SCHOREL & SCHOREL (No.3)

[2020] FCCA 922

FEDERAL CIRCUIT COURT OF AUSTRALIA

SCHOREL & SCHOREL (No.3) [2020] FCCA 922

Catchwords:
FAMILY LAW – PROPERTY – Adjustment of property interests – loan by husband’s parents – whether contribution by husband or on behalf of parties – post separation assets and liabilities – assessment of contributions – disparity in income – justice and equity.

Legislation:

Family Law Act 1975 (Cth), ss.44, 75, 79

Cases cited:

Bevan & Bevan [2014] FamCAFC 19

Chapman & Chapman [2014] FamCAFC 91

Kessey & Kessey (1994) FLC 92-495

Mabb & Mab [2020] FamCAFC 18

Scott & Danton [2014] FamCAFC 203

Russell & Russell (1999) FLC 92-877

Stanford v Stanford [2012] HCA 52

Teal & Teal [2010] FamCAFC 120

Applicant: MR SCHOREL

Respondent: MS SCHOREL

File Number: SYC 8325 of 2015

Judgment of: Judge Obradovic

Hearing date: 4 March 2019

Date of Last Submission: 4 March 2019

Delivered at: Parramatta

Delivered on: 29 April 2020

REPRESENTATION

Counsel for the Applicant: Mr Cummings SC

Solicitors for the Applicant: Walter & Elliott Family Lawyers

Counsel for the Respondent: Mr Lethbridge SC

Solicitors for the Respondent: Barkus Doolan

ORDERS

1. Leave is granted to the applicant (“husband”) pursuant to s.44(3) of the Family Law Act 1975 (Cth) (“the Act”) to make an application for alteration of property interests pursuant to s.79 of the Act out of time.

2. Within 28 days the parties shall do all acts and things and sign all documents necessary for the respondent (“wife”) to transfer to the husband all her right, title and interest in the property situate at and known as B Street, Suburb C in the State of New South Wales being the whole of the land comprised in (omitted) (“B Street Property”).

3. Simultaneously with the transfer of the wife’s interest in the B Street Property to the husband, the husband shall:

   (a)cause to be paid to the wife, or as she may direct in writing, the sum of $392,048;

   (b)indemnify the wife against any and all liability in relation to the loan from the husband’s parents (namely, Mr A Schorel and Ms B Schorel) to the husband and wife which is secured over the B Street Property by way of mortgage (registration number …94); and

   (c)use his best endeavours to obtain a full release from the husband’s parents  of any and all liabilities owed by the wife to the husband’s parents arising from the loan secured over the B Street Property by way of mortgage (registration number …94).

4. Upon noting that:

   i.The A & B Schorel Family Trust was established under a Deed of Trust and the rules governing the operation of the said Trust are governed in the said Trust Deed.

   ii.The husband is the Nominator of The A & B Schorel Family Trust.

   iii.D Pty Ltd is the Trustee of The A & B Schorel Family Trust.

   iv.D Pty Ltd holds 100 ordinary shares of 100 ordinary shares of A Pty Ltd.

   v.The husband and the wife are both directors of D Pty Ltd and each hold 50 ordinary shares of 100 ordinary shares in that company.

   Within 28 days the wife shall:

   (a)pay any liabilities owed by The A & B Schorel Family Trust to the Australian Taxation Office in respect of any income directed by the wife to be paid through The A & B Schorel Family Trust for the period 27 October 2014 to 4 March 2019; and

   (b)pay any liabilities owed by A Pty Ltd to the Australian Taxation Office in respect of any income directed by the wife to be paid through A Pty Ltd for the period 27 October 2014 to 4 March 2019;

   (c)do all acts and things and sign all documents necessary to:

   (i)assign to the husband the whole of her right, title and interest or liability (if any) in any loan account the wife has with The A & B Schorel Family Trust and thereafter the husband shall, subject to the wife making the payments referred to in (a) and (b) above, indemnify and keep indemnified the wife against all actions, claims, suits and demands both at law and in equity, which the said Trust now has or may have at any time or times in the future against the wife;

   (ii)relinquish all of her right, title and interest in respect of The A & B Schorel Family Trust, whether such interest may be actual, contingent or otherwise;

   (iii)resign as a director of D Pty Ltd; and

   (iv)transfer her 50 ordinary shares in D Pty Ltd to the husband.

5. Subject to these Orders, the husband is solely entitled to the exclusion of the wife to all other property both real and personal in his ownership, possession and/or control, including but not limited to:

   (a)all monies in financial institutions in his name whether in Australia or overseas;

   (b)his 50 ordinary shares in D Pty Ltd;

   (c)his publicly listed shares;

   (d)his motor vehicle E;

   (e)his superannuation entitlements whether in Australia or overseas; and

   (f)his furniture, household effects, jewellery and personalty.

6. Subject to these Orders, the wife is solely entitled to the exclusion of the husband to all other property both real and personal in her ownership, possession and/or control, including but not limited to:

   (a)her interest in the property at F StreetF Street, Suburb C in the State of New South Wales being the whole of the land comprised in (omitted) (“F Street Property”);

   (b)all monies in financial institutions in her name whether in Australia or overseas;

   (c)her 10 ordinary shares in G Pty Ltd

   (d)her interest, if any, in the Schorel Family Trust;

   (e)her motor vehicle H;

   (f)her superannuation entitlements whether in Australia or overseas;

   (g)her interest [with] Employer I including any retirement benefit; and

   (h)her furniture, household effects, jewellery and personalty.

7. The husband indemnify and keep indemnified the wife in relation to all liabilities and debts in his name, including but not limited to the liability in respect of his car lease, any credit card liabilities and income tax liabilities.

8. The wife indemnify and keep indemnified the husband in relation to all liabilities and debts in her name, including but not limited to her home loan in respect of the F Street Property, her loan from Ms J, her K Bank car loan, her National Australia Bank personal loan, any credit card liabilities and personal income tax liabilities.

9. In the event that either party refuses or neglects to execute any deed, document or instrument necessary to give effect to these Orders, the Registrar of the Federal Circuit Court of Australia be appointed pursuant to s106A of the Act to execute such deed, document or instrument in the name of the said party and do all acts and things necessary to give validity and operation to the deed, document or instrument upon the Registrar being provided with verification of such refusal or failure by way of affidavit.

10. Remove all outstanding issues from the list of cases awaiting finalisation.

IT IS NOTED that publication of this judgment under the pseudonym Schorel & Schorel (No.3) is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT PARRAMATTA

SYC 8325 of 2015

MR SCHOREL

Applicant

And

MS SCHOREL

Respondent

REASONS FOR JUDGMENT

1. On 4 March 2019, the Court heard the competing applications of the husband and wife in respect of the property adjustment orders sought by each of them. Judgment was reserved.

2. The proceedings were commenced by the husband 36 days after the expiry of the relevant limitation period. The wife does not oppose leave being granted for proceedings to be commenced out of time. There was only a minor delay that has been satisfactorily explained in the husband’s evidence. There is no prejudice to the wife flowing from the delay. It is appropriate for leave pursuant to s.44(3) of the Family Law Act (Cth) 1975 to be granted.

3. On 5 July 2019, the husband filed an Application in a Case seeking for delivery of judgment to be stayed pending the hearing of the Application in a Case, which included an application for liberty to file a further Application in a Case for the hearing to be re-opened. That Application in a Case was first before the Court on 21 October 2019, when the Court was advised that the parties were negotiating and that the application may not be pressed. On 3 December 2019 the Court received notification from the husband’s solicitors that the Application in a Case was no longer pressed. While the stay application was ultimately not pressed the practical effect of the filing of the Application in a Case on 5 July 2019 was that reasons for judgment were reserved for an additional five months.

The relevant legal principles to property adjustment orders

1. The overall approach to the determination of an application for property adjustment orders pursuant to s.79 Family Law Act 1975 (Cth) was set out by the High Court in Stanford v Stanford.[1] Such approach was subsequently considered by the Full Court of the Family Court in Bevan & Bevan[2], Chapman & Chapman[3] and Scott & Danton[4].

   [1] [2012] HCA 52; (2012) 247 CLR 108

   [2] [2014] FamCAFC 19

   [3] [2014] FamCAFC 91

   [4] [2014] FamCAFC 203

2. Once the issue of whether it is just and equitable to make any order is resolved, the Court is to then consider the contributions made by the parties as defined in s.79(4)(a) to (c), the matters set out in s.79(4)(d) to (g) and in particular the subjective considerations as to the parties by having regard to the provisions of s.75(2) in so far as they are relevant.

3. The Court is then to consider the justice and equity of the actual orders to be made, in the context of the Court’s obligations to make appropriate orders as provided for in s.79(1) of the Act.[5]

   [5] see generally Russell & Russell (1999) FLC 92-877; Teal & Teal [2010] FamCAFC 120

4. The just and equitable requirement is “one permeating the entire process”[6].

   [6] Bevan supra at [86]

Factual Findings

1. Prior to commencing cohabitation with the husband, the wife, in 2001, purchased a property in L Street, M City, Country N, where she was living at the time. The M City property on purchase had an equity of approximately Country N$48,000.

2. The husband started living in M City, Country N in around June 2001, and the parties met in July 2001.

3. The parties commenced cohabitation in 2003 in Country N. At the time, the wife who was born in 1967 was 36, and the husband who was born in 1970 was 33. Both the husband and the wife were in full-time employment.

4. At the time of the commencement of the parties cohabitation, the wife:

   a)Owned the M City property which remained subject to a mortgage;

   b)Had an amount in retirement savings; and

   c)Was earning approximately Country N$240,000 per annum as a manager at Employer O (Country N).

5. At the time of the commencement of the parties cohabitation, the husband:

   a)Had some savings;

   b)Owned shares in the Commonwealth Bank of Australia which as at October 2003 had a value of $12,871;

   c)Owned a motor vehicle;

   d)Had superannuation; and

   e)Was earning approximately Country N$110,580 per annum.

6. Without particular evidence, it is difficult to assess the exact value of each of the parties’ assets as at the commencement of the relationship. It would appear though that the wife’s initial financial contribution was slightly higher than that of the husband. Rather than the precise value of each of the assets the parties held at that time, the more relevant issue is the use to which those assets were put.

7. The parties were married 2005.

8. Between December 2003 and July 2006, the parties lived in the wife’s M City property. The husband contributed regular funds towards the mortgage, and other expenses associated with that property. His contributions towards the mortgage were no more than half the mortgage payments during that period.

9. In July 2006, the wife’s M City property was sold and the entire net sale proceeds were placed in the wife’s bank account in Country N.

10. Whilst the parties were still living in Country N, the husband became eligible for two bonuses from his work in the amount of approximately Country N$20,000. His evidence is that those moneys were ultimately utilised for the benefit of the parties jointly. It appears that one of those payments was received after the parties left Country N.

11. In October 2006, the parties moved to Sydney, Australia.  It was after this time that the parties started using a joint bank account, although for the most part it was the wife’s income which went into the joint account.

12. Between the time of the move to Australia and the sale of the wife’s M City property the parties lived in rental accommodation. After moving to Australia, the parties initially lived in rental accommodation in Sydney before purchasing the former matrimonial home, located at B Street, Suburb C (“B Street Property”) in October 2019.

13. The parties paid $1,250,000 for the B Street Property. That purchase price was funded by a loan of $1,000,000 from the husband’s parents, and the balance, including the cost of sale and stamp duty, from funds which the parties had accumulated, including the proceeds of sale of the wife’s M City property and the husband’s work bonuses received from his former employer in Country N.

14. The loan of $1,000,000, which is subject to a written loan agreement, was and remains secured by a registered mortgage over the B Street Property. The loan agreement contains the following clauses:

    3.1    Subject to clause 3.2, the Borrowers[7] must pay to the Lenders[8] the Principal Sum, or so much of the Principal sum as shall remain outstanding, on the date which is 30 years from the date the Principal Sum is advanced by the Lenders to the Borrowers.

    3.2   If agreed by the Lenders and Mr Schorel[9] at any time after the date of this Agreement, the Lenders may, at any time, give to the Borrowers a written notice requirement the repayment of the Principal Sum, or such part thereof as is specified in the notice… If such notice is provided, the Borrowers must repay to the Lenders the Required Payment within seven (7) days of the Borrowers’ receipt of the notice.

    [7] Defined in the loan agreement to be Mr Schorel and Ms Schorel, namely the parties to these proceedings

    [8] Defined in the loan agreement to be Mr Schorel and Ms Schorel, the husband’s parents

    [9] The husband in these proceedings

15. Between September 2010 and October 2014, the husband received $47,600 by way of gifts from his parents[10]. These funds were utilised for the benefit of the parties. 

    [10] Referred to in wife’s case outline document, appears to be a concession

16. The parties separated under the one roof on 27 October 2014. The wife left the former matrimonial home on 18 January 2015.The parties’ divorce order became final on 18 April 2016.

17. At separation, each party retained $90,000 from funds jointly held.

18. Following the parties’ separation, the husband has remained living in the B Street Property. He has met all of the payments in relation to strata, fees, rates and interest repayments, in addition to organising and paying for cleaning, maintenance and upkeep of the property.

19. In February 2015, the wife’s role with P Bank was made redundant. She received a redundancy payment that comprised of a cash termination payment of some $127,000 and shares that she sold in September 2017 for $82,900[11].

    [11] Rounded to the nearest $100

20. In December 2015, the parties reached agreement in respect of parenting arrangements for their two children, X who was born 2009 and Y who was born 2011. Those arrangements were finalised by way of final orders made by consent on 21 December 2015. The parties also entered into a Binding Child Support Agreement in late December 2015.

21. Pursuant to the final parenting orders, the children spend time with each of the parties in an equal shared care arrangement.

22. In April 2016 the wife purchased a property at F StreetF Street, Suburb C (“F Street Property”) for $1,610,000. The purchase of the F Street Property was funded by way of a registered mortgage in favour of Q Bank in the amount of $1,287,000 and a loan from the wife’s friend Ms J in the amount of $243,910. The balance of the purchase price and associated costs, including stamp duty, was paid from moneys held by the wife. This amounted to over $245,000.

23. In May 2016 the husband’s role with Employer R was made redundant. He received a redundancy payment of $49,400.[12]

    [12] Rounded to the nearest $100

24. The parties have both worked in paid employment for the duration of their relationship. Both are professionals. The wife has had two periods of maternity leave. For the duration of the parties’ relationship and post separation, the wife’s earnings have been higher than those of the husband. At the time of final hearing, the husband’s total annual income was $165,000[13] while the wife’s was between $500,000 and $560,000. The husband is employed as a manager for Employer S. The wife is a professional at Employer I.

    [13] Exclusive of superannuation contributions

25. In July 2007, the A & B Schorel Family Trust (“Trust”) was established pursuant to a deed. The husband is the nominator of the Trust pursuant to that deed, and has the power to appoint and remove the trustee. D Pty Ltd is the trustee of the Trust. The husband and wife are both directors and shareholders in the trustee company. D Pty Ltd is the sole shareholder in A Pty Ltd. The husband is the sole director and secretary of A Pty Ltd, which has a 4% shareholding of Country N Company T. A Pty Ltd has not received any dividends from Company T since November 2016.

26. In the 2017 financial year, the wife utilised A Pty Ltd as a vehicle for Employer I to distribute certain earnings to her (via the Trust). Subsequently, arising out of the income declared to the Australian Taxation Office, A Pty Ltd owes $48,500[14] in income tax.

    [14] Rounded to nearest $500

Determination

1. In many matters which come before this Court, the requirement of whether it is just and equitable to make any orders is readily satisfied by the fact of the parties’ separation; as there is not and will not thereafter be the joint use of property by the parties. The requirement is so satisfied in this instance.

2. Most of the facts were agreed between the parties and the proceedings boil down to a small number of discrete issues. In the end, a broad brush approach has been taken in respect of the ultimate issue of determining what property adjustment orders are to be made.

Credit

1. Both the husband and the wife were cross-examined by learned Senior Counsel.

2. It became apparent during the wife’s cross-examination that she was less than careful as to the correctness of her trial affidavit. Her evidence was that she had only read the document once before swearing as to its truth and that it was for the most part, an approximation. Her further evidence was that some of the figures contained in her affidavit were arrived at from her recollection, rather than checking against source documents. This was particularly so in respect of her income and the redundancy payment she received in 2017. At times, the discrepancy between the figures available from primary documents when compared to what was contained in the wife’s affidavit were significant.

3. It was submitted on behalf of the husband, that where there was a difference between what the husband and the wife said, that the Court ought to prefer the evidence of the husband. It was further submitted that the wife’s affidavit was “replete with errors” and that unless her evidence was corroborated by documentation, the Court ought not accept the wife’s evidence.

4. It was submitted on behalf of the wife, that the case advanced by the wife relies not so much on what she has said in her affidavit but rather what is said in the documents before the Court. 

5. The Court does not make any adverse finding because of the wife’s careless evidence. Such evidence was for the most part, clarified during the wife’s detailed cross-examination, which largely centred on financial contributions.

B Street Property and Classification of the Loan

1. As noted earlier, the B Street Property was purchased by the parties in October 2009 for $1,250,000, funded in part by the loan from the husband’s parents in the amount of $1,000,000. The balance of the purchase price was funded from the proceeds of sale of the wife’s M City property (to which the husband had contributed between December 2003 and July 2006), savings and other funds accumulated by the parties including, during their relationship.

2. A significant cause of disagreement between the parties is whether the loan by the husband’s parents made to the husband and wife at the time of purchase of the B Street Property was a loan to the parties or a loan on behalf of the husband.

3. A contribution by a parent of a party will usually be taken to be a contribution made by or on behalf of that party unless there is evidence that establishes it was not the intention of the parent to benefit only that party:[15] Kessey & Kessey[16]. Recently, the Full Court in Mabb & Mabb[17] reaffirmed that the presumed intention of the donor to advantage the child in the marriage is no more than an evidentiary device.

   [15] Being the child of the parent

   [16] (1994) FLC 92-495 at p81,150

   [17] [2020] FamCAFC 18 at [37]

4. The documents evidencing the loan agreement between the parties and the husband’s parents indicate that the loan was made to both of the parties, and not only to the husband. The husband’s evidence refers to the loan being made to him and the wife, not only to him.  The husband’s parents were not witnesses in the proceedings.

5. The loan agreement provides that the loan may be called upon by the husband’s parents for early repayment if the husband and his parents agree. There was no suggestion in the evidence that the loan would be called upon prior to the expiration of the 30 year term provided by the loan agreement, nor was there any evidence in what circumstances the husband and his parents might agree to a notice being issued for the early repayment of the loan amount or any part thereof.

6. The principal amount of the loan, being $1,000,000 is otherwise repayable 30 years after the date on which the moneys were advanced. Therefore, the principal amount is not repayable until October 2039[18].

   [18] Unless clause 3.2 of the loan agreement is triggered

7. There are default provisions in the loan agreement, which trigger the principal amount becoming immediately due and payable. Those default provisions are conditional upon the husband’s parents issuing a written notice requiring the default to be rectified. The only regular payments required according to the loan agreement, are annual interest payments equal to 0.5% per annum, calculated on monthly rests. In real terms, this is an annual payment of $5,000 being made on 28 June each year. While the parties were together, such payments were made by the parties jointly. Since separation, the husband has solely been responsible for those interest payments.

8. It was submitted on behalf of the wife that the intention of the husband’s parents was that the loan would benefit both parties. The intention was said to follow from the following factors:

   a)The loan agreement and the mortgage, which it was submitted, conclusively support a conclusion that the intention of the husband’s parents was that the loan would benefit both parties;

   b)That both parties were and continue to be jointly and severally liable for repayment of the debt; and

   c)The husband’s evidence referring to the moneys being lent to him and the wife and that the interest payments were met by him and the wife.

9. Contrary to those submissions, the Court finds that it is an inescapable conclusion on the evidence as a whole that the loan was provided to the parties because of the existence of the parent-child relationship between the husband’s parents and the husband.

10. The terms of the loan agreement are very favourable to the borrowers, noting that:

    a)the annual interest rate is only 0.5% and payable annually, and that no repayments of the principal sum are to be made before October 2039;

    b)the term for early repayment is subject to an agreement between the husband and his parents for such early repayment to occur (and not at the lender’s discretion or on the triggering of any other event); and

    c)the default provisions only come into play at the option of the husband’s parents, upon the issue of a notice and not otherwise.

11. Furthermore:

    a)there was no evidence suggesting that there is any intent on the part of the husband’s parents to call on the loan prior to October 2039, nor that the husband would agree to such early repayment;

    b)there was no evidence that the husband’s parents would issue a default notice in circumstances provided for in the loan agreement or that default would likely occur; and

    c)It was not suggested by the wife that the loan was made because of anything which she did for the husband’s parents.

12. As such, any benefit which the parties derived from the loan by the husband’s parents is a contribution attributable to the husband. 

13. In 2010 there were some minor renovations to the B Street Property. The cost of the renovation was approximately $7,000. There is no evidence as to the improvement in value to the property, if any, as a result of these renovations. The cost of the renovation was paid out of the wife’s income.

14. The B Street Property has remained occupied by the husband after the parties separated. He has had the benefit of occupying the property to the exclusion of the wife. Whilst occupying the property, the husband has not only retained the benefit of the terms of the loan agreement with his parents, namely the minimal interest repayments and no principal repayments, but also the benefit of the whole of the wife’s equity in the property. He has been responsible for the upkeep and maintenance of the property post separation, as well as meeting all costs associated with the property.

F Street Property

1. At separation, the wife has had the expense of renting a home until she purchased the F Street Property, approximately 18 months after separation.

2. The equity in the F Street Property has by and large been created by direct contributions made by the wife, although there was a minor indirect contribution by the husband towards that asset.

Section 75(2) Factors

1. The parties are both in good health and relatively close in age. They each have many productive years left. They each continue to be employed and earn significant incomes, although the wife’s gross income at the time of the final hearing was more than triple that of the husband.

2. In addition to the $1,000,000 loan, the husband’s parents had during the parties’ relationship and post separation provided other financial support to the husband. During the relationship the amount which was gifted to the parties was $47,600 while post separation, the husband’s parents have gifted him over $100,000. It appears that the husband’s parents remain a financial resource to him.

3. The terms of the loan in respect of the B Street Property are such that the husband will have another 19 years to repay the principal amount. The evidence of the wife is that the loan was in essence a “living inheritance” and that in reality the loan will never need to be repaid. The annual interest payments on that loan are less than the wife’s monthly loan repayments associated with the F Street Property. This is a significant ongoing benefit to the husband.

4. There is an equal time arrangement for the care of the parties’ children, and neither party pays child support to the other. 

5. Each of the parties have re-partnered.

The Pool

1. At the time of final hearing, the property pool consisted of the following assets:

Item	Owner	Value
B Street Suburb C	Joint	$2,400,000
The A & B Schorel Family Trust	Joint	$50,000
NAB Account ending in ..86	Husband	$9,339
F Street, Suburb C	Wife	$2,000,000
NAB Account ending in ..50	Wife	$15,231
Schorel Family Trust	Wife	$500
Loan to Schorel Family Trust	Wife	$29,870
TOTAL:	$ 4,504,940

Superannuation:

Fund	Owner	Value
Mr Schorel Super Fund	Husband	$158,992
Ms Schorel Super Fund	Wife	$100,000
AMP Superannuation (…55)	Wife	$106,683
TOTAL:	$ 365,675

1. A number of liabilities were in dispute between the parties, the first of those relating to the tax liability of A Pty Ltd. The agreed balance sheet handed up at final hearing indicated that the parties were in agreement about the value of the Trust, being $50,000. This is the value of the shares held by A Pty Ltd in Company T. The agreed balance sheet did not show any liability in respect of that company, which is strictly correct as the debt is a debt owed by that company and not by either of the parties[19]. The evidence is that there was at the time of hearing a tax debt of $48,500 owed by A Pty Ltd.

   [19] The husband is the sole director of A Pty Ltd. There is no evidence that he is or may become personally liable for such taxation, and there is no evidence that he has or may receive a director’s penalty notice issued by the ATO.

2. Despite hearing the evidence of the parties, it is still unclear how it is that the wife, who is neither a director nor secretary of that company[20], was able to instruct her accountant to lodge the company tax return (unbeknownst to the husband). It appears from the evidence that the husband had also lodged, through his accountant, an earlier and different company tax return but that for reasons which have not been explained, the Australian Tax Office has accepted the return which was lodged on the wife’s instructions. It appears from the evidence that the husband, as a director of that company, has the capacity to cause an amended return to be lodged but has chosen not to do so as at the date of hearing. The orders sought by the husband would see the wife paying any outstanding or anticipated liabilities owed by the company as a result of her having directed income to the company. In all of the circumstances, this is an order which is appropriate. It would be neither just nor equitable for the wife to receive the benefit of income that was distributed through the Trust without meeting the associated taxation liability.

   [20] Indeed she holds no position within the company

3. The wife also sought for her personal taxation liabilities to be included in the balance sheet. As at the date of hearing, the wife owed $111,677 in income tax and $41,947 for the quarterly instalment ending 31 December 2018. The wife also sought a pro-rata liability of $20,000 to be included for the third tax instalment for the 2019 financial year. The wife receives income monthly and pays tax on that income quarterly. Given that the wife used her income for payments towards the F Street Property and that those taxation liabilities existed at the time of the final hearing it is appropriate for those liabilities to be included in the balance sheet (as is the F Street Property).

4. At the time of final hearing, the property pool consisted of the following liabilities:

Liability	Owner	Amount
Loan from Mr A Schorel and Ms B Schorel	Joint	$1,000,000
Q Bank Loan for F Street Property	Wife	$1,223,475
Loan from Ms J	Wife	$243,910
Tax Liability for FY18	Wife	$111,677
Tax Liability for second quarter FY19	Wife	$41,947
Pro-rata tax liability for third quarter FY10	Wife	$20,000
TOTAL Liabilities	$ 2,641,009

1. Therefore, the total net pool at the time of hearing is assessed at $2,229,606.

Conclusion as to Adjustment

1. The Court finds that the parties, over the course of their relationship, made disparate but substantial contributions, each in their own way. The parties’ differing contributions were not only financial but also non-financial, direct and indirect.

2. At the commencement of that relationship, the wife was the owner of her M City property, which was later sold and the net proceeds of sale were utilised for the purchase of the B Street Property. The husband did however, contribute to some of the equity the wife held in the M City property as at the time of its sale. The M City property was also the property where the parties lived together for the first few years of their relationship. The use to which the M City Property was put, before and after its sale is a significant early contribution by the wife.

3. At the time of the purchase of the B Street Property the parties had been cohabiting for almost six years, less than three of which were in the M City Property. The loan from the husband’s parents allowed the parties to purchase the B Street Property with terms that were, and remain, very favourable to the borrowers. The B Street Property has almost doubled in value since it was purchased. This is the result of market forces and not the result of any special contribution by either of the parties. The use to which the loan from the husband’s parents was put, is a significant contribution on the part of the husband.

4. The wife’s acquisition of the F Street Property, while to a large part funded from post-separation income and borrowings, was in some small part funded by assets acquired or resulting from the period the parties cohabited. Overall however, the equity held in that property at time of final hearing was by and large a sole contribution by the wife, with little indirect contribution by the husband.

5. During the course of the parties’ relationship, the parties both cared for the children and each made contributions to the other as homemaker, parent and support in relation to their respective employment positions.  Overall, the non-financial contributions as parent and homemaker by the wife were marginally greater than those by the husband.

6. For the duration of the parties’ relationship it appears their combined income was always in excess of $300,000, if not in excess of $400,000. The parties were together for almost 14 years. The only asset acquired during their relationship was the B Street Property, which was funded mostly by way of the loan from the husband’s parents. After five years of living in that property together, the parties had not paid off any of the principal amount owing on the loan. The wife contends that the husband directed a significant portion of his income towards his own activities. It is certainly not clear on the evidence how the parties spent their combined income during the 14 years of cohabitation. Therefore, the fact that the wife has earnt more than the husband for the duration of their relationship does not of itself translate into a finding that her financial contributions were greater than those of the husband.

7. Post-separation, the wife has retained the benefit of the termination payment and shares arising from her employment with P Bank[21]. The husband has likewise retained the benefit of a termination payment he received from Employer R.[22]

   [21] The wife was employed by P Bank in part, during the parties’ relationship

   [22] The husband was employed by Employer R, in part, during the parties’ relationship

8. Post separation, the husband has had the benefit of continued occupancy of the B Street property at nominal cost. The wife has had the added disadvantage of meeting the cost of re-housing herself and the children with funds and property largely created post separation.

9. In the face of repeated requests by the husband the wife has not been full and frank in respect of her obligations for disclosure. Although ultimately most of these matters were clarified, there remained a lack of transparency in particular about the wife’s tax affairs and the circumstances of her utilisation of A Pty Ltd of which the husband is the sole director. As noted earlier, A Pty Ltd has a tax liability in excess of $48,000 caused by the wife directing certain of her income to be paid through the use of that entity.

10. While the wife has a significantly higher income than the husband, the husband has retained the benefit of the ongoing low interest loan from his parents.

11. The wife has the capacity to access her Country N superannuation account notwithstanding the potential tax consequence associated with that withdrawal. In any event, the wife’s superannuation position is superior to that of the husband.

12. Overall, an adjustment of 55% to the husband and 45% to the wife is just and equitable having regard to the parties’ contributions, ongoing financial circumstances and other relevant matters considered herein.

13. Therefore, based on a net pool of $2,229,606, the husband is to receive $1,226,283 and the wife is to receive $1,003,323.

14. As such, the husband is to receive:

Item	Value
B Street Suburb C	$2,400,000
The A & B Schorel Family Trust	$50,000
NAB Account ending in ..86	$9,339
Mr Schorel Super Fund	$158,992
Payment to Wife	($392,048)
Loan from Mr A Schorel and Ms B Schorel	($1,000,000)
Total:	$1,226,283

1. As such, the wife is to receive:

Item	Value
F Street, Suburb C	$2,000,000
NAB Account ending in ..50	$15,231
Schorel Family Trust	$500
Loan to Schorel Family Trust	$29,870
Ms Schorel Super Fund	$100,000
AMP Superannuation (…55)	$106,683
Payment by husband	$392,048
Q Bank Loan for F Street Property	($1,223,475)
Loan from Ms J	($243,910)
Tax Liability for FY18	($111,677)
Tax Liability for second quarter FY19	($41,947)
Pro-rata tax liability for third quarter FY10	($20,000)
Total:	$1,003,323

Conclusion

1. The above adjustment will result in both parties having significant assets at their disposal: they will both retain their homes and have the benefit of their accumulated superannuation assets. The husband will retain the favourable loan from his parents, thus providing him with long term stability and significant benefit.

2. In all of the circumstances and for all of the reasons set out above, orders to be made as set out in the forefront of these reasons are just and equitable.

I certify that the preceding eighty-four (84) paragraphs are a true copy of the reasons for judgment of Judge Obradovic

Associate:

Date: 29 April 2020