Seleher and Shaffi
[2008] FamCA 500
•4 July 2008
FAMILY COURT OF AUSTRALIA
| SELEHER & SHAFFI | [2008] FamCA 500 |
| FAMILY LAW - PROPERTY SETTLEMENT – Contributions - Adjustment for other matters - Just and equitable |
| Family Law Act 1975 (Cth) ss 75 & 79 |
In the Marriage of Hickey (2003) 30 Fam LR 355
In the Marriage of Lenehan (1987) 11 Fam LR 615
In the Marriage of Norbis (1986) 10 Fam LR 819; FLC 91-712
In the Marriage of Zyk (1995) 19 Fam LR 797
In the Marriage of Coghlan (2004) 33 Fam LR 414
Mallett v Mallett (1984) 9 Fam LR 449
In the Marriage of Ferraro (1992) 16 Fam LR 1
In the Marriage of Shewring (1987) l2 Fam LR 139
In the Marriage of Pierce (1998) 24 Fam LR 377; (1999) FLC 92-844
Robb and Robb (1995) FLC 92-555
| APPLICANT: | Mr Seleher |
| RESPONDENT: | Ms Shaffi |
| FILE NUMBER: | SYC | 6497 | Of | 2007 |
| DATE DELIVERED: | 4 July 2008 |
| PLACE DELIVERED: | Sydney |
PLACE HEARD: | Sydney |
| JUDGMENT OF: | Judicial Registrar Loughnan |
| HEARING DATE: | 29 & 30 May and 26 June 2008 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr G. Johnston |
| SOLICITOR FOR THE APPLICANT: | Faye Marie Nicholls |
COUNSEL FOR THE RESPONDENT: | Ms W. Langley |
| SOLICITOR FOR THE RESPONDENT: | Uther Webster & Evans |
Orders
The husband shall forthwith do all acts and things necessary including signing all documents necessary to cause the caveat lodged on the property known as and situate at P in the State of New South Wales to be removed.
The wife shall forthwith do all acts and things necessary including signing all documents necessary to cause any caveat lodged by her on any of the following properties:
V property in the State of New South Wales
N property in the State of New South Wales; and
S property in the State of New South Wales,to be removed.
The applicant husband and the respondent wife shall do all acts and things necessary to forthwith place each of the following properties:
V property in the State of New South Wales
N property in the State of New South Wales; and
S property in the State of New South Wales,on the market for sale by private treaty at a price agreed between the husband and the wife or failing such agreement at a price equivalent to the mean of two valuations by registered valuers being member of the Australian Institute of Valuers, one obtained by and at the expense of the husband and one obtained by and at the expense of the wife, such valuations to be made not more than two weeks apart from each other.
In the event that any of the properties is not sold by private treaty within four months from the date of this order the husband and the wife are to forthwith do all acts and things necessary including the execution of all documents necessary for the sale of each parcel of property by public auction and in particular are to:
(a) place the said properties and each of them with an auctioneer agreed between the parties (hereinafter called “the auctioneers”) for the sale of each property by public auction at the earliest possible date;
(b) execute all documents requested by the auctioneers for the sale of the said properties;
(c) request the auctioneers to recommend a reserve price to be placed on each of the said properties for the purpose of the auction sale and accept such recommended reserve price;
(d) pay to the auctioneers equally, any sums requested for advertising expenses in relation to the auction;
(e) attend at the auction sale or sales and negotiate with the highest bidder in the event that the reserve price is not reached and accept the advice of the auctioneers as to the acceptance of a price less than the reserve price;
(f) execute contracts of sale;
(g) co-operate in every way with the auctioneers in relation to the auction of the said properties;
(h) execute all other documents necessary to complete the sales.
The husband and the wife shall do all acts and things necessary to procure that upon the sale of each and every such property the proceeds of sale be paid in the following manner and priority:
(a)In payment of the mortgage secured over the said property,
(b)in payment of agent’s commission and auction expenses (if any) due on the sale;
(c)in payment of legal costs of sale;
(d)the balance to be placed in a controlled moneys account in the name of the husband and wife.
Upon the sale of the last remaining of such properties the balance of proceeds of sale of all the said properties be divided in the following manner and priority:
(a)in payment of the Capital Gains Tax owing as a result of the sales;
(b)in payment of 17% of the balance remaining to the wife; and
(c)in payment of the balance to the husband.
Within 7 days of the date of these orders the husband make available for collection by the wife or her nominee all items of a personal nature belonging to the wife including but limited to clothes, books and other document presently located at the husband’s parent’s home.
Within 7 days of the date of these orders the wife make available for collection by the husband or his nominee the silk carpet given to the parties by the husband’s parents together with all items of a personal nature belonging to the husband including his clothes, computers, University books and other personal items presently located in the second bedroom in the property known as and situate at N in the State of New South Wales.
Within 7 days of the date of these orders the wife make available for collection by the husband or his nominee the Honda motor vehicle of the parties, together with all keys, papers and manuals referable to that vehicle.
Within 14 days of the date of this order the respondent wife do all acts and things necessary to prepare two lists of the furniture and other household items contained in the matrimonial home, but excluding the items specifically dealt with in another order contained herein. The contents of the two lists are to be of approximately equal value.
The wife transfer to the husband her interest in the items contained in whichever of the said two lists the husband shall so choose and that the husband do all acts and things necessary to transfer to the wife his interest in the items contained on the other such list.
The respondent wife make available for collection by the husband or any persons nominated by him all of those items contained in whichever of the said two lists the husband chooses pursuant to the above order at any reasonable time requested by the husband and that pending collection of the items by the husband the wife shall properly store and maintain such items.
What within 14 days of the date of this order the applicant husband do all acts and things necessary to prepare two lists of the furniture and other household items belonging to the parties that are presently located in the husband’s parent’s home but excluding the items specifically dealt with in another order contained herein. The contents of the two lists are to be of approximately equal value.
The husband transfer to the wife his interest in the items contained in whichever of the said two lists the wife shall choose and that the wife do all acts and things necessary to transfer to the husband her interest in the items contained on the other such list.
The husband make available for collection by the wife or any persons nominated by her all of those items contained in whichever of the said two lists the wife chooses pursuant to the above order at any reasonable time requested by the wife and that pending collection of the items by the wife, the husband shall properly store and maintain such items.
Other than as provided herein the husband and wife each be declared the sole legal and beneficial owners of all other items of property presently in their respective possession or control including but not limited to money, shares, real property, motor vehicles, entitlements to superannuation, furniture, furnishings and personal effects.
The husband shall indemnify the wife and keep her indemnified in relation to any debt of the parties or either of them, owing to his parents, Yamaha Finance or G.E. Finance.
In the event either party refuses or neglects to do such act or thing or sign such document within seven days of such act or thing being required or such document being submitted to them for signature, then pursuant to Section 106A of the Family Law Act 1975, a Registrar of the Family Court shall have power to do such act or thing or sign such document on behalf of the defaulting party.
Leave is granted to either party to restore the proceedings within 21 days and on giving at least 7 days prior notice to the Court and the other party in relation to the form of these orders.
IT IS NOTED that publication of this judgment under the pseudonym Seleher & Shaffi is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)
| FAMILY COURT OF AUSTRALIA AT SYDNEY |
FILE NUMBER: SYC 6497 OF 2007
| MR SELEHER |
Applicant
| MS SHAFFI |
Respondent
REASONS FOR JUDGMENT
After living together for more than 8 years the parties cannot agree on a settlement of their property.
Applications
The husband seeks orders in accordance with his Amended Application for Final Orders filed 29 April 2008. The effect of his application is that the three properties be sold and that the net proceeds, after his parents are repaid $113,000 be divided 85% to him and 15% to the wife. The overall distribution is calculated to be about 22.22% to the wife. He wants the personalty divided in specie with the wife retaining a framed carpet from her parents and he retaining a carpet from his parents.
The orders sought are:
1.That the parties forthwith do all acts and things and execute all documents necessary to sell the property situate at and known as [S property] (“the home”) on such terms and with an agent agreed upon by the parties within 14 days of the date of this order and failing agreement then with such agent as the President of the Real Estate Institute of New South Wales shall nominate and such agent shall determine the method and terms of sale including sale price.
2.That the proceeds of sale of the home shall be distributed in the following order and priority:
i. In payment of all conveyancing costs and agents fees and commission;
ii. In discharge of the mortgage;iii. In payment of the sum of $125,000 to the husband’s parents;
iv. In payment of 85% of the balance to the husband and 15% to the wife.3.That the husband forthwith do all acts and things and execute all documents necessary to sell the property situate at and known as [V property] (“the [V] home”) on such terms and with an agent agreed upon by the parties within 14 days of the date of this order and failing agreement then with such agent as the President of the Real Estate Institute of New South Wales shall nominate and such agent shall determine the method and terms of sale including sale price.
4.That the proceeds of sale of the [V] home shall be distributed in the following order and priority:
i. In payment of all conveyancing costs and agents fees and commissions;
ii. In payment of Capital Gains Tax arising on such sale;
iii. In payment of 85% of the balance to the husband and 15% to the wife.
5.That the parties forthwith do all acts and things and execute all documents necessary to sell the property situate at and known as [N] (“the unit”) on such terms and with an agent agreed upon by the parties within 14 days of the date of this order and failing agreement then with such agent as the President of the Real Estate Institute of New South Wales shall nominate and such agent shall determine the method and terms of sale including sale price.
6.That the proceeds of sale of the unit shall be distributed in the following order and priority:
i.In payment of all conveyancing costs and agents fees and commissions, outstanding rates and levies;
ii. In discharge of the mortgage;
iii. In payment of Capital Gains Tax arising on such sale;
iv. In payment of 85% of the balance to the husband and 15% to the wife.
7.That the wife forthwith withdraw the caveats she has lodged over the titles to the [V] property and the unit.
8.That the goods and chattels be divided evenly within 28 days of the making of these orders in the following manner:
(a) That each item be listed and valued.
(b)Each of the parties nominate an item they wish to keep in turn until the list is exhausted.
(c) The total value for each of the parties be approximately equal.
(d)Should any of the items of value be missing from the [N] unit, namely two silk carpets and paintings, then that item is deemed to be in the possession of the wife and the value of that item be taken into account at settlement.
9. Except as otherwise specified in these orders:
(a)any interest of the husband in any property in the name of or possession of or under the control of the husband vests in the husband free from claim from the wife and;
(b)any interest of the wife in any property in the name of or possession of or under the control of the wife vests in the wife free from claim from the husband.
(c)Each party indemnify the other in respect of any liability that may arise in relation to any item of property that vests in him or her pursuant to these orders.
10.That in the event that either party shall fail, neglect or refuse to execute any deed, instrument or document to give validity and effect to these orders then upon the other party filing any affidavit setting out such failure, neglect or refusal then a Registrar or a Deputy Registrar of the Sydney Registry of the Court is hereby appointed pursuant to section 106A of the Family Law Act to execute any such deed, instrument or document in the name of the party who defaults and to do all things necessary to give validity to the operation of the deed, instrument or document.
11.That the parties have liberty to apply on 7 days notice in respect of the implementation of these orders.
12. That the wife pay the husband’s costs of and incidental to the proceedings.
The wife seeks orders in terms of a document handed up during final submissions as follows:
SHORT MINUTE OF ORDER
1That the applicant husband and the respondent wife do all acts and things necessary to forthwith place the properties described in the Schedule hereto on the market for sale by private treaty at a price agreed between the husband and the wife or failing such agreement at a price equivalent to the mean of two valuations by registered valuers being member of the Australian Institute of Valuers, one obtained by and at the expense of the husband and one obtained by and at the expense of the wife, such valuations to be made not more than two weeks apart from each other.
2That in the event that any one of the properties described on the schedule hereto is not sold by private treaty within four months from the date of this order the husband and the wife are to forthwith do all acts and things necessary including the execution of all documents necessary for the sale of each parcel of property by public auction and in particular are to:
(a) place the said properties and each of them with an auctioneer agreed between the parties (hereinafter called “the auctioneers”) for the sale of each property by public auction at the earliest possible date;
(b) execute all documents requested by the auctioneers for the sale of the said properties;
(c) request the auctioneers to recommend a reserve price to be placed on each of the said properties for the purpose of the auction sale and accept such recommended reserve price;
(d) pay to the auctioneers equally, any sums requested for advertising expenses in relation to the auction;
(e) attend at the auction sale or sales and negotiate with the highest bidder in the event that the reserve price is not reached and accept the advice of the auctioneers as to the acceptance of a price less than the reserve price;
(f) execute contracts of sale;
(g) co-operate in every way with the auctioneers in relation to the auction of the said properties; and
(h) execute all other documents necessary to complete the sales.
3That the husband and the wife do all acts and things necessary to procure that upon the sale of each and every property contained in the said Schedule the proceeds of sale shall be paid in the following manner and priority:
(a) In payment of the mortgage secured over the said property,
(b) in payment of agent’s commission and auction expenses (if any) due on the sale;
(c) in payment of legal costs of sale; and
(d) the balance to be placed in a controlled monies account in the name of the husband and wife.
4That upon the sale of the last remaining property contained in the said Schedule the balance of proceeds of sale of all the said properties be divided in the following manner and priority:
(a) in payment of the sum of $58,000 to the husband’s parents,
(b) in payment of 35% to the wife of the balance remaining after payment to the husband’s parents, and
(c) in payment of the balance to the husband.
5That within 7 days of the date of these orders the husband make available for collection by the wife or her nominee the following items presently located at the husband’s parent’s home:
(a)all items of a personal nature including but limited to clothes, books and other documents.
6That within 7 days of the date of these orders the wife make available for collection by the husband or his nominee the following:
(a)clothes, computers, University books and other personal items presently located in the second bedroom in the property known as and situate at [N] in the State of New South Wales.
7That within 14 days of the date of this order the respondent wife do all acts and things necessary to prepare two lists of the furniture which was contained in the matrimonial home and is and that the furniture contained on each list be approximate in value to that contained on the other list.
8That the respondent wife transfer to the applicant husband her interest in the items contained in whichever of the said two lists the husband shall so choose and that the husband do all acts and things necessary to transfer to the wife his interest in the items contained on the other such list.
9That the respondent wife make available for collection by the husband or any persons nominated by him all of those items contained in whichever of the said two lists the husband chooses pursuant to the above order at any reasonable time requested by the husband and that pending collection of the items by the husband the wife shall properly store and maintain such items.
10That within 14 days of the date of this order the applicant husband do all acts and things necessary to prepare two lists of the furniture and other household items belonging to the parties that is presently located in the husband’s parent’s home and that the furniture contained on each list be approximate in value to that contained on the other list.
11That the applicant husband transfer to the respondent wife his interest in the items contained in whichever of the said two lists the wife shall so choose and that the wife do all acts and things necessary to transfer to the husband her interest in the items contained on the other such list.
12That the applicant husband make available for collection by the wife or any persons nominated by her all of those items contained in whichever of the said two lists the wife chooses pursuant to the above order at any reasonable time requested by the wife and that pending collection of the items by the wife the husband shall properly store and maintain such items.
13That other than as provided herein the husband and wife each be declared the sole legal and beneficial owners of all other items of property presently in their respective possession or control including but not limited to money, shares, real property, motor vehicles, entitlements to superannuation, furniture, furnishings and personal effects.
14That the husband forthwith do all acts and things necessary including signing all documents necessary to cause the caveat lodged on the property known as and situate at [P] in the State of New South Wales to be removed.
DATED 26 June 2008.
SCHEDULE1The property known as and situate at [V] in the State of New South Wales.
2The property known as and situate at [N]in the State of New South Wales.
3The property known as and situate at [S] in the State of New South Wales.
Affidavits
Husband’s affidavit filed 29 April 2008.
Husband’s Financial Statement filed 29 April 2008.
Affidavit of the husband’s mother sworn 17 March 2008.
Affidavit of the husband’s sister sworn 17 March 2008.
Wife’s Affidavit filed 28 April 2008
Wife’s Financial Statement filed 28 April 2008Issues for determination
The main issues for determination are:
The credit of the witnesses and in particular, of the parties;
The amount owed to the husband’s parents for their advances for the purchase of the S property;
The extent by which the contributions made by and on behalf of the husband exceeded those of the wife;
The extent of an adjustment in favour of the wife for the non-contribution factors of section 79(4).
The hearing
The matter was listed for hearing over two days. Some time was spent by the parties trying to resolve the matter. However, there were several interruptions beyond the control of the parties, in particular two urgent duty matters and although the evidence was completed it was not possible for submissions to be made in the time available. The matter was adjourned to 26 June 2008 for oral submissions. The hearing was concluded on that date and judgment was reserved.
Short History
The husband and wife are 39 and 29 years of age, respectively. They were married in January 1999 and separated on 26 March 2007.
Children
There are no children of the marriage.
Background Facts
In 1986 the husband’s parents bought V property.
Over five years of his university studies the husband’s parents advanced him $20,000 a year.
In 1993 the husband’s parents wanted to raise moneys to build a residence on their land at G. It is the evidence of the husband’s mother that she and her husband could not borrow the necessary funds. She says that in order to raise those moneys and so as to allow the husband to repay the $100,000 he owed them, they transferred the V property to him for $100,000.
The husband borrowed $100,000 by way of mortgage, secured on the V property and paid it to his parents. By late 1997 the husband had repaid the mortgage loan.
The wife was born in Iran and in 1995 she immigrated to Australia. The parties met in December 1997 in Adelaide.
In March 1998 the wife commenced studies for a Bachelors degree at Flinders University.
In March /April 1998 the husband purchased N property for $350,000.
In May/June 1998 the parties started planning an engagement and wedding. They were formally engaged on 3 October 1998.
In November 1998 the wife moved from Adelaide to Sydney to reside with the husband at his parents’ residence at G. The husband and his mother say that the parties paid for nothing except the costs of a mobile phone for the husband’s mother. The wife says that the parties paid $200 per week rent and make contributions to gas, electricity and phone bills. The wife says she undertook homemaker duties at the home. The husband and his mother and sister say that she did not.
The wife’s father sent the wife $2000 to assist with wedding costs. The wife gave her savings and $2000 (a total of $6,500) to the husband to meet the expenses of the parties.
The parties were married in January 1999.
The husband deposes to having the following assets at that time:
Assets Value Equity in the N unit $180,000 Equity in the V property $140,000 Nissan 300ZX motor vehicle $27,000 Suzuki Swift GTI motor vehicle $12,000 Jet ski $15,000 Superannuation $20,000 Moneys in the bank $15,000 Gold jewellery $7,000 C Holdings Pty Ltd $50,000
No objection was made on behalf of the wife to the values ascribed by the husband to each of those assets. The husband was asked about some of the figures in cross-examination. It transpires that the value of the equity in the N unit is an estimate made by him. The effect of his opinion is that he thinks the equity increased significantly in the first 12 months after purchase. That might be true but there is no basis given for that assertion. The husband bought the unit in March /April 1998 for $350,000. He paid a deposit of $35,000. The property was immediately rented out and the rent was applied to the mortgage. There was a shortfall of the mortgage over the rental income of $650 per month. The parties were married in January 1999. Thus it is his case that the combination of an unspecified reduction in the mortgage and any increase in value, generated an equity of $180,000 in 8 months. The husband’s evidence on this point was challenged in cross-examination and in any event his evidence has little weight. Indeed his evidence about the value of the equity in 1999 would not have survived an objection. The best I can say is that the husband had an equity in the N unit on the date of marriage.
As to C Holdings Pty Ltd, in May 1997 the husband and three others put in $50,000 each to establish the business. As at 30 June 2007 the balance sheet of the company showed debts to each of the principals of $12,620 and that the business had an equity of $58,893.69. Thus the husband’s interest could have been worth about $27,343 on 30 June 1997. When the husband left the business in April 2001 he received no dividend or payout of equity. There is no evidence about the loan being repaid. Thus on the date of marriage the husband is likely to have had an interest in a business worth somewhere in the range $27,343 to nil.
In March 1999 the wife applied for a transfer from Flinders University to Sydney University and enrolled in a four year degree.
The wife says that from the end of 1999 to early 2001 the wife worked part time in the husband’s business “[C] Holding Pty Limited”. There was income splitting but did not actually receive the salary attributed to her. The husband banked her salary into his account. It is the husband’s case that the wife did no work in the business. There is no explanation as to why the Commissioner was told otherwise.
From April 2001 to 2002 the wife worked as a casual waitress on Friday, Saturday and Sunday evenings and earned up to $300 per week. During university holidays the wife worked an additional night each week. The wife says she gave her earnings to the husband for joint expenses.
In November 2001 the wife’s parents expressed a wish to live in Australia. The wife opened an account with the ANZ Bank for them in Australia. Between November 2001 and February 2002 the wife’s father deposited $233,437.43 into that account.
In 2002 the wife’s parents purchased a property at P. The purchase was funded from funds in the ANZ Bank and a $50,000 loan from the Commonwealth Bank.
The wife says that from 2002 to 2003 she worked at L Centre as a Tutor for about 5 to 6 hours per week earning up to $150 per week. In addition wife also had three private students during this period. The wife says that all of her income was given to husband for joint expenses.
From December 2002 to April 2003 the wife worked as an Assistant, earning $516 net per week. The wife says that this money was also deposited to the husband’s account each week. At the same time wife continued working as a Tutor for L Centre and with private students. Wife’s earnings were applied by the husband to the parties’ expenses.
The wife says that in 2002 she painted the entire inside of the V property. The husband says that she did not. He points to evidence that the property was painted by tenants in about 1999 and recorded as in good order on a real estate agent’s inspection in August that year. The evidence the husband relies on does not exclude the possibility that the wife painted the property in 2002. In fact the agent’s report of August 1999[1] did record the ceiling of bedroom one as needing painting. In any event I can safely take judicial notice of the fact that painting can occur notwithstanding that the same walls and ceilings have previously been painted and irrespective of the condition of those walls and ceilings. The parties re-carpeted the property. The parties did not live in the V property.
[1] Part of exhibit 17
In July 2003 the parties discussed purchasing an investment property at S.
In September 2003 the wife painted the interior of the N property.
In October 2003 the parties moved into the N property.
In October 2003 the parties purchased a property at S for $712,000 in joint names. The husband’s father loaned the parties $71,206 to assist with the purchase. The husband asserts that his parents lent the parties a further $55,000 thereafter.
In October 2003 the husband’s parents received half the rental income from the V property as repayment of the loan used to purchase the S property.
In October 2003 the parties decided to rent the S property. The wife cleaned the property, painted some rooms and organized the removal of rubbish to prepare the property for rental.
On 8 December 2003 the wife was employed by R Company as a Consultant. Her salary was deposited into the husband’s account.
From February 2004 to 2005 the wife continued tutoring.
In March 2004 the wife commenced employment with Q Company as a Consultant and worked on a full-time basis until 7th August 2005. All earnings were deposited into the husband’s account.
In April 2004 the husband sold the jewellery given to the wife at their wedding, with the wife’s consent.
In 2005 the wife’s father sent a total of $53,893.22 to the husband’s ANZ Bank account. Those funds were used to pay off the wife’s parents’ mortgage and to purchase a motor vehicle.
In May of 2005 the parties refinanced all loans with the St George Bank. The wife became a co-borrower in relation to the N property mortgage and the S property mortgage remained in joint names. At the same time as that refinance, the parties opened a joint account. From that time, the wife deposited her wages into the joint account.
In August 2005 the parties purchased a Honda motor vehicle for $26,000. The motor vehicle was registered in the husband’s name. The vehicle was purchased by way of a loan from GE Finance. $11,500 was withdrawn from the joint account. The wife was told by the husband that it was for the purchase of the motor vehicle.
On 8th August 2005 the wife commenced employment with her current employer, D Company, as Advisor / Co-ordinator.
From 2005 to March 2007 the wife continued tutoring.
In 2005 the husband purchased a Mercedes Benz motor vehicle.
In December 2005 the parties spent $7,000 on cosmetic surgery for the wife and sold $7,000 in gold jewellery to help fund that surgery.
In April 2006 the husband purchased a Honda motor bike, borrowing $10,292.00. Repayments were made from the joint account.
In September 2006 the parties sold the Mercedes Benz. The proceeds of sale being $64,000 were deposited into the joint account. A $5000 deposit was paid on a new vehicle. The husband cancelled the order after separation and retained the deposit.
On 26 March 2007 the parties separated. The wife remained in the N property. She had exclusive use of the Honda motor vehicle. She pays all outgoings (except the mortgage repayments) for N property and paid the loan instalments and all running costs on the car.
From March 2007 to June 2007 the mortgages on the S and N properties were paid from the joint account.
In June 2007 the wife withdrew half the funds ($31,244.28) from the joint account. The husband withdrew the balance on the following day.
In July 2007 the wife met all mortgage repayments on the N property.
On 20 August 2007 the husband lodged a caveat on the wife’s parents’ property.
On 17 September 2007 the husband commenced these proceedings by filing his Application for Final Orders.
On 4 December 2007 the husband demanded that the wife vacate the N property and return the Honda motor vehicle.
On 11 December 2007 the wife learned from the RTA that the Honda motor vehicle was registered in the husband’s mother’s name.
In January 2008 the wife filed an Application in a Case seeking exclusive occupation of the N property and other interim property orders.
On 20 February 2008 funds the wife deposited in the joint account to pay the mortgage on N property were withdrawn by husband. He later re-deposited those moneys minus $60.
On 25 March 2008, exactly 12 months after separation, the husband travelled to the N property and, without notice to or permission from the wife, removed the registration plates from the Honda motor vehicle. Save for moving the vehicle to her brother’s property at P, the wife has not had the use of the vehicle since. In April 2008 the wife hired a motor vehicle to enable her to get to work. She reduced the car repayments by the costs of hiring the motor vehicle.
In April 2008 the husband’s employment contract expired but he has continued in paid employment thereafter.
During submissions on 26 June 2008 I ordered that the wife remain in occupation of the N property, to the exclusion of the husband pending the sale of that property and that she maintain the mortgage repayments and meet all other outgoings associated with the property until the sale. That order was not made by consent as the husband had sought but I did not order, that the wife also pay out arrears of about $3,200 on the mortgage. The fact of the arrears is a matter I will take into account in identifying a final settlement.
Credit and Submissions
The evidence of the witnesses
The only witnesses called for cross-examination were the parties, the husband’s mother and his sister.
As the case was finally argued there are several significant factual disputes and it is necessary to make observations about credit. Although valiant efforts were made on behalf of the parties by their counsel to distinguish their credit-worthiness and that of the husband’s mother and sister, I found each of the witnesses to be unsatisfactory. All of the witnesses were prone to advocacy and each in turn was put to repudiate aspects of their earlier written and oral testimony. The parties have very different views about certain events and about aspects of their history together. Although there is no evidence of collusion between them on detail, quite the contrary, the husband, his mother and sister have a similar, strong, jaundiced and patronising view of the wife.
The husband was a poor witness. His evidence about the wife’s lack of contribution is in absolute terms and did not survive his cross-examination. For example it is his evidence at paragraph 23 that: “During the first five years of our marriage while [the wife] lived with me and my parents, she did not contribute in any financial way during this period.” When I pressed him about that he conceded that he did not know if the wife had applied her income to the marriage during that period. As with his mother’s affidavit, no effort has been made to cast his evidence in neutral terms. For example, he describes their role in driving the wife to the railway station and university and picking her up in the afternoon as a ‘chauffeur service’.
Further, it is the husband’s evidence that in addition to $125,000 his parents lent him in the period for a few months from September 2003 there was a further $65,500 given to him by them in the period 2002 to 2006 and that his parents have all the statements showing these payments. His mother gave written evidence in similar terms about the $125,000 although she changed her evidence during cross-examination to the effect that the $125,000 was lent over a period of about 2 years, not several months. She says that the gifts amounted to a total of about $37,000 – not the $65,500 asserted by the husband.
The husband has been somewhat childish in his conduct and that lends further weight to the argument that he has allowed his view of the world to colour his evidence. He agreed that he removed the registration plates from the Honda motor vehicle being used by the wife at the expiration of 1 year from separation. The effect of his evidence is that his actions were not timed by reference to the expiration of a ‘period of patience’ respected in his culture, as the wife asserts but that it was just an appropriate time.
The husband’s mother was a reasonable witness but her evidence is very much coloured by her attitude to the wife. On the positive side the change in her evidence about the period over which $125,000 was lent and her evidence that only a further $37,000 was advanced put her testimony at odds with that of her son, suggesting a level of independence or at least a lack of collusion between them. Unfortunately her affidavit is replete with hyperbole and reflects a certain view about the wife. As with her son’s affidavit, the husband’s mother describes her role in driving the wife to the railway station and picking her up in the afternoon as acting as a ‘chauffeur’.
Other aspects of her evidence are oddly expressed. She deposed “We always helped them with financial support, between the years they moved over [N] up to recently the amounts have totalled about $80,000”. In her oral evidence, the husband’s mother explained that the $80,000 was her estimate of the effective value to the parties of her and her husband storing two rooms full of the parties’ goods at the G home. She concludes her affidavit with the very telling sentence: “That [the wife] is now trying to carve out for herself, from our efforts and our son’s efforts, part of our hard earned property is for me, heartbreaking.”
The husband’s mother conceded that her evidence to the effect that she and her husband had guaranteed the parties’ S property mortgage, is wrong. That concession took several minutes of cross-examination as she insisted on responding to the effect that she and her husband had offered to guarantee the loan, albeit that the offer was not taken up. In relation to the V property she says at paragraph 44 of her affidavit:
“44.The rental income on this property goes to [the husband] and he claims it in his tax returns.”
That is inconsistent with the evidence of both parties and her own oral evidence. The husband’s mother said in cross-examination that since 2006 she has kept the net rental return on the property.
On the critical issue of the advance of moneys from the husband’s parents to the husband, being the $125,000 and the $37,000, I am inclined to accept the husband’s mother. $90,000 of the $125,000 is supported by the evidence of moneys passing through the account of the husband’s sister in payments relating to the deposit on the N property and for stamp duty. This is not a situation where the wife has contrary evidence. There are ambiguously endorsed cheque butts that support the husband’s mother’s evidence. The accounting records of the husband’s mother are irregular but that is not to say that the payments were not made.
The husband’s sister was a poor witness. Her affidavit directly contradicts the evidence of her mother and brother and in oral evidence she said it does not accurately reflect her own evidence. In relation to the V property she deposes:
“20. They subsequently transferred the property to [the husband] and he acquired the loan for $100,000. I recall that the discussions concerning our parents repaying the loan were held while I was present.
21. I do know that the repayments of the loan were made by my parents because of the many discussions over the years and it was always made clear it was my parents responsibility not [the husband’s].”
In cross-examination she said that that aspect of her evidence was wrong. Again, on the positive side there is no suggestion of collusion in the preparation of her evidence but she is primarily an advocate for her brother rather than a reliable witness of truth. For example she deposes:
“16…
My mother is devastated by [the wife’s] false claims to have contributed non financially with a view to securing a little more of the family’s hard earned assets for herself.
She conceded that although she purports to say that the wife undertook no household tasks, she was not in a position to observe the wife at all times when the parties lived at the G property.
The wife was a very poor witness. At several points in her affidavit the wife asserts that she had no access to a bank account in the period from the marriage until 2003. It transpired through cross-examination that she had up to 6 accounts during that period and most of them on her own evidence, were in her name and contained her money. Her explanation to me was that she forgot about the accounts. The trouble with that is that in her affidavit she has reported complete conversations from years ago, consistent with the first proposition. She must have known at the time of those asserted conversations that she had several bank accounts. Thus I take it that the evidence about the conversations is false.
The wife is also hampered because, on her own case, she was not informed about all of the family finances. The effect of much of her evidence is that she did not and does not know how things were arranged or funded during the marriage.
Submissions
The written submissions made on behalf of the husband are as follows:
Credit
1At the commencement of the proceedings I opened by saying that the evidence of the parties was so diametrically opposed that the inescapable conclusion was that someone was not telling the truth.
2Although the husband’s evidence was not always as accurate as it may have been, it is submitted that he was a truthful witness. Some of his estimates, particularly in relation to the equity in the properties as at the date of cohabitation, may have been high or inaccurate. However, on the whole, the Court would accept that his evidence was neither misleading nor untruthful.
3Further, your Honour would accept that the husband’s mother was a truthful witness. The husband’s sister’s evidence may be found to be unsatisfactory, however, as you observed when she was giving evidence that her recollection in respect of the repayment of the loan for the [V] property certainly did not assist the husband’s case and therefore you would accept that she was not deliberately giving false evidence.
4On the other hand, the wife’s evidence was wholly unsatisfactory. The transcript will be replete with answers “That’s not true sir”, being a negative response to an allegation that she was lying to the Court. In particular, you would find the following:
(i)that the wife had no savings at the commencement of cohabitation as asserted in paragraphs 14 and 15 of her Affidavit and, as you noted, the conversation she sets out at paragraph 20 makes no sense at all. The Court would be satisfied that had the wife had the cash she asserts to have had that she would have paid her Centrelink debt[2] rather than asking the husband to pay it off at $20 per week;
[2] Exhibit 8
(ii)the Court would be satisfied that the wife has wholly exaggerated her contributions as a homemaker and that she was busy studying at university from January 1999 until late 2003 for a period of 5 years or, specifically, 4 years and 10 months. The Court would find that during that period the husband’s mother did do the vast majority of the cleaning of both the upstairs and downstairs areas at the [G] home and that the parties did not pay either rent or board as asserted by the wife in paragraph 26 of her Affidavit;
(iii)your Honour would also find that the wife’s evidence in relation to use of family cars was both untruthful and inaccurate. You would be comfortably satisfied that at the commencement of the time when she got her licence in 2000 that both of the family vehicles were manual vehicles and that she could not drive a manual vehicle;
(iv)the Court would also be comfortably satisfied that the wife was assisted by the husband and his sister in relation to her studies and that she clearly did have difficulty with English and the understanding of Latin terms;
(v)although a relatively trivial matter, the wife emphatically denied that the husband’s handwriting appeared anywhere on her application for a driver’s licence. This is clearly not the case and, although the whole of the form was not completed by the husband, there certainly were parts of it that were[3] completed by him;
[3] see Exhibit 16
(vi)the wife asserts that she was active in the husband’s business performing administrative and clerical duties from the end of 1990 until early 2001 at paragraph 31 of her Affidavit. She asserts answering telephones, filing invoices, general cleaning and clerical duties. This is denied by the husband. At the time the wife was studying full-time and travelling daily from the [outer south suburban] area to [inner Sydney]. The Court would be comfortably satisfied that the wife did not undertake the tasks as alleged. It is submitted that she has taken advantage of the fact that the parties were income splitting at the time to assert that she actually carried out the tasks for which she earned income. At paragraph 33 the wife said, “I did not operate my own bank account from November 1998 until May of 2005 … I had had a bank account prior to moving in with [the husband], but closed it once we were married, if not before.”;
(vii)the wife had the following accounts from 1999 and onwards:
(a)NAB account last four digits 3652[4];
[4] Exhibit 9
(b)Commonwealth Bank account[5];
[5] Exhibit 10
(c)ANZ bank account opened on 21 June 2001[6];
[6] Exhibit 11
(d)Colonial Bank account opened in December 1999[7];
[7] Exhibit 12
(e)NAB Flexicard account[8];
[8] Exhibit 13
(viii)it is interesting to note that the wife also had an account with the Bank of South Australia[9]. What is interesting about this account is that she swore that she had opened it for the purposes of having an address close to a school at which she wished to attend. This was clearly a deceitful act on her behalf;
[9] Exhibit 14
(ix)at paragraph 47 the wife asserts that she earned $516 net per week between December 2002 and April 2003, a period of 5 months. She asserts that this money was deposited into the husband’s account each week. She also says that she was doing maths tutoring. The Court will find that the wife deliberately withheld all of the husband’s bank records prior to the hearing of this matter and only produced them at lunchtime on the first day of the hearing. Had she been truthful about her assertion no doubt she would have exhibited the relevant bank statements in respect of which she says her earnings were paid in to. It is clear from the bank accounts that were tendered against her that at least some of her earnings were paid into various bank accounts, for example, her […] income at one time and other deposits that were clearly not overseas transfers which were paid into the ANZ account[10];
[10] Exhibit 11
(x)at paragraph 48 the wife asserts that her earnings were applied by the husband to expenses as he directed. She claims to have had no control over her money. The wife clearly had access to finances of the family and deposed, at paragraph 34, that she had a key card to access the husband’s account. She also conceded that she was given a supplementary card to the husband’s Gold American Express card and perhaps one other credit card. She concedes withdrawing monies at ATMs at the university;
(xi)at paragraph 49 on page 18 of her Affidavit the wife continues the lie, “as I did not operate my own bank account”;
(xii)at paragraph 56 of her Affidavit the wife says that when moving to the [N] property in October 2003 the husband did not assist other than for hiring a truck that she and her father used. Under cross-examination she conceded he not only hired the truck but loaded the truck and drove the truck she denied unloading which the husband asserts;
(xiii)at paragraph 65 the wife continues her lie, “Until 2005, I did not have a bank account of my own and [the husband] had control over all of our finances. At the commencement of the relationship I gave [the husband] all my savings, and during our marriage gave [the husband] all my earnings. On that basis, [the husband] had control of all our finances.”
(xiv)at paragraphs 77 to 79 the wife sets out what she says are transactions in relation to motor vehicles. Following cross-examination of her, the Court will be comfortably satisfied that an amount of $11,600 was paid from the parties’ joint funds to purchase a motor vehicle for the wife’s parents rather than being part of a car loan transaction for the parties;
(xv)the wife asserts at paragraph 84 of her Affidavit the husband paid for his university fees for his MBA from the joint funds. The Court will accept that the husband used the deferred HECS system to fund his MBA;
(xvi)at paragraph 96 the wife claims a contribution to the payment of the mortgage from July 2007 to date in respect of the [N] property. The wife has had exclusion occupation of that property since that time and therefore cannot claim it as a contribution whilst at the same time the husband had to rent premises at […].
Asset Pool – Step 1
The husband contends for the following pool:
Assets:
(i)[V Property] $221,000.00
(ii)[N property] $465,000.00
(iii)[S property $750,000.00
(iv)wife’s contents $1,000.00
(v)monies removed from joint account by wife $31,244.00
(vi)monies removed from joint account by husband $31,000.00
(vii)husband’s Yamaha vehicle $13,000.00
(viii)husband’s Honda vehicle $13,000.00
(ix)[K] Pty Limited $2.00
(x)husband’s superannuation $50,425.00
(xi)wife’s superannuation $19,483.00
$1,595,154.00
Liabilities:
(xii)home mortgage $298,596.00
(xiii)husband’s parents’ loan for [S property] $113,000.00 (6.iii)
(xiv)other mortgages $642,891.00
(xv)Yamaha finance $18,000.00
(xvi)husband’s Citibank credit card $3,500.00
(xvii)GE Finance $12,838.00
(xviii)selling costs on 3 properties at 2.5% $35,900
(xix)Capital Gains Tax (estimate) $13,690[11]
[11] The figures of Mr AH, accountant with the property agreed values substituted – tax at 45%
$1,138,415.00
Net assets - $1,595,154.00 - $1,138,415.00 = $456,739
In respect of the controversial items I make the following submissions:
Monies removed from joint account by each of the parties
(i)the parties have other assets by way of funds on account and shares. I have not included these because the source of funds in respect of those items has clearly come from the monies removed from the joint account by each of the parties;
Silk Rugs
(ii)Your Honour would be satisfied on the evidence that there were two silk rugs given to the parties, one by each of their parents. The wife has the silk rug given by the husband’s parents and I seek an order that she return it to him as on the evidence the Court would be satisfied that she has retained the pink and sliver silk rug given by the wife’s family. We do not know what the value of these rugs is;
Husband’s Parents’ Advances for [S property]
(iii)the wife has now conceded that in addition to the deposit of $71,200 that the husband’s parents paid the Stamp Duty of $18,800[12]. In addition, the Court would accept that the husband’s parents advanced significantly further sums by way of cheque[13] and by way of cash advances[14]. The parents have been collecting rents on the [V] property for approximately 2 years. The best evidence is that the net rental income has been approximately $120 per week or about $6,000 per annum. It would be open to the Court to deduct the amount of $12,000 from the amount claimed of $125,000.
[12] Exhibit 2
[13] Exhibit 3, being part of the tender of cheque stubs
[14] Exhibit 5
Each of the properties is subject to Capital Gains Tax. The husband’s case is that each of the 3 properties should be sold. Attached to these submissions is a calculation provided by the husband’s accountants of Capital Gains Tax which I understand to be uncontroversial.
In relation to selling costs and conveyancing costs, I have allowed agent’s commission at 2.2% and conveyancing costs at .3% to make a total of $2.5%, which again should not be controversial.
Contribution Based Entitlements
The husband introduced 2 properties.
The husband’s parents made significant contributions on his behalf.
The husband and his parents contributed to the welfare of the wife’s family.
The husband made the overwhelming financial contribution.
Contribution based entitlements favour the husband in a ratio of between 80:20 and 90:10.
Section 75(2) Factors
The section 75(2) factors are balanced evenly.
Whilst the husband will have substantially more capital he is 10 years older than the wife.
The wife has a good position as a […] co-ordinator. The husband paid for the wife’s university education and provided significant assistance with her studies.
A Just and Equitable Result
The orders sought by the husband are set out in his Amended Application for Final Orders filed 29 April 2008. He seeks orders for the sale of the three properties and the repayment to his parents of $125,000 which is now contended to be $113,000.
The wife would therefore receive 15% of the following:
(i)[V property] $221,000.00
(ii)[N property] $465,000.00
(iii)[S property] $750,000.00
$1,436,000.00
Less
(iv)home mortgage $298,596.00
(v)husband’s parents’ loan for [S property]$113,000.00
(vi)other mortgages $642,891.00
(vii)selling costs on 3 properties at 2.5% $35,900
(viii)Capital Gains Tax (estimate) $13,690 $1,104,077
$331,923
Wife receives
i. 15% of $331,923 $49,788.00
ii.wife’s contents $1,000.00
iii.monies removed from joint account by wife $31,244.00
iv wife’s superannuation $19,483.00
$101,515.00
% of net assets - $101,515.00 x 100 = 22.22%
$456,739.00
It is submitted that such a result in the circumstances is both just and equitable.
79.In oral submissions it is said that the husband will agree to a two lists approach being taken to the household contents at the N unit and the husband’s parents’ home save that before the lists are prepared the husband should retain the carpet that the wife concedes she has at the unit and she can retain the framed carpet given by her parents.
80.It is agreed that the wife and husband respectively, will remove the caveats placed on the three subject properties and the wife’s parents’ home.
81.The submissions made on behalf of the wife were to the following effect:
ASSETS
[V] property $222,000 Agreed value
(for the purposes of GST liability)
[N] property $465,000 Agreed value
[S] property $750,000 Agreed value
Cash in banks Husband $ 8159
Wife $ 21,399
Shares Husband $ 5000
Motor bike Husband $ 13,000
Motor vehicle Husband $ 13,000
Household contents Husband $ 3000
Wife $ 1000
TOTAL $1,501,558Wife contends that $62,488 should be added into the pool and half (that is $31,244) should be added notionally to the assets that each party holds in his or her possession.
Wife also contents that husband has taken at least $5000 (deposit paid on Mercedes Benz motor vehicle) and not disclosed the fate of those funds.
Wife contends that $11,500.00 was taken from the joint account for the purchase of the motor vehicle – those funds were not used for the purchase of the motor vehicle, and accordingly the fate of those funds is unknown.
Wife’s Total $1,564,046SUPERANNUATION
Husband $50,425
Wife $19,483
Total $69,908
TOTAL POOL INCLUDING SUPERANNUATION
Wife’s value $1,633,954
Husband’s value $1,571,466
LIABILITIES
Mortgage [S] property $650,000
[N] property $295,000
Loans Husband $125,000 NOT AGREED
Credit card Husband $ 3,500
Wife NIL
Finance Motor bike $ 18,000
Motor vehicle $ 13,500
Husband’s Total $1,107,000
Wife’s Total $ 980,000
NET POOL
Husband’s value $464,466
Wife’s value $693,594Effect of Orders sought by Wife
Value Liability
[N] property $465,000 $295,000
Cash payment $100,000
Notional asset $ 31,244
Cash at hand $ 21,399
Furniture $ 1000
Superannuation $ 19,483
Total $638,126 $295,000
TOTAL $333,126
Which equates to 48% of the net pool as asserted by the wife
s79(4) Contributions
Husband has initial contributions of [V] property subject to small mortgage and [N] property subject to large mortgage.
Wife made an initial contribution of $6,5000
Wife has indirect contributions to the [V] property and the [N] property.
Wife worked part time throughout the marriage whilst studying
Wife has homemaker contribution both to the parties and to the husband’s parentsHusband 55% to 60%
Wife 40% to 45%s75(2) adjustment
Wife has lesser earning capacity than husband
Husband has financial resource in [V] property
Husband’s non-disclosure of assets
Adjustment to wife no less than 5%Conclusion
Wife should receive on an adjustment of the property of the parties 45% to 50% of the net pool available for distribution.
82.In oral submissions it is the wife’s case that:
·credit findings should be made in her favour and against the husband and his witnesses;
·the loan to the husband’s parents is not $113,000 but $90,000 (deposit plus stamp duty on S property) minus $32,240 (being a calculation of rent received by the husband’s mother since 2003). If I thought the rent was only paid since 2006 the rent would be $12,896. Thus I take the submission to be that the debt is either $77,104 or $57,760;
·the wife’s contributions are 30%, not the 10-20% advocated on behalf of the husband;
·The adjustment to the wife should be 5%.
The approach in proceedings under section 79
83.The case law reveals that there is a permissible approach to the determination of an application brought pursuant to the provisions of s 79. That approach involves four inter-related steps. First, I am to make findings as to the identity and value of the property, liabilities and financial resources of the parties at the date of the hearing. Second, I should identify and assess the contributions of the parties within the meaning of s 79(4)(a), (b) and (c) and determine the contribution based entitlements of the parties expressed as a percentage of the net value of the property of the parties. Third, I should identify and assess the relevant matters referred to in s 79(4)(d), (e), (f) and (g), (the other factors) including, because of s 79(4)(e), the matters referred to in s 75(2) so far as they are relevant and determine the adjustment (if any) that should be made to the contribution based entitlements of the parties established at step two. Fourth, I should consider the effect of those findings and determination and resolve what order is just and equitable in all the circumstances of the case. [15]
[15] This summary of the effect of the authorities is paraphrased from the comments of the Full Court in In the Marriage of Hickey (2003) 30 Fam LR 355 at 370
The property of the parties at the date of the hearing
- The Court is required to make a finding as to the property of the parties at the date of the hearing.
- There is little controversy in relation to the list of assets. The contents of the N property and the parties’ assets at the husband’s parents’ house are to be divided in specie. The parties have adopted an approach of including in the list, moneys advanced to each of them after separation. For that reason assets said to be sourced in those advances, such as the husband’s furniture and the wife’s savings have been excluded from the list. Similarly the question of reading back into the pool paid legal costs does not arise as there is a risk of double counting assets.
- Otherwise the parties agreed that the relevant list of assets and liabilities is as set out below:
Assets Value V property $221,000 N property $465,000 S property $750,000 Moneys removed from joint account by husband $31,000 K Pty Limited $2 Husband’s Yamaha motor cycle $13,000 Husband’s Honda motor vehicle $13,000 Husband’s superannuation $50,425 Moneys removed from joint account by wife $31,244 Household contents (W) $1,000 Wife’s superannuation $19,483 Total $1,595,154.00
Liabilities:
87.The liabilities are largely agreed. As to the disputed issues:
Husband’s Citibank credit card
88.The husband owes Citibank $3,500. I have some sympathy with the submission made on behalf of the wife, to the effect that the agreement to deal with post separation assets by reference to the advance made to each of them makes it difficult to also allow consumer debt acquired by either party over that period. I will exclude the husband’s Citibank debt from the list of liabilities.
Loan to husband’s parents
89.The submission on behalf of the husband is that the debt stands at $113,000, being an advance of $125,000 minus $12,000 in rent. The husband argues that the wife has now conceded that his parents advanced $90,000 for the S property. In addition, it is submitted that the husband’s parents advanced further sums by way of cheque and by way of cash advances. The parents have been collecting rents on the V property for approximately 2 years. The best evidence is that the net rental income has been approximately $120 per week or about $6,000 per annum. On that basis it is argued that it would be open to the Court to deduct the amount of $12,000 from the amount claimed of $125,000.
90.The wife argues that the loan to the husband’s parents is either $77,104 or $57,760, depending on whether the V property rent was diverted to the husband’s mother from 2003 or 2006. This is based on $90,000 being originally advanced for S property, by way of deposit and stamp duty but not further amounts by way of the cheques relating to the ambiguously endorsed cheque butts produced in the husband’s case.
91.Albeit that they have a different recollection of the period over which the advances were made, the husband and his mother have given broadly consistent evidence about the advances. The wife does not know one way or the other. As to the rent, the husband declared the rent in his tax returns made after 2003 but not after 2006. It does not make sense for him to declare the income if it was diverted to his mother. I accept the husband and his mother on this issue and find that the rent for V was only re-directed to the husband’s mother from 2006.
92.Therefore the net amount owing is $113,000.
Selling costs and CGT
93.Learned counsel for the husband has provided estimates of selling costs and the Capital Gains Tax impost arising on the sale of the properties. They are objected to by the wife. Nothing turns on this. There will be selling costs and CGT. The orders will be cast in terms of a percentage division and so whatever the ultimate costs and tax, they will be born in the proportions that the parties take the real estate. No harm is done by including indicative figures in the list of liabilities.
94.The liabilities are:
Liabilities Amount Mortgage to St George $298,596 Loan to husband’s parents $113,000 Other mortgages $642,891 Yamaha Finance $18,000 GE Finance $12,838 selling costs on 3 properties at 2.5% $35,900 Capital Gains Tax (estimate) $13,690 $1,134,915.00
95.The net assets have a value of $460,239 ($1,595,154 - $1,134,915).
Financial Resources
96.There are no quantifiable financial resources. The husband’s family seems to deal with finances on a collective basis. The husband’s sister had her parent’s money in her account; the husband’s mother manages the V property for the parties, the husband’s mother and sister both treat the husband’s money and theirs. It is likely that the husband will have ready and informal access to financial support should he need it. However, there is no detailed evidence about the financial circumstances of the husband’s parents or sister and therefore the potential value of the resource cannot be assessed.
Contributions
97.The obligations placed on the Court by s 79 call for an assessment of the respective contributions of the parties. The manner of assessing contributions has been the subject of previous decisions. The contributions of a parent and homemaker are to be assessed, not in any merely token way, but in terms of their true worth to the building up of the assets[16]. There are said to be risks in taking an overly technical approach to the assessment of the respective contributions of the parties in that the Court can become involved in questions of the quality of contributions which go far beyond the real world expectations of parties[17].
[16] Mallett v Mallett (1984) 9 Fam LR 449; In the Marriage of Ferraro (1992) 16 Fam LR 1
[17] In the Marriage of Shewring (1987) l2 Fam LR 139
A separate pool for superannuation
98.As to whether the Court should assess contributions asset by asset or globally, the authorities have it that the latter approach is preferred, in appropriate circumstances either approach is permissible and sometimes the asset by asset approach is best. See In the Marriage of Lenehan (1987) 11 Fam LR 615; In the Marriage of Norbis (1986) 10 Fam LR 819; FLC 91-712; In the Marriage of Zyk (1995) 19 Fam LR 797.
99.In the Marriage of Coghlan (2004) 33 Fam LR 414 the Full Court opined that it is preferable for contributions to superannuation to be assessed separately from those made to other assets. However the Court allowed that superannuation may be included in the list of property drawn up as “the first step” in the determination of proceedings under s 79, whether or not a splitting order is sought in those proceedings. The Full Court suggests that that:
“… approach could be adopted where the parties agree that it should be adopted, or where the court is satisfied that the superannuation interest is indeed property within the meaning of the definition of property contained in s 4(1), or if the interest is not within that definition, but is of relatively small value in the context of the value of the other assets in the case, or there are features about the interest which leads the court to conclude that this would be an appropriate approach.”
Here neither of the parties seeks a splitting order and the case has been argued on the basis of one pool of assets. I too will apply the section 79(4) considerations globally.
Contributions
Section 79(4)(a) Contributions
In relation to the injection of assets it is the husband’s evidence that at the commencement of cohabitation he had the following:
Assets Value Equity in the N unit $180,000 Equity in the V property $140,000 Nissan 300ZX motor vehicle $27,000 Suzuki Swift GTI motor vehicle $12,000 Jet ski $15,000 Superannuation $20,000 Moneys in the bank $15,000 Gold jewellery $7,000 C Holdings Pty Ltd $50,000
No objection was made on behalf of the wife to the values ascribed by the husband to each of those assets. The husband was asked about some of the figures in cross-examination. It transpires that he thinks that the only capital gain made on the N unit was made in the first 12 months of its purchase. That might be true but there is no basis given for that assertion.
The evidence about the V property is bizarre. It was owned by the husband’s parents. The husband and his mother say that his parents needed money to build a residence on their land at G and could not borrow it. In order to raise the necessary funds and so as to allow the husband to repay the $100,000 he owed them, they transferred the V property to him for $100,000. Thus the husband’s parents gave up the V property and forgave a $100,000 debt in order to obtain $100,000. In reality it cost the husband’s parents a great deal more than $100,000 in order to obtain $100,000. None of that matters for the purposes of these proceedings, the net effect is that the husband came into the marriage with an equity in the V property.
As to C Holdings Pty Ltd, each of four partners put in $50,000. A year later the company accountant credited the husband with a loan account of something over $12,000. The husband ceased to be a director in April 2001. When the husband left the business he received no dividend or payout of equity. He lost his $50,000. In In the Marriage of Pierce (1998) 24 Fam LR 377 at 386 the Full Court was dealing with an imbalance of initial contributions and said among other things:
[28] 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 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. In the present case that use was a substantial contribution to the purchase price of the matrimonial home: see also Campo and Campo (Full Court, Sydney, 19 May 1995, unreported) at pp 21–2 of the joint judgment of Ellis, Lindenmayer and Finn JJ and Zahra and Zahra (Full Court, Sydney, 3 October 1996, unreported) per Ellis J at p 10.
Thus the use of the injected funds is relevant. In that context the husband bringing to the marriage the equity in the company was not significant. The equity remained in that form, did not contribute directly or indirectly to the acquisition, conservation or improvement of another asset and was finally lost.
Additional funds of the order of $37,000 were provided by the husband’s parents.
In terms of paid employment:
· The husband was in paid employment throughout the marriage. He thought that his salary was about the $90,000 per annum level from 1994 but that thereafter he received bonuses on top of that salary;
· the wife says that:
o from the end of 1999 to early 2001 the wife worked part time in the husband’s business “[C] Holding Pty Limited”;
o from April 2001 to 2002 the wife worked as a casual waitress on Friday, Saturday and Sunday evenings and earned up to $300 per week. During university holidays the wife worked an additional night each week;
o from 2002 to 2003 she worked at L Centre as a Tutor for about 5 to 6 hours per week earning up to $150.00 per week. In addition wife also had three private students during this period;
o from December 2002 to April 2003 the wife worked as an Assistant, earning $516.00 net per week;
o on 8 December 2003 the wife was employed by R Company as a Consultant;
o from February 2004 to March 2007 the wife continued maths tutoring;
o in March 2004 the wife commenced employment with Q Company as a consultant and worked on a full-time basis until 7th August 2005;
o on 8th August 2005 the wife commenced employment with her current employer, D Company, as an Advisor/ Co Ordinator.
The extent of the wife’s part-time work during the period from marriage to the end of 2003 is contested by the husband.
Despite the income splitting arrangement, the husband denies that the wife did any work for C Holding Pty Limited. I am not able to resolve this issue.
The wife’s taxable income was:
1999-2000 $16,840
2000-2001 $11,700
2001-2002 $7,761
2002-2003 $12,328
2003-2004 $14,942
2004-2005 $51,764
2005-2006 $62,066
2006-2007 $68,791The husband says that the parties engaged in income splitting in the period 2001 to 2003. Even that is odd because he resigned as a director in April 2001. It is hard to imagine there being much income to split thereafter.
The husband’s evidence is that the wife worked sporadically, working up to three nights in some months and then going for 6 months without paid employment. If, on the husband’s evidence, the income splitting arrangement was limited to 2001 to 2003, the wife’s earnings in the 1999-2000 and 2000-2001 financial years suggest that her work was more than sporadic.
Since separation the husband has been out of the matrimonial properties and has met the shortfall on negatively geared properties while the wife has had the benefit of the N property and has generated arrears of about $3,200 on the mortgage secured on that property. In both cases those are contributions made by the husband.
With a substantial initial contribution and full time employment throughout the marriage, the greater financial contribution was made by the husband by a significant margin.
Section 79(4)(b) contributions
The evidence of non-financial contributions to assets is hotly disputed.
The wife says that in 2002 she painted the entire inside of the V property. The husband says that he painted that property although he does not say when. He disputes that the wife ever painted the property. He points to evidence that the property was painted by tenants in about 1999 and recorded as in good order on a real estate agent’s inspection in August that year. The evidence the husband relies on does not exclude the possibility that the wife painted the property in 2002. In fact the agent’s report of August 1999[18] did record the ceiling of bedroom one as needing painting but I can safely take judicial notice of the fact that painting can occur notwithstanding that the same walls and ceilings have previously been painted and irrespective of the condition of those walls and ceilings. I accept the wife’s evidence. The parties re-carpeted the property.
[18] Part of exhibit 17
In September 2003 the wife painted the interior of the N property. The husband agreed but in the spirit of the rest of his evidence, in cross-examination he says that she did such a poor job that it had to be repainted soon thereafter.
When the parties decided to rent the S property, the wife cleaned the property, painted some rooms and organized the removal of rubbish to prepare the property for rental.
The greater non-financial contributions were made by the wife.
Section 79(4)(c) contributions
There are no children of the marriage. This was not a long marriage and the balance of homemaker contributions will therefore not have much impact on the distribution of property. It is possible that most, if not all, of the homemaker role in the first five years was undertaken by the husband’s mother. There is no provision for homemaker contributions to be made ‘on behalf of’ a party. I will refer to this later by reference to section 75(2)(o).
In the last four years the parties probably each undertook aspects of the homemaker role.
Conclusion on Contribution
The husband argues that the parties’ contributions favour him in the proportions 80% - 90% compared to 10% - 20% by the wife. The wife argues that the contributions were more like 30% by her and 70% by the husband.
This is a marriage where cohabitation spanned about 8 years.
The husband brought significant assets into the marriage in the form of equity in property. The parties each had paid employment. The wife’s employment was sporadic for the first five years as she completed full-time study. Her income improved steadily from December 2002. The husband had a good wage and some other benefits from full-time employment.
The wife made the greater non-financial contributions but they were not extensive.
The main homemaker task only arose from the end of 2003. The parties probably shared that role but there being no parenting contributions, the main focus of the proceedings is on financial contributions.
It is of great concern that the factual dispute between the parties is very substantial and that could have a significant effect on the assessment of contributions. Although he clearly made the greater contribution, it seems to me that the husband’s assessment of contributions is a bit light. I find that the contributions made by and on behalf of the husband were greater than those of the wife in the proportions 75% by the husband and 25% by the wife.
The other matters in Section 79
Dealing with the matters identified in the legislation:
Section 79(4) (d)
Pursuant to s 79(4)(d) I am required to take into account the effect of any proposed orders on the earning capacities of the parties. No such effect was identified in the course of submissions.
Section 79(4)(e) - Section 75(2) Factors
The relevant matters in Section 75(2) would seem to be paragraphs (a), (b), (j), (k) and (o).
(a) the age and state of health of each of the parties;
First, as to the age and state of health of each of the parties. The husband and wife are 39 and 29 years of age respectively. There is no significant evidence about their health.
(b)the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment;
The husband receives $2,578 per week made up of $2,116 in wages, $412 per week in rent and $50 per week through K Pty Ltd which contracts out his services. He lives alone. The husband’s fixed expenditure is as follows:
Expenditure
Amount Income tax $670.00 Superannuation contributions – Colonial $190.00 Rent $411.00 Rates and levies $51.00 Mortgage payments to St George Bank on the S property $1,002.00 Other rates and levies $81.00 Landlord insurance CGU $21.00 Health insurance $10.38 Motor bike insurance $15.40 Motor bike registration – Yamaha registration number … $11.00 Hire purchase or lease payments Yamaha motor bike – Yamaha Finance $92.00 Mastercard payments to Citibank $67.00 All other expenses $227.00 Total $2,848.78
As far as I know the husband is fully exercising his earning capacity.
The wife’s income is $1,499 per week from her wages at D Company. In addition the wife’s employer makes contributions to her Super Fund. The wife lives alone.
The wife’s expenses are as follows:
Expense Amount Income tax $419.00 Mortgage payments to the St George Bank $544.00 Rates and levies $80.00 Comprehensive motor vehicle insurance AAMI $12.00 Health insurance Medibank Private $20.00 Motor vehicle registration – 2005 Honda reg.n number … $47.00 Hire car – Europe Cars Ltd $290.00 HECS and living expenditure $375.00 Total $1787.00
In her Financial Statement the wife explains that she intends to deduct the hire car payments from her mortgage and car payments for the Honda. I gather that the reasoning behind that is that the wife is unable to use the Honda because the husband removed the registration plates from the vehicle.
There is no suggestion that the wife is not fully exercising her earning capacity. Judicial notice can be taken that incomes in the wife’s field often do not reach the heights achieved in the husband’s field and other professions linked more to the commercial world. It may be that the wife will never achieve an income of the order of that currently enjoyed by the husband.
(c)whether either party has the care or control of a child of the marriage who has not attained the age of 18 years;
This does not arise.
(d) commitments of each of the parties that are necessary to enable the party to support:
himself or herself; and
a child or another person that the party has a duty to maintain;
(e) the responsibilities of either party to support any other person;
I have set out the detail of those commitments above.
(f) subject to subsection (3), the eligibility of either party for a pension, allowance or benefit under:
any law of the Commonwealth, of a State or Territory or of another country; or
any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia,
and the rate of any such pension, allowance or benefit being paid to either party;
Neither of the parties receives distributions by way of pension or superannuation entitlements.
(g) where the parties have separated or the marriage has been dissolved, a standard of living that in all the circumstances is reasonable;
The parties holidayed in the Whitsunday Islands in early 2000 and travelled to Israel in early 2001. The husband had a jet ski. Otherwise there is little evidence in relation to the standard of living of the parties during the marriage.
(h) the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income;
This is not relevant. Neither of the parties has foreshadowed further study.
(ha) the effect of any proposed order on the ability of a creditor of a party to recover the creditor’s debt, so far as that effect is relevant;
This is not relevant.
(j) the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party;
Albeit that the tuition fees were deferred under the HECS (s)cheme (now called H.E.L.P.), the husband supported the wife during her full-time studies. He provided some assistance to the wife with those studies. The husband characterised that as assistance with English. The wife conceded assistance with essays although she asserts that largely came by way of referral to a study group at the university.
(k) the duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration;
The parties both gained qualifications during the marriage. In the husband’s case that was an MBA.
(l) the need to protect a party who wishes to continue that party's role as a parent;
This is not relevant.
(m) if either party is cohabiting with another person — the financial circumstances relating to the cohabitation;
The parties live alone.
(n) the terms of any order made or proposed to be made under section 79 in relation to the property of the parties;
(na) any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage; and
These provisions are not relevant.
(o) any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account;
There are ‘contributions’ that have been made that fall outside the provisions of section 79(4) (a), (b) & (c). They include 5 years of homemaker contributions and some assistance with transport by the husband’s mother and the assistance of the husband’s sister with the wife’s studies. There is no scope for section 79(4)(c) contributions to be made on behalf of a party. Learned counsel for the husband suggested that they were non-financial contributions made on behalf of the husband to the conservation of assets. It is hard to identify an asset which was conserved as a result of those efforts. There may be an available argument that those efforts should be recognised, just as contributions to a child who is not a child of the marriage are recognised, under section 75(2)(o) – see Robb and Robb (1995) FLC 92.
I do not think much turns on this. For example, there is no evidence that there was a significant task to be undertaken in each category. It was the very clear evidence of the husband’s mother that she felt those efforts to be a matter of honour on behalf of her son and daughter in law. On the other hand it was the unchallenged evidence of the wife that her mother-in-law was overseas for periods of up to 6 months at a time. In that event the husband’s mother was not available to do all of the homemaking tasks. One or more of the witnesses is perjuring themselves over this and I simply cannot get to the bottom of it.
(p) the terms of any financial agreement that is binding on the parties.
There was no binding agreement made between the parties.
Section 79(4)(f)
There are no relevant orders.
Section 79(4)(g)
There is no child support assessment.
Conclusion
The wife argues for an adjustment of not less than 5% for the “other matters” referred to above and, depending on the findings in relation to contributions, the husband argues that it should be nothing or 5% at the most. Favouring an adjustment to the wife there is the imbalance in the parties’ property (the husband will take 75% and the wife only 25%), in their incomes and perhaps their earning capacities. Her income is 75% of that of the husband. Favouring an adjustment to the husband there is the fact that the wife is 10 years his junior. That means the wife has the potential of 10 more years in the paid workforce than the husband.
The only adjustment sought is one in favour of the wife. To some extent the factors referred to above tend to cancel each other out. In my view the competing factors favour a small adjustment to the wife. There is a relatively small pool of net assets and care is needed not to focus exclusively on percentages but an adjustment to the wife of 2.5%, creating a disparity of 5%, would seem appropriate.
Just and Equitable
Based on their contributions and the other matters in s 79 the appropriate division of non-superannuation assets property is 55% to the wife and 45% to the husband. I must consider whether it would be just and equitable within the context of s 79 if the net assets of the parties were divided in those proportions.
The net assets have a value of $460,239. If they were divided in the proportions 72.5% to the husband and 27.5% to the wife they would receive about $333,673 and $126,566 respectively.
The husband has or has had the benefit of:
Assets Value Moneys removed from joint account by husband $31,000 K Pty Limited $2 Husband’s Yamaha motor cycle $13,000 Husband’s Honda motor vehicle $13,000 Husband’s superannuation $50,425 Loan to husband’s parents -$113,000 Yamaha Finance -$18,000 GE Finance -$12,838 Total ($36,411.00)
In order to receive 72.5% of the net assets he would need to receive $370,084 from the net proceeds of sale of the properties. He would owe any unpaid legal fees for these proceedings, his Citibank card debt and any other personal debts.
The wife has or has had the benefit of the following:
Assets Value Moneys removed from joint account by wife $31,244 Household contents (W) $1,000 Wife’s superannuation $19,483 Total $51,727.00
In order to receive 27.5% of the net assets she would need to receive a further $74,839 from the net proceeds of sale of the properties. She would owe any unpaid legal fees for these proceedings and any other personal debts.
The estimated value of the properties is as follows:
Assets Value V property $221,000 N property $465,000 S property $750,000 Mortgage to St George -$298,596 Other mortgages -$642,891 selling costs on 3 properties at 2.5% -$35,900 Capital Gains Tax (estimate) -$13,690 Total $444,923.00
So that the parties share in any profit or loss associated with the sales I will describe the division of net proceeds as a percentage representing the proportions 370,084:74,839. I will round that out to 83% to the husband and 17% to the wife.
She would owe any unpaid legal fees for these proceedings and any other personal debts.
As to the form of orders:
it is agreed that the caveats of the three properties and the husband’s parents’ home will be removed;
it is agreed that the three properties will be sold and the net proceeds divided;
it is agreed that the husband will retain the Honda motor vehicle and the related debt;
it is agreed that a division will be made in specie of the contents of the N unit and of the parties’ personalty held at the home of the husband’s parents. In final submissions the husband’s counsel proposed, without objection from the wife’s counsel, that the two carpets at the N property be excluded from the lists and that the wife retain the framed carpet from her parents and that the husband retain the carpet given by his parents. In the form of orders proposed on behalf of the wife, provision is made to exempt personal items of the parties from the division by lists and that seems a sensible proposal. The more complicated the orders, the greater risk of problems in implementation but I will assume that the parties are capable of giving effect to these arrangements in a practical and dignified way.
Conclusion under Section 79
The effect of the orders will be an overall division in the approximate proportions 72.5% to the husband and 27.5% to the wife. That will be effected by the sale of all real estate, the division of the net proceeds 83% to the husband and 17% to the wife, the division of some personalty by the two lists method and the retention by each of the parties of other assets.
The parties are at liberty to relist the matter in relation to the drafting of the orders within 21 days.
I certify that the preceding one husband and sixty seven (167) paragraphs are a true copy of the reasons for judgment of Judicial Registrar Ian Loughnan.
Associate:
Date: 4 July 2008
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