Schiftan & Schiftan

FAMILY COURT OF AUSTRALIA

SCHIFTAN & SCHIFTAN

[2007] FamCA 653

FAMILY LAW - PROPERTY SETTLEMENT – Superannuation

FAMILY LAW - SPOUSAL MAINTENANCE

Family Law Act 1975 (Cth)

APPLICANT:

Mrs Schiftan

RESPONDENT:

Mr Schiftan

FILE NUMBER:

SYF

3670

2005

DATE DELIVERED:

19 June 2007

PLACE DELIVERED:

Sydney

JUDGMENT OF:

O'Ryan J

HEARING DATE:

23 April 2007

REPRESENTATION

COUNSEL FOR THE APPLICANT:

Mr Lloyd

SOLICITOR FOR THE APPLICANT:

Karras Partners Lawyers

COUNSEL FOR THE RESPONDENT:

Mr Lethbridge

SOLICITOR FOR THE RESPONDENT:

Coleman & Greig

Orders

The Husband and the Wife do all acts and things and execute all deeds, documents, instruments and writings necessary to sell the former matrimonial home situate at and known as V being the whole of the property contained in Certificate of Title, Folio Identifier … and for this purpose the Wife be appointed trustee to sell the home on behalf of the parties for the best price reasonably attainable but the listing of the property to be no later than 1 December 2007 or such other time as the parties may agree and on completion of the sale the proceeds of sale be distributed in the following manner and priority:-
1.1In discharge of the mortgage registered upon the title of the home in favour of Westpac Banking Corporation as dealing numbers … and ….
1.2In payment of reasonable costs incurred in selling the property, including agent’s commission and solicitor’s fees.
1.3In payment to the Wife of the entire balance then remaining.
The Husband forthwith do all acts and things and execute all deeds, documents, instruments and writings necessary to transfer to the Wife the whole of the Husband’s right, title and interest in Kia Carnival motor vehicle registered no. … .
The Husband forthwith do all acts and things and execute all deeds, documents, instruments and writings necessary to transfer to the Wife the whole of the Husband’s right, title and interest in the C shares identified in the joint statement of assets.
The Husband’s superannuation interest with the S Superannuation Plan be split to create a superannuation interest for the Wife as follows:-
4.1Pursuant to s 90MT(2) of the Family Law Act1975 (Cth) and reg 27 of the Family Law (Superannuation) Regulations the Court determines the amount in relation to the Husband’s superannuation in the S Superannuation Plan is $952,000.00.
4.2Pursuant to s 90MT(4) of the Family Law Act the Court allocates a base amount to the Wife in respect of the Husband’s superannuation interests in the S Superannuation Plan of $557,026 such specified amount being the “base amount” for the purposes of this Order.
4.3Pursuant to s 90MT(1)(a) of the Family Law Act whenever a splittable payment becomes payable in respect of the Husband’s superannuation in the S Superannuation Plan the Wife is entitled to be paid by a transfer, in specie, of assets to the required value being assets as agreed between the parties and in the absence of an agreement being listed securities to a value calculated in accordance with the Family Law Regulations for the base amount as applicable in accordance with Order 4.2, and there is then to be a corresponding reduction in the entitlement of the Husband at the time of the splittable payment.
4.4The operative time for the payment under this Order is 63 days after the date of the Order.
4.5The Trustee shall do all such acts and things and sign all documents as may be necessary, in accordance with the obligations set out under the Family Law Act and the Family Law (Superannuation) Regulations to calculate the entitlement to make the in specie payment to the Wife in accordance with these Orders, such payment to be implemented by a transfer of the agreed assets or in the absence of an agreement the listed securities to such complying self-managed superannuation fund as nominated by the Wife.
4.6The Husband shall not give or grant to the Trustee of the S Superannuation Plan a binding death nomination in favour of a child which would have the effect of in any way reducing the value to the Wife of the splittable order herein and in particular the higher base amount allocated to her and the Husband and his legal personal representatives in the event of his death, do hereby indemnify and keep indemnified the Wife in respect of any loss that may be suffered by her as the result of any failure by him to comply with this Order.
4.7The Husband forthwith do all acts and things and sign all documents necessary to cause and maintain the Wife to be the nominated death beneficiary of his entitlement to a sum not less than the higher base amount in respect of the total value of his entitlement in the S Superannuation Plan, until such date as there is a split of payments in favour of the Wife pursuant to these Orders.
4.8Having been accorded procedural fairness in relation to the making of this Order, this Order binds the Trustee of the S Superannuation Plan.
The Husband pay spousal maintenance to the Wife as follows:-
5.1A periodic sum of $300 per week until 1 January, 2009 or until the Wife obtains full time paid employment whichever event shall first occur.
5.2All periodic mortgage instalments due in respect of the former matrimonial home until settlement of the sale of the said home in accordance with paragraph 1 hereof.
In the event that either party refuses or neglects to execute any deed or instrument in order to give validity and operation to these Orders, then a Registrar of this Court is hereby empowered pursuant to s 106A of the Family Law Act to execute such deed or instrument in the name of the person who has so refused or neglected to comply.
Leave granted to the parties to seek further directions in relation to the implementation of these Orders.

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYF 3670 of 2005

Mrs Schiftan

Applicant

And

Mr Schiftan

Respondent

REASONS FOR JUDGMENT

Introduction

Before me for hearing are applications for property settlement.
The Wife is Mrs Schiftan and she seeks the following:
1.      That the husband shall, within 60 days, do all acts and things necessary and sign all instruments, documents and writings required to transfer to the wife the whole of his right, title and interest in the former matrimonial home known as 10 [V] being the whole of the property contained in Certificate of Title, Folio Identifier […] (“the home”).
2.      That the husband shall, within 60 days, do all acts and things necessary to pay out and otherwise discharge the mortgages registered upon the title of the home in favour of Westpac Banking Corporation, being registered dealing numbers […] and […].
3.      The husband shall forthwith do all acts and things necessary to transfer to the wife the whole of the right, title and interest in Kia Carnival motor vehicle registered no. […].
4.      The husband’s superannuation interests with the [S] Superannuation Plan shall be split to create a superannuation interest for the wife as follows:-
4.1Pursuant to Section 90MT(2) of the Act and Regulation 27 of the Family Law (Superannuation) Regulations the Court determines the amount in relation to the husband’s superannuation in the [S] Superannuation Plan is $952,000.00.
4.2Pursuant to Section 90MT(4) of the Act the Court allocates a base amount to the wife in respect of the husband’s superannuation interests in the [S] Superannuation Plan of either:-
4.2.1$420,215.00 in the event that the husband complies with Orders 1 and 2 hereof, the evidence of such compliance being the provision to the trustee of a copy of a registrable Memorandum of Transfer and Discharge of Mortgage in respect of the home; or
4.2.2$744,000.00 in the event that the husband fails to comply with Orders 1 and 2 hereof;
such specified amounts being the “base amount” for the purposes of this Order.
4.3Pursuant to Section 90MT(1)(a) of the Act whenever a splittable payment becomes payable in respect of the husband’s superannuation in the [S] Superannuation Plan the wife is entitled to be paid by a transfer, in specie, of ASX listed securities to a value calculated in accordance with the Family Law Regulations for the base amount as applicable in accordance with Order 4.2, and there is then to be a corresponding reduction in the entitlement of the husband at the time of the splittable payment.
4.4The operative time for the payment under this Order is 63 days after the date of the Order.
4.5The Trustee shall do all such acts and things and sign all documents as may be necessary, in accordance with the obligations set out under the Family Law Act 1975 and the Family Law (Superannuation) Regulations 2001 to calculate the entitlement to make the in specie payment to the wife in accordance with these Orders, such payment to be implemented by a transfer of the ASX listed securities to such complying self-managed superannuation fund as nominated by the wife.
4.6The husband shall not give or grant to the Trustee of the [S] Superannuation Plan a binding death nomination in favour of a child which would have the effect of in any way reducing the value to the wife of the splittable order herein and in particular the higher base amount allocated to her and the husband and his legal personal representatives in the event of his death, do hereby indemnify and keep indemnified the wife in respect of any loss that may be suffered by her as the result of any failure by him to comply with this Order.
4.7The husband shall forthwith do all acts and things and sign all documents necessary to cause and maintain the wife to be the nominated death beneficiary of his entitlement to a sum not less than the higher base amount in respect of the total value of his entitlement in the [S] Superannuation Plan, until such date as there is a split of payments in favour of the wife pursuant to these Orders.
4.8That having been accorded procedural fairness in relation to the making of this Order, this Order binds the Trustee of the [S] Superannuation Plan.
5      In the event that the husband fails to comply with Orders 1 and 2 hereof, then the wife shall be appointed trustee to sell the home on behalf of the parties for the best price reasonably attainable, the timing of such sale to be at the discretion of the wife but the listing of the property to be no later than 1 May, 2008 whereupon the proceeds of sale shall be distributed in the following manner and priority:-
5.1In discharge of the mortgage registered upon the title of the home in favour of Westpac Banking Corporation as dealing numbers […] and […].
5.2In payment of reasonable costs incurred in selling the property, including agent’s commission and solicitor’s fees.
5.3In payment to the wife of the entire balance then remaining.
6      That the husband pay spousal maintenance to the wife as follows:-
6.1A periodic sum of $406.00 per week until 1 January, 2009 or until the wife obtains full time paid employment or until settlement of the sale of the home in accordance with Order 5 hereof, whichever event shall first occur.
6.2All periodic mortgage instalments due in respect of the home until such time as the husband has complied with Order 2 hereof or until settlement of the sale of the home in accordance with Order 5 hereof, whichever event shall first occur.
7 In the event that either party refuses or neglects to execute any deed or instrument in order to give validity and operation to these Orders, then a Registrar of this Court is hereby empowered pursuant to Section 106A of the Act to execute such deed or instrument in the name of the person who has so refused or neglected to comply.
8      Leave granted to the parties to seek further directions as to the implementation of these Orders.
The Husband is Mr Schiftan and he seeks the following:
1.      That the husband and wife immediately do all acts and things to place on the market for sale and to sell for its fair market price the property situated at and known as [V] being the whole of the land contained in Certificate of Title Folio Identifier […] (“the property”). Such sale, unless the parties otherwise agree in writing, to be by way of public auction to be conducted by a real estate agent and auctioneer agreed by the parties or in default of their agreement for a period exceeding 14 days then by a real estate agent and auctioneer appointed by the President for the time being of the Real Estate Institute of New South Wales and upon completion of the sale, the net sale proceeds after the payment of all selling costs including real estate agent’s and auctioneer’s commission and disbursements and solicitors’ costs of sale and disbursements be divided and paid in the following manner and priority:
1.1First in payment of 35% of the then remaining balance to the wife; and thereafter,
1.2The then remaining balance to the husband.
2.      That further upon settlement of the sale of the property, the husband shall out of his share of the net proceeds pay to the amount of $127,500.
3.      That the husband immediately do all acts and things to transfer to the wife the whole of his right, title and interest in and to the [C] shares identified in the parties’ Joint Balance Sheet tendered at the hearing for the purposes of the proceedings and all his right, title and interest in the Kia Carnival motor vehicle, registration number […].
4.      That the wife make available for collection by the husband, at a date and time agreed between the parties but being prior to completion of the sale of the property, all of the items of personalty referred to in paragraph 53 of the husband’s Affidavit of Evidence sworn 30 June 2006.
5.      That the husband’s superannuation interest with the [S] Superannuation Plan (“the Superannuation Plan”) be split between the husband and the wife in accordance with the following orders:
5.1Pursuant to s.90MT(2) of the Act and Regulation 27 of the Family Law (Superannuation) Regulations, the value of the husband’s entitlement in the Superannuation Plan being the amount to be split between the wife and him is $952,000;
5.2Pursuant to s.90MT(4) of the Act, the Court allocates a base amount to the wife in respect of the husband’s superannuation interests in the Superannuation Plan of $476,000, such amount to be satisfied by the allocation to the wife’s interest thereby created of assets in specie to the required value being assets as agreed between the parties or in default of their agreement as determined by the existing manager of the Superannuation Plan so as to create an interest to the value of $476,000 containing assets and investments reflecting the present investment strategy of the Superannuation Plan;
5.3That the operative time for payment under this order be whichever of the following events shall first occur namely either 28 days from the date of this order or 14 days from the date upon which the assets and investments to constitute the fund to be allocated to the wife are determined;
5.4That upon the determination of the interest to be allocated to the wife, the wife do all acts and things to cause her interest in the said superannuation plan to be rolled over to such other complying fund as may be nominated by her to the trustees of the Superannuation Plan in writing, such nomination to be delivered no later than 60 days from the date upon which the wife’s entitlement is determined pursuant to these Orders.
6.      That these Orders be binding upon the trustee of the [S] Superannuation Plan.
7.      That the wife’s Application for Spousal Maintenance be dismissed.
The Husband was born in June 1960. The Wife was born in September 1965. The parties were married on 21 February 1982 and separated on 14 June 2005.
There are four children of the marriage R born in December 1985, M born in April 1989, J born in October 1991 and T born in December 1997. On 23 April 2007 by consent I made the following orders:
1.      The husband and the wife shall have equal shared parental responsibility for making all decisions concerning the long term care, welfare and development of the children of the marriage [J] born [in] October 1991 and [T] born [in] December 1997 (“the children”).
2.      That each party shall have sole parental responsibility for making all decisions concerning the day to day care, welfare and development of the children during all periods when the children are in their care respectively.
3.      That the child [J] shall live with the husband.
4.      That the child [T] shall live with the wife.
5.      That the wife shall spend time with [J] in accordance with [J’s] expressed wishes.
6.      That the husband spend time with [T] and such time to include the following:-
(i)Each alternate weekend from after school Friday until 6.30pm on Sunday during daylight saving time and 5.30pm during Eastern Standard time.
(ii)Each alternate Wednesday from 5.30pm until 7pm.
(iii)For one half of all the school holidays.
(iv)During the following Jewish festivals in every year ending with an even number, at times to be agreed:-
a)Purim;
b)First night Passover (Pesach);
c)Rosh Hashana;
d)Yom Kippur;
e)Sukkot;
f)Simchat Torah;
(v)For four hours on [T’s] birthday unless it is a school day and in the event it is a school day then the time shall take place on the Saturday or Sunday immediately following the birthday, being the day upon which the wife has not organised a birthday party, in the event that such day does not otherwise coincide with time that [T] would ordinarily be spending with the husband pursuant to these Orders.
7.      That each of the parties shall be at liberty to telephone the children when they are not spending time with them.
8.      That [J] shall remain enrolled at [R] High School.
9.      That each of the parties use their best endeavours to encourage and facilitate communication between [J] and the wife.
10.     That each of the parties undertakes to the Court to contact the school counsellor at [R] High School within 7 days of the date of these Orders and accept any recommendations made by her in relation to [J].
11.     That both parties are restrained from denigrating the other party in the presence or hearing of the children.
12.     Each party shall instruct the school attended by the children from time to time to make available to the other party copies of school reports, correspondence, event notices and any other written material which is ordinarily forwarded to that party.
The children R, M and T live with the Mother.

Relevant principles-property settlement

The approach to the determination of an application pursuant to s 79 of the Family Law Act 1975 (Cth) is well established by authority. Section 79(2) provides that I shall not make an order, under the section, unless I am satisfied, in all the circumstances, that it is just and equitable to make the order. I am required, in considering what order, if any, I should make, to take into account the respective contributions of the parties referred to in paragraphs (a), (b) and (c) of s 79(4); the effect of any proposed order upon the earning capacity of the parties; the matters referred to in s 75(2), so far as they are relevant; any other order made under the Act affecting a party or a child, and any child support under the Child Support (Assessment) Act 1989 (Cth).

Relevant principles-spousal maintenance

Section 74, which has been described as the basal provision in the Family Law Act in relation to spousal maintenance, provides that in proceedings with respect of the maintenance of the party I may make such order as I consider proper for the provision of maintenance in accordance with Part VIII. Section 72 provides that a party to the marriage is liable to maintain the other party to the extent that the first mentioned party is reasonably able to do so if, and only if, that other party is unable to support her or himself adequately whether by reason of having the care and control of the child of the marriage who has not attained the age of 18 years, by reason of age or physical or mental incapacity for appropriate gainful employment, or for any other adequate reason having regard to any relevant matter referred to in s 75(2): see In theMarriage of Mitchell (1995) 19 Fam LR 44.

Section 75(2) sets out a number of matters which I should take into account in exercising the jurisdiction given by s 74. Section 72 establishes a threshold question before the power in s.74 may be exercised, and that threshold question is whether the applicant for spousal maintenance is unable to support himself or herself adequately by reason of the matters set out in (a), (b), or (c), of s 74, but having regard to any relevant matter referred to in s 75(2). In Mitchell (supra), at p 59, the Full Court said that the question that whether the applicant can support herself or himself adequately is not to be determined by reference to any fixed or absolute standard but having regard to the matters referred to in s 75(2) and more specifically the paragraphs of that sub-section.

Preliminary overview

It is agreed that the parties have assets of a net value of $1,610,086 which includes superannuation interests of a value of $953,385. As well the Husband has long service leave entitlements of a value of $39,595 and annual leave entitlements of a value of $26,029.
As to contributions being the matters in s 79(4)(a), (b) and (c) of the Family Law Act the Wife’s case is that I should assess the contribution based entitlements of each party expressed as a percentage of all of the current net assets of the parties as equal. The Husband’s case is that I should assess the contribution based entitlements of each party expressed as a percentage of the current net assets as to 50 per cent to the Husband and 50 per cent to the Wife of the superannuation interests and as to 65 per cent to the Husband and 35 per cent to the Wife of the other assets.
As to the matters in s 79(4)(d), (e), (f) and (g) of the Family Law Act the Wife’s case is that if I made the finding as to contribution based entitlement sought by her then there should be an adjustment in her favour of a further 10 to 15 per cent of all assets having regard to these other factors. The Husband’s case is that if I made the finding as to contribution based entitlement sought by him then there should be a further adjustment in favour of the Wife of five per cent of all assets having regard to the other factors.
In summary, the Husband seeks an entitlement of 55 per cent of the net assets and the Wife seeks an entitlement of 65 per cent.
The Husband contended that there are two matters which support his entitlement to a greater share of the non-superannuation assets. First, his contribution of greater assets he had at the commencement of the relationship and second the contributions made by his mother.
There are also issues in relation to how the entitlement of each party should be satisfied. In particular this relates to when the matrimonial home is sold and whether the Husband receives any portion of the proceeds of sale in partial satisfaction of his entitlement.
I received a joint case summary document in accordance with the Case Management Directions and I was told that the marital and financial history set out in the document was exhaustive.

Background

In January 1964 the Husband’s parents set up a business in the garage of their home at N. The business was established to produce goods for the national die-casting industry. The business has evolved to specialise in the design and manufacture of goods for use in specific packaging industries in Australia and South East Asia.
On 27 June 1966 H Pty Ltd was registered. The current directors are the Husband, his brother Mr LS and his mother Mrs ES. The Husband holds 23.53 per cent of the issued shares.
In 1968 H Pty Ltd purchased vacant land at F, and thereafter built a small factory on the property.
In 1970 the Husband’s uncle, Mr FS, joined H Pty Ltd and acquired one third of the issued shares.
The Husband contended that in the early 1970’s “B” class shares in H Pty Ltd were created to take advantage of applicable tax laws. The Husband holds 20 of such shares.
In 1975 the Husband completed the School Certificate at U High School.
In 1976 the Husband was employed by H Pty Ltd as an apprentice toolmaker.
In June 1978 H Pty Ltd completed the purchase of a factory at R for $157,500. To pay the cost an amount of $130,000 was borrowed from the then State Bank. The Company still occupies this property.
In 1980 the Husband graduated as a tradesman from a Technical College.
On 15 July 1981 the Husband purchased a unit at B for $59,000 and thereafter rented the unit for six months. To pay the cost the Husband borrowed about $40,000 from the then Bank of New South Wales and obtained the balance from his parents. The Husband’s mother said that she gifted $20,000 to the Husband.
The parties were married in February 1982.
At the commencement of cohabitation the Husband owned the B unit, a motor vehicle, some savings and a small amount of superannuation. The Husband had a debt to the bank.
At the commencement of cohabitation both parties were in paid employment. The Husband was working for H Pty Ltd and the Wife was working as a beauty therapist.
After the parties were married they lived in the unit at B.
On 22 April 1983 the Husband’s mother gifted $2,990.57 to the Husband.
On 28 March 1984 the parties purchased a home at G for $87,500. The Husband sold the B home for $57,500 and applied the net proceeds of sale and as well the parties borrowed $41,000 from Westpac Bank.
In April 1984 the parties undertook significant renovations to the G property.
In mid 1985 the Wife ceased work when she was three months pregnant with the child R.
The child R was born in November 1985.
The child M was born in April 1989.
On 8 May 1991 the Husband was appointed as director and secretary of H Pty Ltd.
The child J was born in October 1991.
In 1993 the Husband’s father died and the Husband’s role in the Company changed. The Husband contended that he and his brother worked long hours in an attempt to ensure that the Company continued trading successfully.
On 13 August 1996 the Husband’s mother gifted $37,500 to the Husband.
On 20 August 1996 the parties settled the purchase of a home at V for $375,000. The Husband contended that the price was $335,000. To pay the costs the parties borrowed $116,000 from Westpac Bank. The Husband contended that the parties borrowed $120,000. The Husband also contended that he applied $68,000 he received from his mother.
On 9 September 1996 the Husband’s mother gifted $25,000 to the Husband.
On 25 October 1996 the parties sold the home at G for $190,000 and received approximately $180,000 net from the proceeds. The Husband contended that the sale price was $180,000. The mortgage had been repaid by this time.
In November 1996 the parties commenced renovations to the home at V and to pay the costs they increased the Westpac Bank mortgage loan to $280,000.
On 2 December 1996 the Husband’s mother gifted $5,500 to the Husband.
On 28 May 1997 the Husband’s mother gifted $10,000 to the Husband.
In December 1997 the child T was born.
On 15 May 1999 the Husband’s mother gifted $3,000 to the Husband.
The parties’ single expert accountant Ms D said that in September 1998 the current shareholders of H Pty Ltd agreed to buy back the 32 shares held by Mr FS and his family. The current shareholders are the Husband, his brother Mr LS, his mother and his brother Mr TS. Ms D said that Mr TS is a passive investor.
On 30 June 1999 H Pty Ltd contributed $29,443 to the Husband’s superannuation.
On 30 June 2000 H Pty Ltd contributed $20,000 to the Husband’s superannuation.
On 30 June 2001 H Pty Ltd contributed $20,000 to the Husband’s superannuation.
On 30 June 2002 H Pty Ltd contributed $10,000 to the Husband’s superannuation.
In June 2002 the parties undertake landscaping at their home at V to host the child M’s Bar Mitzvah and increased the Westpac Bank loan to $312,000.
In November 2002 the Wife commenced part time work as a cleaner at a nearby Hospital earning $14.90 per hour.
On 18 November 2002 Q Pty Ltd was registered and it later became known as P Pty Ltd. The Husband owns 17.24% of the issued ordinary shares and H Pty Ltd owns 236,742 redeemable preference shares. P Pty Ltd owns the technology to manufacture therapeutic goods which are sold through pharmacies and are also recommended and sold by physiotherapists and chiropractors to their clients.
In 2003 H Pty Ltd contributed $10,000 to the Husband’s superannuation.
In October 2003 the Wife ceased work at the hospital.
The child R left school at the end of 2003.
In 2004 H Pty Ltd contributed $10,000 to the Husband’s superannuation.
The parties separated in June 2004. The Husband ceased living in the matrimonial home and is currently living with his mother in her three bedroom unit.
On 5 August 2004 the Husband’s mother gifted $20,000 to the Husband.
In 2005 H Pty Ltd contributed $10,000 to the Husband’s superannuation.
Proceedings were commenced in the Family Court when on 5 August 2005 an application was filed by the Wife.
On 7 September 2005 orders were made by a Registrar that by way of interim spouse maintenance the Husband pay the whole of the mortgage repayments of the former matrimonial home as and when they fall due and that the parties do all things necessary to approach the mortgagee to have those monthly payments reduced if possible to interest only or some lesser amount accepted by the bank. It was noted that the orders were made on the basis that the Husband paid family health insurance cover with the health insurer that included the Wife and the Husband’s commitment to pay assessed child support at the rate of $2,531 per month.
On 23 February 2006 the Wife commenced a decorating course at a Sydney TAFE.
On 5 August 2006 the child J commenced to live with the Husband.

Financial circumstances

The first step is to determine the extent and value of the property, liabilities and financial resources of the parties at the time of the hearing.

Conclusion - financial circumstances

It is agreed that for the purposes of these proceedings, the parties have the following assets and liabilities:
Assets $
·V property h/w)  585,000
·H Pty Ltd (h/w)  400,500
·Kia motor vehicle (h/w)  9,000
·WBC account number … (w)  80
·WBC account number … (h)  170
·C shares (x 10) (w)  134
·Home contents (w)  5,000
·Legal fees (h)  74,996
·Legal fees (w)       70,449
Total1,145,379
Superannuation
S superannuation (h)  952,000  -
A super (w)1,385                   -
953,385
Total2,098,764
Less
Liabilities
·WBC mortgage (h/w)  323,785
·WBC Visa (h)  9,615
·WBC Visa (w)  3,249
·HZ & AZ(w)  74,996
·The husband’s mother (h)  70,499
·H Pty Ltd loan account (h)        6,534
Total (488,678)
Balance$1,610,086
The equity in the non superannuation interest assets is $656,701.
The Husband is a member of the S Superannuation Plan which is a self managed superannuation fund. The trustees of the Fund are the Husband, his brother Mr LS, the Husband’s mother and Mr JS who is the son of Mr LS. The Husband and the other trustees are the only members of the Fund. The assets of the Fund comprise listed shares and trusts, Commonwealth bonds, publicly offered management investment funds and a mortgage loan.
I have come to the conclusion that the matrimonial home should be sold. It was accepted on behalf of the Wife that the property would have to be sold. Subject to costs of sale the anticipated net proceeds of sale is $261,215 being the agreed value of $585,000 less the mortgage debt of $323,785. I have no evidence of the costs of sale but two per cent or more is often referred to and thus in my view the costs of sale may be $11,700. Although it is somewhat arbitrary I am going to allow an amount of $10,000 for the costs of sale and this has the outcome that the non superannuation assets have a net value of $646,701 and including superannuation interests all assets have a net value of $1,600,086.

Financial resources

The Husband has entitlements to long service leave of a value of $39,595 and annual leave of a value of $26,029. The entitlements may be property for the purposes of the definition of property in s 4 of the Family Law Act however this issue was not argued before me and thus I will treat the interests as a financial resource of the Husband.

Contribution

The duration of the marriage was approximately 23 years and there are four children.
The Husband had greater assets than the Wife at the commencement of the relationship. The Husband contributed the assets he had at the commencement of cohabitation. I accept that the equity in the unit at B was not significant. In submissions I was told that the Husband also had an interest in H Pty Ltd although I could find no evidence dealing with such interest at the commencement of the relationship including in the affidavit of the single expert. However, the Husband holds 20 “B” class shares and according to the Husband this class of share was created in the early 1970’s.
The other matter which I take into account is the money that was received from time to time from the Husband’s mother. The Husband’s mother gave evidence corroborating what the Husband said and she was not cross examined. The husband’s mother said that between April 1983 and August 2004 she gave the Husband $118,990.57. This does not include the amount paid to assist the Husband to acquire the unit at B.
During the relationship the Husband was always in paid employment.
For a period of the relationship the Wife was in paid employment. The Wife worked from the date of marriage on 21 February, 1982 until mid-1985 (when she was three months pregnant) and all her wages were deposited into the joint account for household purposes. The Wife undertook part time work between November 2002 and October 2003, the income from which was applied to the benefit of the household.
The Wife was primarily responsible for the care of the children and domestic tasks. The Husband made a contribution as homemaker and parent in that when the Wife was not in paid employment the Husband’s earnings supported the family and as well he attended to gardening, home maintenance and the care of the children. However, I have no doubt that the Wife’s contribution as homemaker and parent was significantly greater than that of the Husband. The Wife gave evidence of the tasks she undertook. The Wife gave evidence that was not disputed about the Husband’s hours of work. What the Wife said was corroborated by Ms D who said that she was advised that the Husband works on an average 50 to 60 hours per week in the performance of his duties. The Husband gave evidence that when the parties were married the Wife usually worked from 9.00 am to 5.00 pm whereas he was working from 7.00 am to 6.00 pm.

Conclusion - contributions

In the circumstances of this case I accept that it is appropriate to separately assess the contributions of the partes in relation to the non superannuation assets and the superannuation assets.
In relation to the non superannuation assets the matters that favour the Husband are the assets he had at the commencement of the relationship and the gifts from his mother. I am of the view, that the contribution based entitlements of the parties, expressed as a percentage of their non-superannuation assets, should be assessed as to 60 per cent or $388,020.60 to the Husband and 40 per cent or $258,680.40 to the Wife. This is a disparity of $129,340.20.
I am of the view, that the contribution based entitlements of the parties, expressed as a percentage of their superannuation assets should be assessed as to 50 per cent or $476,692.50 to the Husband and 50 per cent or $476,692.50 to the Wife.
The outcome of these findings is that the Husband has a contribution based entitlement to all assets of 54 per cent or $864,713.10 and the Wife has a contribution based entitlement to all assets of 46 per cent or $735,372.90.

Other factors

I am satisfied that the orders I propose to make will have no effect upon the earning capacity of either party.
The Husband is aged 47 years and the Wife is aged 42 years.
Both parties are in good health. However the Wife contends that she is being prescribed anti-depressant medication.
The Husband is in receipt of a total average income of $1,700 per week which includes a salary of $1,508 and contribution to superannuation of $192 per week. He also has the benefit of a motor vehicle and all expenses are paid by the H Pty Ltd. He pays tax of $395 per week and thus he has an after tax salary of $1,305. He has other benefits. His expenses include $250 for the interest in respect of the mortgage on the title of the matrimonial home and child support of $405 per week. He pays no rent or board to his mother.
Ms D said that the life cycle of the industry in which H Pty Ltd is involved is considered mature with industry growth expected to under perform against real growth in the economy over the next three to four years. However, she gave evidence about an analysis that in the future there may be an increase in demand for the particular products offered by the business. Further, that there remains a strong demand for the products of the industry despite the long term decline of manufacturing sectors in Australia. As well, the Australian Industry Group Annual Manufacturing forecasts for 2006 indicate a level of activity that may result in continued demand for products of the company.
The Wife is not in receipt of any income from paid employment. Prior to working as a cleaner at the nearby Hospital the Wife considered resuming her career as a beauty therapist. She had not worked as a beauty therapist since 1985 and she thought it might be sensible for her to try and re-enter the industry. She had also undertaken casual work for friends and relatives over the years and thought she might be able to obtain work without too much difficulty. The Wife attended numerous interviews and she said, which I accept, that she soon realised that she had been out of the work force for so long that her skills were outdated and that there was no demand for the styles with which she was familiar. As well, she realised that the industry was looking for younger therapists and that she repeatedly failed to secure any work. In February 2006 she commenced a decorating course at a Sydney TAFE which is a three year course. The Wife hoped that by completing this retraining she would be able to obtain paid employment as a decorator and this remains her intention. She is currently undertaking what she called the work experience component of her course by attending a decorating business at her area on Tuesdays and Wednesdays on an unpaid basis.
In her affidavit of 7 June 2006 the Wife gave evidence that apart from mortgage instalments, health insurance premiums and Foxtel television subscription her weekly needs are a total of $494. In a financial statement of 12 March 2007 the Wife gave evidence that currently her total average weekly income was $470 being family assistance of $65 and child support of $405. The Wife has no other income. The Wife also gave evidence, and it was not challenged, that she estimates that her average weekly expenses for the support of herself is a total of $373. I note however, that the expenses do not include any amount for cleaning, repairs, dry cleaning, books and magazines and importantly, accommodation expenses.
When the Wife completes her decorating course at the end of 2007 she intends to endeavour to obtain paid employment as a decorator. The Wife gave no evidence as to what her expected income may be however in cross examination she made a guesstimate that she may receive $14 or $15 per hour. If the Wife worked an eight hour day for five days a week and was in receipt of a gross amount of $14 per hour then she would receive a gross wage of $520 per week. I accept the Wife’s evidence as to why she has not attempted to resume paid employment in the beauty industry. I accept that the Wife is endeavouring to establish a career as a decorator and obtain paid employment in this industry. However, I am also of the view that if and when the Wife does qualify as a decorator and obtains paid employment although she may then be able to support herself adequately it is likely that she will receive an income which is significantly less than the income that is received by the Husband.

At the present time the Husband has a significantly greater income than the Wife. In assessing the weight to be given to this factor I take into account for reasons I will hereafter give that the Husband will have to pay spousal maintenance to the Wife for a period of time. However, I am of the view that if and when the Wife is in paid employment and the Husband is no longer paying spousal maintenance his income will still be greater than that of the Wife.
I am of the view that the Husband has a greater earning capacity than the Wife.
As a result of my findings as to the contribution based entitlements the Husband has greater assets than the Wife being a disparity of $129,340.20.
I take into account that the loan account of the Husband with H Pty Ltd is not immediately repayable.
The Husband has as a financial resource the benefit of long service leave and annual leave entitlements. I do attach weight to these interests, amongst other things, because the entitlements were deducted in determining the value of H Pty Ltd.
The Husband also has as a financial resource his mother. Over a number of years the Husband’s mother has provided funds to the Husband. The Husband has had the benefit of rent free accommodation with his mother since about June 2004. The Husband’s mother is a director and shareholder of H Pty Ltd and in his evidence the Husband contended that his mother is “effectively the owner of the company.” In a recent affidavit the Husband said that his mother has paid his legal fees and expenses of approximately $66,000. As well, the Husband gave evidence of payments made by his mother between March and October 2005 of $2,449.69 relating to the former matrimonial home. The Husband also said that the child J had to undergo surgery in early 2007 and his mother made all of the payments associated with the surgery. The Husband went on to say that he is unable to pay any of the further treatment expenses associated with the child’s ongoing treatment and he has asked his mother to pay for the future medical bills that the child requires. However, notwithstanding this finding it is not a matter to which I attach significant weight.
There are two adult children of the marriage, R, who is 21 years of age and M who is 18 years of age. R is in full time employment earning approximately $400.00 per week and M is completing his Year 12 Higher School Certificate education. Both are residing with the Wife in the former matrimonial home.
Both parties will have the responsibility to provide support for the children J and T. I am of the view that given the ages of the children the Wife’s responsibility will be greater than that of the Husband. The child J is in year 10 at school. The child T is in year 4. However, I also take into account that the Husband is currently paying child support of $2,531 per month and that he will continue to pay child support.
The Wife is in receipt of Centrelink Family Assistance Part A and B in the sum of approximately $65.00 per week.

Conclusion – other factors

The significant matters are the greater income of the Husband, the greater earning capacity of the Husband, the greater assets of the Husband, the financial resources of the Husband and the greater responsibility of the Wife for the care of the child T.
The Husband will pay child support and for reasons I will shortly give for a period of time will pay spousal maintenance. There is then child M who is completing his Year 12 Higher School Certificate education. The child is presently residing with the Wife in the former matrimonial home. For a period of time the Wife will also have the responsibility of the care of this child. The Wife is concerned that the home not be sold until the child has completed his examinations. I am of the view that this is reasonable and I propose that the home not be sold until after the examinations. However I will also take into account in favour of the Husband that he will have to continue to make payments to the bank pursuant to the arrangements he has made in relation to the mortgage.
In all the circumstances, I am of the view, that there should be an adjustment of five per cent or $80,004.30 of all of the net assets of the parties to the contribution based entitlement of the Wife.

Effect of property order

The Wife seeks as part of her entitlement that she receive the whole of the net proceeds of sale of the home after the discharge of the mortgage and the payment of costs. The Husband seeks that he receive a portion of the net proceeds of sale and that the Wife’s entitlement be otherwise reflected in the amount she receives from his superannuation interest.
I have come to the conclusion that the Wife should receive the net proceeds of sale of the home as part of her entitlement. The Wife’s capacity to borrow funds is limited by the assets she would have available. The Husband will also have as property interests his shareholding in the H Pty Ltd and this interest has a value of $400,500. The home will have to be sold as the Wife does not have the capacity to pay the mortgage secured on the title. The Wife had originally sought that the Husband transfer to her the home unencumbered. The difficulty with this approach, which the Wife accepts, is that the Husband would not have the ability to discharge the mortgage except by a realisation of his interest in H Pty Ltd and this would then effectively only leave him with his superannuation interest. I am going to order that the home be sold as and from 1 December 2007.
I am not going to make any order about the division in specie of items of personalty as there was no evidence and no submissions. However the parties may always reach an agreement about the division of such items.
The Wife will receive an entitlement of 51 per cent of all assets or $816,044 which will comprise the following:-
Assets$
·Net proceeds of sale of the matrimonial home   251,215
·Kia motor vehicle   9,000
·WBC account number …   80
·C shares (x 10)   134
·Home contents   5,000
·Legal fees        70,449
Total335,878
·A super  1,385
·Portion of superannuation interest of Husband     557,026
Total894,289
Less
Liabilities
·WBC Visa   3,249
·HZ & AZ     74,996
Total (78,245)
Balance$816,044
The Husband will receive an entitlement of 49 per cent of all assets or $784,042 which will comprise the following:-
Assets $
·H Pty Ltd   400,500
·WBC account number …   170
·Legal fees   74,996
Total475,666
·Superannuation interest  395,024
Total870,690
Less
Liabilities
·WBC Visa   9,615
·The husband’s mother   70,499
·H Pty Ltd loan account        6,534
Total (86,648)
Balance$784,042
In all the circumstances, having regard to all relevant statutory considerations, I am of the opinion that the outcomes identified above are just and equitable.

Conclusion-spousal maintenance

I am satisfied that at the present time by reason of having the care and control of two children of the marriage and also by reason of her age and incapacity for appropriate gainful employment that the Wife is currently unable to support herself adequately. I will assume that this situation will change when the Wife completes her course and obtains paid employment.
The Wife will have however have to obtain accommodation and assuming she used her property settlement entitlement to pay for such accommodation I have no doubt it will be modest.
I am satisfied that the Wife’s weekly needs are not less than $373 per week. In fact for reasons given they are probably more.
After payment of the mortgage and child support the Husband has a net amount of $650. When the home is sold the Husband will no longer have to pay the mortgage although I accept that at that time he will have accommodation costs.
The parties’ financial circumstances are comparatively modest and limited. However I am satisfied that the Husband has the capacity to pay spousal maintenance for a limited period. He will only have to make payments in respect of the mortgage until completion of the sale of the former matrimonial home.
I propose to order that until January 2008 the Husband pay to the Wife the amount of $300 per week. However I accept that if in the meantime there are changes in the financial circumstances of the parties which I have not addressed in these reasons then the order may have to be reviewed.

I certify that the preceding 114 paragraphs are
a true copy of the reasons for judgment
of the Honourable Justice O’Ryan

………………………………………………………..
Associate
Date: 19 June 2007

IT IS NOTED that this judgment for all publication and reporting purposes be referred to as SCHIFTAN & SCHIFTAN

[2007] FamCA 653

19 June 2007

Key Legal Topics

Areas of Law

Family Law

Legal Concepts

Jurisdiction

Procedural Fairness