Shipman & Shipman
[2023] FedCFamC1F 152
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Shipman & Shipman [2023] FedCFamC1F 152
File number(s): SYC 8192 of 2018 Judgment of: ALTOBELLI J Date of judgment: 16 March 2023 Catchwords: FAMILY LAW – PROPERTY – Where the value of the husband’s assets at cohabitation increased within a short period after commencement of cohabitation – Where the husband receives an O Super Scheme pension which has been valued but cannot be capitalised – Where the husband made a greater financial contribution as at cohabitation – Where the Court makes a s 75(2) adjustment for the husband – Where the property is divided into three pools, including a separate pool for the O Super Scheme pension – Where it is ordered that the O Super Scheme pension be split. Legislation: Family Law Act 1975 (Cth) ss 75(2), 79(1), 79(2), 79(4) Cases cited: Bevan & Bevan (2013) FLC 93-545; [2013] FamCAFC 116
NHC & RCH (2004) FLC 93-204; [2004] FamCA 633
C and C (2005) FLC 93-220; [2005] FamCA 429
Hickey and Hickey and Attorney General for the Commonwealth of Australia (Intervener) (2003) FLC 93-143; [2003] FamCA 395
Jabour & Jabour (2019) FLC 93-898; [2019] FamCAFC 78
Stanford v Stanford (2012) 247 CLR 108; [2012] HCA 52
Trevi & Trevi (2018) FLC 93-858; [2018] FamCAFC 173
Williams & Williams [2007] FamCA 313
Division: Division 1 First Instance Number of paragraphs: 78 Date of hearing: 5–8 September 2022 Place: Sydney Counsel for the Applicant: Ms Beck Solicitor for the Applicant: Newnhams Solicitors Counsel for the Respondent: Mr Cummings SC with Ms Abdelraheem Solicitor for the Respondent: Barkus Doolan Winning ORDERS
SYC 8192 of 2018 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MR SHIPMAN
Applicant
AND: MS SHIPMAN
Respondent
order made by:
ALTOBELLI J
DATE OF ORDER:
16 March 2023
THE COURT ORDERS THAT:
1.By no later than 4pm on 12 April 2023, the parties have leave to file in chambers an agreed Minute of Order reflecting an alteration of property interests contemplated by the reasons for judgment delivered today.
2.The matter is otherwise adjourned for mention on 26 April 2023 at 9am.
Note: 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 the pseudonym Shipman & Shipman has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
ALTOBELLI J:
INTRODUCTION
These reasons for judgment explain the basis on which the Court will make orders altering the property interests of the parties in this case.
BACKGROUND
The applicant in this case is the husband (“the husband”). He is 64 years old and lives in Sydney. The respondent is the wife (“the wife”) who is 48 years old and also lives in Sydney. There are two children of the marriage, X and Y (“the children”), who are aged 13 and 10 respectively. The children live with the husband. The husband is a retired public servant and communications professional whose only income is his O Super Scheme pension, a small amount of dividends from shares and the Family Tax Benefit. The wife is employed in sales with an annual salary of about $180,000. They commenced cohabitation in late 2000, however nothing turns on this. They married in late 2001 and separated in December 2018. The present proceedings commenced shortly after separation. The husband initially filed for parenting orders only, but the wife joined the property issue. On 7 September 2021, it was ordered by consent on a final basis that the children live with the husband but spend time with the wife for four nights each fortnight, as well as for one period of seven consecutive nights during the school holidays that occur at the conclusion of terms 1, 2 and 3; during the Christmas school holiday period as agreed in writing between the parties (or failing agreement, for three periods of seven consecutive nights); and on special occasions. The matter then proceeded as to financial issues only.
The financial proceedings between the parties initially involved a second, third, and fourth respondent, but that part of the litigation was settled by way of consent orders made on 5 September 2022. By way of summary, the husband agreed to pay the second respondent, the wife’s mother, $136,363.92, together with interest, on settlement of the sale of the family home in Sydney (“the family home”). In addition, all parties agreed to enter into a new put and call option deed, and deed of loan agreement, relating to the development of the family home. Where relevant, the details of the consent orders and the underlying agreements will be discussed below.
Both parties had assets at the time of cohabitation, and the Court will need to adjudicate on whether one party made a greater contribution to the relationship as at the date of cohabitation. It is clear that at the time of cohabitation, when the husband was a public servant, he had interests in two properties located in an area of Sydney.
During their marriage, the parties developed properties, transferred a property from the husband to the wife, purchased new properties, sold properties, purchased the family home, and have sought to redevelop this home. Both parties had the benefit of financial assistance from their parents, sometimes on commercial terms, other times not, sometimes on loan, and other times by way of gift.
The husband worked as a public servant until early 2007 and then commenced working as a communications professional in late 2007. The wife worked, principally in sales roles, for most of the marriage apart from periods when the children were born. The husband ceased work in late 2012 in order to care for the children full-time. He received an inheritance from his mother in late 2014. During the marriage, both parties became involved in the communications industry which generated income. All of these matters require the Court to assess contribution up to the date of separation, and then up to the date of hearing. There is also an issue about the extent of any future needs adjustment in the husband’s favour.
Where it is necessary to discuss the detail of the transactions that have been summarised above, this will be set out below.
THE COMPETING PROPOSALS
The precise Minutes of Order sought are reproduced in the first and second schedules to these reasons. The orders are complex because of the possible sale of the family home for redevelopment purposes. The consent orders made on 5 September 2022 set out the basis of this. In short, however, the husband contends that he made a greater contribution at cohabitation, as at the date of separation, and also by the time of the hearing. In addition, he contends there should be a future needs adjustment in his favour. Doing the best the Court can to understand his proposal and his submissions, he seeks at least a 65:35 split in his favour.
By closing submissions, the wife contended that the Court would ultimately assess contribution and future needs in the husband’s favour as to 52.5 per cent, and the wife 47.5 per cent.
The parties agree that the family home will need to be sold, whether or not it is redeveloped.
Where necessary, the detailed orders sought by each party will be examined.
THE EVIDENCE
In support of his case, the husband relied on the following documents:
(a)Second Further Amended Initiating Application filed 7 September 2021;
(b)Reply filed 1 October 2021;
(c)Financial statement filed 15 October 2021;
(d)His affidavit filed 15 October 2021;
(e)His affidavit filed 8 August 2022;
(f)Affidavit of Mr E filed 8 August 2022;
(g)Affidavit of Mr R filed 8 August 2022;
(h)Affidavit of Ms S filed 8 August 2022;
(i)Case outline filed 29 August 2022; and
(j)Various documents tendered during the proceedings, marked as exhibits A1–A16.
In support of her case, the wife relied on the following documents:
(a)Further Amended Response to Initiating Application filed 17 August 2022;
(b)Her affidavit filed 8 August 2022;
(c)Affidavit of Mr Doherty filed 8 August 2022;
(d)Financial statement filed 8 August 2022;
(e)Her affidavit filed 14 October 2021;
(f)Single Joint Expert Report of Ms H dated 17 September 2022;
(g)Case outline filed 29 August 2022; and
(h)Various documents tendered during the proceedings, marked as exhibits R1–R11.
THE APPLICABLE LAW
This is an application under s 79 of the Family Law Act 1975 (Cth) (“the Act”) which relevantly provides:
79 Alteration of property interests
(1)In property settlement proceedings, the court may make such order as it considers appropriate:
(a)in the case of proceedings with respect to the property of the parties to the marriage or either of them—altering the interests of the parties to the marriage in the property; or
(b)in the case of proceedings with respect to the vested bankruptcy property in relation to a bankrupt party to the marriage—altering the interests of the bankruptcy trustee in the vested bankruptcy property;
including:
(c)an order for a settlement of property in substitution for any interest in the property; and
(d)an order requiring:
(i) either or both of the parties to the marriage; or
(ii) the relevant bankruptcy trustee (if any);
to make, for the benefit of either or both of the parties to the marriage or a child of the marriage, such settlement or transfer of property as the court determines.
…
(2)The court shall not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.
(4)In considering what order (if any) should be made under this section in property settlement proceedings, the court shall take into account:
(a)the financial contribution made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last‑mentioned property, whether or not that last‑mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(b)the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last‑mentioned property, whether or not that last‑mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(c)the contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage and any children of the marriage, including any contribution made in the capacity of homemaker or parent; and
(d)the effect of any proposed order upon the earning capacity of either party to the marriage; and
(e)the matters referred to in subsection 75(2) so far as they are relevant; and
(f)any other order made under this Act affecting a party to the marriage or a child of the marriage; and
(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.
Section 79(4) incorporates the provisions contained in s 75(2) of the Act, which states:
(2) The matters to be so taken into account are:
(a)the age and state of health of each of the parties; and
(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; and
(c)whether either party has the care or control of a child of the marriage who has not attained the age of 18 years; and
(d)commitments of each of the parties that are necessary to enable the party to support:
(i)himself or herself; and
(ii)a child or another person that the party has a duty to maintain; and
(e)the responsibilities of either party to support any other person; and
(f)subject to subsection (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)any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia;
and the rate of any such pension, allowance or benefit being paid to either party; and
(g)where the parties have separated or divorced, a standard of living that in all the circumstances is reasonable; and
(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; and
(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; and
(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; and
(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; and
(l)the need to protect a party who wishes to continue that party’s role as a parent; and
(m)if either party is cohabiting with another person—the financial circumstances relating to the cohabitation; and
(n)the terms of any order made or proposed to be made under section 79 in relation to:
(i)the property of the parties; or
(ii)vested bankruptcy property in relation to a bankrupt party; and
(naa)the terms of any order or declaration made, or proposed to be made, under Part VIIIAB in relation to:
(i)a party to the marriage; or
(ii)a person who is a party to a de facto relationship with a party to the marriage; or
(iii)the property of a person covered by subparagraph (i) and of a person covered by subparagraph (ii), or of either of them; or
(iv)vested bankruptcy property in relation to a person covered by subparagraph (i) or (ii); and
(na)any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage; and
(o)any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account; and
(p)the terms of any financial agreement that is binding on the parties to the marriage; and
(q)the terms of any Part VIIIAB financial agreement that is binding on a party to the marriage.
In Bevan & Bevan (2013) FLC 93-545 (“Bevan”), the Full Court considered the High Court’s decision in Stanford v Stanford (2012) 247 CLR 108, which provided guidance on how s 79 of the Act was to be interpreted and implemented. Bevan endorsed the continuing application of the four-step approach articulated by the Full Court in Hickey and Hickey and Attorney General for the Commonwealth of Australia (Intervener) (2003) FLC 93-143 (“Hickey”), but on the basis that it is a shorthand distillation of the words of s 79 of the Act, as opposed to being a statutory edict. The four steps articulated in Hickey at [39] are:
(1)Identify and value the property, liabilities and financial resources of the parties;
(2)Identify and assess the contributions of the parties and express them as a percentage of the net value of the property;
(3)Identify and assess the other facts relevant under s 79(4)(d)–(g) including s 75(2) and determine the adjustment (if any) to be made to the contribution entitlements at step two; and
(4)Consider the effect of the above and resolve what order is just and equitable in all the circumstances.
Another legal issue that arises is whether I should notionally add back assets to the property pool. In the Full Court’s decision of Trevi & Trevi [2018] FamCAFC 173, Murphy J explains at [27]:
The Full Court held in Omacini and Omacini that addbacks fall into “three clear categories”: where the parties have expended money on legal fees; where there has been a premature distribution of matrimonial assets; and “waste” or wanton, negligent, or reckless dissipation of assets.
(Footnotes omitted)
Relevant to this case is the first category—that is, the question of adding back expenditure on legal fees. In this regard, the Full Court in NHC and RCH (2004) FLC 93-204 at [55] and [57] states:
55.This decision appears to confirm the principle that where the payment of legal costs can be regarded as a premature distribution of funds (in which both parties have an interest), it is appropriate to add back those costs as a notional asset. It also confirms the principle that where funds have been borrowed to pay legal fees, and such liability is still outstanding, neither the payment of the fees nor the liability should be taken into account. The decision also supports the proposition that where it is determined that a payment of legal fees should be taken into account as a notional asset, any outstanding liability in respect of those fees should also be taken into account.
…
57.If the funds used existed at separation, and are such that both parties can be seen as having an interest in them (on account, for example, of contributions), then such funds should be added back as a notional asset of the party, who has had the benefit of them.
OBSERVATIONS ABOUT THE CREDIBILITY OF THE PARTIES
Both parties made submissions about unsatisfactory aspects of the other’s evidence and that, as a result, other evidence they gave should be doubted. The Court disagrees with the latter proposition. The nadir of the husband’s evidence related to the negotiations for, and the entering into of, the put and call option deed on the family home. The nadir of the wife’s evidence related to the email which became Exhibit A12, her sale of valuable shares, and her evidence about personal expenditure. There are other examples for each party which need not be examined. The wife was a much poorer historian generally, but especially as to financial matters, than the husband. The Court does not accept, however, that the other evidence led by each party cannot be assessed in the usual manner by reference to the entirety of the evidence in this case.
THE BALANCE SHEET
By closing submission, the parties had agreed to a joint balance sheet which is reproduced below:
Ownership Description Husband’s value Wife’s value ASSETS 1 H K Street, Suburb G $4,000,000 No less than $6,675,000 2 H U Portfolio $6,257 $6,257 3 H V Portfolio $38,406 $38,406 4 H W Investment $594 $594 5 H Commonwealth Bank of Australia account ending …77 $6,070 $6,070 6 H Commonwealth Bank of Australia account ending …13 $1,000 $1,000 7 H National Australia Bank account ending …78 $16,384 $16,384 8 H Wine $6,294 NK 9 H Watches $10,000 NK 10 H Motor Vehicle 1 $28,000 $28,000 11 H Specialist Collection $2,160 NK 12 W Z Company Shares – … $4,050 $4,050 13 W BB Bank Account NK Nil/Nominal 14 W Commonwealth Bank of Australia account ending …85 NK Nil/Nominal 15 W Commonwealth Bank of Australia account ending …71 NK Nil/Nominal 16 W Jewellery/Watches NK E $60,000 17 W Motor Vehicle 2 $48,600 $48,600 18 W Personal Effects NK [incl. in 16 above] 19 Joint Home contents at K Street, Suburb G $10,000 E $ 60,000 20 Joint Commonwealth Bank of Australia account […69] $0 Nil/Nominal Total $ 4,177,815 E$ 6,944,361 ADDBACKS 21 W Proceeds of sale of M Company shares (less proceeds of sale used for repayment of Mr Doherty and Ms Doherty – incorporated in legal fees) NK Nil/NA 22 W Unexplained spending from loans from Mr Doherty and Ms Doherty NK Nil/NA 23 W Legal Fees – Total $1,231,867 $1,231,867 NA 24 H Legal Fees – Total $437,087 $437,087 NA 25 H Post Separation sale of assets by Husband Nil NK Total $ 1,668,954
LIABILITIES 26 H Judgment Debt in NSW District Court Proceedings to Ms Doherty including interest as at first day of hearing $150,522 $133,841
[Husband to bear any additional amount]27 H Personal loans and funds owed to trades – see note $300,452 NA 28 Joint Commonwealth Bank of Australia Home Loan ending …19 $884,434 $884,434 29 W Funds owing to SMSF by Wife $36,650 $36,650 30 W/H Taxes, penalties and interest payable NK NK 31 W Personal loans owing by Wife $710,282 $ 710,282 Total E$ 2,082,340 E$ 1,765,207 SUPERANNUATION Member Name of Fund Type of Interest Husband’s value Wife’s value 32 H P Super Fund Pension $1,204,332 $1,204,332 33 H O Super Scheme $95,976 $95,976 34 H The Shipman Superannuation Fund SMSF $84,891 $84,891 35 W DD Superannuation Fund Accumulation $44,734 $44,734 36 W The Shipman Superannuation Fund SMSF $41,631 $41,631 37 W The Shipman Superannuation Fund – item 29 $36,650 $36,650 Total $ 1,508,214 $1,508,214 FINANCIAL RESOURCES Ownership Description Husband’s value Wife’s value 38 H Put and Call Option Deed relating to K Street, Suburb G $3,000,000 NA Total $3,000,000 $ NA TOTALS Applicants value Respondents value Assets $4,177,815 E $ 6,944,361 Addbacks $ 1,668,954 NK Liabilities $2,082,340 E $ 1,765,207 Total Non-Superannuation Pool (incl addbacks) $3,764,429 E $ 5,179,154 Total Non-Superannuation Pool (excl addbacks) $2,095,475 E $ 5,179,154 Superannuation $1,508,214 $1,508,214 Financial Resources $3,000,000 NK Total Pool (incl. Superannuation, Financial Resources and addbacks $8,272,643 E $6,687,368 Total Pool (incl. Superannuation and Financial Resources but excluding addbacks $6,603,689 E $6,687,368
A number of items fall for adjudication by the Court.
Item 1 is the family home. The value placed by the husband is arbitrary in the sense that there is no admissible expert evidence to this effect. The value placed by the wife is based on the single joint valuation report prepared by Ms H. In reality neither of these figures is of assistance to the Court, at this point. It is common ground that if the put and call option deed entered into as a result of the consent orders of 5 September 2022 is implemented, the family home will sell for $7 million. Whether the put and call option deed will be implemented was not known at the time of the hearing, is not known to the Court as it prepares these reasons for judgment, and indeed may not be known at the time these reasons are published. If by the time that these reasons for judgment are ready to be published the Court is not informed of the implementation of the put and call option deed, the Court’s preference is, consistent with submissions made on behalf of both parties, that it should publish its reasons for judgment but not make a final order without the further input of both parties. The Court will treat the value of the family home as notionally being $7 million.
In relation to item 8, the husband’s wine collection, he concedes a value of $6,294. In circumstances where there is no evidence led to the contrary, this figure will be adopted as an admission against interest.
In relation to item 9, the husband’s watches, he concedes a value of $10,000. For the same reason as for item 8 this will be the figure adopted for the balance sheet.
The same result pertains to item 11, the husband’s specialist collection. The value of $2,160 will be adopted as an admission against interest.
The same principle applies to item 16, the wife’s jewellery/watches. She concedes a value of $60,000, which will be adopted for present purposes.
In relation to item 19, the jointly owned contents in the family home (which is occupied by the husband and children), the husband concedes a value of $10,000, whereas the wife contends a value of $60,000. In the absence of any independent evidence, the husband’s figure will be adopted. Whilst the wife’s orders inferred to the contrary, no specific evidence was led in this regard. The contents will be treated as an asset to be retained by the husband.
The focus now turns to add backs. Neither party attributes a value to item 21, quite properly so given that the evidence indicates that the sale proceeds of the M Company’s shares were largely applied towards legal fees by the wife, which is conceded below.
No value was attributed to item 22, and this is understandable given the lack of any cogent evidence about the spending in question.
Both parties conceded that the legal fees in items 23 and 24 should be added back. The Court notes that the parties also agree to item 31 remaining on the balance sheet, being personal loans owed by the wife to her parents in the sum of $710,282. An impression formed from the evidence is that most of this money was applied towards legal fees which are already accounted for at item 23. Thus, items 23 and 24 should appear on the balance sheet as stated, as should item 31 as a liability.
There is a dispute in item 26, with the difference between the two proposed figures explained by reference to interest accruing on the judgment debt in question. The husband contends that the interest should be shared, whereas the wife contends that he should personally pay the interest in question. The wife’s contention was, quite properly, not pressed strongly by her senior counsel. The husband did borrow the money, but the benefit of the loan was not personal, it was for the family. In the circumstance, the liability should be $150,522 at item 26, though the Court recognises that this is only an interest calculation up to the first day of the hearing, and not as at the date of these reasons, or of orders when made.
In closing submissions, counsel agreed that item 27 should appear on the balance sheet at the figure contended by the husband. The rationale for this is clear – the family benefited.
In relation to item 29, in the orders proposed by both parties, and in the submissions made on their behalf, it was conceded that the wife should bear the financial consequences of her improperly (but the Court accepts mistakenly) using superannuation fund moneys for personal use. The liability has been agreed at $36,650. In Order 6 proposed by the husband, the payment by the wife would be credited to her member entitlement in the fund. It must follow that item 29 would be nil.
There are two other items of contention. Firstly, item 32 is the capitalised value of the husband’s O Super Scheme pension (“O Super Scheme pension”) – $1,204,332 – in accordance with the single joint expert report of Mr D, and the parties’ agreement. There is no issue about the valuation, but the Court will need to give consideration as to how this is treated, as there is no evidence that the pension can, in fact, be commuted or capitalised. Thus, attributing to the husband the capitalised value would produce an inequity: C and C (2005) 33 Fam LR 414. For the time being, item 32 is technically correct and will remain as such on the balance sheet, although the Court will allocate this to a separate pool to be split as the Court considers appropriate. In the orders sought by the wife it seems that she wishes the full value of the O Super Scheme pension to be included for the purposes of calculating her share, but that the benefit in question be split, with no suggestion that this would result in her becoming entitled to anything other than a share of the periodical payment, rather than a lump sum.
The remaining issue is item 38. Here the husband contends that the difference between the value that he attributes to the family home, $4 million, and the value that will be received if the put and call option deed is implemented, $3 million, should be treated as a financial resource, and not as an asset. The rationale for this is not clear, but presumably has something to do with the potential time difference between the making of any orders and the exercise of the option relating to the property and any associated uncertainty. The binary adopted by the husband is a false one, especially in circumstances where both parties agree to the sale of the home. Item 38 should read as nil, in tandem with the rejection of the husband’s contention that the value of the property at item 1 is $4 million.
Accordingly the balance sheet will read as follows:
Ownership Description Value ASSETS 1 H K Street, Suburb G $7 million 2 H U Portfolio $6,257 3 H V Portfolio $38,406 4 H W Investment $594 5 H Commonwealth Bank of Australia account ending …77 $6,070 6 H Commonwealth Bank of Australia account ending …13 $1,000 7 H National Australia Bank account ending …78 $16,384 8 H Wine $6,294 9 H Watches $10,000 10 H Motor Vehicle 1 $28,000 11 H Specialist Collection $2,160 12 W Z Company Shares – … $4,050 13 W BB Bank Account NIL/nominal 14 W Commonwealth Bank of Australia account ending …85 NIL/nominal 15 W Commonwealth Bank of Australia account ending …71 NIL/nominal 16 W Jewellery/Watches $60,000 17 W Motor Vehicle 2 $48,600 18 W Personal Effects [incl. in 16 above] 19 Joint Home contents at K Street, Suburb G $10,000 20 Joint Commonwealth Bank of Australia account […69] NIL/nominal Total $7,237,815 ADDBACKS 21 W Proceeds of sale of M Company shares (less proceeds of sale used for repayment of Mr Doherty and Ms Doherty – incorporated in legal fees) NIL/NA 22 W Unexplained spending from loans from Mr Doherty and Ms Doherty NIL/NA 23 W Legal Fees – Total $1,231,867 $1,231,867 24 H Legal Fees – Total $437,087 $437,087 25 H Post Separation sale of assets by Husband NIL Total $1,668,954 LIABILITIES 26 H Judgment Debt in NSW District Court Proceedings to Ms Doherty including interest as at first day of hearing $150,522 27 H Personal loans and funds owed to trades – see note $300,452 28 Joint Commonwealth Bank of Australia Home Loan ending …19 $884,434 29 W Funds owing to SMSF by Wife NIL 30 W/H Taxes, penalties and interest payable NK 31 W Personal loans owing by Wife $710,282 Total $2,045,690 SUPERANNUATION Member Name of Fund Type of Interest Value 32 H P Super Fund Pension $1,204,332 33 H O Super Scheme $95,976 34 H The Shipman Superannuation Fund SMSF $84,891 35 W DD Superannuation Fund Accumulation $44,734 36 W The Shipman Superannuation Fund SMSF $41,631 37 W The Shipman Superannuation Fund – item 29 $36,650 Total $1,508,214 FINANCIAL RESOURCES 38 H Put and Call Option Deed relating to K Street, Suburb G NIL Total $0 NET POOL (INCLUDING SUPERANNUATION): $8,369,293 ASSESSMENT OF CONTRIBUTION
Approach to assessment of contribution
The Court has a broad discretion as to whether contribution is assessed on a global, asset-by-asset, or other approach. In this case it is clear that while contribution should be assessed globally, by reference to all of the assets of the parties, the implementation of any order altering property interests must consider the nature of the assets. The Court thus proposes to create three separate pools.
Pool 1 will be the husband’s O Super Scheme pension, item 32 on the balance sheet, with a formal value of $1,204,332. As this is a pension entitlement, it will be split in specie by reference to any order the Court makes for alteration of property interests.
Pool 2 will be the superannuation pool, items 33 to 37 on the balance sheet, with a value of $303,882.
Pool 3 will be the remaining non-superannuation assets, items 1 to 31 on the balance sheet, having a net value of $6,861,079, whilst acknowledging that the value of item 1, the family home, is notional.
The total net assets available to the parties is $8,369,293.
Contribution as at the date of cohabitation
The wife submits there should be no finding that as at the date of cohabitation the husband made a greater initial contribution as compared to hers. She contends that at the time of cohabitation she had total assets valued at approximately $92,000, whereas the husband had assets worth no more than approximately $220,000. She contends that the weight to be attached to the husband’s initial contribution must be assessed against the rubric of all other contributions, both financial and non-financial, made over the course of their marriage: Jabour & Jabour (2019) FLC 93-898.
The husband contends that even if his assets were only worth that which the wife contended, it fails to take into account the value to them that was realised within a relatively short period of time after cohabitation: Williams & Williams [2007] FamCA 313 at [26].
The first observation the Court makes is that whilst both parties placed dollar values on the assets that they had at cohabitation, there was no expert evidence about these values, although both parties seemed not to take this point. The Court accepts this evidence as a rough approximation by the parties themselves about their comparative contribution at the time.
The next point the Court makes is that it must be wary about assessing a greater initial contribution expressed as a percentage, as opposed to making a general finding about this.
When the evidence is examined in greater detail, the submissions made on behalf of the husband are more closely aligned to the evidence than the submissions made on behalf of the wife. The husband came into this relationship with properties at Suburb T and Suburb CC. The value of each property increased significantly within three years of cohabitation. Noting the limitations of any submission that is made in the absence of expert evidence about value, the husband’s case was that the value of his initial contribution three years after cohabitation was about $930,000, not the $220,000 conceded by the wife. He contends that this became a significant cornerstone of their later wealth, particularly in terms of property holdings. In any event, the increase in the value of the husband’s superannuation entitlement is also significant, even if it cannot be precisely quantified. The Court finds that the husband did make a greater initial financial contribution when this is measured in real terms, not just at the date of cohabitation, but within a few years thereafter, even taking into account the myriad contribution that occurred from the date of cohabitation.
Contribution to the date of separation
On behalf of the wife it was contended that contribution should be assessed as being equal as at the date of separation. By contrast, on the husband’s behalf it was contended that contribution as at the date of separation should be assessed as between 60 to 65 per cent, presumably quantifying the initial contribution discussed above.
This was a long relationship that produced two children in which two highly capable, strong-willed personalities with different attributes and skills worked to the best of their ability in the roles that they mutually adopted in the family they established. The Court accepts that there is evidence that the wife suffered from health issues at times, but probably not much earlier than the end of the relationship. If this had an impact on the husband’s contribution it was not clearly apparent as at the date of separation, though arguably became so afterwards.
The husband was a public servant at the time that they cohabited in late 2000. He retired in early 2007 and began a career in communications in late 2007. The husband has at all times since his retirement as a public servant been in receipt of an annual O Super Scheme pension of about $75,000. In 2012, he ceased working in order to care for the children full-time. The oldest child was about two years old, and the youngest about six months old at this time. The wife worked throughout the marriage except for relatively short periods surrounding the birth of the children. She worked primarily in sales roles and appears to have enjoyed considerable success, and was well remunerated.
The husband contends that they, at all relevant times, separated their finances. Presumably this submission was made as it was relevant to how the Court would assess contribution. Even if the evidence clearly established that this was accurate, which it does not, it would not necessarily influence how contribution is assessed in a lengthy marriage such as the present one where there has been a clear intermingling of finances, and where assets have been held at times solely by the husband, or the wife or jointly, as regards, for example, home contents.
Both parties had financial assistance from their parents. For example, in 2006 when the husband developed one of the properties that he brought into the marriage, the wife’s father loaned him either $675,000 or $775,000, however nothing turns on this difference. The husband contends that as this was a loan on commercial terms, the wife could not be deemed to have made any contribution to this loan. The fact that the loan was on commercial terms is irrelevant in this context. On any assessment of the financial circumstances of the parties at the time this loan was made, they were highly geared and thinly stretched, and the fact that the loan was made to the husband, even on commercial terms, plausibly reflects the relationship between the wife and her father. This is a contribution made by the wife, though not of itself a significant one in the overall scheme of things.
The loan from the wife’s father was repaid, but the source of the funds was a gift made to the husband from his mother in 2008, of $740,000. The husband’s mother also made a further gift of $105,000 to assist with the development of the Suburb CC property, and he also received an inheritance of $101,861 in 2014. In the husband’s case, it is submitted that the gifts made by his mother of over $900,000 are a significant contribution made during cohabitation that cannot be ignored. The Court agrees. The Court does not accept the attempt in the wife’s case to suggest that because of the care and assistance she provided to the husband’s mother in her infirmity, that the gifts in question were actually joint gifts. The Court finds this implausible, and, in any event, unsupported by the evidence before the Court.
The property in Suburb CC that the husband brought into the marriage was developed in 2006 with the assistance of the loan from the wife’s father, which was subsequently repaid in 2008 using a gift from the husband’s mother. The husband realised a net amount of $2.32 million from the Suburb CC development, which was applied to the purchase of the family home and funded renovations. Throughout this period, of course, the wife was also making contributions. Shortly after cohabitation, the Court accepts that she was paying about $300 weekly towards the mortgage payment on the Suburb T property that the husband brought into the marriage, as well as $150 fortnightly towards other household expenses, though it is possible that these payments were not made at the same time. The Suburb T property was transferred to the wife from the husband, in an exercise that was ultimately to increase equity for both parties, and which took advantage of the wife’s salary. The mortgage that was taken out as part of this transaction was serviced by both the wife and the husband, and whether this was directly or indirectly is irrelevant.
After the family home was purchased, there was a dispute between the parties about the nature and extent of the wife’s financial contribution by way of mortgage payments. She contends that she was predominantly responsible for the mortgage payments in the sum of $3,000 per month. The husband disputed this, asserting that he paid the mortgage repayment from the date of purchase to 2015, and it was only from then to the date of separation in December 2018 that the parties shared the mortgage. The wife was cross-examined about this. The Court prefers the husband’s evidence. The husband was a much better historian of events during the relationship, and had a much better recall of financial matters than the wife. In cross-examination, the wife was clearly confused about the purpose for which money that was provided by her mother was used. She initially contended that it was for the renovation of the family home, but then agreed that it was used to fund the accommodation bond for her mother-in-law’s aged care accommodation, and then seemed to suggest it was used for both. Specifically in relation to the $3,000 per month allegedly contributed by her towards the mortgage, initially she insisted that this commenced from 2011 to 2015, but then she prevaricated and suggested that it certainly started after 2015, and that before then it was, words to the effect: “...perhaps not $3,000, but I was paying some money monthly.” The Court prefers the husband’s evidence on this point.
In the context of a contended add-back for expenditure incurred by the wife, which was ultimately not pressed, there was an issue about how the wife applied her not-insubstantial income throughout the marriage. Clear findings as to quantum and purpose are not possible on the evidence, but it was clearly substantial expenditure. Notwithstanding this, the Court is satisfied that even if she was not contributing to the mortgage on the family home between 2011 and 2015, she was contributing to living expenses, and it is unlikely that the husband on his salary, and then pension, which was less than the wife’s salary, could have been paying for all of the expenses of the family.
The loan of $400,000 provided by the wife’s mother in late 2012, repaid by 2015 and 2017 (although not in full), and which constitutes the liability at item 26 of the balance sheet, is a contribution made through the wife. This is the loan in respect of which the wife’s evidence about its purpose was confusing and unclear. The Court is satisfied that most of it was used for the purposes of paying the accommodation bond for her mother-in-law’s aged care accommodation. It is possible that some of it went towards the cost of renovations to the family home. The wife contended that some of the money in question was used for other purposes that had not been disclosed. The Court finds that unlikely. A plausible explanation was advanced in the husband’s case in relation to the quantification of the accommodation bond.
The wife’s mother made a number of personal loans to the wife which were used for the benefit of the family. These loans are noted as a joint liability at item 31 of the balance sheet.
The wife was at all relevant times earning a greater income than the husband, and she worked for most of the marriage except for when the two boys were born. Both the husband and the wife were engaged in relatively well-paid work.
In relation to non-financial contributions including as homemaker and parenting, the overall finding of this Court is that up until the husband ceased working full-time at the end of 2012, the non-financial contributions of both parties were equal. After 2012, however, the wife worked full-time, and the husband worked, at most, part-time. It is true that the household enjoyed the benefit of assistance from paid domestic staff to assist with the care of the children for a number of years. They also had assistance with some homemaking duties. From 2012 onwards, the husband arguably made a greater contribution in the non-financial sense, though the wife was working at this time. She ceased working for a period in 2017, principally due to her health.
For present purposes, where the Court refers to the balance sheet, the Court adopts as a working assumption that the home has a notional value of $7 million, and that the husband’s O Super Scheme pension is treated as a superannuation asset which will be split in specie. This means that its capital value will be excluded for present purposes. Overall, and having regard to the myriad contributions made by both parties, as at the date of separation the Court finds contribution to be assessed at 57.5 per cent in the husband’s favour, producing a differential of 15 per cent, which on the balance sheet is quantified at $1,074,744.15. This reflects his greater initial financial contribution at, and shortly after cohabitation, as well as the substantial financial contribution derived through the husband from his mother. The sheer quantum of this contribution cannot be ignored even after considering the myriad other contributions made by the wife in the marriage. Hence an assessment of contribution at 57.5 per cent his favour.
Contribution in the period after separation to the date of hearing
During the hearing, but prior to closing submissions, the Court had formed the view that the husband was contending that he made a greater contribution in the post-separation period, particularly as homemaker and parent. In closing submissions, however, the quantification of this became somewhat opaque. Although the husband’s counsel did not heavily press this point, perhaps the clearest submission in this regard was that the husband’s contribution should be taken into account under s 75(2)(o). On behalf of the wife it was contended that there would be no further adjustment in respect to the post-separation period. The period in question – 2018 to 2023 – is lengthy, and he has borne the bulk of the parenting in this period. The Court will do so.
Assessment under s75(2)?
The wife contended that if contribution were assessed as equal, there would be a small adjustment in the husband’s favour of about 2.5 per cent, primarily based on the husband’s primary care of the children. By contrast, the husband contended there should be a s 75(2) adjustment of at least 10 per cent.
The husband is 64 years old, the wife 46 years old. They are both in good health. In the wife’s case, she concedes that she has previously suffered from a dependence health issue but has since had improved health and is engaged with medical professionals. Her senior counsel submitted that the wife has done well to recover from her health issues. The Court agrees. Nonetheless, there is a substantial age difference between the parties.
The income, property, and financial resources of the parties has been identified, and where relevant, discussed above. It is clear to the Court that the wife has a significant financial resource in the support provided by her parents. Her good, steady income reflects both her physical and mental capacity for appropriate gainful employment. In the past, she has been capable of earning significantly more than what she presently does. She is clearly accomplished at her work. There is no evidence which the Court accepts that her present employment is insecure. By contrast, the husband has been out of the full-time workforce for over a decade. He is, however, a highly intelligent, articulate and capable man. The Court accepts his evidence that he has had difficulty finding employment that is suitable, having regard to his understandable desire to be the primary carer for the children. It seemed common ground, as well as the evidence in this case, that the husband had a public profile. This thus makes plausible his assertion that the “baggage of the past”, together with his age and parenting responsibility, would make it harder for him to obtain work.
The husband is the undisputed primary carer of the two children who are now aged 13 and 10. The younger child has behavioural issues that require close management and supervision, as well as occasional psychiatric care and counselling. There is evidence before the Court of recent challenging behaviour at school and in extracurricular activities. Regrettably, it did not reflect well on the wife when she sought to minimise the special needs of her youngest son. The Court finds that most, but certainly not all, of the difficult parenting of the youngest son was primarily undertaken by the husband in the post-separation period.
The husband will have the long term care of the children – in the case of the younger boy for eight years. He will be 72 years old by the time both children have ceased their minority.
The husband receives an O Super Scheme pension in the sum of $75,000 per year which will continue for his lifetime. The Court will find that this needs to be split between the parties as the only just and equitable means of sharing an asset whose notional capital value is substantial. This means his income from this source will reduce. He has other superannuation entitlements that he will be able to access in the near future. The wife’s superannuation entitlement is much smaller.
The order for alteration of property interests contemplated by these reasons will see the husband receiving a greater share of the parties’ assets.
The wife pays child support. Even though the assessment is for $185 per week, pursuant to a private agreement with the husband, she pays private school fees which roughly equates to $415 per week, which is almost double the amount of the assessment. This is a substantial contribution to the needs of the children and is proportionate to the respective earning capacities of the husband and the wife.
Having regard to all of these matters, the Court assesses an adjustment in favour of the husband under s 75(2) of 7.5 per cent, producing a further differential of 15 per cent, quantified at $1,074,744.15 in terms of the pool.
A just and equitable order?
Having regard to the Court’s findings above, an order altering property interests will be made reflecting a 65 per cent split in the husband’s favour.
Pool 1 will be split in specie, as to 65 per cent to the husband and 35 per cent to the wife. The values are notional only. The split will be reflected in the periodical payments.
Pool 2 will be divided as to 65 per cent to the husband. In practical terms, 65 per cent of $303,882 equals $197,523.30. The husband’s current superannuation has a value of $180,867, so there will be a small splitting order in his favour out of the remaining superannuation in the wife’s name.
Pool 3 will notionally be divided as to $4,459,701.35 to the husband, and $2,401,377.65 to the wife.
The Court is satisfied that such an alteration of property interests is as just and equitable as the funds of this case allows. For example, both the short and long-term needs of both parties are met by the proposed orders.
IMPLEMENTING THE ALTERATION OF PROPERTY INTERESTS
Subject to a contrary agreement by the parties, and reflecting the Court’s assumptions about the parties’ preferences about assets to be retained, the assets which each of the husband and wife will retain are as follows:
Pool 1 - Superannuation – $1,204,332
SUPERANNUATION WIFE HUSBAND 32 P Super Fund (Pension) $421,516.20 P Super Fund (Pension) $782,815.80 Total $421,516.20 Total $782,815.80 Pool 2 – Remaining Superannuation
SUPERANNUATION WIFE HUSBAND 33 O Super Scheme $95,976 34 The Shipman Superannuation Fund (SMSF) $84,891 35 DD Superannuation Fund $44,734 36 The Shipman Superannuation Fund (SMSF) $41,631 37 The Shipman Superannuation Fund (item 29 in following table)_ $36,650 Total $123,015 Total $180,867 Pool 3 – Remaining Non-Superannuation Assets
WIFE HUSBAND ASSETS Description Value Description Value 1 K Street, Suburb G $7,000,000 2 U Portfolio $6,257 3 V Portfolio $38,406 4 W Investment $594 5 Commonwealth Bank of Australia account ending …77 $6,070 6 Commonwealth Bank of Australia account ending …13 $1,000 7 National Australia Bank account ending …78 $16,384 8 Wine $6,294 9 Watches $10,000 10 Motor Vehicle 1 $28,000 11 Specialist Collection $2,160 19 Home contents at K Street, Suburb G $10,000 12 Z Company Shares – … $4,050 13 BB Bank Account NIL/nominal 14 Commonwealth Bank of Australia account ending …85 NIL/nominal 15 Commonwealth Bank of Australia account ending …71 NIL/nominal 16 Jewellery/Watches $60,000 17 Motor Vehicle 2 $48,600 18 Personal Effects [incl. in 16 above] 20 Commonwealth Bank of Australia account […69] NIL/nominal Commonwealth Bank of Australia account [#969] NIL/nominal Total $112,650 Total $7,125,165 ADDBACKS 21 Proceeds of sale of M Company shares (less proceeds of sale used for repayment of Mr Doherty and Ms Doherty – incorporated in legal fees) NIL/NA 22 Unexplained spending from loans from Mr Doherty and Ms Doherty NIL/NA 23 Legal Fees – Total $1,231,867 $1,231,867 24 Legal Fees – Total $437,087 $437,087 25 Post Separation sale of assets by Husband NIL Total $1,231,867 Total 437,087 LIABILITIES 26 Judgment Debt in NSW District Court Proceedings to Ms Doherty including interest as at first day of hearing $150,522 27 Personal loans and funds owed to trades $300,452 28 Commonwealth Bank of Australia Home Loan ending …19 $884,434 29 Funds owing to SMSF by Wife NIL 30 Taxes, penalties and interest payable NIL/NK Taxes, penalties and interest payable NIL/NK 31 Personal loans owing by Wife $710,282 Total $710,282 Total $1,335,408 NET TOTAL $634,235 NET TOTAL $6,226,844 ORDERS
Consistent with the submissions made by the parties, they have leave to file in chambers by 12 April 2023 agreed Minutes of Order that implement the orders for alteration of property interests contemplated by these reasons for judgment, having regard to the development of the family home.
The matter will otherwise be adjourned for mention on 26 April 2023 at 9am.
I certify that the preceding seventy-eight (78) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Altobelli. Associate:
Dated: 16 March 2023
SCHEDULE ONE
FAMILY LAW ACT 1975
IN THE FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
AT SYDNEY
File No. SYC8192/2018
BETWEEN
MR SHIPMAN
(Applicant)AND
MS SHIPMAN
(Respondent)APPLICANT’S MINUTE OF ORDERS
BY CONSENT IT IS ORDERED
1.That for the purpose of these Orders, the following definitions shall apply:
a.“Husband” means Mr Shipman.
b.“Wife” means Ms Shipman.
c.“Parties” means the Husband and the Wife.
d.“Suburb G Property” means the property situate at K Street, Suburb G, NSW, being all of the land contained in Folio Identifier ….
e.“Suburb G Mortgage” means the Mortgage in favour of the Commonwealth Bank secured over the title of the Suburb G Property.
f.“Contract of Sale” means Annexure A of the PCO Deed.
g.“PCO Deed” means the Put & Call Option Deed between the Husband, E Pty Ltd and Mr FF dated late 2022;
h.“Loan Agreement” means the Deed of Loan Agreement between Husband and E Pty Ltd dated late 2022;
i.“Judgment Debt” means the funds owed by the Husband to Ms Doherty pursuant to the Judgment dated late 2020 obtained in New South Wales District Court Proceedings ….
2.That upon settlement of the sale of the Suburb G property in accordance with the Orders dated 5 September 2022, the net proceeds of sale are to be disbursed in the following manner and priority;
a.The sum required so as to discharge the Suburb G Mortgage;
b.In payment of selling costs;
c.Pay in full the amount owing as at the date of payment, to Ms Doherty pursuant to Orders dated 5 September 2022;
d.In the event that the Wife makes a positive election pursuant to Order 3, the balance then remaining:
i.To the Wife, such that when taking into account these Orders (including Order 3), the sum required such that she receives 35% of the net matrimonial asset pool.
ii.The balance then remaining to the Husband.
e.In the event that the Wife does not make a positive election pursuant to Clause 3, the balance then remaining;
i.To the Wife such that when taking into account these Orders, and to include the $2,500,000 the Husband has agreed to loan the borrower pursuant to the Loan Agreement, the sum required such that she receives 35% of the net matrimonial asset pool.
ii.The balance then remaining to the Husband, inclusive of the $2,500,000 to be repaid by the borrower pursuant to the Loan Agreement.
3.In the event that the property is sold in accordance with the PCO Deed, the Wife shall notify the Husband in writing at least 30 days prior to the date of settlement of the Suburb G Property whether she wishes to obtain the benefit of an option to purchase one unit at a 43% discount as set out at Clause 47.5 of the Contract of Sale.
4.In the event that the Wife does wish to obtain the benefit of an option to purchase a unit as notified pursuant to Order 3, the Husband shall do all acts and things, and sign all documents necessary to assign his rights under Clause 47.5 of the Contract of Sale in respect of the purchase of one unit at a 43% discount.
5.In the event that the property is sold in accordance with the PCO Deed and the Wife makes a positive election pursuant to Clause 3, at the time of repayment pursuant to the Loan Agreement, the Husband pay to the Wife $875,000 (being 35% of $2,500,000) within 7 days of receipt of funds.
6.Within 14 days of these orders, the Wife shall pay into the Shipman Superannuation Fund the sum of $36,650.01, such moneys to form part of the Wife’s member entitlement in the Shipman Superannuation Fund.
7.That the parties do all acts and things and sign all documents necessary to:
a.Make the Shipman Superannuation Fund to compliant, the costs of which to be met equally from the parties’ respective member entitlements;
b.Rollout each of their respective member entitlements in the Shipman Superannuation Fund to a complying fund; and
c.Wind up the Shipman Superannuation Fund, the costs of which to be met equally from the parties’ respective member entitlements;
as expeditiously as possible.
8.That as between the Husband and Wife, the Wife is responsible for and indemnifies the Husband in relation to any monetary penalties and/or interest imposed or required to be paid by the Australian Taxation Office resulting from or in connection with the withdrawal of funds from the Shipman Superannuation Fund on 26 August 2016.
9.Further to Order 8, that as between the Husband and Wife, the Wife is responsible for and indemnifies the Husband in relation to any monetary penalties and/or interest imposed or required to be paid by the Australian Taxation Office resulting from or in connection with the Wife’s withdrawal of funds from the Shipman Superannuation Fund in non-compliance with the Superannuation Industry (Supervision) Act 1993.
10.That other than as specifically dealt with herein, the Husband be the sole owner of all items of furniture, property, effects and superannuation in his name, possession, custody or control as at the date of these Orders.
11.That other than as specifically dealt with herein, the Wife be the sole owner of all items of furniture, property, effects and superannuation in her name, possession, custody or control as at the date of these Orders.
12.That other than as specifically dealt with herein, the Husband is solely responsible for and indemnifies the Wife and will keep the Wife indemnified with respect to any debt, liability or claim in his sole name or any liability that may arise in relation to items of property vesting in him pursuant to these Orders.
13.That other than as specifically dealt with herein, the Wife is solely responsible for and indemnifies the Husband and will keep the Husband indemnified with respect to any debt, liability or claim in her sole name or any liability that may arise in relation to items of property vesting in her pursuant to these Orders.
14.That in default of the parties or either of them doing all acts and things and executing all such documents as are necessary to give effect to these Orders, a Registrar or Deputy Registrar of the Federal Circuit Court of Australia at Sydney be appointed pursuant to Section 106A to execute all such documents in the name of the party in default and to do all such acts and things necessary to give validity and operation to these Orders. The defaulting party shall be responsible for meeting all costs associated with the making of such Application.
15.That the Wife pay the Husband’s costs of and incidental to this Application.
NOTATION
A.These Orders should be read in conjunction with the Orders dated 5 September 2022.
SCHEDULE TWO
IN THE FEDERAL CIRCUIT AND FAMILY
COURT OF AUSTRALIA (DIVISION 1)
AT SYDNEYFile No. SYC8192/2018
BETWEEN
MR SHIPMAN
(Applicant Husband)AND
MS SHIPMAN
(Respondent Wife)AND
MINUTE OF ORDERS SOUGHT BY THE RESPONDENT WIFE
DEFINITIONS:
THE COURT NOTES THE FOLLOWING DEFINITIONS FOR THE PURPOSES OF THESE ORDERS:A.1.“Suburb G Property” means the property situated at and known as K Street, Suburb G in the state of New South Wales, being the whole of the land contained in Folio Identifier …, together with the improvements, fixtures and fittings erected thereon and/or attached thereto, of which the Husband is the sole registered proprietor.
A.2."Suburb G Property Builder Debts" means the monies the Husband asserts are owing to Mr R and/or Mr GG in relation to works at the Suburb G Property (E$ 21,000 and E$12,000 respectively).
A.3.“Suburb G Property Mortgage” means the mortgage registered number … secured against the title to the Suburb G property and the accompanying Commonwealth Bank Home Loan account number …19 held in the parties' joint names.
A.4.“Suburb G furniture, furnishings and affects” means all items of furniture, furnishing and affects situated at the Suburb G property (excluding the Husband's Specialist Collection, the Husband's Watches, the Wife's Jewellery, and the Wine Collection.)
A.5.“the Contract” means any contract entered into for the sale of the Suburb G property as a consequence of the exercise of the Option, and specifically including the contract annexed to the P & C Deed entered into between the Husband, Mr FF and E Pty Ltd in late 2022.
A.6.“The Ms Doherty Payment” means the $136,363.92 payable to Ms Doherty pursuant to Order 1 of the Orders of this Court (referable to Ms Doherty) the dated 5 September 2022].
A.7."The Ms Doherty Interest Payment" means all interest payable by the Husband to Ms Doherty pursuant to Orders 2 and 3 of the Orders of this Court (referable to Ms Doherty) dated 5 September 2022.
A.8."The Deed of Loan" and/or "DLA" means the Deed of Loan Agreement entered into between the Husband, Mr FF, and E Pty Ltd in late 2022.
A.9.“Husband's Specialist Collection” means the entire specialist collection of the Husband.
A.10.“Husband’s Credit Cards” means all credit cards accounts held in the Husband’s sole name or on his behalf or at his insistence with any bank or financial institution.
A.11.“Husbands Suburb G Loan” means any loan the Husband makes to the purchaser of the Suburb G Property in the event that the Option is exercised, including pursuant to the DLA.
A.12.“Husband's Investments” means the Husband's shareholdings/units held in U Portfolio and V Portfolio.
A.13.“Husband’s Motor Vehicle” means the Motor Vehicle 1 motor vehicle registered in the Husband’s sole name.
A.14."Husband's P Super Fund" means the Husband’s entire right, interest and entitlement in the P Super Fund.
A.15."Husband's Personal loans" means all liabilities owing by the Husband as a consequence of his borrowing funds from/funds being advanced by third parties including but not limited to Mr HH, Mr JJ, Ms MM, Mr KK, Mr LL and/or Ms NN.
A.16.“Husband’s O Super Scheme” means the Husband’s entire right, interest and entitlement in the O Super Scheme.
A.17."Husband’s Savings” means funds held in bank accounts in the Husband’s sole name with any bank or financial institution, the particulars of which are not known.
A.18."Husband's Watches" means the watches in the Husband's possession and/or control, including Watch 1, Watch 2, Watch 3 and Watch 4.
A.19.“Joint Accounts” means all bank accounts held in the parties’ joint names with any bank or financial institution, including Commonwealth Bank of Australia joint account number …69.
A.20.“Shipman Super Fund” means the parties’ self-managed super fund called the Shipman Superannuation Fund, of which the Husband and Wife are the trustees and members of the fund.
A.21.“Option” means either option (be it the put option ["Put Option"] or the call option ["Call Option"]) referred to in the Put and Call Option Deed entered into between the Husband, Mr FF and E Pty Ltd in late 2022 ("the P&C Deed").
A.22.“"the Purchaser” means Mr FF and/or E Pty Ltd pursuant to the P&C Deed or any person or entity who enters into the Contract with the Husband
A.23.“Wife’s Credit Cards” means all credit cards accounts held in the Wife’s sole name or on her behalf or at her insistence with any bank or financial institution, including her CBA and OO credit cards.
A.24.“Wife’s Investments” means the Wife's shareholdings/units held in Z Company, and a BB Bank real time account.
A.25.“Wife’s Jewellery” means all items of jewellery and watches in the Wife’s possession and/or control.
A.26.“Wife’s Motor Vehicle” means the Motor Vehicle 2 having registration number … and registered in the Wife’s sole name.
A.27."Wife's Personal Loans" means all liabilities owing by the Wife as a consequence of her borrowing funds from/funds being advanced by third parties including but not limited to Mr Doherty and Ms Doherty (excluding the Parties' Ms Doherty Loan, the Ms Doherty Loan Interest and the Ms Doherty Legal Costs).
A.28.“Wife’s Savings” means all funds contained in bank accounts held in the Wife’s sole name with any bank or financial institution in Australia or overseas, including her bank account with the Commonwealth Bank of Australia ….85 and …71.
A.29.“Wife’s Settlement Payment” or the "Wife's Settlement Sum" means the sum payable to the Wife to give effect to these orders and more particularly calculated in accordance with Order 2
A.30.“Wine Collection” means the collection of bottles of wine held at the Suburb G property at separation.
ORDERS SOUGHT BY THE WIFE
1.That to assist in interpretation of these Orders the Court notes that:
1.1the Husband is a party to the Option pursuant to the P&C Deed;
1.2the Put Option may be exercised on its terms by no later than mid-2023 and the Call Option by no later than mid-2023;
1.3in the event that the Option is exercised, the Contract (for the sale of the Suburb G property) will be entered into which requires settlement within 90 days of the date of the Contract;
1.4the Contract also provides that the Husband is required to provide up to $2,500,000 by way of vendor finance to the purchaser pursuant to the Deed of Loan (with an option to the Husband to receive two properties in the redeveloped Suburb G property ["the Husband's Unit Option") [" the Husband’s Suburb G Loan"];
1.5the consequence of the Husband’s Suburb G Loan is than on settlement of the contract the purchaser will only be required to pay the purchase price less the amount of the Husband’s Suburb G Loan (up to $2,500,000);
1.6it is the intention of these Orders that the Husband’s Suburb G Loan be regarded as an asset that the Husband will retain;
1.7in that event it is the intention of these Orders that any payment required to be made to the Wife will be:
1.7.1 calculated on the basis that the Husband retains the Husband's Suburb G Loan as an asset, and
1.7.2 the payment to the Wife will be made from the proceeds of the settlement of the Contract.
2.That for the purposes of these Orders, the Wife’s Settlement Sum is a sum representing 47.5 % of the property pool as found by the Court but which for the sake of clarity:
2.1includes in the event that:
2.1.1 the Option is exercised:
2.1.1.1the proceeds of sale of the Suburb G Property; and
2.1.1.2the Husband’s Suburb G Debt (as an asset of the Husband); or
2.1.2 the Option is not exercised:
2.1.2.1the net proceeds of sale payable/paid into controlled monies pursuant to Order 2 of the Orders of this Court (referable to Mr FF and E Pty Ltd) made 5 September 2022;
2.2includes all pension and superannuation interests at the values agreed on the Joint Balance Sheet);
2.3excludes any monies still owing on the Suburb G Mortgage after payment pursuant to Order 3.4.2 (or Order 4.2) below (which liability it is intended be borne solely by the Husband); and
2.4excludes the Ms Doherty Interest Payment (which liability it is intended be borne solely by the Husband).
3.That in the event that the Suburb G Property is sold pursuant to a contract arising from the exercise of the option the following provisions have effect:
3.1Upon entering into the Contract, or as soon thereafter as the Wife’s Settlement Sum is ascertained, the Husband forthwith:
3.1.1 provide to the purchaser an irrevocable direction to pay the Wife’s Settlement Sum to the Wife on settlement of the sale of the Suburb G Property, and
3.1.2 provide a copy of such direction to the Wife’s solicitors and evidence of its provision to the purchaser;
3.2Upon settlement of the sale of the Suburb G Property, the Husband do all acts and things and sign all documents to ensure that the purchaser pays directly to the Wife (or her nominee), the Wife’s Settlement Sum;
3.3In the event that for whatever reason the Wife is not paid the Wife’s Settlement Sum on settlement of the sale of the Suburb G Property, the Husband shall remain liable to pay the Wife the Wife’s Settlement Sum, and in that regard the Husband forthwith do all acts and things and sign all documents to immediately upon receipt of written request of the Wife, assign all of his rights under the Option, the Contract, and the DLA, and otherwise in respect of the sale of the Suburb G Property, to the Wife;
3.4On settlement of the sale of the Suburb G Property, the proceeds of sale be paid in the following manner and priority:
3.4.1 all costs and expenses of sale including legal costs and disbursements, agents commission, valuer's fees, and auction expenses;
3.4.2 the amount required to repay the Suburb G Mortgage to a maximum amount of $925,000;
3.4.3 to pay the Ms Doherty Payment to Ms Doherty;
3.4.4 the amounts required to pay all municipal and water rates outstanding with respect to the Suburb G Property;
3.4.5 the Wife’s Settlement Sum to the Wife (or her nominee) less the sum of $710,282;
3.4.6 the sum of $710,282 to the Wife's father, Mr Doherty (being the $ 710,282 identified and provided for in Order 3.4.5 above);
3.4.7 any monies still owing on the Suburb G Mortgage after payment pursuant to Order 3.4.2 above;
3.4.8 to pay the Ms Doherty Interest Payment to Ms Doherty; and
3.4.9 the balance, if any, to the Husband.
4.That in the event that the Put Option is not properly exercised in accordance with the P&C Deed by 24 June 2023 or the Call Option is not properly exercised with the Wife's prior written consent by 30 June 2023, on settlement of the sale of the Suburb G Property pursuant to Order 2 of the Orders of this Court (referable to Mr FF and E Pty Ltd) made 5 September 2022, the proceeds of sale be paid in the following manner and priority:
4.1all costs and expenses of sale including legal costs and disbursements, agents commission, valuer's fees, and auction expenses;
4.2the amount required to repay the Suburb G Mortgage to a maximum amount of $925,000;
4.3to pay the Ms Doherty Payment to Ms Doherty;
4.4the amounts required to pay all municipal and water rates outstanding with respect to the Suburb G Property;
4.5the Wife’s Settlement Sum to the Wife (or her nominee) less the sum of $ 710,282;
4.6the sum of $710,282 to the Wife's father, Mr Doherty (being the $ 710,282 identified and provided for in Order 4.5 above);
4.7any monies still owing on the Suburb G Mortgage after payment pursuant to Order 4.2 above;
4.8to pay the Ms Doherty Interest Payment to Ms Doherty; and
4.9the balance, if any, to the Husband.
5.That within 14 days of the exchange of the Contract or simultaneously with the Husband vacating the Suburb G Property (whichever occurs first), the Husband make available for collection by the Wife (or her nominee) from the Suburb G Property (at such reasonable time nominated by the Wife), the following items of the Suburb G Furniture, Furnishings and Effects:
5.1.the furniture previously situate in the master bedroom (Inc. Bed, mattress, bedding, and cupboards);
5.2.the Wife's clothing, shoes and personal effects;
5.3.the formal dining room setting (incl. table and chairs and glass cupboard);
5.4.the formal lounge room setting (incl. lounges, coffee tables, and side tables) and soft furnishings;
5.5.the children’s single beds;
5.6.the children’s cubby house;
5.7.the formal glassware, formal dining setting and cutlery;
5.8.the Wife's kitchen accoutrements – (incl. baking dishes, pots, pans and the like);
5.9.the Paintings (prints) and framed photos,
which items the Wife then retain to the Husband's exclusion; and for that purpose the Husband be restrained from doing any act or thing having as its cause or effect (or allowing or causing any third party to do so), any damage to/disposal of the items in question pending collection.
The Husband's O Super Scheme
6.That Order 7 to Order 9 constitute an “O Super Scheme Order”.
7.That in accordance with paragraph 90XT(1)(b) of the Family Law Act 1975:
7.1The Wife (“the Non-member”) (or such other person mentioned in s.90XE of the Family Law Act 1975) be entitled to be paid the specified percentage of each splittable payment from the superannuation interest of the Husband, Mr Shipman (“the Member”) (Date of Birth, 1958; O Super Scheme member number in the O Super Scheme Scheme (“O Super Scheme”);
7.2The Member’s entitlement (or the entitlement of such other person in relation to the Member’s superannuation interest in the O Super Scheme) be correspondingly reduced by force of the O Super Scheme Order; and
7.3the specified percentage for the purposes of the O Super Scheme Order be 47.5 %.
8.That the O Super Scheme Order have effect from the O Super Scheme operative time and the O Super Scheme operative time for the purposes of these Orders be the beginning of the seventh day after service of a sealed copy of the O Super Scheme Order on the PP Corporation (“the O Super Scheme Trustee”).
9.That the O Super Scheme Trustee do all such acts and things and sign all such documents as may be necessary to:
9.1calculate, in accordance with the requirements of the Family Law Act 1975 the entitlement awarded to the Non-member under the O Super Scheme Order; and
9.2pay the entitlement whenever the O Super Scheme Trustee makes a splittable payment from the Member’s superannuation interest in the O Super Scheme.
10.That for the purposes of Order 7 to Order 9 above, the Court NOTES:
10.1.that in accordance with section 90XZD of the Family Law Act 1975, the O Super Scheme Trustee has been accorded procedural fairness in relation to the making of the O Super Scheme Order and was provided with a copy of the proposed the O Super Scheme Order before it was made;
10.2.that the O Super Scheme Trustee, after service upon it of a sealed copy of the O Super Scheme Order, has additional obligations under Part 16 of the O Super Scheme Trust Deed and Rules;
10.3.that any payments from the Member’s superannuation interest in the O Super Scheme made after the O Super Scheme Trustee has observed its additional obligations under the O Super Scheme Trust Deed and Rules are not splittable payments in accordance with Division 2.2 of the Family Law (Superannuation) Regulations 2001; and
10.4.that the O Super Scheme Trust Deed and Rules require the Member and the Non-member to be alive at the O Super Scheme operative time and the O Super Scheme Trustee has requested a prospective O Super Scheme operative time.
11.That should the balance in the Husband's O Super Scheme as at date of compliance with Order 7 to Order 10 above be less than $95,976, the Husband simultaneously pay to the Wife such sum equal to 47.5 % of the shortfall.
The Husband's P Super Fund
12.That Order 13 to Order 16 constitute the “O Super Scheme Splitting Order”.
13.That in accordance with paragraph 90XT(1)(b) of the Family Law Act 1975:
13.1The Wife (“the Non-member”) (or such other person mentioned in s.90XE of the Family Law Act 1975) be entitled to be paid the specified percentage of each splittable payment from the superannuation interest of Mr Shipman (“the Member”) (Date of Birth, 1958) in the P Super Fund (“P Super Fund”);
13.2The Member’s entitlement (or the entitlement of such other person in relation to the Member’s superannuation interest in the P Super Fund to whom a splittable payment may be made) be correspondingly reduced by force of the O Super Scheme Splitting Order; and
13.3the specified percentage for the purposes of O Super Scheme Splitting Order be 47.5 %.
14.That the O Super Scheme Splitting Order have effect from the P Super Fund operative time and the P Super Fund operative time be the beginning of the seventh day after service of a sealed copy of the O Super Scheme Splitting Order on the Trustees of the P Super Fund (“the P Super Fund Trustee”).
15.That the P Super Fund Trustee do all such acts and things and sign all such documents as may be necessary to:
15.1calculate, in accordance with the requirements of the Family Law Act 1975 the entitlement awarded to the Non-member under the O Super Scheme Splitting Order; and
15.2pay the entitlement whenever the P Super Fund Trustee makes a splittable payment from the Member’s superannuation interest in the P Super Fund.
16.That for the purposes of Order 13 to Order 15 above, the Court NOTES:
16.1that in accordance with section 90XZD of the Family Law Act 1975, the P Super Fund Trustee has been accorded procedural fairness in relation to the making of O Super Scheme Splitting Order and was provided with a copy of the proposed O Super Scheme Splitting Order before it was made;
16.2that the P Super Fund Trustee, after service upon it of a sealed copy of the O Super Scheme Splitting Order, has additional obligations under NSW legislation; and
16.3that any payments from the Member’s superannuation interest in the P Super Fund made after the P Super Fund Trustee has observed its additional obligations under the relevant NSW legislation are not splittable payments in accordance with Division 2.2 of the Family Law (Superannuation) Regulations 2001.
17.That pending compliance with Order 13 to Order 16 above, the Husband be restrained from doing any act or thing (or instructing, causing or allowing any representative or nominee to do any act or thing) having as its cause or effect, the:
17.1accessing, withdrawal or draw down of his interest and/or entitlements (or any portion thereof) in the Husband's P Super Fund; and/or
17.2the increase in the regular payments being made to the Husband from the Husband's P Super Fund.
The Shipman Super Fund
18.That should the Wife not already have done so by the date of these Orders, the Wife forthwith pay the sum of $ 36,650.01 (plus any interest deemed owing by the Australian Tax Office on such sum by such date, if any) to the Shipman Super Fund, and forthwith thereafter, in accordance with Section 90XT of the Family Law Act 1975 and in order of priority:
18.1a base amount be allocated to the Husband out of the Wife's member interest in the Shipman Super Fund, as required by s90XT(4) of the Family Law Act ["the Husband's SS Base Amount"];
18.2the Husband be entitled to be paid the Husband's SS Base Amount when a splittable payment first becomes payable from the Wife's interest in the Shipman Super Fund, in accordance with the Family Law (Superannuation) Regulations 2001;
18.3the Wife's entitlement, and the entitlement of such other person to whom a splittable payment may be made to the first payment out of the Wife's interest in the Shipman Super Fund, be hereby correspondingly reduced;
18.4for the purposes of Order 18.1 to Order 18.3 above, the Husband's SS Base Amount/Percentage be 100% (such that the Husband then holds the entire member interest in the Shipman Super Fund) ["The Husband's Consolidated Member Interest"];
18.5this Order have effect from the operative date, being 7 days from payment by the Wife pursuant to Order 18.4 above or the date of the service of these Orders on the Trustees of the Shipman Super Fund, whichever is the later;
18.6the Trustees of the Shipman Super Fund do all acts and things and sign all documents necessary to:
18.6.1calculate, in accordance with the requirements of the Family Law Act 1975 and the Family Law (Superannuation) Regulations, the entitlement created by Order 18.1 to Order 18.5 above; and
18.6.2pay the entitlement when a splittable payment first becomes payable out of the Wife's member interest in the Shipman Super Fund.
19.That simultaneously with payment by the Wife pursuant to Order 18 above, the Husband pay the sum of $ 41,631 direct to the Wife.
20.That simultaneously with compliance with Order 19 above, the parties do all acts and things and sign all documents necessary to remove the Wife as a member of the and a Trustee of the Shipman Super Fund.
21.That, having been accorded procedural fairness in relation to the making of these Orders, these Orders bind the Trustees of the Shipman Super Fund in so far as these Orders relate to the Shipman Super Fund.
22.That simultaneously with compliance with Order 18 above, the Husband indemnify the Wife and keep her so indemnified as and against all actions, claims, suits, demands and liabilities arising out of or in connection with the Wife having been a member and/or Trustee of the Shipman Super Fund.
General
23.That save as provided in these Orders, the Wife be solely, legally and beneficially entitled, to the exclusion of the Husband, to all other real and personal property of whatsoever nature and kind as in her ownership, possession or control at the date of the making of these Orders, or to which she may become entitled after the making of these Orders including but not limited to:
23.1the Wife's Investments;
23.2the Wife's Jewellery;
23.3the Wife's Motor Vehicle; and
23.4the Wife's Savings.
24.That save as provided in these Orders to the contrary, the Husband be solely, legally and beneficially entitled, to the exclusion of the Wife, to all other real and personal property of whatsoever nature and kind as is in his ownership, possession and/or control at the date of the making of these Orders, or to which he may become entitled after the making of these Orders, including but not limited to:
24.1the Husband’s Bank Accounts;
24.2the Husband's Specialist Collection;
24.3the Husband's Investments;
24.4the Husband's Motor Vehicle;
24.5the Husband's Savings;
24.6the Husband's Watches; and
24.7the Wine Collection.
25.That the Wife indemnify and keep indemnified the Husband against any liability of any nature which the Wife has, including but not limited to any debt in respect of the Wife's Credit Cards, the Wife's Personal Loans, and/or any other debts owing or attaching to any asset that the Wife receives/retains.
26.That the Husband indemnify and keep indemnified the Wife against any liability of any nature which the Husband has, including but not limited to any liability or debt in respect of the Husband's Credit Cards, the Husband's Personal Loans, and/or all other debts owing or attaching to any asset that the Husband receives/retains; and
27.That save as any paragraph compromising these Orders provides to the contrary, each of the Husband and the Wife release the other from all actions, claims, suits, demands and debts from one to the other.
28.That parties do all acts and things and give all consents and execute all documents and writings necessary to give effect to the Orders made herein.
29.That in the event either party refuses or neglects to execute any deed or instruments, the Registrar of the Court be appointed pursuant to Section 106A of the Family Law Act 1975, to execute such deed or instrument in the name of such defaulting party and to do all acts and things necessary to give validity to the operation of the deed or instrument.
30.That the Husband pay the Wife's costs of, an in conjunction with, these proceedings.
31.That the Court NOTES that these Orders should be read in conjunction with the Orders of this Court of 5 September 2022.
3
0