Seward & Seward
[2023] FedCFamC2F 1578
•8 December 2023
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Seward & Seward [2023] FedCFamC2F 1578
File number(s): LNC 708 of 2022 Judgment of: JUDGE TURNBULL Date of judgment: 8 December 2023 Catchwords: FAMILY LAW – PROPERTY- 33 year marriage- assessment of contributions – weight to be given to the Husband’s initial contributions of real estate and two workers compensation payments received during the marriage – whether there should be any adjustment to either party for other factors set out a s79(4) (d)–(g) – whether the Husband should be responsible for the payment of outgoings relating to the various properties and the company before they are all sold. Legislation: Family Law Act 1975 (Cth) ss 79(4)(a)–(c), 79(4)(d)–(g), 75(2) Cases cited: Aleksovski v Alexsovski [1996] FamCA 111
Beck & Beck (No 2) (1983) FLC 91-318
Briginshaw v Briginshaw (1938) 60 CLR 336
Clauson & Clauson (1995) FLC 92-595
Dawes & Dawes [1989] FamCA 71
Dovgan & Dovgan [2021] FamCA 306
Gadhavi & Gadhavi [2023] FedCFamC1A 117
Griffiths & Kerkemeyer [1977] HCA 45
Hickey & Hickey & Hickey [2003] FamCA 395
Jabour & Jabour [2019] FamCAFC 78
Lotta & Lotta [2017] FamCA 50
Mallet & Mallet [1984] 156 CLR 605
Stanford & Stanford (2012) 247 CLR 108
Teal & Teal [2010] FamCAFC 120
Division: Division 2 Family Law Number of paragraphs: 90 Date of last submission/s: 9 November 2023 Date of hearing: 8 & 9 November 2023 Place: Launceston Counsel for the Applicant Ms Trezise Solicitor for the Applicant Andrea Trezise Counsel for the Respondent Mr Kitto Solicitor for the Respondent James C Kitto ORDERS
LNC 708 of 2022 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MS SEWARD
Applicant
AND: MR SEWARD
Respondent
ORDER MADE BY:
JUDGE TURNBULL
DATE OF ORDER:
8 DECEMBER 2023
THE COURT ORDERS THAT:
1.SALE OF TOWN C
(a)The property known as and situated at B Street, Town C in Tasmania, comprised in Certificate of Title Volume … Folio … (“Town C”) be immediately listed for sale on the below-mentioned terms and conditions: -
The Selling Agent, Price and Terms & Conditions of the Sale
(i)The selling agent for Town C will be Mr D of E Company situate at F Street, City G (hereinafter referred to as the “selling agent”); Alternatively: a selling agent or agent(s) the parties agree in writing or in default of agreement as set out below;
(ii)The listed sale price and method of sale and manner of advertising for sale of Town C will be as agreed by the parties in writing and in default of agreement as set out below;
(iii)The terms and conditions of sale of Town C, including the acceptance or rejection of any offer to purchase Town C, will be as agreed between the parties and in default of agreement as set out below;
In the absence of the parties’ agreement - Default Provisions
(iv)In default of agreement between the parties about any of the matters relating to the sale of Town C:
A.either party may request the President of the Real Estate Institute of Tasmania (“the President”) to determine the matter in dispute;
B.the cost of the President’s determination must be shared equally between the parties.
For Auctions
(v)If Town C is offered for sale by way of auction the parties must each pay and be responsible for payment of one-half (50%) of all auction expenses payable before the Town C is auctioned.
Compliance
(vi)Both parties must:
A.co-operate in every way with the selling agent(s) during the sale of Town C, including allowing inspection of Town C at times reasonably requested by the selling agent or agent(s); and
B.ensure that Town C is in a neat and clean condition at the time of inspection by the prospective purchaser(s).
C.accept all reasonable advice from the selling agent(s) concerning the following: -
(1) the method/manner of sale;
(2) the listing/reserve price;
(3) the marketing strategy of Town C;
(4) preparation of Town C for sale.
(b)Contemporaneously with Order 1(a) above, the parties shall do all acts and things necessary to commence the process of discharging the H Company Mortgage no. … (‘the H Company Mortgage’) registered against the title to Town C, to the intent and effect that the parties will be ultimately released entirely from that liability once Town C sells.
(c)From the date of this Order and pending the settlement of the sale of the Town C property, the Respondent shall pay the following: -
(i)all mortgage payments payable in relation to the H Company Mortgage until it is discharged;
(ii)all Council rates, Land Tax and Water charges for Town C;
(iii)all insurance premiums for Town C for a value sufficient for a complete rebuild of each improvement situate thereon.
Distribution of Sale Proceeds:
(d)Upon the completion of the sale of Town C, the net sale proceeds are to be distributed as follows: -
(i)to discharge the H Company Mortgage; and
(ii)to pay all selling costs, commissions and expenses of the sale including agents fees and legal / conveyancing fees;
(iii)all Council rates, land tax and water charges that remain owing; and
(iv)the balance to be held in Trust with the Applicant’s solicitors until the calculation can be made pursuant to paragraph 5 of this order.
2.SALE OF J STREET, TOWN K, QLD (“TOWN K”)
(a)The property situate at J Street, Town K (CT …) “Town K” be immediately listed for sale on the following terms and conditions:
The Selling Agent, Conveyancer, Price and Terms & Conditions of the Sale
(i)The selling agent for Town K will be as follows: -
Real Estate Agent: Mr L of M Company
Address: N Street, City O
Ph: …
E: …
Alternatively: a selling agent or agents the parties agree in writing or in default of agreement as set out below;
(ii)The Conveyancer for the sale of Town K will be as follows: -
Conveyancer: P Law Firm
Address: Q Street, Suburb R, Qld
Ph: …
E: …
(iii)The listed sale price and method of sale and manner of advertising for sale of Town K will be as agreed by the parties in writing and in default of agreement as set out below;
(iv)The terms and conditions of the sale of Town K, including the acceptance or rejection of any offer to purchase Town K, will be as agreed between the parties and in default of agreement as set out below;
In the absence of the parties’ agreement - Default Provisions
(v)In default of agreement between the parties about any of the matters relating to the sale of Town K:
A.either party may request the President of the Real Estate Institute in the relevant State or their nominee (“the President”) to determine the matter in dispute; and
B.the cost of the President’s determination must be shared equally between the parties.
For Auctions
(vi)If Town K is offered for sale by way of auction the Parties must each pay and be responsible for payment of one-half (50%) of all auction expenses payable before the Property is auctioned.
Compliance
(vii)Both parties must:
A.co-operate in every way with the selling agent(s) during the sale of Town K, including allowing inspection of Town K at times reasonably requested by the selling agent or agent(s); and
B.ensure that Town K is in a neat and clean condition at the time of inspection by the prospective purchaser(s);
C.accept all reasonable advice from the selling agent(s) concerning the following: -
(a) the method/manner of sale;
(b) the listing/reserve price;
(c) the marketing strategy of Town K; and
(d) preparation of the said property for sale.
(b)From the date of Order, and pending the sale of Town K, the Respondent shall pay the following:
(i)all mortgage payments payable in relation to the S Bank Mortgage until the aforesaid mortgage is discharged;
(ii)all Council rates, land tax and water charges for Town K; and
(iii)all insurance premiums for Town K for a value sufficient for a complete rebuild of each improvement situate thereon.
Distribution of Sale Proceeds:
(c)Upon the completion of the sale of Town K, the net sale proceeds are to be distributed as follows: -
(i)to discharge the S Bank Mortgage number … (hereinafter referred to as the “S Bank Mortgage”); and
(ii)to pay all selling costs, commissions and expenses of the sale including agents’ fees and legal / conveyancing fees.
(iii)all Council rates, land tax and water charges that remain owing; and
(iv)the balance to be held in Trust with the Applicant’s solicitors until the calculation can be made pursuant to paragraph 5 of this order.
3.T COMPANY (“THE BUSINESS”)
(a)The parties shall immediately list for sale all their right, title and interest in the Business known as T Company (“the Business”), on the below-mentioned terms and conditions:
The Selling Agent, Price, and Terms & Conditions of the Sale
(i)The selling agent for the Business will be Ms U of V Company (hereinafter referred to as the “selling agent”); Alternatively: a selling agent or agent(s) the parties agree in writing or in default of agreement as set out below;
(ii)The listed sale price and method of sale and manner of advertising for sale of the Business will be as agreed by the parties in writing and in default of agreement as set out below;
(iii)The terms and conditions of sale of the Business, including the acceptance or rejection of any offer to purchase the Business, will be as agreed between the parties and in default of agreement as set out below;
In the absence of the parties’ agreement - Default Provisions
(iv)In default of agreement between the parties about any of the matters in relation to the sale of the Business:
A.either party may request the President of the Real Estate Institute of Tasmania (“the President”) to determine the matter in dispute;
B.the cost of the President’s determination must be shared equally between the parties.
For Auctions
(v)If the Business is offered for sale by way of auction the parties must each pay and be responsible for payment of one-half (50%) of all auction expenses payable before the Business is auctioned.
Compliance
(vi)Both parties must:
A.co-operate in every way with the selling agent(s) during the sale of the Business, including allowing inspection of the Business, its assets, and financial records, at times reasonably requested by the selling agent or agent(s); and
B.ensure that the Business, its assets and financial records, are in a neat and clean condition / order at the time of inspection by the prospective purchaser(s).
C.accept all reasonable advice from the selling agent(s) concerning the following: -
(a) the method/manner of sale;
(b) the listing/reserve price;
(c) the marketing strategy of the Business;
(d) preparation of the said Business for sale.
D.Utilise the services of Mr W of X Company, Chartered Accounts of City G (“the accountant”) for the purpose of provision of Financial Statements and other information required by the selling agent or prospective purchasers of the Business.
(b)The net proceeds from the sale of the Business (after payment of all selling agent’s commission, marketing costs, conveyancing costs and all other costs and expenses incidental to the sale of the Business), shall – provided it is a permissible and tax effective use of funds, given that the company will be wound up — be applied to pay down the outstanding balance of the H Company Mortgage but if that mortgage has been discharged or it is not a permissible or tax effective use of such funds the balance shall be held in Trust to be distributed pursuant to paragraph 5 of this Order.
4.Y PTY LTD (“THE COMPANY”):
(a)Upon sale of the Business the parties shall jointly instruct at equal cost, the accountant to wind up the Company.
(b)From the date of this Order and pending winding up of the Company, the Respondent, on behalf of the Company using Company funds, shall pay the following: -
(i)any and all Business liabilities including past, present and future;
(ii)all Business insurances;
(iii)all Business trade/supplier accounts;
(iv)all Licence fees required to conduct the business of the Business;
(v)any and all Income Tax, PAYGW Tax and GST liabilities payable now and/or in the future, attached to the Business.
(c)The net proceeds from the winding up of the Company (after payment of all selling agent’s commission, marketing costs, taxes, conveyancing costs and all other costs and expenses incidental to the sale of the Company), shall be applied to pay down the outstanding balance of the H Company Mortgage but if that mortgage has been discharged the balance shall be held in Trust to be distributed pursuant to paragraph 5 of this Order.
5.DISTRIBUTION OF SURPLUS MONIES FROM THE ABOVE-MENTIONED SALES
(a)Once all net balances (if any) from the sale of Town C, Town K, the Business, and the winding up of the Company (‘the total net balances’) have been received pursuant to this Order, then there be a division of all property of the parties (excluding superannuation) in the proportion 49% to the Applicant and 51% to the Respondent, calculated as follows: -
(i)WHERE:
A.= the net assets retained by the Applicant — ($200,443.81);
B.= the net assets retained by the Respondent — ($56,795);
C.= the total net balances.
(ii)AND WHERE A+B+C = I;
A.the Applicant shall receive a sum equal to (I x 49%) – A, and
B.the Respondent shall receive a sum equal to (I x 51%) – B.
6.SUPERANNUATION
(a)Paragraphs 6(a) – 6(f) (inclusive) of this Order are binding on Z Company, the Trustee of Super Fund 1, account number …09 (‘the Fund’) and it is declared that these Orders are made in accordance with s90XT(1)(a) of the Family Law Act1975 (Cth).
(b)Pursuant to s 90XT(4) of the Family Law Act1975 (Cth) the base amount allocated to Ms Seward (the Applicant) out of the interest of the husband, Mr Seward (the Respondent) in the fund is $67,155 (“the base amount”).
(c)In accordance with s 90XT (1)(a) of the Family Law Act 1975 (Cth) whenever the Trustee of the Fund makes a splittable payment from the interest of the Respondent in the fund the Applicant shall be entitled to be paid an amount calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations2001 (Cth) (“the Regulations”) using the base amount and there be a corresponding reduction in the entitlement of the person to whom the splittable payment would have been made but for this order.
(d)These Orders have effect from the operative time and the operative time is the fourth (4th) business day after the day on which the final sealed Orders are served upon the Trustee.
(e)Until the Trustee of the Fund has effected the splittable payment in favour of the Applicant pursuant to Order 6(b) herein the Trustee of the said Fund, the Respondent, his personal representatives or any other persons acting on his or their behalf be and are hereby restrained from disposing of all or any amount payable to the Respondent and/or his personal representatives received by or held in trust for the benefit of him or them.
(f)A sealed copy of these Orders be served by the solicitors for the Applicant upon the Trustee of the fund within fourteen (14) days of the date of this Order.
7.OTHER PROPERTY
(a)From the date of this Order, the Respondent shall transfer to the Applicant and where necessary, transfer to her any right, title or interest he may have in the following:-
(i)a Motor Vehicle 1;
(ii)all chattels in the Applicant’s possession (including household furniture and effects formerly used by the parties jointly but now in the possession or control of the Applicant);
(iii)all savings, investments and shareholding(s) held by the Applicant or registered in her sole name;
(iv)the AA Company investment held in trust by Andrea Trezise, Barrister & Solicitor; and
(v)the lawnmower;
to the intent that the Applicant shall be the sole and absolute owner thereof.
(b)The Applicant shall transfer to the Respondent any right, title or interest she may have in the following:-
(i)Motor Vehicle 2;
(ii)all chattels in the Respondent’s possession (including household furniture and effects formerly used by the parties jointly but now in the possession or control of the Respondent);
(iii)all the Respondent’s tools & equipment listed in the document annexed hereto and marked with the letter “A”, save and except for the lawnmower; and
(iv)all savings, investments and shareholding(s) held by the Respondent or registered in his sole name;
to the intent that the Respondent shall be the sole and absolute owner thereof.
8.LIBERTY TO APPLY
(a)The parties have liberty to apply in relation to the implementation of this Order.
Annexure “A”
Respondent/Husband Tools & Equipment Item Value Motor Vehicle 3 22,000 Motor Vehicle 4 3,500 Motor Vehicle 5 750 Garden Tools 300 Aluminium Ladders 500 Miscellaneous Hand Tools 300 Workshop Bench 450 Gun Safe – Compliant 350 Shot Gun 120 Gun Safe - Non Compliant 50 Ice Box 120 Tree Saw 180 Grass Trimmer 120 Grinder 450 Panel Saw 1,800 Large Saw 400 Lawn Mower400Tool Chests 2,750 Hand Tools 800 Furniture 425 Cement Mixer 350 Wheel Barrows 120 Furniture 1,600 Total 37,835
37,435Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE TURNBULL
Overview
These are property proceedings initiated by Ms Seward (‘the Wife’) on 9 November 2022. At trial she sought an equal division of the parties’ assets (including superannuation). Mr Seward (‘the Husband’) sought a 60/40 division of the parties’ non-superannuation assets in his favour, and an equalisation of the parties’ superannuation interests.
Facts and Chronology
The Wife was born in 1961 and is 62 years of age. She is self-employed as a domestic worker.[1]
[1] Affidavit of Ms Seward, filed 30 October 2023 ‘Wife’s affidavit’ [8].
The Husband was also born in 1961, is currently 61 years of age and is self-employed.[2] The Husband is a qualified tradesperson for Y Pty Ltd trading as T Company (‘the company’).[3]
[2] Affidavit of Mr Seward, filed 31 October 2023 ‘Husband’s affidavit’ [3].
[3] Husband’s affidavit (n2) [4].
At the commencement of cohabitation in 1988, the parties moved into one of the BB Street homes owned by the Husband.[4] The parties married in 1989.[5]
[4] Wife’s affidavit (n1) [13].
[5] Ibid [3].
The Wife was employed as a hospitality worker at CC Business. Her possessions were savings of $25,000 and Motor Vehicle 6 valued at $5,000.[6] The Wife accepted that the Husband held 3 properties in his name all purchased in 1988:[7]
(a)DD Street, Town EE (the Town EE property’) — purchased for $25,000;[8]
(b)FF Street, Town EE (‘the FF Street property’) — purchased for $10,000;[9]and
(c)BB Street, Town GG (‘the BB Street properties’) — purchased for $82,000.[10] This property was encumbered by a mortgage of $57,000.
[6] Ibid [10] – [11].
[7] During cross-examination the Wife accepted that the Husband held three properties in his name at cohabitation – and that she paid $20,000 to the Husband to reduce the mortgage on the BB Street property.
[8] Exhibit W3.
[9] Exhibit W3.
[10] Wife’s affidavit (n1) [13]. Exhibit W3 established the consideration to be $82,000.
The Wife claimed that she contributed to the purchase of the BB Street properties by paying the Husband $20,000 — which he used to pay down the mortgage. She also purchased $5,000 worth of furniture.[11] At a minimum, the Wife did invest her savings (which at cohabitation the Husband asserted was $25,000) into the BB Street property by way of furniture and furnishings.[12]
[11] Trial: cross examination.
[12] Husband’s affidavit (n2) [35].
The Husband also held an interest in HH Company, at the commencement of cohabitation, which he sold in 1991 for $50,000, netting $44,000.[13] The Husband’s position was that he invested $50,000 of his plant and equipment into HH Company in 1987 and was brought out for the same amount.[14] There was no evidence of the valuation of HH Company at the time of cohabitation, but given the purchase price, I accept that HH Company was probably worth what it was ultimately sold for in 1991.
[13] Ibid [29]. Exhibit H3 confirmed that the Husband sold his interest for that amount less the vendor’s loan. The Husband said that there was no such loan.
[14] Husband’s affidavit (n2) [36]-[39].
There are two adult children of the relationship, now aged 30 and 29.[15] The Husband agreed that the Wife was the primary homemaker during the relationship, whist he was the primary breadwinner. The parties agreed on this division of labour early in the relationship.[16] Both parties accepted that the other worked very hard during the relationship.
[15] Wife’s affidavit (n1) [6].
[16] The Wife under cross-examination.
In 1989, the parties sold the BB Street homes for approximately $120,000. They then purchased KK Street, Town LL — upon which homes were developed before it was sold. They also purchased MM Street, Town NN for approximately $130,000 with the assistance of a small mortgage[17] — developed and later sold in 1994. They then purchased land at OO Street, Town LL — upon which they built a home which was later sold.[18] The Husband was deeply involved in the development and building on all these properties.
[17] Wife’s affidavit (n1) [15].
[18] Ibid [17].
Later the parties purchased B Street, Town C for approximately $170,000 and sold the OO Street property.[19] The Husband’s position was that he caused the matrimonial home to be constructed upon the Town C property. In addition, he said he performed almost all the maintenance around the property[20] although he conceded that the Wife also contributed to the outdoor maintenance.[21]
[19] Ibid [19].
[20] Husband’s affidavit (n2) [66]-[69], [71].
[21] Ibid [72].
Whilst living at the Town C property the parties started the company. The Husband ran the company from the home, working with machines until such time as he was injured. He then worked as a sales representative, whilst the Wife attended to the book work, invoicing, and debt recovery.[22] Both parties are Directors of the company and the Wife is the Secretary.[23] The Husband asserted that he built the business from the ground up. He derives a gross annual income of approximately $69,193 from the company, although the Wife contended that his income is higher. The parties have equal shares in the company and both are its employees.[24] The Wife was paid a wage of $200 per week from the company until 2020. The Husband agreed that the Wife assisted with administrative duties when the company was up and running.[25]
[22] Wife’s affidavit (n1) [20].
[23] Husband’s affidavit (n2) [6].
[24] Ibid [44]-[48].
[25] Ibid [52].
The Wife said her role increased in the company after the Husband suffered an injury,[26] and particularly after he suffered another significant injury.[27] The Husband’s injuries prompted the parties to end one part of the business and concentrate on others.[28]
[26] Wife’s affidavit (n1) [21].
[27] Ibid [22]. He had a serious accident.
[28] Ibid [23].
In 2002 the parties moved into the house constructed on the Town C property.[29]
[29] Ibid [24].
Later the Husband purchased several properties situated interstate:
(d)PP Street, Town QQ, NSW;
(e)RR Street, Town SS, WA;
(f)TT Street, Town UU;[30] and
(g)J Street, Town K, QLD.
[30] Husband’s affidavit (n1) [15].
The Wife stated that she did not want anything to do with the purchase of these properties. The Town SS and Town UU properties have now been sold at a substantial loss.[31] The Husband said that he retained the rental income from the interstate properties, but this was used to repay the mortgages secured over them.[32]
[31] Wife’s affidavit (n1) [28] & [53].
[32] Husband’s affidavit (n2) [57].
In 2010 the Wife commenced a business — ‘VV Business’.[33] The Husband said that the Wife retained all income from this operation.[34] The balance sheet evidences that the Wife has a bank account containing $172,124 — sourced primarily from the income received from her business.
[33] Wife’s affidavit (n1) [27].
[34] Husband’s affidavit (n2) [56].
The Wife claimed that the parties separated in January 2021 when she wrote the Husband a letter confirming that the marriage was over. Under cross examination, the Husband stated that he believed the separation date to be January 2022 because the Wife continued to undertake domestic tasks for him until that date. The parties still live in the Town C property.[35] The property is mortgaged, securing a debt of $383,893 ($80,000 of which is a business loan related to the company).[36] The Husband pays all expenses relating to that property including rates, water, insurance electricity and bills.[37]
[35] Wife’s affidavit (n1) [7]. Husband’s affidavit (n2) [60]: Separation occurred 1 January 2022.
[36] Husband’s affidavit (n2) [21] – [22].
[37] Ibid [59] – [60].
The Wife commenced proceedings on 22 November 2022. On 31 January 2023 orders were made for the sale of the Town QQ, Town SS, Town UU and Town K properties. The first three have sold whilst the Town K property remains on the market for sale.[38] The rent received from the Town K property is paid towards the mortgage.[39]
[38] Ibid [17].
[39] Ibid [5].
The trial commenced on 8 November 2023 and concluded the next day.
Joint balance Sheet
The agreed assets, liabilities and superannuation was tendered in document exhibited as J1—extracted here.
Assets
1. Town C (offers over $1,300,000.00) TBA 2. Town K property ($600,000.00) TBA 3. AA Company $ 20,897.81 (W) 4. Motor Vehicle 1 $ 7,000.00 (W) 5. Motor Vehicle 7 $ 2,700.00 (H) 6. Motor Vehicle 2 $ 7,500.00 (H) 7. Lawnmower $400.00 (W) 8. Assets to be retained by Husband $ 37,435.00 (H) 9. Joint bank accounts:
ANZ – close
$ 44.00 – ½ each
WW Company ($1,513.00 – to be used re Town K costs pending sale$ 22.00 (W)
$ 22.00 (H)
NIL (W)
NIL (H)10. Husband’s bank accounts $ 6,769.00 (H) 11. Shareholdings $ 2,369.00 (H) 12. Wife’s business/bank accounts $ 172,124.00 (W) 13. T Company ($79,674.00 including plant & equipment to be sold $40,520.00 and 145 Financial Valuation $39,154.00 Directors Loans of $52,732.00 (30th June 2023) if they can be
repaid)TBA Total - Assets $257,238.81 + TBA’s above
W keeping $200,443.81 H keeping $56,795.00Liabilities
14. S Bank (Town K) $ 388,000.00 15. H Company (Town C – business loan) $ 80,320.00 16. H Company (Town C – home loan) $ 303,300.00 17. Cost of sale – Town C E $ 30,000.00 18. Cost of sale – Town K E $ 15,000.00 Total $ 816,620.00 Superannuation
19. Super Fund 1 (W) $ 5,544.00 20. Super Fund 1 (H) $ 132,590.00 21. Y Pty Ltd – unpaid super (30.06.2023) (H) $ 7,265.00 Total $ 145,339.00
The parties agreed that their superannuation interests should be divided equally, resulting in a split to the Wife from the Husband’s larger fund of $67,155.00.[40] I am satisfied that their agreement results in a just and equitable division of their superannuation interests.
[40] The Trustee had not been provided with procedural fairness at the time of trial, however the Court received such by email on 17 November 2023 from Ms Trezise for the Applicant.
Evidence
Both parties gave evidence and were cross-examined, with each making appropriate concessions and answering questions directly. They presented as hard-working people who strived to build an asset base for the benefit of their family. I commend them for their years of effort.
The Applicant relied upon
·Her Further Amended Initiating Application filed 30 October 2023;
·Her affidavit filed 30 October 2023;
·Her updated financial statement filed 30 October 2023; and
·Exhibits W1-W5.[41]
[41] ‘W1’ – p1-19 and 82-161 Husband’s third tender bundle. ‘W2’ – Wife’s tax returns for years 2021 and 2022. ‘W3’ pp 40, 49, 58 of Husband’s first tender bundle. ‘W4’ – p 82-162 Husband’s third tender bundle. ‘W5’ – ANZ bank statement.
The Respondent relied upon
·His Amended Response to Final Orders filed 31 October 2023;
·His affidavit filed 31 October 2023;
·His updated financial statement filed 31 October 2023; and
·Exhibits H1-H4.[42]
[42] ‘H1’ – p214-218 Husband’s first tender bundle. ‘H2’ – p 220-231 Husband’s first tender bundle. ‘H3’ – p67-71 Husband’s first tender bundle. ‘H4’ – p31-82 Husband’s third tender bundle.
The Wife filed one tender bundle and the Husband filed three. Only those documents that were tendered as exhibits from those bundles were ultimately relied upon.
Standard of Proof
I note briefly, before continuing, that all facts in issue in these proceedings must be proved on the balance of probabilities. A fact in issue is 'proved' if I am reasonably satisfied, on the evidence, that it is more likely than not that the fact existed or occurred in the manner ultimately determined.
Dixon J, as he then was, also remarked upon the standard of proof for civil proceedings in Briginshaw v Briginshaw (1938) 60 CLR 336, which remain relevant and authoritative:
The truth is that, when the law requires the proof of any fact, the tribunal must feel an actual persuasion of its occurrence or existence before it can be found. It cannot be found as a result of a mere mechanical comparison of probabilities independently of any belief in its reality. No doubt an opinion that a state of facts exists may be held according to indefinite gradations of certainty; and this has led to attempts to define exactly the certainty required by the law for various purposes. Fortunately, however, at common law no third standard of persuasion was definitely developed. Except upon criminal issues to be proved by the prosecution, it is enough that the affirmative of an allegation is made out to the reasonable satisfaction of the tribunal. But reasonable satisfaction is not a state of mind that is attained or established independently of the nature and consequence of the fact or facts to be proved. The seriousness of an allegation made, the inherent unlikelihood of an occurrence of a given description, or the gravity of the consequences flowing from a particular finding are considerations which must affect the answer to the question whether the issue has been proved to the reasonable satisfaction of the tribunal.
I must ground my assessment of the issues in dispute on facts, of which I am persuaded, on the balance of probabilities.
Issues for Determination
Issue 1: The impact of the Husband’s contribution of three properties and an interest in a business at the commencement of the relationship.
The evidence established that the Husband introduced three properties to the relationship — all purchased in 1988. The equity in those properties was approximately $60,000 although the Wife said that she contributed $20,000 to the mortgage secured against the BB Street properties and $5,000 on furniture. The Husband stated that the Wife spent $25,000 entirely on furniture. Either way, it was an important financial contribution. The Husband also held an interest in HH Company, which he said was redeemed, with a payout of $50,000 in 1991.
Mr Kitto, for the Husband, submitted that the introduction of these assets was an important contribution, that created the building block for the asset pool now to be divided. Ms Trezise, for the Wife, submitted that the impact of these contributions has eroded over time given the significant contributions made by her client over a very long marriage.
Issue 2: The impact of the Husband’s contribution of $223,000 received by him from workers compensation payments.
The Wife conceded that the Husband received two compensation payments for workplace injuries — $44,000[43] in 2003 and $179,000 in or about 2010.[44] . The Wife stated in her affidavit:
21.[Mr Seward] had a very bad accident at work approximately four (4) years after the business commenced. During that period that [Mr Seward] was recovering, I kept the business going by taking over the sales, driving [Mr Seward] around to customers, [delivering goods] in addition to doing the bookwork, invoicing, and debt collection. In addition, I was looking after the family being the homemaker and child carer.
22.Approximately two (2) years later, [Mr Seward] had another [serious] work accident. I looked after [Mr Seward] during his recovery for over a period of approximately twelve (12) months. During that period, I continued to deliver [goods], deal with customers, suppliers, bookwork, bills, and payments. In addition, I did all the home cleaning, cooking, washing, and running kids around. I was physically and mentally exhausted during this period.
[43] The Husband confirmed in his oral evidence that this was the net amount he received.
[44] Husband’s affidavit (n2) [77].
Mr Kitto submitted that the combined payout of $223,000 was a further significant contribution to the marriage, that would not have been received but for the Husband sustaining serious injuries.
Ms Trezise submitted that the impact of these payments has also been eroded by virtue of the significant contributions made by the Wife during the relationship and the contributions she made in assisting the Husband with his work — particularly in the 12 – 24 months following the second injury.
Issue 3: Whether the Husband’s income is higher than he claims and whether he had the capacity to pay the mortgage on the [BB Street] properties rather than allowing the mortgage to fall into arrears of approximately $9,726.43.[45]
[45] Ibid [61].
The Husband claimed that his capacity to earn income from his business has reduced because of the loss of a good client and his poor health:
80.I eventually moved into sales as a consequence of a lack of mobility and strength and have been doing all of the selling in relation to the Company since in or about 2010.
81.I also do some of the deliveries of the Company's products.
82.However, I say that the heavy lifting involved in the work connected with the Company has affected my back.
83. I do experience back pain on a daily basis, which at times can be debilitating.
84.My doctor (ie. [Dr XX]) has now prescribed me the following medications for my back pain: -
(a) [1] (which l take one […] tablet per day of a night)
(b)[2] (which I take two tablets per day when required during the day)
(c) [3] (which I take three […] tablets per day.
85.I started on these medications last month but prior to that I took [pain killers] (which are not prescribed), which I have taken for a number of years.
86. I take the prescribed medications as an anti-inflamatory and for pain relief.
87.The tablets do make drowsy and so in the event that I secure alternate employment, I will need to factor in that I cannot drive when I am drowsy and this will dictate what employment I will be able to become involved in.
He also said that his business will be unviable once the matrimonial home sells:
92.I say that as I operate the Company from the Home that when it is sold I will have to relocate the Company at a substantial cost.
93.However, as stated above, I have enquired about leasing a shed similar in size and characteristics to the shed that the Company currently operates out of at the Home and the approximate annual rent is $38,500 plus outgoings, which would in effect make the Company unviable, hence seeking an order for the sale of the Company. (emphasis in original)
Ms Trezise submitted that the Husband continues to have the capacity to meet the mortgage payments and other outgoings and he will always be able to create an income in the amount he presently enjoys. The Husband’s Financial Statement evidenced an income of $69,000,[46] whilst the Wife earned $18,200 in the 2021 financial year and $19,626 in 2022.[47]
Issue 4: Whether the Husband should be solely responsible for the outgoings relating to the properties and the Company until they are sold.
[46] Financial Statement of Mr Seward, filed 31 October 2023 (‘Husband’s financial statement’).
[47] Exhibit W2 – Wife’s taxation returns.
The Wife sought orders that the Husband remain responsible for all the outgoings — including mortgage payments — relating to the Town C and Town K properties, until such time they are sold. The Wife contended that the Husband has always made these payments from his income (including the rent from the Town K properties) and that he has the capacity to continue such payments.
The Husband claimed that his income has reduced and that the Wife has sufficient income and savings to meet half of these outgoings until the properties are sold.
Terms of the orders sought.
The framework for the Orders sought was exhibited as J2 — noting the disagreement in relation to paragraphs 3, 6, 11 and 12 and 20 of that document.[48] That framework is largely adopted for the orders I set out at the commencement of these Reasons.
Property adjustment: The Law
[48] Noting that paragraph 20 relates to costs. The orders in J2 have been extracted and incorporated into the final orders with different numbering and modification.
Property proceedings under Part VIII and the approach in Hickey and Stanford
Part VIII of the Act governs the scope of the Court’s power with respect to property and financial matters. The Court’s powers under ss 79(1) — as ‘very wide discretion[s]’ — must be exercised according to principled reason,[49] and are constrained by a number of factors to which the Court must direct itself.[50] To this end a typical approach, which I intend to follow, is that set out in Hickey & Hickey [2003] FamCA 395 and Stanford & Stanford (2012) 247 CLR 108,[51] comprising four steps:
(1)identify the parties’ existing legal and equitable property interests, liabilities, and financial resources at the time of trial, and then determine whether it is just and equitable to adjust their interests pursuant to s 79(1);[52]
(2)consider the parties’ contributions under s 79(4)(a)–(c);
(3)consider the factors under s 79(4)(d)–(g) including, by virtue of s 79(4)(e), the ‘subjective considerations’ under s 75(2) insofar as they are relevant;[53] and then
(4)‘stand back’ to consider the justice and equity of the actual terms of order proposed to be made.[54]
[49] Stanford & Stanford (2012) 247 CLR 108, 122 [41].
[50] Mallet & Mallet (1984) 156 CLR 605, 608 (Gibbs CJ), noting that the ‘very wide discretion to make such order as [the court] thinks fit’ is conferred only ‘when [the court] is satisfied that it is just and equitable that an order should be made’, with his Honour further stating that ‘there are some broad principles to which the court is required to give effect, and some circumstances which it is required to take into account’ in making an order, and with Dawson J (at 647) referring to the just and equitable requirement as the ‘overriding requirement’.
[51]Hickey & Hickey [2003] FamCA 395, [39], noting the remarks of the Full Court in Norman & Norman [2010] FamCAFC 66, [60], at which their Honours state that ‘[i]t is the mandatory legislative imperative (to reach a conclusion that is just and equitable) that drives the ultimate result’ and that ‘[f]or all its usefulness and merit [the four—step approach] merely illuminates the path to the ultimate result’. I also note the three ‘fundamental propositions’ set out in Stanford & Stanford (n48) 120 [36], as alternative guidance for trial judges, ultimately towards the same objective as the approach in Hickey, namely to cover off on all necessary points and criteria in pt VIII.
[52] Stanford & Stanford (n49) 120 [37], noting the explanatory remarks in Lotta & Lotta [2017] FamCA 50, [283]–[284], importantly that ‘[s]uch a consideration should not be guided by an assumption that the parties’ rights to or interests in property are or should be different from those that then exist’ and that ‘the court needs to conclude that it would be unjust or unfair to leave property rights intact under s 79(2) of the Act’.
[53] Lotta & Lotta (n52) [289].
[54] Teal & Teal [2010] FamCAFC 120, [70], referring to Phillips & Phillips [2002] FamCA 350 in which, at [68], their Honours discuss the importance of considering the ‘real impact’ of an order to assess whether the result is just and equitable.
Identifying the parties' legal and equitable interests
The net non-superannuation pool is as extracted at paragraph 20 of these Reasons. The value of the net pool cannot be determined until the properties and the company sell. The parties have agreed upon agents to sell the properties and the company, and upon an accountant to calculate any tax effect of the sale of these assets.
By reference to the parties’ existing legal and equitable property interests, is it just and equitable to make an order pursuant to s 79?
As foreshadowed above, the law requires that any interference with regard to the legal and equitable interests of the parties' adheres to principled reason.[55] Justice and equity, with respect to property settlement in s 79(2), does not admit of exhaustive definition and it is ‘not possible to chart its metes and bounds’.[56] The principles contained within the Act also accommodate ‘stated or unstated assumptions and agreements about property interests during the continuance of the marriage’.[57] It is just and equitable, according to Stanford, for a Court to make a property settlement order if such agreements or assumptions with respect to property interests during the marriage have been brought to an end, which usually occurs with the end of the marriage or relationship.
[55] Stanford & Stanford (n49) 121 [41].
[56] Ibid 120 [36].
[57] Ibid 122 [41].
Both parties seek a property order. They own real estate, cash and other property as well as holding liabilities. They both own superannuation and agree on the amount of the Husband’s superannuation that will be split to the Wife’s fund. The assumptions and agreements that the parties' held during their relationship as to the arrangement of their property interests and liabilities, were ended when the parties' separated. They both made significant contributions towards the accumulation of their assets. It is just and equitable for there to be a property order in this case.
Section 79(4)(a)–(c) — assessment of contributions
In assessing the parties’ contributions I must ‘weigh and assess the contributions of all kinds and from all sources made by each of the parties throughout the period of their cohabitation’.[58] A trial judge must not disproportionately account for one contribution over and above the ‘myriad of other contributions’ made during the relationship.[59] This means that any contribution, whatever its size or significance, should not be weighed against the other ‘miscellany’ of contributions made, but instead should be assessed as one of those myriad contributions.[60] In essence, as expressed by Harper J in Dovgan & Dovgan [2021] FamCA 306, the introduction of property by one party to a long relationships must be assessed holistically: ‘all contributions must be weighed collectively and so it is an error to segment or compartmentalise the various contributions and weigh one against the remainder’.[61]
[58] Jabour & Jabour [2019] FamCAFC 78, [60].
[59] Ibid [43].
[60] Ibid [59], [73].
[61] Dovgan & Dovgan [2021] FamCA 306, [347].
Recently, the Full Court in Gadhavi & Gadhavi [2023] FedCFamC1A 117 at [30], confirmed that the Court cannot overlook the use and impact of an asset introduced into the relationship by a party:
30.It was not in dispute that the primary judge applied proper principle in determining that the assessment of the impact of the Husband's initial contributions could only properly occur after she assessed "the totality of the parties' contribution—based entitlement over the entirety of the marriage and post-separation" (at [210]).
31.In that respect, in Pierce v Pierce (1999) FLC 92—844 ("Pierce"), the Full Court stated at [28]:
…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. (Emphasis added)
32.To similar effect, in Cabbell & Cabbell [2009] FamCAFC 205, the Full Court stated at [54] that in considering the parties' contributions, it is necessary to trace the use of those assets and consider the foundation that they laid for the subsequent accumulation of wealth by the parties.
33.That is, in evaluating the parties' contributions, it was necessary for the primary judge to have regard to the context of the Husband's initial contribution and specifically, to the opportunity that initial contribution created and the impact of that initial contribution on the subsequent wealth of the parties as at the date of the hearing. (Emphasis added)
The Court must also consider the parties' non-financial contributions, including those as homemaker and parent, and not give such contributions token weight. In Dawes & Dawes [1989] FamCA 71 (‘Dawes’), the Full Court stated:
73.Although it is difficult, as it always is in such cases, to put one's finger squarely on what led his Honour to so undervalue the Wife's contribution, we think that one significant matter which did so was that he failed to give any weight to the fact that the Wife's performance of her role as homemaker and parent during the 30 years of cohabitation was not just a contribution under s.79(4)(c) (which he subsequently recognized to some degree) but was also a significant contribution under s.79(4)(b). That point was made by the Full Court (Nicholson, C.J., Murray and Buckley, JJ.) in In the Marriage of Napthali (1988) 13 Fam LR 146 at p 151, where their Honours said:—
151.Turning now to the second ground of appeal, (which was that 'the court erred in law in failing to take into account contributions made by the Wife during the marriage as homemaker and parent') it is apparent that nowhere in her Honour's judgment does she consider the contribution of the Wife to the business assets as a home—maker and parent. It is clear that the Wife did perform this role and nowhere in the evidence or in the submissions was any criticism directed at her capacities in this regard. It is to be noted that in Mallet v. Mallet [1984] HCA 21; (1984) 9 Fam LR 449; (1984) FLC 91—507, the High Court whilst rejecting the proposition of a presumption of equality, approved statements by this Court that the purpose of s 79(4)(b) is to give recognition to the position of the house Wife who by her attention to the home and the children frees her Husband to earn income and acquire assets and also approved the proposition that the contribution made by the Wife as a home—maker and parent should be recognised not in a token way but in a substantial way: see Gibbs C.J. at Fam LR 451; FLC 79,111; Mason J. at Fam LR 461—2; FLC 119—20.”[62] (Emphasis added)
[62] Dawes & Dawes [1989] FamCA 71, [73] (Lindenmayer, Strauss and Cohen JJ).
In relation to injury payments, the Full Court in Aleksovski v Alexsovski [1996] FamCA 111:
46.In our view, having regard to the facts of this case, his Honour was entirely correct in that the Wife’s damages award and, in particular, that portion of it which related to pain and suffering, should be regarded as contribution by her to the marriage and to the family.
47.Similarly, that portion of a damages award which relates to economic loss, representing income lost during the marriage or period of cohabitation may also be regarded as a contribution by the party who has suffered the loss.
…
52.In our opinion, in most cases, a damages verdict arising from a personal injury claim, whenever received, is a contribution by the party who suffered the injury. It should not be considered in isolation, for the reason that each and every contribution, which each of the parties makes to the relationship, must be weighed and considered at the same time.[63]
[63] Aleksovski v Alexsovski [1996] FamCA 111 [46], [47], [52].
I shall have regard to all these principles when assessing the parties' contributions.
Non-superannuation assets
Section 79(4)(a)–(c) — contributions
Section 79(4)(a): direct financial contributions
Both parties accepted that they each worked very hard during their 33-year relationship. At the commencement of the relationship, the parties reached an agreement that the Husband would be the primary breadwinner and that the Wife would be primarily responsible for the homemaking duties and raising children — an agreement to which they adhered throughout the marriage. That is not to say that the Wife did not contribute via paid employment. She worked for CC Company as a hospitality worker, before having children. In 2010 the Wife commenced a business and throughout the years of its operation was able to accumulate significant savings, forming part of the amount of $172,124 that is included in the balance sheet.[64] The Wife also worked in the company for several years undertaking administrative and clerical duties.[65] That role increased in the 12 months following the Husband’s second injury:
22.Approximately two (2) years later, [Mr Seward] had another [serious] work accident. I looked after [Mr Seward] during his recovery for over a period of approximately twelve (12) months. During that period, I continued to deliver [goods], deal with customers, suppliers, bookwork, bills, and payments. In addition, I did all the home cleaning, cooking, washing, and running kids around. I was physically and mentally exhausted during this period.
[64] Item 12 of the balance sheet extracted earlier in these Reasons — not all the monies in that account are from the business earnings. Payment of superannuation and government payments received during COVID form part of those funds.
[65] Wife’s affidavit (n1) [20] – [22].
The Husband did introduce property and a business to the relationship, holding equity of approximately $110,000. At that time, the Wife contributed $25,000, that was either used to pay down a mortgage and/or to purchase furniture. The introduction of the property and the business were important contributions that provided the parties with the cornerstone to enable the purchase of other properties and to secure a loan for the company.[66]
[66] The business loan for the Husband’s business is secured against the Town C property.
The Husband also made a significant financial contribution of approximately $223,000, being compensation monies he received for injuries. His second injury was assessed as a major injury[67] and led to the Husband changing his business.[68] Those monies were applied to the construction costs of the matrimonial home and the purchase of the interstate properties.[69] The Husband agreed that the Wife did assist him with his work for 12 months following his second injury. The monies were received in two lump sums, but there was no evidence as to what component of each payment was for pain and suffering, lost income and/or for the Wife’s efforts in assisting him pursuant to the principles set out in Griffiths & Kerkemeyer [1977] HCA 45.[70] It is clear, however, that those payments would not have been received but for the Husband suffering injuries, and I place weight on this important contribution.
[67] Husband’s affidavit (n2) [78].
[68] Wife’s affidavit (n1) [23].
[69] Husband’s affidavit (n2) [76], [77].
[70] Griffiths & Kerkemeyer [1977] HCA 45.
Since separation both parties have continued to earn income from their respective business’. There is an issue as to whether the Husband should continue to make the payments of outgoings for the properties until they are sold. As will become clear, I am satisfied that the Husband has always made these payments and earns sufficient income to continue such payments.[71] Further, the business loan is secured against the Town C property. As the Husband will continue to operate the business until it is sold, and earns a higher income than the Wife, it is appropriate that he pay the loan associated with that property. Such payments are an ongoing contribution of the Husband — noting that he missed three months of mortgage payments relating to the Town K property, creating arears of $9,726.53. The Husband continues to meet the outgoings for the various properties and his business. The Wife’s earnings have been largely preserved in the bank account detailed in the balance sheet, now holding $172,124.
[71] See paragraphs 63-65 of these Reasons.
I assess that the Husband’s direct financial contributions to the marriage were greater than the Wife’s.
Section 79(4)(b): direct and indirect non-financial contributions to property
Both parties made indirect contributions to the maintenance of the properties purchased during the relationship, particularly those situated in Tasmania. The Husband was heavily involved in the building of dwellings on several of the properties that the parties owned throughout the years. The Husband agrees that the Wife assisted with the landscaping of the KK Street property.[72]
[72] Husband’s affidavit (n2) [51].
The Husband’s construction work was an important contribution; but that is not to diminish the Wife’s significant effort in looking after the children and attending to all the household chores in difficult circumstances — including living in a small flat with two small boys’ whilst the home on the Town C property was being built.[73]
[73] Wife’s affidavit (n1) [19].
I find that the parties worked as a team to develop the various properties purchased during the relationship — particularly those purchased in Tasmania.
Section 79(4)(c):contributions to the welfare of the family, including contributions as homemaker or parent
The Husband agreed that the Wife was primarily responsible for all the domestic chores and caring for the children. This demarcation of responsibilities was agreed around the time the parties’ commenced cohabitation. The Wife’s contributions as a homemaker were so significant that the Husband doubted that the parties had separated in 2021 — when the Wife advised him via a letter that the marriage was over — because it was not until a year later that the Wife stopped undertaking all the domestic chores for him. The Wife’s contributions in this regard were significant and they enabled the Husband to contribute as detailed in these Reasons.
Conclusion regarding the parties’ contributions
Considering the extensive contributions made by two very hard-working people throughout 33 years of marriage, I consider that the parties’ contributions be assessed 53%/47% in favour of the Husband. This pays regard to the important contributions that the Husband made by way of his injury payments and the introduction of valuable assets into the relationship — valued in total at approximately $333,000 in the context of a net non-superannuation asset pool valued at approximately $1,420,000.[74] I also take into account the significant contributions of the Wife as an income earner and the primary homemaker over a long marriage. All those contributions, assessed as a whole, make up the myriad of contributions of both parties over a long relationship. On the assumption that the net asset pool is ultimately valued at $1,420,000[75] then a 53% adjustment to the Husband will result in him receiving assets valued at $752,600 and the Wife $667,400 — a differential of $85,200.
[74] J1 evidences a net pool valued at 1,420,618 provided the expected sale prices for the Town C and Town K properties and the business are realised.
[75] The eventual value of the net pool once the balance proceeds of sale of the properties and the business are known, may be different to the figure stated. The best evidence I have as to the potential net value of the pool is found in J1.
Section 79(4)(d)–(g), including s 75(2) — other factors
It is not the task of a Court with jurisdiction under Part VIII to engage in social engineering under s 79(4)(d)–(g) — that is, to serve any ‘moral’ or ‘charitable’ (but non-legal) ends outside the bounds of s 79.[76] The Full Court in Beck & Beck (No 2) (1983) FLC 91-318 explained that
[i]t is the financial consequences of all of the relevant matters that are to be taken into account and the section is so drafted to effect this purpose while excluding matters of conduct in a moral or non-financial sense.[77]
[76] Clauson & Clauson (1995) FLC 92-595, 81,912.
[77] Beck & Beck (No 2) (1983) FLC 91-318 78,167–78,168.
Whether, in relation to maintenance or property settlement, the Court cannot assess or account for the s75(2) (or s90SF(3)) factors without satisfying itself that it bears upon a party’s financial circumstances.[78]
[78] Jacobson & Jacobson (1989) FLC 92-003, 77,178, at which Nygh J remarks that there ‘cannot be any doubling up as between the adjustment in capital position of the parties, which is implicit in sec 75(2) factors [in the context of s 79],and making provision for the periodic needs of a party who suffers from an inability to support [themselves] pursuant to sec 72 of the Act’. Both assessments, on his Honour’s remarks, require an assessment of the financial consequences of the factors considered. See also Sigley & Cullen (No 3) [2015] FamCA 825, [42], [105], as an example, in which Cronin J discusses the Applicant ’s health as it affected her academic studies, which in turn may have affected her employment prospects.
The term ‘earning capacity’ is defined as ‘a capacity to obtain income which could be used to provide maintenance … and not merely as current income from personal exertion or from the use of personal skills.’[79]
Section 79(4)(d): the effect of any proposed order upon the earning capacity of either party to the marriage
[79] Beck & Beck (1983) FLC 91-318, 78,166.
The Husband argued that the agreed orders will reduce his income earning capacity, because he operates his business from the matrimonial home that will be sold, and to rent other premises with a large enough shed would make his business unviable. He also claimed that he has lost a significant client and suffers from a back injury.
Under cross-examination, the Husband was taken to his personal bank statements and the business bank statements[80] for the company. This was done to explore his contention that he did not have the capacity to pay the mortgage relating to the Town K property for three months in mid-2023, and that he does not have the capacity to continue to meet the outgoings relating to the properties until they are sold.
[80] Exhibit W1.
The bank statements for 2023 establish:
(a)In the month of March 2023, the business account held approximately $24,000 at the start and $6,000 at the end.[81] In that time he was paid 6 amounts of $1,535. His personal account held around $7,000 through that period[82] — into which he received one payment of $1,535.
(b)In the month of April 2023, the business account held approximately $6,000 at the start and $22,600 at the end.[83] In that time he was paid 3 amounts of $1,535. His personal account held around $7,200 at the start of April and $3,200 until June[84] — into which he received one payment of $1,535.
(c)In the month of May 2023, the business account held approximately $22,600 at the start and $21,500 at the end.[85] In that time he was paid 4 amounts of $1,535. As stated, his personal account received one payment of $1,535.
(d)In the month of June 2023, the business account held approximately $21,500 at the start and $18,800 at the end.[86] In that time he was paid 8 amounts of $1,535 (including 4 amounts on 30 June). His personal account for mid-June to mid-August held around $3,200 at the start and $10,200 at the end[87] — into which he received six payments of $1,535 (4 around 30 June).
(e)In the month of July 2023, the business account held approximately $18,800 at the start and $5,100 at the end.[88] In that time he was paid 5 amounts of $1,535. As stated, his personal account received six payments of $1,535.
(f)In the month of August 2023, the business account held approximately $5,100 at the start and $13,900 at the end.[89] In that time he was paid 1 amount of $1,535. His personal account held around $10,200 from mid-august until mid-October, when it held $7,100[90] — into which he received no payments of $1,535.
(g)In the month of September 2023, the business account held approximately $13,900 at the start and $24,900 at the end.[91] In that time he was not paid any amount. As stated, his personal account also did not receive any payments during that period.[92]
[81] Ibid p113-115.
[82] Ibid p15 & 16.
[83] Ibid p113-115.
[84] Ibid p15 & 16.
[85] Ibid p113-115.
[86] Ibid p113-115.
[87] Ibid p15 & 16.
[88] Ibid p113-115.
[89] Ibid p113-115.
[90] Ibid p15 & 16.
[91] Ibid p113-115.
[92] Ibid p15 & 16.
The bank statements for the Husband and the business, evidence that he held adequate funds in each of his accounts to pay the mortgage for the Town K property in mid-2023. There was no reason for the mortgage to fall into arrears of $9,726.53 during that time.[93]
[93] Husband’s affidavit (n2) [62].
The statements also confirm that the Husband has continued to receive income from the business enabling him to pay business debts and pay himself a wage. There is a buffer of monies in each account for the whole of 2023. There is no corroborative evidence that he will not be able to continue to earn an income as evidenced in the bank statements.
In his Financial Statement, the Husband claimed that his income from the company is $1,330 per week ($69,160 per annum).[94] This seems consistent with the amounts paid to him from the business account.[95] There was no evidence produced by the Husband to support the contention that he will be physically unable to work in the years ahead or that his ability to earn income will not continue notwithstanding the imminent sale of his business. The Husband had the strength of character to continue to work and adapt his business after suffering significant workplace injuries. The Wife supported and assisted the Husband through this change. Given his industrious nature, his length of time in his industry and his proven ability to adapt, I have little doubt that the Husband will continue to work hard and earn income — as he has always done. Even though the Town C property will be sold, the Husband will still have to find accommodation and he may choose to look for a property from which he can operate his business. He also provided no corroborating evidence to support his claim that renting a shed to run his business would cost in the order of $36,000.[96]
[94] Husband’s financial statement (n46) [11].
[95] Counsel for the Wife did not provide a calculation of the exact amounts the Husband received from the business account over a financial year – noting that not all of the payments to him went into his personal bank account in 2023. The Husband also explained that some of the $1535 amounts were directed to mortgage payments. Adding the $1535 amounts together for part of a calendar year the figure is approximately $40,000.
[96] Husband’s affidavit (n2) [93].
I note that the proposed orders contemplate the Husband’s business being sold. This is his choice. The Wife is content for him to retain the assets of his business so that he can keep operating. Even if he chooses to sell his business, I infer from his years of experience in his industry, that he will still maintain his client connections — notwithstanding his uncorroborated claim that he recently lost a good client.[97] He is also worried that his pain medication may affect his driving and therefore potential employment. He brought no expert evidence to support this concern.[98] The Husband does not claim that he will lose the ability to sell goods if his business is sold — which, again, is the Husband’s choice. I am not satisfied that the order for the sale of the business and/or the sale of the Town C property will impact upon the Husband’s income earning capacity.
Section 79(4)(e): the matters referred to in subsection 75(2) so far as they are relevant
[97] Cross-examination of the Husband – he claimed he stopped working for ‘YY Company’ in mid-23.
[98] Ibid [84]- [87].
Section 75(2)(a): the age and state of health of each of the parties
The Wife is 62 years of age, and the Husband is 61. They have both worked very hard over a long period of time. The Husband claimed that his ability to earn income was impacted by his state of health and by the fact that his business would be sold because of the orders that will be made by this Court. The Wife contended that both parties can continue to work and, notwithstanding stated health problems,[99] there should be no adjustment as each party has the capacity to earn a reasonable income. Neither party produced any admissible evidence to prove that their incomes may be impacted by their state of their health. I have already found that the Husband can continue to receive income and even to continue with his business if he so chooses. Consequently, I am satisfied that both parties’ ability to earn income is not adversely impacted by their age not health. That said, I accept that both parties are in the final stages of their working lives.
[99] The Wife under cross-examination said that she was medicated for anxiety and depression. Husband’s affidavit (n2) [83]-[84].
The Husband’s income is approximately $69,000 per annum. The Wife’s evidence regarding her income was confusing. In her Financial Statement she states she has an income of $770 per week (approximately $40,040 per annum). Under cross-examination she said that her income was approximately $26,000 per annum — $13,000 from domestic work and $13,000 from work at ZZ Company. Her taxation returns, however, confirmed that her income was $18,200 in the 2021 financial year and $19,626 in the 2022 financial year.[100] What is clear is that the Wife earns less than the Husband. There is no evidence that the Wife can earn more from her business than she currently does.
Section 75(2)(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
[100] Exhibit W2.
As stated, both parties have the capacity to earn income, although the Husband’s income is higher than the Wife’s. Both parties will receive a cash sum as well as superannuation by virtue of the Orders I will make.
Section 75(2)(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 section is not relevant.
Section 75(2)(d): commitments of each of the parties necessary to enable them to support themselves and a child or another person that the party has a duty to maintain
Neither party claims that they are unable to support themselves from their income and resources. Neither has an obligation to support any other person.
Section 75(2)(e): the responsibilities of either parent to support any other person
This section is not relevant.
Section 75(2)(f): subject to s 75(3), the eligibility of either party for a pension, allowance or benefit under: (i) any law of the Commonwealth, of a State or Territory or of another country; or (ii) an superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside of Australia
This section is not relevant.
Section 75(2)(g): a standard of living that in all the circumstances is reasonable
Both parties will receive a cash sum and superannuation. Both parties have the capacity to earn income. Both parties should be able to maintain a reasonable standard of living into the future.
Section 75(2)(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 section is not relevant.
Section 75(2)(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 section is not relevant.
Section 75(2)(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
Both parties made significant contributions throughout a long relationship. They determined their primary responsibilities early in their marriage. The asset pool available to divide would not have been built without the hard work, dedication, support, and commitment of both parties.
Section 75(2)(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
Both parties have been able to develop their businesses and general skills throughout the relationship. The Wife’s skill base is as a factory worker, whilst the Husband is a proficient sales representative and, when he was able, a tradesperson. Neither will need to retrain to continue to earn an income.
Section 75(2)(l): the need to protect a party who wishes to continue that party’s role as a parent
This section is not relevant.
Section 75(2)(m): if either party is cohabiting with another person—the financial circumstances relating to the cohabitation
This section is not relevant.
Section 75(2)(n): the terms of any order made or proposed to be made under section 79 in relation to the property of the parties
Assuming a net asset pool of $1,420,000,[101] on a contributions-based entitlement, the Husband will receive net assets worth $85,200 more than those to be received by the Wife.[102]
Section 75(2)(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
[101] The eventual value of the net pool once the balance proceeds of sale of the properties and the business are known, may be different to the figure stated. The best evidence I have as to the potential net value of the pool is found in J1.
[102] See paragraph 56 of these Reasons.
This section is not relevant.
Section 75(2)(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 no other relevant considerations.
Section 79(4)(f): any order made under this Act affecting a party to the marriage or a child of the marriage
This section is not relevant.
Section 79(4)(g): 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
This section is not relevant.
Conclusion regarding the matters referred to in s 79(4)(d)–(g)
Given the Wife’s inferior income, and my assessment of the parties’ contribution-based entitlement, it is appropriate that there be an adjustment in her favour. That adjustment will be 2%. I note that I have made this adjustment even though the Wife sought no adjustment for these factors. I consider, however, that the adjustment as stated is appropriate.
Consequently, I have found that the parties net non-superannuation assets will be 51%/49% in favour of the Husband. Assuming that the net pool is ultimately valued at $1,420,000,[103] then the Husband will receive assets valued at $724,200 and the wife $695,800 — a differential of $28,400.
[103] As already mentioned, this is subject to the final amount the parties receive from the sales of the properties and the company.
Final assessment: a just and equitable exercise of discretion?
After assessing contributions and other factors this Court must consider whether, considering those assessments and the actual property to be divided, the proposed exercise of the discretion under s 79 is just and equitable. In Clauson & Clauson, the Full Court said the following:
… that exercise is not done in isolation; it is done against the background of conclusions already arrived at on contributions, the consequence of which will be in some cases to intrude into the s 75(2) exercise because of the dimension of the former conclusion and the total pool.
It is largely for that reason that it is ultimately necessary to stand back from the process and reach a conclusion which appears overall to be a just and equitable exercise of the discretion.[104]
[104] Clauson & Clauson (n76) 81,911–81,912.
This was a long marriage where both parties worked very hard for the benefit of their family. They are now heading towards their retirement years. The Orders I will make will result in both parties retaining cash, cars, personal belongings, and superannuation — and they should be debt free. Each has the capacity to earn income. My hope is that the Husband will ultimately decide not to sell his business, and instead use that asset and business name to build further income before selling the same at the point of his retirement.
Standing back, I am satisfied that a 51/49 division of the parties’ net non-superannuation assets in favour of the Husband, and an equal division of their superannuation assets, results in a just and equitable outcome.
I certify that the preceding ninety (90) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Turnbull. Associate:
Dated: 8 December 2023
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