to seeking an order for 49.6%, the wife seeks an order that the wife receive 100% of the funds owing to the husband (and indirectly the wife) from [F] Pty Ltd of $400,000.00. The submission is made in relation to this debt that “if there were to be any monies recovered that would benefit the wife, at the end of the day.” Adding $400,000.00 to 49.6 % of the known asset pool would unreasonably distort the percentage division and fail to have regard to the relevant section 79 (4) factors.

123.Having regard to the section 79(4)(a) contributions I can identify no basis for ordering that the wife receive 100% of this very significant debt. I intend to make an order that any proceeds that are received in the future as a result of the husband’s interest in [F] Pty Ltd and it’s subsidiaries be divided in the same division as the overall property division in this matter.

124.This marriage is a marriage of 8 years and 8 months.

125.I am aware of the principles in relation to assets introduced at the commencement of the relationship and the requirement for the Court to acknowledge and give proper weight to that contribution as well as properly acknowledging the offsetting contributions of the other party as set out in the matter of Pierce & Pierce[18] wherein it was stated that:

“In our opinion it is not so much a matter of erosion of contribution but a question of what weight is to be attached, in all of the circumstances, to the initial contribution.  It is necessary to weigh the initial contributions by a party with all other relevant contributions of both the husband and the wife.  In considering the weight to be attached to the initial contribution, in this case of the husband, regard must be had to the use made by the parties of that contribution.”

[18] (1999) FLC 192-844.(Ellis, Baker and O’RyanJJ).

126.At paragraph 30 their Honours stated:

“There is an obligation on a trial Judge not only to identify the relevant contributions, but also to assess them.”

127.In this matter the wife has made contributions primarily in relation to the welfare of the family including raising the three children whilst at times working as a [omitted]. I am not satisfied that the financial and non-financial contributions of the wife result in a finding that contributions of the wife were either equal to or greater than the husband, which is submitted on behalf of the wife.

128.The husband asks that the Court make a finding that the husband’s contributions equate to no less than 80% based on his overwhelming financial contributions and his non financial contributions. The husband’s personal injuries contributions have been made late in the marriage, particularly the second payment of almost $600,000.00 which was paid in May 2009, only 8 months prior to separation.

129.Without being dazzled by the husband’s financial contributions, I consider that the division of property, having regard to the section 79(4) contributions, is heavily weighed towards the husband.

130.The wife’s initial contributions financial contributions are negligible. The wife has worked as a [omitted] during the marriage for a period and the balance of the relationship the wife has been a stay at home mother contributing to the welfare of the family. This is not an insignificant contribution. Whilst she has made indirect contributions to the Property W boarding house, her contributions do not equal those of the husband who purchased, altered and introduced this asset into the marriage. 

131.The asset pool in existence at the time of separation has been accumulated primarily through the financial contributions of the husband.

132.I am satisfied that having evaluated each of the parties financial and non-financial contributions, an appropriate division of property in a marriage of this length of time, including acknowledgment of post-separation contributions by each party is reflected in a percentage of 80/20 in favour of the husband.

Step 3 – Is an adjustment required after consideration of the factor in s.79 (4) (d) – (g) including the section 75(2) Factors

133.In terms of the parties ages, the wife is aged 35 and the husband is seven years older at 42. The wife does not have any issues regarding health which would prevent her from engaging in the workforce. 

134.The husband maintains reasonable health on a day to day basis though it is uncontested that the husband suffers considerable physical and psychological disabilities as identified in his personal injuries claims and psychiatric report. It is not possible for him to resume employment as a [omitted]. The wife has expended moneys in this matter by paying a private detective to follow the husband to Dubai, in an endeavour to appease the issues she has of great mistrust about the husband and his work capacity and his financial affairs. Her enquiries have failed to result in any evidence being presented in relation to the husband’s income earning capacity or undisclosed income or hidden funds in banks. It is the wife’s intention to now return to the workforce as stated by her at the trial.

135.I accept the husband’s evidence that he is not able to engage in [omitted] work. His work in Afghanistan for a period of around 9 months consisted of him [omitted]. The nature of this work is as stated by the husband completely different to “[omitted]” as he was doing as a [omitted]. The husband has earned only $12,000.00 in the last 12 months as a [omitted]. The husband hopes to ultimately earn more than this in his own business however, I accept his evidence that he is unlikely to return to Afghanistan any time soon. Given that the involvement of Australia and the United States and other countries is coming to an end with the withdrawal of the troops, the husband asserts, and I accept, that this will be a dangerous place for him to ever return and he has no intention of doing so. In my view, the wife overestimates the husband’s earning capacity, and she fails to accept that he does not have the physical or mental capacity to earn money as he once did in his career as a [omitted]. This aspect of the husband’s section 75(2) claim is not acknowledged by the wife. It is the wife’s contention that the husband has a greater earning capacity than herself however there is no evidence to substantiate this assertion.

136.The wife is a fully-qualified [omitted] of some 16 years, who previously worked in her own [business omitted]. The wife has not worked at all in the paid workforce since separation despite her claims of not having sufficient funds at her disposal.  The youngest child [Z], has been attending day care for two days a week during 2012. The other two children are at school. I consider that the wife has had a choice of whether to generate income for herself or not in the post-separation period and that she has chosen not to. 

137.There is no evidence before me, other than the wife’s of what a [omitted] would be paid as a salary. The wife’s evidence is that a salaried [omitted] would earn $18.00 or $19.00 dollars an hour or more. I am somewhat wary as to the wife’s evidence on such matters given the wife’s tendency to give self serving and false evidence. I do not accept the submission made on behalf of the wife that if she established her own business she would pay herself the same as a [omitted]. It seems to me that if the wife established her own [omitted] or established a business wherein she did [omitted], she would be in a position to make a profit as an owner as opposed to simply paying herself the salary of a [omitted].

138.I accept the husband’s evidence that it was possible for the wife when she worked previously to separation, to make anywhere from $300.00 up to $2,000.00 a day as a [omitted]. On those figures conservatively estimating even $400.00 a day for five days a week would result in an income of $2,000.00 a week or annually $104,000.00. If the wife worked only 3 days a week on an average of $400.00 a day, her weekly income would be $1,200.00 and annually it would be $62,400.00. Alternatively, if the wife was to earn $800.00 per day for only three days per week, her income would be $2,400.00 per week, or 35 hours at $20.00 per hour.  This would appear to be a most conservative estimate and it is likely that the wife could earn from $36,000.00 a year up to $100,000.00 or more a year depending what she chooses to do.

139.I accept that the wife has been out of the workforce for two and a half to three years. The wife has the skills and experience of a [omitted] and I do not consider that the duration of the marriage has made any significant impact on her skills noting that the wife had her own [business] during the marriage. She has in the past worked from home and conducted her own business, and I am satisfied that she has the capacity to do this in the future. I consider that it is more than likely that the wife has a greater income earning capacity than the husband. 

140.Looking at the husband’s own estimate of earning $50,000.00 as provided to the Child Support Agency, I note that his actual earnings are around $12,000.00 as at the date of trial. The husband is working as a [omitted] under the name and style “[A] Pty Ltd”.  At the time of trial, the husband’s business had generated very little income and he had not had a job offer in more than 12 months.  It is the husband’s position that he intends to continue to operate this business as it is the type of work that allows him to work part-time around the hours that he spends with the children.

141.On the material before me I am satisfied that the husband has a limited capacity to earn income and that he has less capacity than the wife.

142.In terms of the care of children, the wife is the primary carer of the parties’ three children with the children living with the wife nine days a fortnight and living with the husband for five nights and part of the sixth day per fortnight. The children will be sharing the holidays equally between the wife and the husband. 

143.As to the Child Support paid by the husband, I reject any suggestion that the husband has been avoiding his Child Support obligations as this assertion of the wife is entirely inconsistent with the evidence. The husband has agreed in the past to pay considerable expenses over and above his Child Support obligations and I am satisfied that he will do so in the future

144.It is submitted on behalf of the husband that given the husband’s limitation in earning capacity as opposed to the wife, the age of the parties and the length of the marriage, that there is no further adjustment required after consideration of the section 75(2) factors.

145.I have considered making no alteration to the findings of contribution. There are factors which suggest that this is not an unreasonable submission. The husband’s physical and medical issues which have resulted in his personal injuries claims are significant. He has lost his career. This has considerably affected considerably his income earning capacity and at present he has only a very modest income. He is 7 years older than the wife. He contributes willingly to the support of his children.

146.There were no submissions made on behalf of the wife as to what, if any, weight ought to be attributed to the s.75(2) factors. I note that the wife will be the primary carer of three children which is the most significant factor in her favour in my view. I am also mindful though of the children spending 5 ½ days with the husband each fortnight. The marriage is of a mid length. Based on the contribution percentage division as determined by me, the husband will retain significantly more assets than the wife. This is a factor I need to consider. The husband will retain significant superannuation, as compared to the wife however he is seven years older than the wife and it is primarily the husband’s direct financial contributions which have resulted in funds being placed in the Sawyer Superannuation Fund in the first place. His prospects in the work force are more limited than the wife given his medical conditions. The wife is young enough to retrain or re-educate herself should she chose to do so.

147.In weighing up all of the section 75(2) factors I find that the factors are fairly evenly balanced. In all of the circumstances of this matter, however, I consider that bearing in mind the size of the asset pool and the matters I have referred to which favour the wife, a modest adjustment pursuant to section 75(2) factors is appropriate. This is mainly to address the three children living primarily with the mother and the husband’s financial resources as opposed to the wife’s. In consideration of the husband’s section 75(2) factors, circumstances a much reduced percentage than might otherwise have been the case will be appropriate. I intend to adjust the division of 80/20 by adding on an uplift factor of 6%.

148.On a property pool of this size, 6% equates to an additional $156,031.00. Adding 6% to my findings in relation to contribution, results in the wife receiving 26%, which equates to a total of $676,135.00. The husband shall retain 74%.

149.It is agreed that the wife retains certain assets in her possession and that she has had three interim payments. I note from the draft of terms of orders sought by the husband that he seeks to retain the Sawyer Superannuation Fund and that a splitting order be made to enable the wife’s current interest in the Sawyer Superannuation Fund to be transferred to the husband as part of the property settlement. I have considered whether or not the wife should be receiving part superannuation and part cash, however given that the husband wishes to retain what seems to be a self-managed superannuation fund, I consider it is appropriate that their joint interest in the Sawyer Superannuation Fund be severed to bring an end to the parties’ joint financial affairs. The wife can also hopefully utilize any funds received as the basis for the purchase of real estate for herself and the children.

150.The wife has her own superannuation with [S] Super of $32,300.00.  The wife has also received $150,000.00 pursuant to an interim property order made on 30 November 2010, $150,654.00 as drawn down to pay out the wife a further interim payment and $100,000.00 pursuant to Orders made in August 2012. The add-back of $60,000.00 is also in the wife’s possession. The wife therefore has already had in her possession or in her sole use, the sum of $492,954.00.

151.In order for the wife to receive 26% of the amended asset pool after deduction for the amounts that the wife has been paid or retained for her own use, a further cash adjustment is to be paid to the wife in the sum of $183,181.00 ($676,135.00 less $492,954.00).

Step 4 – Determining if the division proposed is just and equitable

152.In undertaking the fourth step of this proposed property division, I am mindful of the significant direct financial contributions of the husband both at the commencement of the marriage and during the marriage. The husband’s second personal injuries claim was received only 8 months prior to separation. The wife’s contributions to the welfare of the family primarily have in my view been addressed in acknowledging her contributions of 20%.

153.The current size of the property pool is approximately $2.6 million.  The proposed division would result in the wife receiving $676,135.00 and the husband $1,924,385.00

154.The husband has worked hard throughout the marriage in the face of great adversity as can be seen in the psychiatric report. He has lost his career as a [omitted] and he has been left with significant work related disabilities. During the course of the marriage his further direct financial contributions have introduced around $1 million into this family. The property the husband owned prior to the marriage has also crystallised into a significant profit of around $1.6 million, though the wife indirectly contributed for the duration of the marriage. This family has a comfortable lifestyle and his contributions are reflected very strongly in the current asset pool. 

155.There is a significant debt owing to the husband of $400,000.00 which amount is absent from the property pool. In my view it is extremely unlikely that any funds will materialise for distribution to the husband (and wife) arising from the husband’s interest in [F] Pty Ltd. However the orders will provide for the amount to be shared in the same proportions as the division of property in the judgment should any funds be received. The husband is to be liable for and responsible for payment of the other debts remaining in this pool.

156.The wife has made her own contributions to the marriage, primarily her contributions to the welfare of the family, her work from time to time as a [omitted] in her own business and her assistance, albeit of a minor nature, to the renovations carried out during the marriage. The arrangement of the wife becoming a full-time mother was agreed between the parties as part of their marriage relationship. I have considered and rejected the submission that there be no further adjustment under the section 75(2) factors, and determined that a modest adjustment of 6% in the wife’s favour is appropriate. I accept that the husband’s reduced income earning capacity off-sets to some extent, the children living primarily with the wife, however there are three children and the husband will have greater financial resources on the proposed division. Given the length of the parties relationship, together with all of the other matters referred to in these reasons, I consider in all of the circumstances, the proposed division of 26:74 reflects a just and equitable distribution.

157.A significant amount of the wife’s entitlement has already been used by her during the progress of this trial primarily on legal fees.  It is contended on behalf of the husband that it is not the Court’s role to express any sympathy for the wife by increasing what would otherwise be her percentage, given that the wife has spent a large amount of funds on legal fees. The wife has engaged five legal firms to represent her in this litigation. That has been her prerogative. The wife has been determined to prove the husband has been dishonest in his conduct as a litigant, though she has failed to do so.  She has chosen to spend money on legal fees that could have otherwise been in her possession. 

158.I am satisfied in all of the circumstances that the amount provided for of 26% to the wife and 74% to the husband is just and equitable. 

159.I have adopted the terms of Orders sought as proposed by the husband and altered the percentage being paid to the wife to accommodate the additional 6% according to these findings.  

160.It is ordered that the husband pay to the wife in full and final satisfaction of all property payments between the parties the sum of $183,181.00 however, such sum is to be paid after and subject to any costs order.  I will make directions for any costs applications and determine that matter as soon as possible.

I certify that the preceding one hundred and sixty (160) paragraphs are a true copy of the reasons for judgment of Willis FM.

Associate: 

Date:  31 January 2013