Sheldon and Sheldon

[2017] FCCA 578

FEDERAL CIRCUIT COURT OF AUSTRALIA

SHELDON & SHELDON [2017] FCCA 578

Catchwords:
FAMILY LAW – Property dispute after 5 year relationship – multiple disputes about contributions – whether monies advanced by family members constituted loans or not – whether business mortgage should be responsibility of both parties or just one of them – contributions assessed as equal – future needs also equal – whether superannuation should be equalised.

Cases cited:
Stanford & Stanford (2012) 247 CLR 108

Applicant: MS SHELDON

Respondent: MR SHELDON

File Number: MLC 8298 of 2015

Judgment of: Judge Burchardt

Hearing date: 2 March 2017

Date of Last Submission: 2 March 2017

Delivered at: Melbourne

Delivered on: 3 April 2017

REPRESENTATION

Counsel for the Applicant: Mr Hall

Solicitors for the Applicant: Beaumont Lawyers

Counsel for the Respondent: Mr Stanley

Solicitors for the Respondent: Falcone & Adams

ORDERS

1. Within 30 days the real property situate and known as Property E being the whole of the land more particularly described in Certificate of Title Volume (omitted) Folio (omitted) (“the real property”) be sold altogether out of Court (“the sale”) and that the Husband and Wife forthwith do all acts and things and sign all necessary documents to effect a sale of the real property and by way of consequential arrangement that shall be made for the purposes of effecting a sale:

   (a)The listing price for the real property shall be as agreed between the parties and if there is no agreement the listing price shall be as advised by a valuer nominated by the President of the Real Estate Institute of Victoria.

   (b)The real property shall be listed for sale by a private treaty with an agent as agreed by the parties and in default of agreement by an agent nominated by the President of the Real Estate Institute of Victoria.

   (c)In the event that the real property has not been sold within three (3) months of listing on the market then the parties shall make all such arrangements and do all such acts and sign all such documents and pay all moneys equally necessary to procure a sale by public auction of the real property upon the following terms:-

   i.The auctioneer shall be an agent as agreed by the parties and in default of agreement the auctioneer shall be nominated by the President of the Real Estate Institute of Victoria;

   ii.The auction shall take place within three (3) months after the deadline date for sale by private treaty;

   iii.The reserve price shall unless agreed upon by the parties be as proposed by the auctioneer;

   iv.The parties shall each pay and be responsible for payment of one half of auction expenses payable before the real property is auctioned.

   (d)In the event that the property is not sold by auction or by private negotiation within fourteen (14) days after the said auction then the parties do all acts and sign all necessary documents and shall pay all moneys equally as necessary to procure a second auction within a further five (5) weeks of that date otherwise upon the same terms and conditions as applied to the first auction.

   (2)  Upon completion of the sale the proceeds of the sale be applied:

   (a)First to pay all the costs, commissions and expenses of the sale.

   (b)Secondly to discharge the mortgage and any other encumbrance effecting the real property.

   (c)The balance then remaining be applied:

   i.As to 47.7% to the Applicant Wife; and

   ii.The balance to the Respondent Husband, LESS the sum of $10,000.00 which shall be deducted at source and paid to the Applicant by way of legal costs order.

   (3)  Pending completion of the sale:

   (a)The Husband have the sole right to occupy the real property and that during such right of occupation the Husband pay all rates and taxes and like apportionable outgoings of the real property as they fall due.

   (b)The parties hold their respective interests in the real property upon trust pursuant to these Orders.

   (c)Neither party encumber the real property without the consent in writing of the other party.

   (d)Any joint tenancy of the parties is hereby expressly severed.

   (4)The Husband forthwith do all such acts and things and sign all such documents as may be reasonably required by the Applicant Wife to transfer to the Wife or at her direction at the expense of the Wife all of the Husband’s right, title and interest in the company (omitted) Pty Ltd (omitted).

   (5)  Upon the transfers referred to in the preceding Order:

   (a)The Applicant Wife indemnify and keep indemnified the Respondent Husband in relation to all and any liabilities in respect of the business known as “(omitted)” and the company (omitted) Pty Ltd (omitted);

   (b)The Husband relinquish absolutely any and all claims against the Wife and/or the said company for any amounts recorded as payable to the Husband in the books of the company or otherwise lent by the Husband to the company or the Wife.

   (6)  The parties forthwith do all such acts and things and sign all such documents as may be required to transfer the trailer registration number (omitted) to the Applicant Wife at the expense of the Wife.

   (7)  Unless otherwise specified in these Orders and save for the purposes of enforcing any monies due under these or any subsequent Orders:

   (a)Each party be solely entitled to the exclusion of the other to all property (including choses-in-action) in the possession of such party as at the date of these Orders.

   (b)Monies standing to the credit of the parties in any joint bank account are to be divided equally between them.

   (c)Each party retain their respective superannuation benefits.

   (d)Insurance policies remain the sole property of the owner named thereon.

   (e)Each party be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these orders.

   (f)Any joint tenancy of the parties in any real or personal estate is hereby expressly severed.

   (g)Each party will be solely liable for any taxation assessments issued by the Taxation Department against them for both past and future financial years, and may retain any taxation refunds received by them for those years and both parties agree to make no claims in relation thereto.

2. All extant applications be otherwise dismissed.

AND THE COURT NOTES:

A.That pursuant to section 81 of the Family Law Act 1975 it is intended that these Orders shall finally determine the financial (and other) relationship between the parties and avoid the need for further proceedings between them.

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

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT MELBOURNE

MLC 8298 of 2015

MS SHELDON

Applicant

And

MR SHELDON

Respondent

REASONS FOR JUDGMENT

Introductory

1. All curial disputes are, by definition, unfortunate but this property dispute is especially so.  The parties’ positions are, in truth, only a fairly short distance apart and, from what I have been told about the legal costs, it seems highly probable that they have spent between them more than they are in fact now arguing about.

2. The vast majority of the facts in the case are not the subject of disagreement.  The primary differences between the parties are:

   a)whether a mortgage/business loan in the joint names of the parties should be treated, in effect, as an asset of the wife

   b)whether there should be a 10 per cent adjustment to the wife in respect of future needs

   c)whether superannuation of the parties should be equalised.

3. In my view, this case calls, overwhelmingly, for an outcome that gives the parties an equal share of the non-superannuation assets.  There should not be an equalisation of superannuation.  The mortgage should remain a liability of the parties jointly.

Agreed or uncontroversial facts

1. The wife was born on (omitted) 1969 and the husband on (omitted) 1961.  They met and, it seems fairly clear they became intimate shortly after, in 2008.  The parties did not cohabit, however, until (omitted) 2010 and had not set up joint bank accounts until shortly thereafter.  At the time of the commencement of the relationship, each of the parties owned a property.

2. The husband sold his property in Property C in 2010 and shortly thereafter, the wife sold her property in Property F.  They then purchased the former matrimonial home in Property E.  Much of the factual dispute in the case concerned who paid the deposit on the Property E property and how much each of the parties contributed.  In my view, these disputes are of no moment for reasons which I hope will become clear.

3. There are no children of the relationship although both of the parties have adult children who do not live with them.

4. The parties were married on (omitted) 2011 and appear to agree that separation took place on 13 May 2015 when, it would appear, the wife moved out of the former matrimonial home.  She then moved in with a (occupation omitted) who had done work for the parties, a Mr K.  According to the wife and Mr K, their relationship became intimate as late as (omitted) 2016 although, clearly, Mr K was offering help to the wife as early as July 2015 when she attended at the former matrimonial home to collect her various chattels.

5. At the time of the commencement of the relationship, the wife was in employment with (employer omitted) in an (occupation omitted) capacity, earning an income in excess of $80,000 and the husband’s income then, some $75,000, was much in the same range.  It would appear that each of the parties has been retrenched during the currency of the relationship.  The husband was retrenched in 2013 (there was dispute as to how long he was unemployed) and the wife was retrenched in October 2014 at which time she received a payment of $97,419.  It seems clear, even if it is not formally conceded, that the bulk of those funds were applied to various family activities including payment down of the extant mortgage and $36,000 was left at separation.  The husband unilaterally extracted $18,000 of that but has since been ordered by the Court to repay it and as best I understand it, has done so.

6. The parties commenced a business in 2013 (the actual date of commencement is not, so far as I can see, clearly denoted in the parties’ extensive materials) but from the financial returns exhibited to the husband’s affidavit, it would seem that the business probably only operated towards the end of the financial year 2012 to 2013.  The business, (omitted) Pty Ltd (“(omitted)”), remains effectively in the possession of the wife and her son, Mr J who was employed in it for an unspecified time until he left in December 2016.

Stanford & Stanford

1. As the High Court made clear in the case of Stanford & Stanford (2012) 247 CLR 108 (“Stanford”), the first task for the Court in property proceedings such as these is to identify the parties’ legal and equitable interests and to determine whether it is appropriate that there be a property division.  Given the marriage (including the de facto period prior to the actual formal ceremony in 2011) lasted from early 2010 until May 2015, there might have been room for argument as to whether any alteration would in fact be appropriate.  Indeed, both parties’ methodology during the proceedings, at times, tended to resemble a straightforward accounting exercise.  Nonetheless, both counsel conceded this was not a case in which property division should not occur.  As the High Court made clear in Stanford, it will often be the case that parties, having separated, cease to conduct their financial affairs in anything like the joint way they did before and the assumptions underpinning such a joint activity, of course, have ceased.  In the circumstances, I am quite prepared to make a property adjustment as both parties seek.

The Pool

1. The pool of assets and liabilities is largely agreed and is constituted by a document which I marked as MFI.  It is as follows:

Agreed Asset Pool

• Former matrimonial home, $857,500

• (omitted) bank mortgage/business loan, $156,732

• Subtotal equity, $700,768

• (omitted) business value in dispute. Husband’s allocation, $156,732

• Toyota (omitted) (wife), $21,000

• Toyota (omitted), $8000

• Partial property settlement of the wife, $18,000

• Partial property settlement of the husband, $15,000

• Chattels in former matrimonial home – disputed

Final total net:

-    $762,768 for the wife

-    $919,500 for the husband

Superannuation:

For the wife:

• $49,494 in (omitted), $48,352 in (omitted) and $25,551 in (omitted)

  -    Total of $123,397

For the husband:

• $205,034 in (omitted) 1 and $211,245 in (omitted) 2.

  -    Total of $211,245

Contribution

1. Much of the evidence in the case went to contribution issues.  It is appropriate to traverse the evidence briefly.

The evidence given by the wife

1. The wife adopted her affidavits and Financial Statement as true and correct.  Under cross-examination, she asserted that the relationship commenced in 2008.  She conceded that each of the parties had their own homes but said that husband spent overnights at her house.  She agreed that each party paid their own bills until April 2010, after which they established a joint bank account.  The Property F property was sold and the matrimonial home bought in June 2010.  Property C (the husband’s property) had been sold before this.  She denied that he had paid the deposit of $70,000 and did not concede that the proceeds of the Property C property were available prior to purchase.  She was certain that she had put more, by way of contribution, than the husband.  She said she received $400,000 from the sale of her home.  When taken to exhibit SS22 at page 71 of the husband’s trial affidavit, she asserted that not only had she contributed to the $269,455 from the sale of her own property but also the $250,000 provided by the parties.  She further said $43,000 was paid to the mortgage after it was taken out.  She had to concede, however, that these assertions were not in her affidavits.  The wife, whose answers were at times argumentative and non-responsive, asserted that the husband had been unemployed for longer in 2013 than he had said following his redundancy.  She also confirmed that she had worked for (employer omitted) before being made redundant in 2014.  She was earning $80,000 to $90,000 at the commencement of the relationship.  She has not sought further (omitted) work since her redundancy.  She has chosen to work in the (business omitted).  She said she loved the work and the peace and tranquillity it involved.  She said she had a meagre income but she loved working there.  The business provided her livelihood.  She conceded she had loyal customers.  The business paid appropriate proportions of her fuel, her phone and other matters.

2. The wife was cross-examined about the financial records of (business omitted).  She confirmed that insurance, at page 185 of the husband’s affidavit, was high because her son was under 25 but he no longer drives the Toyota.  She conceded that the company did not actually pay depreciation.  The wife was cross-examined closely about the loans allegedly owing to persons by (business omitted) and the total of $108,741 recorded inter alia at page 193 of the husband’s affidavit.  She confirmed that Mr J is her son and Mr K is her partner.  The $108,741 recorded as “loans from other persons” is persons other than her son and partner.  She lives with her partner in (omitted).  He is a self-employed (occupation omitted) and they are in a de facto relationship.

3. The mother was cross-examined about the chattels that she alleges the husband has in his possession at the former matrimonial home.  She conceded that she went to collect items in 2015.  She took a removal van and two other vehicles and conceded she was there for six hours.  She was adamant, however, that her access to the property was restricted and repeated her assertions that the husband continues to retain her jewellery, a number of other chattels and various computer records relating to the business.

4. The wife confirmed that the Toyota was bought with money from her son, the business and her mother.  The son, she said, paid $5,000. The vehicle has always been registered to the wife.  Her son no longer drives the vehicle as he ceased work for (business omitted) on 28 December 2016.  The business could no longer afford to pay him and he left on 15 December.  She said that she might have to shut the door if money did not work out. 

5. The wife confirmed that she had paid the mortgage/loan on the family home until July 2016, that thereafter the husband had taken over payments.

The Evidence of Mr K

1. Mr K adopted his affidavit as true and correct.  Under cross-examination, he confirmed that the wife had asked him for $10,000 and he had been repaid $4,500.  There was no loan document or interest.  He said the business was struggling and he helped to pay bills.  There was no set time to repay and he had no intention of suing for any monies owing.

The evidence of Mr J

1. Mr J, under cross-examination, confirmed that he is aged 22 and qualified as a (occupation omitted) in December 2015.  He said he earned $40,000 at the (business omitted) in 2015.  In the purchase of the Toyota for $10,000 as detailed in paragraph 5 of his affidavit, it emerged under cross-examination, the $10,000 he had contributed was a gift from his grandmother.

The evidence of the husband

1. The husband adopted his affidavits and Financial Statement as true and correct.  Under cross-examination, the husband conceded that both parties had put in.  It was a seven-year relationship and ended when the wife moved out.  He has obtained approval from his bank to borrow up to $430,000 to pay the wife out.  He has paid his solicitors $40,000 from savings and from his mother.  He obtained a redundancy payment, after separation, of $19,000 which had been dispersed to his solicitors.

2. The husband was adamant that there was not an equality of contribution to the purchase of the matrimonial home.  He insisted that the $75,000 for the deposit was entirely from him.  He said that the wife’s mother contributed $10,000 but not for the deposit.  He had received $26,006 from the deposit on Property C. 

3. The husband accepted that the wife received a redundancy payment of $97,419.  He said that the various matters asserted by the grandmother to be loans were all given to her daughter and not to him.  He said on a number of occasions that events all took place seven years ago and professed not to have detailed recollection.  He did not accept that the business was not making a profit during the currency of the relationship.

4. The husband said that he now earns $65,000 and is provided with a car and may make additional money through commissions.  He has not received any bonus for the last six months but made some $4,000 to $5,000 in the six months before that.  He has been in his current employment for some 14 to 15 months and regards it as secure.  He is in reasonably good health.  He confirmed that he had no documents to support the loans he asserted from his parents.  His mother is dead and his father is elderly so have called him to give evidence would have been difficult.  The husband was not able to recall his superannuation at the commencement of the relationship.  He accused the wife of taking his computer and was adamant that she had obtained access to the entire house and shed when she visited.  He asserted that the wife took all her jewellery and he had not kept any of her chattels.  He did not accept the wife’s assertion that she receives $593 per fortnight by way of pay.  He asserted that the business was in the practice of having a substantial cash turnover and, effectively, was asserting that the earnings of the business were under-declared for tax purposes.  He said the business was going okay prior to settlement.

1. In re-examination, the husband confirmed that his home in Property C was sold for $370,000 and it was unencumbered at the time.  He repeated that the (business omitted) ran on cash.

Brief observations about the credit of the witnesses

1. Both the wife and the husband struck me as being somewhat combative in the witness box.  Both were concerned to turn their answers to what they clearly perceived to be their benefit.  Nonetheless, both were, in the main, good and responsive witnesses.  While each of them, I think, have made errors in their various calculations from time to time, I do not find either of these two witnesses to have been dishonest.

2. The evidence given by Mr K and by Mr J was unremarkable.

3. I should interpolate that there was quite some debate with counsel for both parties about what should be made about the evidence of both Mr G, an accountant who had sworn as to the records of the company, and the mother of the wife (who has reverted, it should be noted, to her maiden name of (omitted)).

4. As I pointed out, it is all but unknown, in my experience at least, for family law practitioners to put each other on notice that their witnesses are required for cross-examination.  I do not recall, in my eleven years on the bench, ever seeing a formal notice to this effect filed with the Court, nor have I seen any correspondence to that effect.  It seems to be the practice that parties are expected to have their witnesses available unless there is some particular aspect that makes it inappropriate for them to be cross-examined.  Although counsel for the wife made an offer in passing, almost at the conclusion of final submissions, to permit the husband to reopen his case by summoning the wife’s mother for cross-examination, I did not permit this to occur.

5. It is simply not the case that in these circumstances, as counsel for the wife submitted, that the evidence of the wife’s mother must be accepted (and that of Mr G) in its entirety without challenge.  It is a matter of evaluating the force of the evidence from all of the materials in the case.  The solicitors for the husband should probably have put the wife’s solicitors on express notice that all deponents were required for cross-examination.  By the same token, the solicitors for the wife should probably have had all their witnesses readily available to be called.  In my view, both sides have over-emphasised the forensic outcome of this aspect of the dispute in any event.

The initial contributions issue

1. At this point, it is appropriate to come to some of the more particular disputes between the parties. The first is the initial contributions to the purchase of the matrimonial home.

2. The husband has exhibited a number of documents on more than one occasion but, for these purposes, it is convenient to refer to his trial affidavit as it is paginated.  From SS18 at page 35, which is a statement of adjustments relating to the Property C property dated 23 April 2010, it is apparent that, by that stage, a deposit of $37,000 had been paid.  Indeed, from page 36 of the affidavit, it is apparent that settlement had taken place by 23 April 2010 and a net sum, additional to the deposit, of $331,000 (I will endeavour to round most of these figures off) had been paid into his bank account.

3. From page 37, it is apparent that by 1 April 2010, the husband had been forwarded a net amount out of the deposit, as he says, of some $26,600.

4. From exhibit SS22 at page 69 of the affidavit, it is apparent that on 18 June 2010, the wife received a net amount of $269,000, subsequently used to contribute to the purchase of the former matrimonial home.  She had, however, already received a deposit of $35,000 at some anterior point not indicated.  The period for settlement is not indicated so far as I can see but must have been in the ordinary way of things one would assume, at least a month and probably somewhat more.  That means, subject to any deductions similar to those deducted from the husband’s deposit, the wife had a chunk of money of some sort being no more than $35,000 at some period before June.

5. On 22 June 2010, on the husband’s affidavit page 71, there is a letter from solicitors acting for both of the parties in relation to purchase of the former matrimonial home.  The letter confirms that settlement was effected on 18 June 2010.  The amount required to complete settlement (bearing in mind the $75,000 deposit previously paid) was made up of the wife’s $269,000, a mortgage of $148,000 and an amount provided “by yourselves”.

6. Although the husband tendered separately various bank records (exhibits A1 and A2) which I think are also annexed to his affidavits, purporting to show the payments solely by him of the relevant amount, the matter is rendered more clouded by the fact that the deposit may well have been paid on or about 8 April 2010 (there is a withdrawal on that date of $74,000 from the husband’s account). None of the records tendered or referred to are entirely clear as to how the husband’s $26,000 morphed into the larger figure.

7. It is, in my view, unprofitable to speculate as to these matters.  One can say with some certainty that the husband’s assertion that the relationship only commenced when he moved into the wife’s property is not correct.  The parties, clearly, had determined to sell their two homes and buy a home together in sufficient time for the husband to sell his Property C property by April 2010.  He received the deposit certainly no later than 1 April (see affidavit page 37).

8. Since it takes time to put a property on the market and sell it and complete the sale, it is certain, in my view, that the parties had achieved the common intention to sell their homes and buy a home together by early 2010 although it is not possible to say precisely when that would have been.  Accordingly, the relationship lasted for a period somewhat in excess of five years.  Accepting as I do that the parties only established joint back accounts after the purchase of the home, this does not deny the obvious fact that the parties had made a full commitment to one another earlier or they would not have sold their homes.

9. What they did then was to apply their monies to a common purpose.  In fact, the sale price of the husband’s unencumbered home was $370,000.  The sale price of the wife’s house was $487,000 but it had a mortgage of $181,000.  Putting the figures crudely, she obtained slightly in excess of $300,000 and the husband some $370,000.  Both parties committed these funds to the joint enterprise of their relationship.  They are not widely disparate. 

10. Given that both parties sought, from time to time, to suggest that the greater contribution made by their client might merit some adjustment (although not able to be articulated precisely) in the outcome I should make it clear that I do not agree.  While it is true that the husband put in approximately $60,000 or thereabouts more than the wife in net terms, this was a relationship of five years.  It is not a fleeting one.  Neither party has suggested that the Court should approach this as a precise accounting exercise.  In my view, the duration of the relationship was sufficiently long (albeit not in the scheme of things, a very long marriage) for it to be just and equitable to assess these contributions as equal. 

The other contributions made

1. Both of these parties contributed their salaries to the common financial wellbeing of the marriage.  Their earnings were not significantly disparate during the course of the relationship.  The wife, who was employed after all until late 2014, earned somewhat more than the husband and this only goes to buttress the finding I have made above that the parties’ contributions should be regarded as equal.  The same might fairly be said of the redundancy payments which, if added in, would produce something very near to an equality of contribution between the parties.  I note that the wife has, in effect, been able to keep the entirety of the $36,000 that she retained from the net proceeds of her redundancy payment, albeit that these have doubtless been applied,  and very possibly in large part, towards legal costs.

The loans allegedly owing to the company and the value of the company

1. It is common cause that there is no valuation of the business.  The parties sought to traverse the business’ formal financial records to prove, in the husband’s case, that it was worth a lot of money and, in the wife’s, that it had a nil value.  This, of course, engages the issue of the mortgage presently standing at $156,000. 

2. The issue of the mortgage can, in my view, be dealt with shortly.  The parties embarked upon this business initiative at a time when they were well and truly married.  They took the loan out as a common project with a common purpose.  They were both in full-time employment at the time and worked to the extent they were able in their free time.  The business provided employment until December 2016 for the wife’s son.  He seems to have been reasonably well remunerated at a salary in excess of $40,000 bearing in mind that he only qualified, as I understand it, in late 2015.  If ever there was a circumstance where the parties should take the good in a relationship with the bad, this must surely be it.  The husband’s proposal, in effect, that the wife should wear all of the mortgage as things now stand because she retains the business is simply not tenable.  It was a joint liability between the parties.  While of course the value to the wife of the business as an ongoing concern is a matter that must be taken into consideration, it would be wholly unjust and inequitable in these circumstances to allot the mortgage debt entirely to her.  It must be shared equally between the parties.

The loans

1. That brings us to the question of the loans.

2. The first set of loans to be considered is the $108,000, as it now stands in the company’s books, loaned to unidentified persons who are not (see affidavit page 193) the wife’s son, mother or the wife herself.  The loans have their origins in the first set of accounts for the year ended 2013 at which time they were approximately $55,000.  They increased to $107,000 in the following financial year but have been static for at least two years at the figure of $108,741.  The persons who are said to have lent these monies are not, in any way, identified.  There are no details as to what the loan agreements might be said to be, what terms they might involve or indeed, any information whatever.  That the figure has remained static for at least two financial years shows that interest is plainly not payable.

3. The wife says that the husband has effectively prevented her from detailing these loans by refusing to allow her access to her records, whether computer or otherwise.  The husband makes the same accusation, in reverse, of her.  I am completely satisfied on this entirely unsatisfactory evidentiary basis that these loans are not presently likely to be enforced.  Indeed, I could not be entirely satisfied that they even exist as loans.  Mr G’s evidence is entirely generalised, and notwithstanding that he was not required for cross-examination, the terms of his affidavit suggest that he would not have been able to add anything to the very generalised and opaque remarks that he did make to the general effect that the loans were, indeed, true ones. 

4. The wife simply has not established, to my way of thinking, that the $108,000 is in any way repayable even if, which I would significantly doubt, any such loans were truly ever advanced.

5. The wife’s partner, Mr K, has made it clear that he would not seek repayment of his loan.  That is scarcely surprising.  The wife’s son has relevantly deposed that he contributed $10,000 to purchase the Toyota (omitted) in 2013 although it is now clear that that money came from his grandmother.  He has also gone on to say that he lent the business $10,000 from his own savings. He further says that the accounts correctly show that the overall amounts owing to him are $30,000.  The difficulty with this, of course, is that once again, even on his evidence and taken at its highest, it shows no loan agreement, no term for the loan, no interest.  There is simply nothing to characterise it as a loan in any legally enforceable sense.  Whether or not in the ultimate, the wife chooses to pay these sums to her son is a matter for her but there are perhaps two things to be said about this.  Given that these alleged loans have been outstanding for a considerable period of time and there is no suggestion of any endeavour to enforce repayment, it is less probable than otherwise that they will ever be required to be repaid.  That is, as I say, assuming that they are properly characterised as loans.  Mr J had the benefit of employment at what, on the face of it, is a reasonable rate of pay given the allegedly parlous condition of the business. The fact that he may have made contributions from time to time fits more comfortably, as I find, with the operation of a family business as it plainly is, than with any kind of commercial interaction between him and his mother. 

6. The evidence of the wife’s mother only has to be read to be clearly understood.  What she actually deposed was, at paragraph 2:

   That between March 2010 and October 2013, I contributed the total sum of $36,000 to my daughter and the respondent husband to assist them financially.

7. From paragraph 4 of her affidavit, it is apparent that all those payments were made by January 2013, apart from a payment of $5,000 in October 2013. 

8. Nowhere does the wife’s mother assert that these were loans.  They were, as she says, contributions to assist the parties financially.  She was entirely entitled to make them, but on her own evidence, there is no entitlement on her to insist upon repayment. 

9. Finally, it should be noted that, although the figures are entirely unclear, the wife has to give some credit for the fact that she will have the business as an ongoing entity.  She is not being saddled with the totality of the outstanding business loan but only her half-share of it.  On any view of the matter, the wife is sufficiently confident in the future of the business to regard it as being what she wishes to commit herself to for the foreseeable future.  If, contrary to my findings, there is any liability to any third party, whether those are identified or not, it would in my view be just and equitable for those liabilities to fall to her in any event, in all the circumstances.

Conclusion on contributions

1. In all of the above circumstances, the contributions of the parties to the creation of the property pool should be assessed as equal.

Future needs

Section 75 (2) matters

1. Here the wife sought a 10 per cent adjustment in her favour in the light of her health difficulties and reduced earning capacity.  The husband indicated there should be no adjustment, hinting at perhaps a notional minor adjustment to the wife but offset by the notional minor adjustment in contributions in the husband’s favour.

2. Taking the wife’s health first, in paragraph 26 of her first affidavit, filed on 3 September 2015, the wife deposed that she was diagnosed with breast cancer in 1997 and underwent surgery and chemotherapy.  There was a recurrence of the breast cancer and she underwent a double mastectomy.  In 2015, cancerous tumours were found on her ovaries and in March 2015, these were surgically removed.  The wife deposed that she continued to have regular check-ups with regards to her cancer and had arthritis as a side effect of the chemotherapy.

3. In her most recent affidavit, filed 25 January 2017, the wife deposed that, in addition to the health problems outlined earlier, she now had significant difficulties with her right knee which impacted upon her capacity to work.  The wife was earlier (see affidavit 10 October 2016) diagnosed in 1987 with Hodgkin’s lymphoma for which she received radiotherapy but she remains in remission in relation to that condition.  She carries the BRCA2 gene mutation which makes her susceptible to cancer.

4. The husband in both his affidavits and oral evidence was not prepared to, as it were, give the wife any credit for these difficulties.   The reality is that while it is true there is no present evidence of ill health of any significant sort on the wife’s part, there is a question mark over her health in a general way and, while to at least an extent it is not possible to calibrate it, possibly over her earning capacity should her knee problems become worse or should her health otherwise deteriorate.

5. The husband’s health is unexceptionable.

6. Turning to the question of earning capacity, this is a more nuanced matter.  The husband earns $65,000 a year plus a car plus possibly some small bonuses.  He has not re-partnered and has to make his own way in life, at least for the present.  I note that his wage is very much akin to average weekly earnings (and indeed, slightly underneath).  From what he has disclosed in his affidavits, his earning capacity has been at or about something close to this range over a period of time.  He is, of course, now 55 years old.  It seems reasonable, however, in view of the fact that he has been able to get further employment notwithstanding being retrenched after the age of 50, to assume that he is sufficiently skilled in (occupation omitted) to be able to be likely to remain in employment until retirement age.

7. The wife has, of course, an earning capacity through the business.  The books of the business, as is so often the way, leave the Court far from clear as to what the true position is.  I note that the wife, in one of her affidavits, has described the $107,000 worth of loans as being in part created by occasional purchases by her and her son.  I do not need to return to this matter save to say that a business with over $100,000 of debts on its books that is quite unable to be substantiated does not persuade me that its records are meticulously accurate.

8. In truth, the business has had to draw upon the help of third parties to continue.  If no one else, the wife’s son and current partner have certainly contributed sums from time to time.  The necessity of this assistance shows that the business is simply not doing all that well.  The salary allocation has varied from time to time and has, at its highest, in 2015 to 2016, included “salary – ordinary $53,582” and “salaries – associated persons $24,025”.

9. No one has given the Court any indication as to what those figures represent.  The wife’s son asserted he was being paid $40,000.  If he was the associated person, his recollection is false.  If he is accurate, then one would have to assume that the wife was paid only $20,000 or thereabouts in 2015 to 2016.  Over and above all this, of course, there is the fact that there is a measure of cash dealing in the company.  The fact that businesses can, in part, run on cash is notorious.  The evidence of the husband in this regard was given with conviction, and although I have no doubt he has exaggerated, significantly, the extent of the matter, the business must take some payments in cash because I believe his evidence.  Furthermore, on the figures as they stand, which purport to show unremitting and significant losses, the business could scarcely really be continuing if some measure of cash transactions were not going on.

10. In the end, however, it is not necessary for the Court to make conclusive findings about the extent of the wife’s earning capacity with the (business omitted).  That is because there is, in my view, very considerable force in the point made by counsel for the husband.  There is nothing in the evidence that suggests that the wife could not return to the area of (occupation omitted).  Her salary in (occupation omitted) was, in fact, approximately 50 per cent more than that now earned by the husband.  While I accept that to return to work as a (occupation omitted) (something last undertaken, I think, in 1993) would present obvious difficulties particularly given the wife’s age, there is nothing to suggest that were she so minded to change the lifestyle she enjoys, or be compelled to do so by economic necessity, that she would be unable to do so.  In my opinion, the future earning capacities of the parties assessed reasonably, would be about equal.

1. Into the mix also, although in my view it is a matter that would need to be very heavily discounted, is the support that the wife gets from her new partner in the form of rent-free accommodation.  True it is this is a benefit.  The relationship has inured for over a year and could not be said to be wholly fleeting.  It may well continue.  It is a factor to be borne in mind but, in my view, not one attracting very considerable weight.

2. In all the circumstances, the parties future needs are equal, taken overall. The wife is some six years younger than the husband and has a greater number of working years ahead of her, should she choose to work.  Doing the best one can in an area of imprecision, I think no adjustment in the area of future needs is appropriate.

Chattels

1. The wife seeks the return of numerous chattels from the husband and her evidence about not being allowed to collect them was given with conviction.  The husband says that she has already taken all her possessions and his evidence was also given with conviction.  I am simply not persuaded that it is more probable than otherwise that the husband has any chattels in his possession that belong to the wife.  If he has lied to achieve this he may, in the fullness of time, be answerable to a higher authority for his perjury.  I note that the visits of the wife to obtain her chattels may have been marked (the matter was not explored in cross-examination) by a measure of emotion and anger on the part of one or more parties.  The police were certainly called on one occasion.  It is, of course, entirely possible that in the general kerfuffle of moving out, coming back in and of the general feelings of the parties that a number of matters have simply been lost and mislaid.  Indeed, I suspect it is probable that is so.  Ultimately, however, it is clear that the Court cannot make any finding of a positive sort about the chattels.

Superannuation

1. The wife appears to have had superannuation in two separate accounts amounting approximately to $44,000.  She has subsequently discovered a further $25,000 account.  When this money accrued is not entirely clear.

2. At the commencement of the relationship, the husband had marginally under $100,000 in his various superannuation accounts and now has around about $195,000.  The wife’s superannuation is now globally worth approximately $120,000.

3. The wife has sought an equalisation of superannuation.  The husband submits that such equalisation is inappropriate in the circumstances and, indeed, incorporates the differential in superannuation as part of the overall finding that the Court is invited to make that an equal split of assets and liabilities would be rendered fair in the context of the parties each retaining their superannuation.

4. I think there is force in both of those submissions.  The fact is that the superannuation of each of the parties has, broadly speaking, doubled (somewhat more in the case of the wife but, as I say, the $25,000 distorts this).  Given that the parties’ incomes during the relationship were not gigantic (the wife’s in excess of $90,000 and the husband’s in excess of $70,000) and that their 9 per cent standard contributions could not have been, in themselves, all that great bearing in mind that they were not, indeed, both in work at all points throughout the relationship, the fact is that the sums that the parties had have accrued, in large part, through market forces.  Furthermore, the parties’ superannuations have been contributed to by the employer based contributions made to each of the individuals at the time.  While I have already made the point previously, the parties were in a marriage for five years and this is not a case in which either party seeks simply that the parties retain what they brought into the relationship, that consideration, in my view, has much less force in relation to the superannuation component of the matter.  Each of the parties had a certain amount of pre-existing superannuation which owes nothing whatever to the other.  Those have increased by virtue of the personal exertions of the parties during the relationship and by the vagaries of market forces, both of which appear to have assisted the parties in any event.  In my view, bearing in mind further that the husband is six years older than the wife and will have less time in which to accrue further superannuation, it is appropriate that the superannuation not be equalised.  After all, if the wife was to obtain employment at something of the nature of $100,000 and apply statutory superannuation for six years of some $9000 she would, in fact, produce a total very similar to that that the husband presently possesses.

Conclusion

1. For the above reasons, I think that the final outcome of this case, as I have determined it, is just and equitable.  The parties will share the significant debt of the relationship as the wife seeks and the husband resists.  I will not allocate a notional value to the business that it simply does not have.  Nonetheless, I think that the parties’ contributions should be assessed as equal and that the future needs, likewise, do not require any adjustment.  The superannuation I have just dealt with and, in my view, this overall outcome is, in any event, just and equitable.

2. It may be noted that there are a number of issues the parties raised with which I have not felt it necessary to deal.  For example, the husband’s wholly unsupported assertion as to loans from his parents.  A number of other minor controversies litter the scene.  Silence should be taken as indicating that I am not persuaded that the matters asserted have been made out.  They are simply not of sufficient significance for it to be appropriate for the Court to work through a transcript of the proceeding to make sure each and every one of the controversies in this unfortunate, and it must be said, somewhat tawdry and unnecessary dispute to be determined. 

3. The pool as I find it is worth $762,768 (see paragraph 11 above). The husband has asserted a desire to pay the wife out. The husband’s evidence suggests he may not be able to do so. I will give the parties an opportunity to consider these reasons for judgment and hear from them as to the final orders that should be made.

I certify that the preceding seventy two (72) paragraphs are a true copy of the reasons for judgment of Judge Burchardt

Date: 3 April 2017