SS and TS

[2003] FMCAfam 478

FEDERAL MAGISTRATES COURT OF AUSTRALIA

SS & TS [2003] FMCAfam 478

FAMILY LAW – Property – short marriage – valuation of real estate – gifts – contributions – where parties assert payment of wedding expenses are financial contribution – the proper approach to wedding and pre paid honeymoon expenses in the majority of cases is to identify what remains of any savings and cash gifts and include this balance as an initial contribution – where husband’s family provide significant financial assistance, including cash and accommodation – where husband and his family undertake significant owner builder venture of former matrimonial home.

Applicant: SS

Respondent: TS

File No: SYM298 of 2002

Delivered on: 5 December 2003

Delivered at: Parramatta

Hearing dates: 30 & 31 October 2003

Judgment of: Ryan FM

REPRESENTATION

Counsel for the Applicant: Mr G. Roberts

Solicitors for the Applicant: Kells The Lawyers

Solicitor Advocate for the Respondent: Mr J David

Solicitors for the Respondent: Hansons

ORDERS

1. Within ten weeks of the date of these orders the husband shall pay to the wife the sum of One hundred and nineteen thousand seven hundred and seventy dollars and forty nine cents ($119,770.49) and at the same time shall give her a discharge of the Westpac mortgage secured against the property situate at Farmborough Heights.

2. Simultaneously, upon compliance by the husband with Order 1, the wife shall do all acts and things and sign all documents as are necessary to transfer to him her right, title and interest in the property situate at Farmborough Heights.

3. In the event that the husband fails to comply with Order 1 each party shall immediately take all necessary steps and execute all necessary documents to cause the property known as and situate at Farmborough Heights ("the property") to be sold by private treaty at a price to be agreed on between the parties and failing such agreement to be determined by the President of the Australian Property Institute of New South Wales or his nominee and to distribute the proceeds of the said sale as follows:

   (a)In payment of agents commission and advertising expenses and legal expenses of the sale;

   (b)In discharge of the mortgage in favour of Westpac Bank registered over the property;

   (c)78 per cent to the husband from which he shall pay the wife an adjusting amount  of  $31,330.49;

   (d)The balance to the wife. 

4. That in the event that the property fails to be sold by private treaty within a period of 3 months from the date Order 3 becomes operative, then each party take all necessary steps and execute all necessary documents to cause the property to be sold by auction at the earliest possible date at a reserve price to be agreed upon between the parties and failing such agreement to be determined by the President of the Australian Property Institute of New South Wales or his nominee and that the proceeds of the sale be distributed in accordance with Order 4 herein.

5. That pending the sale of the property the husband continue to pay, as they fall due, all regular instalments in respect of the mortgage, council rates, water rates and household insurance in respect of the property, and shall indemnify and keep indemnified the wife in respect of any such amounts, and if any such amounts remain unpaid as at the date of sale of the property, the husband shall be solely liable for any such arrears.

6. That in default of either or both of the husband and the wife doing all such things and executing all such documents as may be needed to comply with these orders that a Registrar of the Wollongong Registry of the Federal Magistrates Court or such other person appointed by the court is authorised to do all such acts and things and execute all such documents on behalf of either or both of the husband and the wife.

7. That all exhibits tendered in these proceedings be returned at the expiration of one calender month unless an appeal is lodged.

8. That the solicitor who issued any subpoena collects that subpoenaed material and returns it to the owner within seven (7) days.

9. All outstanding applications are dismissed.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
WOLLONGONG

SYM298 of 2002

SS

Applicant

And

TS

Respondent

REASONS FOR JUDGMENT

Introduction

1. These are proceedings for the adjustment of property concerning a marriage of 3.5 years duration.  After their engagement the parties purchased land upon which they later built a large home as owner builders. Throughout the marriage the wife worked full time as an accounts clerk and the husband worked in a family business operated in partnership with his brother.

The application

1. SS (“the wife”) filed an application for final orders in the Family Court of Australia on 12 August 2002.  This document contains the orders sought by her at the hearing.  Essentially, she asks that she have 40 per cent of the nett matrimonial assets.  She agrees that the husband should retain the matrimonial home and says that he should buy out her interest in the assets.  Otherwise, that the parties retain their assets and that the husband indemnify her in relation to the mortgage. 

2. TS (“the husband”) filed a response on 30 September 2002.  He says that the wife should have 15 per cent of the net matrimonial assets. 

Short history

1. The husband was born on 18 March 1970 and is 33 years old.  The wife was born on 30 March 1979 and is now aged 24 years. 

2. The parties were married on 3 January 1998.  They did not cohabit prior to their marriage.

3. There are no children of their marriage.

4. The parties separated on 3 July 2001.

5. On 26 August 2002 a Decree Nisi dissolving the marriage was ordered.

The evidence

1. The applicant wife relied on the following evidence:

   ·Her affidavit filed 16 May 2003 and her oral testimony.

   ·Her financial statement sworn and filed 16 May 2003.

   ·Affidavit of RG sworn and filed 16 May 2003 and his oral testimony.

   ·Affidavit of JS sworn and filed 10 June 2003 and his oral testimony.

2. The respondent husband relied on the following evidence:

   ·His affidavit sworn 20 May 2003 and his oral testimony.

   ·His financial statement sworn 24 October 2003.

   ·Affidavit of DS sworn 20 May 2003 and his oral testimony.

   ·Affidavit of AS sworn 20 May 2003 and her oral testimony.

   ·Affidavit of GS sworn 20 May 2003 and his oral testimony.

   ·Affidavit of BK sworn 27 June 2003 and his oral testimony.

   ·Affidavit of EH sworn 20 June 2003 and his oral testimony.

   ·Affidavit of TV sworn 22 October 2003 and his oral testimony.

3. Both parties tendered documents that became exhibits. 

The issues

1. The primary issues are these:

   ·Whether wedding expenses paid by the parties’ parents are relevant contributions and/or a s.75(2)(o) consideration.

   ·The extent of the financial contributions made by or on behalf of the husband. 

   ·The extent of financial contributions made by or on behalf of the wife.

   ·Whether monies taken by the husband from the parties’ joint account after separation should be notionally added back into the asset pool.

   ·The value of the former matrimonial home. Apart from their differing opinions about the cost of work necessary to bring the property into a completed state, the valuer’s differing opinions arose from their analysis of sales evidence.

   ·The extent of the non-financial contribution made by/or on behalf of the husband to the building of the former matrimonial home.

Chronology of relevant events

1. When the parties became engaged in April 1997 they opened a joint account with Westpac Bank.  The account was opened with a deposit of $2,420.48 transferred from the husband’s entire savings account[1].  Thereafter the wife paid her entire wage into the account.  The primary purpose of this account was to save towards the purchase of land. On 16 May 1997 the parties deposited $1,820 into the account derived from cash engagement gifts. After 3 July 1997 the wife made all deposits into that account.  Throughout this period the wife was earning about $200 per week.

   [1] Annexure B & C Husband’s affidavit

2. In about July 1997 the parties purchased a block of land in the Farmborough Heights area.  The wife said the parties paid $68,000 for it.  The purchase price was $79,000[2] and total purchase price, including stamp duty and rates, was $81,787.50.  The wife said a deposit of $20,000 came from joint savings.  I prefer the husband’s evidence that the $7,906 deposit was drawn from monies held by him.  At $200 per week over sixteen weeks, the wife’s entire salary came to about $3,200.  This is the maximum that she could have and did contribute to the non mortgage money used to acquire the land.  The parties borrowed $55,000 from Westpac Bank in order to complete the purchase.  Thus the husband and his parents contributed about $22,000 towards the purchase of the land.  Part of this included a gift of $10,000 by the husband’s mother paid on 5 September 1997[3].

   [2] Exhibit M

   [3] Exhibit P

3. Settlement of the purchase of the land took place on 11 September 1997. 

4. The parties married on 3 January 1998.

5. During the proceedings I expressed concern that issues concerning the wedding costs may not be relevant as a s.79 (4) or s.75(2) issue. Yet a vast amount of evidence was called on the issue. The wife’s family had 94 guests at the wedding reception and the husband's family had 115 guests. The reception cost $8,900. There is a significant dispute as to whether the wife’s father paid for entire reception or whether the husband’s father paid for his guests, giving the S family’s share of the reception costs to the wife’s father. On 5 January 1997 the wife’s father drew $8,769 from his ANZ account[4].  I accept the husband’s father’s evidence that he paid his family’s share to the wife’s father and that Mr RG paid the restaurant the entire reception costs on behalf of both families.  The wife’s father paid $1,800 for her wedding dress.  The parties disagree about payment for other aspects of the wedding although they agree that the honeymoon and some other minor expenses came from their joint savings.  The wife implied that her contribution to the honeymoon ($4,933) and additional expenses was equivalent to that provided by the husband.  However, I have already given her credit for about $3,200 during this period drawn from her wages towards the purchase of the land which means that she earned about another $3,200 nett prior to the wedding.  Her income was being used to repay the Westpac land loan at the rate of $200 per week[5] leaving virtually no additional money to contribute to wedding expenses.  As a consequence, I am satisfied that the husband paid for the honeymoon, wedding and engagement rings and to the extent that the parties contributed to the costs of the wedding, the monies came from the husband.

   [4] Exhibit H

   [5] Exhibit D

6. At the commencement of cohabitation the husband was an equal partner with his brother operating an Exhaust and Muffler Centre.  The husband and his brother established this business in 1993.  The husband also owned a one-quarter share in a commercial property.  His brother and his parents each have a one-quarter interest in the property.  The husband’s parents had purchased the property in 1993 for about $350,000. Neither son contributed financially to its acquisition.  The property consists of three workshops, one of which was occupied by the husband’s business and the other two were leased out.  At that time there was a mortgage secured over the property with an outstanding balance of about $36,000.  The husband had an interest in the land and otherwise an amount of furniture, furnishings and personal effects.

7. Prior to the marriage the wife owned a 1996 Hyundai Excel motor vehicle that the wife’s father had purchased for her in about June 1996 for $20,000.  At about the time of their marriage he transferred the car into the wife’s name and the parties then assumed responsibility for repaying the ANZ car loan of about $17,000.  The wife had her interest in the Farmborough Heights property and otherwise no assets or liabilities of value.  I do not have evidence of the value of the car at cohabitation but it seems probable that it was worth about the same as was outstanding on the ANZ loan.  This is roughly the midpoint taken between its purchase price and insurance pay out 12 months later. That is $20,000 less $15,164 is $4,736.  I divide that figure in half and deduct $2,768 from $20,000.  Hence the car and loan attached to it are about equal. 

8. Upon their marriage the parties moved into the husband’s parents’ home.  They lived there for two and a half years until their home was ready for occupation.  The parties lived on the ground floor of a double storey house.  They had their own kitchen, bathroom, bedroom, meal area and lounge room.  The husband’s mother was predominantly responsible for their cooking and clothes washing.  The wife was primarily responsible for maintaining the interior of their living area.  The wife says that the husband gave his parents $50 or $70 each week towards their living costs.  The husband’s parents deny this.  Given the extent of the husband’s parents’ largess in setting him up financially I am satisfied that the accommodation and living costs were provided without cost to the parties.  Asking their son to pay household expenses would have been inconsistent with their advances to him, allowing him to draw from income that was theirs and the work done building the house.

9. On 7 January 1998 the parties made two deposits[6], one of $5,400 and another of $9,820 into their joint account.  The $9,820 comprised cash wedding gifts, including $4,000 from the wife’s parents[7].  This is a contribution made by the wife: See Gosper  (1987) FLC 91-818 and Kessey (1994) FLC 92-795.  The balance, $5,400, is cash gifts made by members of the husband’s wedding party.  This is a contribution made by the husband. The parties paid out the Westpac land loan quickly.  On 24 March 1998 they transferred $15,000 from their joint account[8] and paid it into the land loan[9].  This was predominantly sourced from the cash wedding gifts already referred to.  Mrs AS agreed that her affidavit evidence that she made this payment was mistaken.

   [6] Exhibit C

   [7] Exhibit B

   [8] Exhibit C

   [9] Exhibit D

10. On 27 March 1998 Mrs AS paid $6,000[10] from her personal account into the Westpac land loan[11].  This was a contribution made on behalf of the husband.  On 25 August 1998 Mrs AS made a gift of $15,000 drawn from her personal savings account[12] and paid it into the Westpac land loan[13].  This is part of a total deposit of $27,500 made that day.  The additional $12,500 was drawn from a joint account owned by the husband, his mother, brother and father (the DATG Westpac account)[14].

    [10] Exhibit P

    [11] Exhibit D

    [12] Exhibit P

    [13] Exhibit D

    [14] Exhibit S

11. Until it was activated again, with a subsequent draw down, the last of the wife’s periodic payments on the land loan account was 6 August 1998. 

12. In August 1998 the wife’s Hyundai motor vehicle was stolen.  After their marriage the parties had been repaying the ANZ car loan at the rate of about $100 per fortnight[15].  On 10 August 1998 the wife received $15,164 from GIO Insurance, which monies were deposited into the parties’ joint account.  At that time the balance of the car loan with ANZ Bank was $11,676.24.  The ANZ car loan was paid in full on 11 August 1998.  In his affidavit[16] the husband said that the insurance monies were used to repay the car loan, forming part of a larger withdrawal of $17,000 made on 25 August 1998.  This withdrawal postdates the final car loan repayment.  During cross-examination the husband agreed that his affidavit evidence on this point was incorrect and recalled that the ANZ loan had been repaid using monies that he had at home. The parties were planning construction of their home and it appears that the husband and his family had cash funds available that were intended for running building expenses.  Having used some of these savings it is probable that the insurance monies replenished the building fund and are included in the $17,000 withdrawal made on 25 August 1998.  This is consistent with the wife’s evidence that the husband received large lump sums from the business and that he had large amounts of cash used for the house and land.

    [15] Exhibit J

    [16] Paragraph 7

13. The balance of the insurance pay out of $3,487.76 was retained in the joint account.  The wife claims that the husband used the balance of the insurance money to purchase a shotgun.  He and his brother enjoy hunting and the husband owned some guns when the parties married. Early in the marriage the NSW government initiated a gun buy back scheme during which the husband relinquished a semi automatic shotgun ownership of which would have become illegal. The husband was obviously confident about this testimony, and I accept his evidence that he received $1,650 on the buy back and that he used this money to buy the gun to which the wife refers in her affidavit. The integrity of his testimony was not lessened by his initial belief that he had paid the buy back money into the joint account which he later corrected as being the DATG account.

14. There is a significant dispute about the payment of $9,500 paid into the parties’ joint account on 15 July 1999[17].  In his affidavit the husband says, “in July 1999 I received a gift of $9,500 from my cousin as a contribution towards the construction of the home”[18].  Giving evidence in chief, the husband said that this payment was a loan (not a gift) from his cousin.  He asserted that the monies were paid to him in cash, which evidence was corroborated by his cousin.  The husband claimed that he then gave this cash to the wife’s father.  The wife’s father agrees that he deposited $9,500 into his ANZ account[19] on 14 July 1999.  However he denied receiving the money from the husband and says that he had the cash at home and deposited into his account before drawing a cheque in the same amount on 15 July 1999 that he gave to the parties.  It makes no sense to me that having received $9,500 from his cousin the husband gave it to his father-in-law before receiving it back and depositing it in his joint account.  Had he received the $9,500 from his cousin that money could have been deposited directly into the husband’s joint account without any intermediary. The husband’s evidence that his cousin was repaid almost immediately is inconsistent with his cousin’s claim that he was paid approximately two years later.  I am satisfied that the source of these monies was the wife’s father and that this is a contribution made on her behalf.

    [17] Exhibit C

    [18] Paragraph 12

    [19] Exhibit H

15. On 6 November 1998 GS paid the husband $7,600[20].  In his affidavit the husband claimed it was a gift, as did GS.  Those monies were paid into the parties’ joint account[21].  The husband and GS both agreed that these monies represented income or drawings to which the husband was entitled from the business and/or rental property. 

    [20] Exhibit R

    [21] Exhibit C

16. In about mid 1999 the parties began construction of a home on the land at Wollongong.  They did not employ a builder to do it and the husband obtained an owner builder permit.  Money for the construction of the home came from three sources.  The parties’ savings, money from the husband’s parents and redraw on the Westpac land loan. Because the land loan had been repaid, but for about $1,000 the parties were able to use that facility to fund part of the construction costs for the home.  On 23 November 1999 they drew down $47,300[22] on the land loan and a further $17,962 as a loan top up on 13 December 1999.  In total they borrowed about $65,000 from Westpac to build the home. 

    [22] Exhibit D

17. The wife says that the parties spent approximately $200,000 constructing the home.  It is an attractive two storeys, obviously substantial, residence[23]. The husband’s mother explained “we paid for a lot of the costs of the building from our family account.”[24]  Mr S Snr quantifies these costs at “over $100,000.”[25]  This includes $15,000 paid by Mrs S Snr on 4 February 2000 and $7,000 from the husband’s parents paid on 25 August 2000.  I accept their evidence about the total sum paid towards the building costs.  The parties agree that the husband’s father effectively operated as project manager during construction.  The husband describes the venture thus, “in total my father, my brother and I worked on the home every opportunity we had, which included after work and every weekend for about eighteen months.  My brother and I had similarly helped my father when he built his own home.  This was part of the way my family helped each other.  Even after my wife and I separated my father and I helped my brother to build his home”.  The wife also attended the property and did what she could to help.  However, she does not have the labouring skills necessary to equip her to truly work alongside the husband and his family.  Nor was I satisfied that she worked at the site with the same frequency and vigour that the husband did.  The wife’s father, her sister and brother-in-law visited the property on no more than a handful of occasions.  While there they assisted with the construction of the home.  There is no comparison between the work performed by the husband’s family and that undertaken by the wife’s family.  Although sub contractors built a great deal of the home, there was a great deal of work performed by the husband and his family.  This includes digging foundations, shifting building materials, labouring for brick layers, tiling, painting, construction of a staircase, building a retaining wall and pergola and general fit out of the home after it reached lock up stage.

    [23] Exhibit L

    [24] Paragraph 8

    [25] Paragraph 11

1. The wife’s father claimed, during evidence in chief, that he gave the parties $7,000 on 16 December 1999 as a donation and $1,000 on

   
   

   1 May 2000.  The wife does not say in her affidavit that she received monies from her father in those amounts on those dates.  Given the specificity, with which she recounted contributions by her parents, I am not satisfied that these monies were paid.

2. Although he relied on only one affidavit at the hearing, Mr RG swore two.  One on 16 May 2003 and a second affidavit on 18 June 2003.  During cross-examination when attempting to explain the absence of any reference to these advances in his first affidavit Mr RG said that although aware he had made these gifts he did not make reference to them because he did not have his bank records available.  He ordered duplicate bank records which he initially said he had received before he swore his second affidavit.  When the issue was pursued he claimed he had not received the records prior to swearing the second affidavit.  Although his bank records evidence withdrawals in these amounts[26] I am not satisfied that the monies were given to the parties.  Mr RG claimed that the $1,000 was a, “house warming gift” yet the house warming was six months later.  I was unable to locate comparable deposits into either the Westpac land loan[27] or into the parties’ joint account[28].  In all of the circumstances I am satisfied that Mr RG’s evidence concerning these transactions was incorrect.

   [26] Exhibit H

   [27] Exhibit D

   [28] Exhibit C

3. In her affidavit[29] the wife claims that in February 2000 the husband asked her to pay her wages into her own account so that there was a discreet fund from which they would purchase furniture.  The wife’s personal account, Westpac Bonus Saver Account, transaction-running sheets are in evidence[30].  Commencing with a deposit of $ 1,129 from her employer on 22 December 1999 it appears that the wife paid her wages into this account thereafter.  Many of the withdrawals concern payments to garages, supermarkets and there are a small number of payments apparently related to the wife’s personal expenses.  The wife claimed that on 25 August 2000 she withdrew the balance of the account and purchased furniture from Harvey Norman, Light City and Knotts Pine.  Exhibit C reveals that the closing balance on 25 August 2000 was $6,620.24.  That day withdrawals totalling $620 were made.  The account balance on 28 August 2000 was still $6,620.24.  Nor do the bank records confirm the wife’s claim that all of the monies in the account as at 25 August 2000 were spent at these shops.  On

   
   

   7 September 2000 the wife withdrew $35 at Light City, on 25 September 2000 $680 at Knotts Pine, on 29 September 2000 $287.50 at Harvey Norman.  Otherwise, the account after 25 August 2000 appears to have been predominantly used for small ATM withdrawals, clothing and supermarket expenses and a number of larger cash withdrawals made 3 November 2000 and 16 October 2000.  I do not accept that the wife’s evidence in relation to withdrawals made from this account accords with her written testimony.  There were no significant transactions on 25 August 2000 and the items identified account attributable to purchase at Harvey Norman, Knots Pine and Light City do not support the wife’s evidence that she spent about $6,600 on furnishings.  While some of the monies were spent on furnishings, the overall evidence gleaned from her account is that this account was used for day to day living and personal expenses and the moneys spent on furniture for the home was modest. 

   [29] Paragraph 21

   [30] Exhibit E

4. At separation the parties’ joint account had a nett balance of $2,945.64.  The husband withdrew those monies without the wife’s consent.  The mortgage stood at $54,587.  On 3 July 2001 the husband drew down on the mortgage in the amount of $8,320[31].  The husband said that he drew down on the mortgage and withdrew monies from the joint account so that he could pay outstanding liabilities for work still being performed on the home.  He indicated that he had receipts, which could identify the payments.  The matter adjourned overnight and the next day the husband was unable to produce any receipts evidencing the payments claimed by him.  I am not persuaded that the monies were used to pay outstanding accounts or for matrimonial purposes. In those circumstances I am satisfied that the monies should be notionally added back into the asset pool: See Townsend (1995) FLC 92-569.

   [31] Exhibit D

5. Since separation the husband has remained in the former matrimonial home.  He lives there alone.  He has made all payments in relation to the home and the mortgage.

6. The wife has returned to live with her parents.  Her father bought her a Honda CRV motor vehicle in about August 2001 for $42,000.  Although registered in his name the car is treated as belonging to the wife and she makes the loan repayments to the ANZ Banking Group.  Mr RG borrowed $43,000 on 10 July 2001[32] which funds were totally expended on the purchase of the car, including about $2,900 on the road costs.  The husband has made no contribution to the acquisition of this asset.  Other than maintaining her car the wife has no other expenses that she must meet from her net income.  Nonetheless, she has not been able to acquire any savings.  

   [32] Exhibit H

Relevant law

1. The approach to the determination of an application under s.79 is well established by authority: Lee Steere and Lee Steere (1985) FLC 91-626; Ferraro (1993) FLC 92-335; and Clauson (1995) FLC 92-595. The process ordinarily involves a multiple part procedure. Firstly, identifying the property, liabilities and financial resources of the parties at the time of the hearing. Secondly, evaluating the contributions made by the parties as defined in ss.79(4)(a) to (c) and the effect of any proposed order upon the earning capacity of either party. I must then evaluate the matters contained in s.75(2) insofar as they are relevant, any other order made under the Family Law Act 1975 affecting a party or child and any child support under the Child Support (Assessment) Act 1989 that a party to the marriage is to provide, or might be liable to provide in the future, for a child to the marriage.

2. In determining what order the court should make under s.79, the court must be satisfied in all the circumstances that it is just and equitable to do so [s.79(2)].  It is the justice and equity of the actual orders that the court must consider: Russell v Russell (1999) FLC 92-877.

Assets at date of hearing

1. The parties reached agreement as to the value of most assets and the quantum of liabilities.  I find that the assets, liabilities and financial resources as at the date of the hearing are as set out in the table below.

Assets as at the date of hearing	$
Farmborough Heights Property (H)	465,000.00
50% interest in the Exhaust & Mechanical Business (H) – Agreed	134,125.00
25% interest in the Unanderra Commercial Property (H) – Agreed	15,000.00
Motor vehicle (W)	37,000.00
Husband’s business savings	4,250.00
Husband’s interest in DAGT account	4,000.00
Furniture, furnishings and household effects	4,000.00
Add back monies withdrawn by husband at separation	11,260.00
Total non superannuation assets	674,635.00
Superannuation
MTAA Superannuation Fund (W) as at 30 June 2003	9,187.86[33]
TOTAL ASSETS	683,822.86
Liabilities as at the date of hearing
Mortgage to Westpac Bank (home) (agreed)	63,000.00
Mortgage to Westpac Bank (business) (H)	1,194.00
Loan from wife’s father for car (W)	38,000.00
TOTAL LIABILITIES	102,194.00
NETT ASSETS	581,628.86

[33] Exhibit I

1. In order to understand the husband’s financial circumstances it is necessary to understand his financial relationship with this brother and parents.  Mr and Mrs S Senior worked hard to establish themselves and their sons financially.  They worked in a mill and acquired sufficient monies to purchase a commercial building at Unanderra for which they paid nearly the entire purchase price, subject to a small mortgage.  They and their two sons are the registered owners of the property.  Income produced from the property is paid into a joint account styled “DATG”.  This is a working account in relation to which all owners are signatories.  The reality is, however, that Mr and Mrs S Senior permit their sons to draw from DATG money earned from the business upon which they have paid income tax.  The brothers take the same approach.  This means that when the husband had significant expenses, that is the land loan and later construction of other home, his brother and parents allowed him to take a greater share of the income from DATG than they did.  Hence he drew money that belonged to the other owners and used it as though it was his own.  Thus the drawings taken by the husband from DATG represent income to which he was entitled and also money advanced by his parents and brother.  The later money is in effect a gift.  Presently GS has greater use of the nett income from DATG because he is building his home.

2. It is the wife’s case that, excluding gifts from his parents, the financial contribution made by the husband after their marriage is no greater than the income declared by him to the Australian Taxation Office.  It is also submitted that any monies drawn by him from DATG form part of the taxable declared to the Australian Taxation Office.  The flaw in this submission is that it does not recognise the use that Mr and Mrs S Senior and GS allowed the husband to make of their income earned by DAGT. 

3. The husband’s taxation returns covering 1 July 1996 until 30 June 2002[34] reveal the following. 

   ·For the year ended 30 June 1997 the husband had a taxable income of $22,753. 

   ·For the year ended 30 June 1998 his taxable income was $17,765.  Relevantly, this includes a capital loss carried forward from prior tax years of $11,617. 

   ·In the year ended 30 June 1999 he was again able to claim a tax loss carried forward of $11,617 so that his taxable income was again $17,084. 

   ·For the year ended 30 June 2000 he again claimed capital losses of $11,617 so that his taxable income was $18,026. 

   ·For the year ended 30 June 2001 his taxable income was $22,204 and for the year ended 30 June 2002, $27,570. 

   [34] Exhibit G

4. The wife’s taxation returns for the period 1 July 1997 until 30 June 2002 are in evidence[35].  Dealing with each year sequentially her taxable income is as follows:

   [35] Exhibit F

Tax Year	Source of Income	Taxable Income
1998	Agency	$12,938
1999	Agency	$13,634
2000	Agency	$17,513
2001	Agency	$22,772
2002	Agency	$25,308

1. The parties do not agree about the value of the former matrimonial home. Both parties agree that the property had not been completed at separation.  I accept the husband’s evidence that he has not undertaken additional work since separation.

2. The description of the property, subject to rectification and completion was uncontentious.  It has an area of 700.5 metres squared and is zoned 2(a) Low Density Residential under Wollongong City Council’s local environmental plan.  The land is slightly irregular in shape, with the front boundary of 10.455 metres and 7.55 metres with the rear boundary measuring 19.85 metres, side boundaries 37 metres east and 37.21 metres on the western side.  The land is steep, rising from the street with the home cut into the land.  The dwelling is a large two storey brick and tile property with attached garaging.  It was architecturally designed.  Photographs[36] provided by Mr JS confirm Mr TV’s description that the property, “is modern in appearance and attractive in style with above average street appeal”.  The ground floor is 156.5 metres squared and first floor 115.7 metres squared.  The two car lock up garage attached to the front of the dwelling is 36.6 metres squared.

   [36] Exhibit L

3. On the ground floor the dwelling comprises an entry foyer leading into a hallway and stairwell, formal lounge/dining room leading through into the kitchen and informal lounge areas.  There is a combined laundry and bathroom.  On the first floor there are four bedrooms, the main with an en-suite and walk in wardrobe.  The main bedroom is on this floor, all bedrooms are spacious.  Prime cost items and fixtures include, “Carpets, ceiling fans, Holland blinds, ducted alarm system, en-suite features shower screen IXL-tastic, vanity, dual flush toilet, walk in wardrobes to main bedroom features shelving unit, bedrooms 2 and 3 features built in wardrobes, two cloak cupboards,  kitchen features granite bench top, Blanco electric oven, Chef cook top four burner electric hotplate, Blanco stainless steel range hood, two bowl stainless steel sink, Blanco BDW206 dishwasher, tap ware, timber venetian blinds to kitchen and halogen lights”[37]

   [37] Page 5 Mr TV’s report

4. Both valuers adopted the same general approach in order to determine the properties current market value.  Each examined the property, comparable sales and interrogated commercially available databases in order to understand recent market conditions.  In relation to specific properties both made allowances for differences in each property and their sale date. Essentially the issue between them is degree of comparability.  The valuers agreed that the subject property is a superior property for its location.  Thus, both examined sales more diverse than in that area.  In order to understand comparable sales and identify whether sales are accurately described as comparable properties the husband’s solicitor helpfully examined Mr JS about the general location of the property.  The property is located in the southwest of the Wollongong business district.  The development of this region started about twenty years ago.  The first suburb developed was Cordeaux Heights.  It was and remains the benchmark development for the area.  Lot sizes are generally bigger than later sub divisions and as many properties as possible look or back onto a reserve.  The development features cycle ways and pathways and the general amenity of the suburb is superior to any subsequent developments.  Later developments have not achieved the same ambience and as a consequence caution must be used when examining Cordeaux Heights sales, as they are sales in a uniformly superior suburb to where the subject property is situated.  Homes may be comparable in Cordeaux Heights but land costs, ambience and services are superior.

5. In descending order of desirability and general marketability the developments start with Cordeaux Heights, then Coachwood, then Farmborough Heights and finally the River Oaks Estate.  Farmborough Heights forms part of the River Oaks Estate.  It is in a valley and the properties there do not have comparable views or ambience to the developments ranked higher.  Potentially, some of the higher ranked suburb homes are relevant because the subject property is at a generally higher standard than other properties in Farmborough Heights.

6. On behalf of the husband, Mr TV provided a report and gave oral evidence. Mr TV has been working as a real estate valuer in the Wollongong and surrounding areas since 1998.  The purpose of his valuation was to determine the market value of the property which he defined as, “the estimated amount for which an asset should exchange on the date of valuation between a willing buyer and a willing seller in an arms length transaction after property marketing where the parties have each acted knowledgably, prudently and without compulsion.” (Australian Valuation Boards of the API 12 December 1993).  Mr JS used the same definition.

7. Mr TV used two valuation methods.  Primarily, comparable sales which he crosschecked using a summation approach. As at 1 July 2003 he valued the property at $445,000.  Because of upward movements in the market he revised his opinion of the property’s value at the date of the hearing to between $455,000-$465,000. Using the summation method he determined the property had a land value at $215,000, hence the value by improvements is $230,000. The value added by improvements to a parcel of land is “the difference between the prices a hypothetical purchaser would pay either for the unimproved parcel or the land in its condition as at the time of valuation” (Murray J.F.N. Principles and Practice of Valuation, 5^th ed, Commonwealth Institute of Valuers, 1973, at 123). 

8. Mr TV obtained a report from Mr AC, a building surveyor.  Mr AC inspected sections of the property fully accessible and visible on

   
   

   18 June 2003.  A qualified pest inspector, Mr AC also inspected the property for termite, borer and fungal decay.  Having completed a thorough inspection of the property Mr AC advised that between $35,000 – $40,000 rectification and completion work is needed before the property could be regarded as completed. 

9. Mr AC identified the work still to be done in order to complete the property and rectify earlier work. Attached to his report are thirty eight photographs depicting work requiring completion if the full market value of the property is to be achieved and a section 149 council certificate obtained.  For example, the front and rear entry thresholds are incomplete, the front stairs are incomplete, tiles and pathways cracked, lead flashing incorrectly installed with consequent eaves damage, en-suite shower screen installed to the incorrect position, mildew and water damage apparent in the lounge room west elevation wall, lounge room north elevation wall, dining room north elevation wall, to name but a few.  Mr TV said that the relevance of this was the expense associated with completing the work and that prospective purchasers would look at the property in a negative light.  Both adversely affecting its market value.

10. From 1 January 2003 the highest sale in Farmborough Heights is

    
    

    7 Wagtail Place.  It sold on 18 June 2003 for $565,000.  Mr TV valued this property and concluded that it was not comparable because it is significantly superior to the subject property.  It comprised 280 square metres living area and included an in-ground swimming pool on a level block, adjacent to a reserve.   The property enjoys panoramic views and was built by the managing director of Beechwood Homes.  It set the benchmark for the area. This property is vastly superior to the subject property.

11. A brief record of the more central features of the sales analysed by Mr TV, re-arranged in order of price, can be seen from what follows, which will also include further comments made on them at the hearing.

    ·

    92 Tamarind Drive, Cordeaux Heights sold for $550,000 on

    
    

    11 March 2003.  This is a four bedroom substantial dwelling with a two car garage.  Both valuers agreed that this property involved a larger home, superior to the subject in appearance, location, aspect and improvements.  Both valuers agreed that it is not a comparable property. 

    ·

    38 Silvertop Parade, Cordeaux Heights sold for $506,000 on

    
    

    13 May 2003.   It is a substantial two level bagged and painted brick veneer home on the crest of a hill.  It is located in one of Coachwood Park estate’s most sought after locations and includes improvements such as ducted air conditioning, three living areas, four bedrooms and a two car garage.  It has panoramic views to the north and south.  Mr TV considered it a vastly superior property to the subject.  Mr JS agreed that the land was superior and provided better views.  He considered the subject dwelling superior.  During negotiations for the sale Mr TV provided the prospective purchasers with a valuation.  The sale had been negotiated at $515,000 however after Mr TV valuation at $498,000, the sale price reduced to $506,000. 

    ·

    52 Derribong Drive, Cordeaux Heights sold for $455,000 on

    
    

    10 June 2003.  It is a four bedroom two-bathroom brick veneer and tile dwelling including a two-car garage and landscaped yard.  Although superior land and location, the dwelling is inferior in age and improvements.  Neither valuer considered it truly comparable.

    ·15 Sandalwood Road, Farmborough Heights sold for $449,000 on 11 July 2003. 15 Sandalwood Road is 635 metres square and the home is considerably smaller than the subject property at 161 metres square.  It comprises a substantial single level residence on a level corner lot within close proximity to the subject property.  The dwelling is a large single level Beechwood home comprising four bedrooms, formal lounge/dining and two-car garage with an en-suite to the main bedroom.  The grounds are fully landscaped.  Mr TV considered the property not as imposing as the subject property and hence rated it slightly inferior.  Both valuers agreed that the land is superior to the subject property because it is flat as compared to the steep sloping block that the parties’ property is situated on.  I was surprised that Mr JS described the land difference as “marginal”. The photographs reveal that 15 Sandalwood Place has easy street access.  Photographs taken from 6 Sandalwood Crescent, which overlook the subject property reveal that the rear of the subject property faces directly into the hill and 6 Sandalwood Crescent looks directly into the back of the subject property.  These features indicate that the land at 15 Sandalwood Place is more than marginally superior.

    ·

    182 Warbles Road, Farmborough Heights sold for $412,000 on

    
    

    7 May 2003.  The dwelling comprises a seven year old master built two storey residence in close proximity to the subject property.  It has four bedrooms, three bathrooms and is a brick and brick veneer construction on a fully landscaped property.  The improvements are older in comparison to the subject property.  The location is superior, as the land is located in an elevated position, giving panoramic views.  Although a superior location, because the property is a battle axe block, Mr TV agreed with Mr JS’s opinion that the property is not comparable to the subject property.

1. Mr JS provided a report and gave oral evidence as to the value of the property on behalf of the wife.  He has a Bachelor of Business in Land Economy and is an Associate Member of the Australian Property Institute. He has been practising as a real estate valuer in the Wollongong and surrounding area since 1988.  As at 6 June 2003 he valued the property at $510,000.  He assessed the land at $240,000 and improvements at $270,000. Because the market has continued to improve he revalued the property as at the date of the hearing at $535,000.  In all valuations of the property he allowed a $25,000 deduction because of the property’s limited landscaping and water penetration problems. In relation to earlier sales, Mr JS said that the market was rising rapidly, at 2 per cent per month.  Thus, earlier sales for about the 12 months preceding the hearing needed to be adjusted at 2 per cent per month in order to determine their current market value.  Mr TV agreed that the market had been rising for the preceding 12-18 months, but did not agree that it was safe to uniformly increase all prior sales in the area by 2 per cent monthly.  He cautioned “upward movement has been state wide with various areas receiving stronger upward movement than others”.[38] The gravamen of his evidence was that valuations must be considered having regard to particular features of the property, including location as well as market influences. As a general proposition I agree with him.

   [38] Report page 9

2. Set out below are some of the more central features of the sales identified by Mr JS and the comments of both valuers in relation to them.  He considered a series of additional properties principally at Unanderra none of which he considered comparable, these sales primarily influenced his opinion of market conditions.  For this reason I have not referred to them in detail.

   ·122 Staff Road, Cordeaux Heights sold for $596,000 on 27 June 2003.  It is a two level bagged and painted brick veneer home with a double garage in a superior location.  Rated by Mr JS as overall a superior property to the subject property.

   ·126 Staff Road, Cordeaux Heights sold for $595,000 on 29 August 2003.  It is a large two level four-bedroom home in a superior location.  Rated overall, a superior property. 

   ·12 Silver Top Parade, Unanderra sold for $492,500 on 27 March 2003.  It is a two level brick veneer home on the crest of a hill with double garage converted to a rumpus room.  Mr JS considered this a good comparison, as it comprised an inferior home, but in a better location.  Using his 2 per cent formula he believed the property would now sell at $560,000. 

   ·

   26 Kooranga Crescent, Cordeaux Heights sold for $470,000 on

   
   

   4 July 2003.  It is a two level four bedroom brick veneer home of 188 metres squared with double garage and veranda situated on a battle axe block of 820.6 metres square.  Although the land is larger it is an inferior block as it does not have street frontage and therefore has less appeal.  The home is 90 squares smaller and is overall an inferior property.  Mr JS said that this sale is not comparable both because of location and features of the property.  It was used to highlight the selling price of an inferior property.  Mr JS did not make clear, however, the overall impact of the property’s location in Cordeux Heights in relation to value. 

   ·3 Noonga Place, Cordeaux Heights sold for $445,000 on 23 January 2003.  It comprises a three level, five bedroom brick veneer and tile roof home of 274.3 squares with double garage of 35.2 metres squared located on a 774.5 metre square block.  There is an outdoor area of 26 metres square.  It is an inferior home in a superior suburb.  Both valuers agree that Cordeaux Heights sales are not comparable.

   ·4 Juniper Place, Unanderra sold for $400,000 on 17 February 2003.  It was a private sale and out of line with the market.  Mr Sharpe included the sale because he was aware of it but does not suggest that the property is comparable.

3. During cross-examination Mr JS agreed that numbers 6 and 15 Sandalwood Place, Farmborough Heights are the two properties of all those examined by both valuers closest in terms of comparability to the subject property.

4. 6 Sandalwood Place is a battleaxe block, which backs onto the subject property.  The land is 1500 square metres, but does not have street frontage.  The improvements are similar to the subject property. 

   
   

   6 Sandalwood Crescent had been listed for sale shortly prior to the hearing.  Mr JS spoke to the agent conducting the sale and understands that the property is for sale at between $530-570,000. One must be cautious about reliance on listing and not completed sale prices.  Listing prices may never be achieved and are subject to too many vagaries to be taken into account as a comparable selling price.

5. Both valuers agree that the land has increased substantially in value since its acquisition.  In September 1998 the parties paid $79,000 for it.  The husband’s valuer opined that as at July 2003 the land was worth $215,000 and the wife’s valuer said $240,000.  At the hearing neither counsel questioned this break down nor sought to update it.  The cost of building the home was about $200,000.  In Styring [2003] FamCA 854 when discussing replacement costs Justice Coleman said “Put simply, whatever it cost to build the matrimonial home, or would cost to rebuild it, the “value” of the property is what the market reveals purchasers will pay for properties comparable to it.  The market sets the “value” of these improvements, not the cost of replacing them.”  Thus while the building costs may inform the process the real issue is the market value of the house and land package.

6. Mr JS appeared to rely substantially on his experience as a valuer and general understanding of the market in coming to his opinion that the entire market in the region was moving uniformly at 2 per cent a month and had been throughout the year.  He did not provide source references for his opinion and appeared to consider Mr TV’s suggestion that valuations should be considered specifically rather than generally as unnecessarily cautious.  As between the two valuers Mr TV’s report gave a more detailed account of the subject property and the sales considered comparatively.  The valuation rationale was apparent and reflected a generally more thorough approach to the task than Mr JS’s evidence or report. As between the two valuers Mr TV included more properties in the same suburb in order to understand local conditions and identify comparable sales. I was surprised that Mr JS was unaware of the sale of 7 Wagtail Place, Farmborough Heights and its use by Mr TV as a benchmark against which the subject property could be measured and then discounted was compelling.  With the appropriate allowance for rectification and completion works required at the subject property I accept Mr TV’s general premise that a $25,000 differential between the subject property and Wagtail Place in June/July 2003 is too narrow.  This is the effect of Mr JS’s evidence.  The differential, factoring in similar costs of repairs to that property is more consistent with the valuation attributed to the subject property in June 2003 by Mr TV. I also consider that Mr TV’s approach to the rectification work was more precise.  Neither valuer is qualified as a building surveyor.  While their daily professional lives would enable them to reach a rough working guide for rectification work, neither can give an informed opinion. Mr TV recognised the limitation of his qualifications and relied on an appropriately qualified professional opinion.  Mr AC’s inspection was clearly more thorough than either valuer in terms of inspecting for completion and rectification work.  The approach taken overall to this issue by the husband’s valuer was considerably more precise than the approach taken by the wife’s valuer.  It reinforces my comfortable satisfaction that overall the husband’s valuer approached the task with greater thoroughness and attention to detail than Mr JS.

7. As between the two valuers I prefer Mr TV. He gives a price range.  As both valuers agree that the market is rising I am satisfied that I should take the upper end of the range.  I find that the property has a value of $465,000.

8. The wife contended for a greater value for the contents of the former matrimonial home.  However, there is no evidence in relation to its value and I have already found her evidence in relation to monies spent on furniture was unreliable.  In the circumstances the husband’s claim of $4,000 is accepted as an admission against interest.

9. Of the other assets the values are either derived from the parties’ financial statements, source documents or is otherwise non-controversial.

Section 79(4) evaluation of contributions and other factors

1. Section 79(4) requires that the court look at the entirety of the contributions, both financial and non-financial, to the welfare of the family as well as to the acquisition, conservation and improvement of those assets. Contributions are not required to be tied to the acquisition, conservation or improvement of a particular asset and are to be taken into account generally as contributions in a total sense.

2. Both parties claim contributions based upon payments made by their respective families. Whilst the general rule espoused In the Marriage of Rainbird [1977] FLC 90-256 at 76,376 is that the “contributor” of a gift is determined by the original intention of the donor, it apparent from Gosper that the donor’s intention is not necessarily the determining factor.  The essence of Justice Fogarty’s judgment is that depending on the circumstances the court is able to treat a gift as a financial contribution of the spouse relative. However, it is also clear that this can be displaced by evidence that the donor intended to benefit both parties to the marriage.

3. In Kessey the Full Court added to Gosper by saying that as a general approach a parental gift is to be treated as a contribution by the child of the donor parent.  Unless there was evidence showing that it was not the parent’s intention to benefit only his or her child.  In that case the court took into account the relationship between a spouse and the spouse parent and concluded that the gift from the parent should be regarded as the contribution of that spouse.  Where the intention of the donor of a gift is not clear the court can look to any special relationship between the donor and one of the spouses and regard the gift as having been contributed by that party: See Gosper at p12; Kessey at pp 81,149, 81,150.

4. The issue of gifts and advances was further discussed Pellegrino and Pellegrino (1997) FLC 92-789. In that case Justice Chisholm sagely acknowledged that parents do not usually have an intention as to whom they intend to benefit when they make gifts to their married children. He held in this case that the parents intended to benefit their daughter by the gift notwithstanding the fact that the husband derived direct and indirect benefit from it. If the motivating circumstance leading to the gift was the parent child relationship, the gift may be regarded as the contribution of the son or daughter, and not also of his or her spouse:  Pellegrino at pp84,726-84,728. 

5. In Gosper  Justice Fogarty  acknowledged that “the authorities are far from consistent in the approach which they suggest” in characterising a gift or benefaction by a relative to one or both of the parties in s.79 proceedings.  He cited Wade in Property Division upon Marriage Breakdown at 213 where it was described as a “sterile debate” and that it was a matter of “selecting a pidgeon [sic] hole from the legislative shopping list available in sec 75 and 79”.

6. The most recent case dealing with the issue of characterisation of gifts is  Pellegrino.  In this case the wife’s parents provided the parties with rent-free accommodation for 17 years of their marriage.  During that time the parties carried out significant renovations.  During the marriage the couple were able to acquire substantial assets and property.  The court held that the provision of the accommodation should be regarded as a contribution made on behalf of the wife.  His Honour stated:“…many of the cases, including Gosper, differ from the present in that the property transferred to the parties is available for distribution in the proceedings.  Nothing turns on this, in my view.  It cannot logically make any difference whether the gift is of a property, or of rent-free accommodation, which enables the parties to invest their money to yield other property available for distribution”   And “In assessing the significance of that contribution, I take into account the length of the provision of rent free accommodation, and the fact that it enabled the parties to apply their savings to build up other assets” at 84,729.

7. The issue of whether the payment of wedding costs constitutes a contribution under s.79(4) or a s.75(2)(o) factor has not been explored in any depth. In the Full Court decision of In the Matter of Lozanov (unreported) 8 June 1994 the parties had a large engagement party and wedding.  The parties had reached an agreement that she pays for the engagement and he pays for the wedding.  When the accounts came in the husband was unable to pay and the wife settled them but was told by the husband that she would be repaid.  The total gifts received totalled $12,000, which were retained by the husband.  The trial judge found that the wife had made a direct financial contribution in the sum of $18,000 to the “fruits of the wedding” and “engagement party”.  The appeal was dismissed with the Full Court commenting that the trial judge was justified in “the approach she took.  We conclude that that was an approach, which was open to her Honour, at least under s.75(2)(o). 

8. In In the Marriage of Sharma (unreported) 22 March 1994 the major issue was whether large payments to the wife were gifts or loans.  However, it dealt briefly with the question of whether the payment of wedding expenses could be contributions.  Justice Wilczek held: “The evidence was also clear that much was expended by and on behalf of the parties in relation to their wedding in Canberra, their religious wedding in India and matter relating to engagements and travelling to India, honeymoon expenses and the like …it would be unrealistic for any of the parties to claim some kind of recompense for those matters.  Both the husband and the wife had the benefit of those expenses incurred, and their travelling and honeymoon.”  His Honour concluded:  “On that basis, I do not propose to further bring into account any funds the parties had prior to the marriage but I have taken into account that a greater portion of the wife’s savings at the commencement of the marriage (of approximately $10,000) were left after the honeymoon, approximately $6,000.”

9. In the first case the Full Court did not make it clear whether the trial judge was correct in seeing it as a contribution under s.79, merely stating that it could have been taken into account under s.75(2)(o).

10. It must be made clear that the issue in this case is not whether the gifts received at the wedding are contributions on behalf of each respective spouse, but rather whether the payments for the wedding and honeymoon are contributions.  The situation in relation to the former, according to Dickey is that there is a rule, which he argues is probably “more a rule of thumb than a strict rule of law”[39] that wedding presents are prima facie regarded as belonging to the spouse whose relatives or friends gave them.  Therefore, the contributor of wedding presents for the purposes of s.79(4) is usually the spouse, provided there is no evidence of the donors’ intention to the contrary: Gosper at p12.

    [39] Dickey, A. (2002) Family Law,(4^th edition) Lawbook Company, Sydney at 670

11. The issue in this case however, was the payment of money towards wedding expenses.  These funds were used to pay the costs of the reception and all the incidentals relating to its decoration and entertainment.  Whilst, the majority of cases involving the advance of gifts have treated the gift as a financial contribution under s.79(4)(a), this case appears to be somewhat different.  Whilst the gift/s were indeed of a financial kind, being as it was a sum of money, this money is no longer available for distribution.  Indeed, the money here has been expended and the parties and their families derived joint enjoyment from it.  However, Pellegrino (supra) made it clear that it does not matter for the purposes of s.79 that the property is not available for distribution.

12. In my opinion there is a difference in the giving of wedding and engagement presents and spending money, from whatever source on the wedding and associated celebrations.  In the above cases the gifts characterised as contributions under s.79(4)(a) have all in some way enabled the parties to invest their money to yield other property, which is available for distribution.  As such, the party on whose behalf the gift was advanced had directly or indirectly financially contributed to the acquisition, conservation or improvement of property of the marriage. The contributions have been towards the purchase price of property, repayment of a mortgage, or payment for repairs and renovations, which are all recognised financial contributions.  Gifts in kind, such as the provision of rent-free accommodation, can be regarded as equivalent to a gift of property as they enable the parties to invest their money to yield other property for division.

13. In my view, the payment of wedding expenses in most cases cannot be seen as a financial contribution within the meaning of s.79(4)(a).  It cannot be said that the payment of the wedding expenses led to the acquisition, conservation or improvement of property.  Whilst, it may be argued that the money enabled guests to be invited, which in turn gave property to the parties by way of gifts, the issue of gifts that results from a wedding is a separate issue.  These gifts themselves, as discussed above, can be regarded as a contribution.

14. The wife’s counsel submitted that if not a s.79(4)(a) factor wedding and associated expenses could be treated as contributions to the welfare of the family.  He was unable to refer me to any authority where a court had adopted this approach.  In my opinion treating “welfare of the family” as a basis for the wife’s submission stretches the words too far.  I agree with the approach taken by Justice Wilczek in Sharma (supra).  The proper approach to wedding and pre paid honeymoon expenses in the majority of cases is to identify what remains of any savings and cash gifts and include this balance as an initial contribution.  Thus I do not take into account pursuant to s.79(4) the monies paid by or on behalf of either party towards their wedding or honeymoon.  Accordingly, I need not adjudicate the wife’s claim “the Respondent’s mother spent some money on Church decorations and gifts of flowers, which I always felt were unnecessary.”

15. Both parties made financial contributions to the acquisition of assets prior to their marriage.  Because this is a short marriage in which there are no children the parties properly emphasised financial contributions.  These must be examined closely.  Three months prior to the start of the 1997/98 financial year the parties established a discreet account into which the wife paid all of her salary.  From that time all monies drawn from it were used for joint matrimonial purposes, including later personal living expenses.  Using $200 per week the wife paid about $2,100 into this account before the 1997/98 tax year.  This is closely comparable to the initial deposit made by the husband. I give both parties equal recognition ($900 each) for the engagement monies as the evidence does not reveal the donor. In the case of presents by joint friends or presents of unascertainable origin these are traditionally regarded as belonging to the spouses jointly.   The wife contributed her car, the value of which is equivalent to the loan supporting it.  Also her share in the land and $9,800 wedding gifts. From July 1998 until separation the wife earned $66,793 (before tax income). This amount is taken from her tax returns[40].  Her income supported her superannuation fund, contributed to I infer entirely by her employer.  There is no evidence that she made additional contributions to her superannuation.  Additionally her father’s gift of $9,500.  Thus at separation the wife made a total financial contribution of $89,793 less tax paid.  Since separation the wife has used her income for her own purposes, paying her car loan and on personal expenses. This is a contribution made entirely by her. 

    [40] Exhibit F

1. The husband made a significantly greater initial contribution than the wife did.  He brought into the marriage his interest in partnership assets, the value of which at the time is not subject of evidence.  However, this has been a short marriage and during the period that the parties cohabited there is no suggestion that any capital improvements were made to the partnership assets.  The partnership’s real estate probably increased in value the extent of any rise is not a matter of evidence.  Having introduced the partnership asset to the marriage the husband worked in the business and any improvement in its value other than market conditions is attributed to efforts made by the partners.  The wife has not made any contribution to the partnership assets. This is a very significant contribution that must be given real weight.  The husband deposited $2,420 into the joint account and contributed his share of the cash engagement funds of $900 and $5,400 wedding gifts.  Putting to one side $10,000 from his mother, which I take into account separately, he paid a greater amount towards the deposit for the land, I infer partly DATG money some of which was declared as his income.

2. Just as I am satisfied that the wife applied all of her income earned during the marriage to joint matrimonial purposes, which includes modest sums for her own day to day living expenses so did the husband.  In addition to the monies earned by him from the partnership, he was able to draw against his parents and brother’s income from the DATG account.  Thus his financial contribution exceeds his taxable income considerably.  Using his taxation returns the husband had a total taxable income of approximately $80,000 from July 1997 until July 2001[41]. While I accept that the husband accounted via his taxation returns for income earned by him, he was not required to disclose to the ATO monies advanced by his parents and brother from their after tax income.  Monies drawn from DATG are a blend of the husband’s money and his family money.  The evidence is not sufficiently precise that I can distinguish individual transactions between the husband’s income and his family’s income. 

   [41] Exhibit G

3. The approach I take is that the husband is credited as having introduced all of the income revealed in his tax returns.  Additionally, I have identified gifts made by his mother from her own account totalling $31,000 to the deposit and land loan and $22,000 from his parents personal accounts towards the home. Deducting the mortgage of $65,000 from the conceded building costs there is a capital shortfall of about $135,000.  The wife’s income was primarily used to pay repay loans and on day to day living costs.  Putting her income and the mortgage fund to one side the husband’s income and family money provided the extra money needed to build the home.  Probably in the vicinity of about $135,000. I must be careful not to count his income twice and a significant portion of it must be deducted from the $135,000. I deduct the $22,000 referred to above from the $100,000 that the husband’s father estimated was drawn from DATG. This satisfies me that the husband received about $78,000 of DATG (some of which is included in the husband’s taxable income) and other monies not already accounted for from his family towards building the home.  He did not maintain a personal savings account and let his income sit in DATG or the partnership account with GS. Standing back from the contributions made by both parties from their own income (and gifts to them) I am satisfied that in addition to the individual lump sum payments made the husband’s father and brother via DATG made a significant financial contribution to the cost of building the home.

4. Since separation the husband has had the use of the home and paid all of the outgoings associated with it.  Given the level of his contribution this is reasonable.  The wife’s counsel submitted that the benefit to the husband outweighed his contribution.  It was submitted that the husband could have tenanted the property and offset expenses by rental income.  At no stage prior to the hearing did the wife suggest that this was a prudent step to take.  On balance I am persuaded that the husband’s occupation of the home is moot in a s.79(4) sense.  Someone needed to live there and financially maintain it and also ensure it was not damaged if left vacant or tenanted. 

5. During submissions the wife’s counsel emphasised that this was a case in which every cent counted.  Hence the approach taken by the wife recounting every cent introduced by her, and on her behalf to the marriage.  Because she was a salaried PAYG earner and her families’ contributions were numerically small she was readily able to proffer a precise accounting.  Although skilled in their field the husband and his brother are not trained in accounts and at times appeared dismayed by the intricacies of their financial dealings.  I am not critical of them. 

   
   

   I was satisfied that the husband had made all his financial documents available to the wife via her solicitors prior to the hearing.  For reasons that are unclear to me inspection did not take place prior to the hearing.  I am satisfied that the husband and his family tried within the constraints of answering questions during a defended hearing to give as honest account as possible of their intertwined financial relationship.  Unfortunately the evidence does not enable me to quantify their entire financial contributions with the same mathematical accuracy that the wife’s circumstances enabled me to do. It follows that the husband directly or indirectly made all financial contributions over and above those made by the wife.  It must not be overlooked that expenses will have been incurred on ventures other than the home.  Clothes, outings and other incidentals for example.

6. Overall, the husband made a vastly superior financial contribution than the wife did. 

7. The husband, his brother and his father worked tirelessly on the property.  Most building projects involve a degree of disagreement along the way.  That the husband and his father may have argued about aspects of the building project does not diminish the quality of the contribution made by Mr S Senior.  His daily presence at the site freed the husband to continue his work in the partnership and enabled the wife to work full time.  Building their home as owner builders was an enormous undertaking.  I accept Mr David’s submission that the husband, his father and brother made a very substantial contribution to the improvement of the property from the time work started on it.  Although the work is not yet completed, their contribution materially contributes to the property’s current value.  The wife and her family worked at the property too.  She performed considerably more manual labour than the rest of her family combined.  However the work she did was neither as significant nor substantial as that undertaken by the husband.  She left me with the strong sense that while she did her best at the property, in reality she was unable to work as hard continuously as the husband did.  Comparatively, the wife’s family made an insignificant contribution to the improvement of the property.  Her contribution is greater that theirs but nowhere near as substantial as the husband’s.

8. The wife’s case gave inadequate recognition to the significance of the contribution made by the husband’s parents through the provision of accommodation and day to day cost of living whilst the parties lived in their home.  They lived in the home rent and costs free for 2.5 years in a marriage that lasted only one year longer.  This enabled them to save the wife’s salary, pay off the mortgage at a rapid pace and acquire savings towards the cost of building their home.  This is a highly significant contribution made on the husband’s behalf.  I give it real weight.

9. During the period that the parties lived in the husband’s parents’ home, the wife maintained their private domain.  She cleaned their area and helped the husband’s mother finish preparation of the evening meal most days and cleaned up after dinner.  After they moved into their own home the wife’s contribution increased because the property was larger and she was largely responsible for maintaining the interior of the home as well as general housekeeping.  These later contributions were undertaken for a comparatively short time.  Overall, her contributions as a home maker exceed the husbands. 

10. Evaluating their contributions it was clear that the husband made a significantly greater initial contribution.  Thereafter the wife made no contribution to the partnership assets.  The husbands parents made gifts at a time which maximised the parties opportunity to buy land and build their home.  To a great extent the parties money was able to work to their maximum benefit.  Capital payments towards the acquisition of the land, the home and in reduction of the mortgage meant that money was not lost to interest unnecessarily.  Allowing the husband to draw and use income that properly belonged to his brother and his parents meant that the house and land package was acquired and improved to a level that could not have been achieved by the parties, even with the gifts received by the wife.  The assets acquired by these parties and their current value are primarily attributable to the husband and support financial and non-financial, direct and indirect by his family.  Without their support, these parties would not have been able to discharge their land mortgage, save their wages, owner build their home and pay outgoings vastly in excess of their joint income and mortgage funds.  The husband’s initial contribution, his parents and brother’s financial support is the most significant financial component of this marriage. 

    
    

    I give them considerable weight.

11. I also give very significant weight to the non-financial contributions made by the husband, his father and brother to the conservation and improvement of the family home.  These efforts are of manifest significance in this short marriage.  In reaching this conclusion I recognise that these considerations must be balanced against the wife’s lesser financial and non-financial contributions towards the assets and as a home maker. Although she worked hard and contributed to the extent that she was able, her contributions and those made by her family are not comparable to those made by and on behalf of the husband. 

12. The orders I propose will not affect the earning capacity of either party.

13. There are no children and hence child support is not an issue.

14. I therefore find that the parties total contribution should be assessed as 78 per cent to the husband and 22 per cent to the wife.

Section 75(2)

1. Both parties agree that there should be no adjustment made pursuant to s.75(2). Whilst I agree that this is so I will nonetheless briefly consider the relevant s.75(2) factors.

2. Both parties are comparatively young and in apparently good health.

3. The husband is engaged running his exhaust and muffler centre and is in receipt of a weekly income of about $530.  The wife works full time as an accounts clerk earning a weekly wage of about $500.

4. As a result of my findings as to the contributions based entitlements of the parties the husband has property of a value of $453,670.51 and the wife has $127,958.34.  The husband thus has greater property interests than the wife.  The wife has a small superannuation interest that forms part of her property interests.  Both parties will have an equivalent opportunity to accrue superannuation in the years that lie ahead.

5. The only other issue that requires consideration is whether I should make an adjustment pursuant to s.75(2)(o) as a consequence of the payments made towards the wedding. I am satisfied that the parties parents made approximately equal payments towards the wedding reception. The wife’s claim that she contributed to the honeymoon, photographer, hire cars and rings to substantially to the same extent that the husband did was not supported by the evidence. Even taking into account the $1,500 paid by her father for her wedding dress, overall the payments made by and on behalf of the husband exceed those made by the wife. Weddings are special occasions usually celebrated in a style designed by both participants, sometimes with considerable input from others. Hopefully the main participants embrace the event with equal enthusiasm and in the venture both include features that gives personal pleasure. In my opinion the majority of cases will not lend themselves to an adjustment under the sub-section because one participant spent more than the other. The spectre of doing so defies reason. Is the court to determine, as the wife would have it here, that money was spent excessively on flowers. Does the court have to consider whether one set of relatives drank and ate more than the other? These factors do not lend themselves to adjustment pursuant to the subsection.

6. Thus the findings I made accord with those both parties agree would result in no adjustment pursuant to s.75(2). The significant factors are the parties’ ages and comparable incomes. The husband has a greater share of the matrimonial assets which given his greater contributions during a short marriage does not warrant further adjustment.

Section 79(2) Is this a just and equitable outcome?

1. Because the court must consider the actual orders not just the percentage distribution under s.79(2) justice and equity in cases such as this requires that the court stands back and looks carefully at the outcome of the s.79(4) and s.75(2) process.

2. Weighing the initial contributions of the husband with the supervening contributions made by him and on his behalf as I have already found demonstrates that his contributions are manifestly superior to those made by the wife.  Without his initial contribution the parties would not have been able to acquire the partnership assets.  It has been maintained without contribution by the wife.  Her initial contribution was modest by comparison and does not have the same pivotal significance to the acquisition of property that the husband’s initial contribution has.

3. But for the financial contributions made by the husband’s family the land loan would not have been discharged as quickly as occurred.  This would have required the parties to pay more in interest on the borrowed money than they did.  But for the husband’s parents providing free accommodation at no cost to the parties for 2.5 of the 3.5 years they cohabited the parties would have used a significant part of their income on day to day living expenses.  In the short time they were married it is unlikely that they could have saved sufficient money to build their home.  Without the husband and his families work on the home the parties would have incurred greater debt and the nett assets would have been commensurately less.  Overall the husbands contributions have been pivotal to the financial success these parties achieved in a relatively short period. The wife’s financial contributions are considerably smaller than those made by the husband as are the contributions made by and on her behalf in building the home.  Her contribution attending to domestic tasks was greater than the husband’s was.  Although they must be treated in a real way, these contributions do not have the same pivotal significance qualitatively or quantitatively that the husband’s non financial contributions carry.  Weighing all of these matters I am satisfied that the outcome is just and equitable.

4. The effect of these orders will leave the husband with the home, his business, savings, contents at the home, money notionally added back and his business account.  This is a total of $637,635.  He must discharge the mortgage and will have a small business loan, liabilities totalling $64,194.  The wife must be free to make her own way financially and given the poor state of the parties’ relationship it is untenable that she be left tied to the husband in any way.  The wife will have her superannuation and car, subject to the car loan, nett assets of $8,187.86.  She is entitled to $127,958.34.  Thus, the husband must pay her $119,770.49 within a reasonable time frame.  He will have ten weeks within which to reorder his affairs so that monies can be paid to the wife.

5. In the event that he fails to pay the monies ordered and/or provide a discharge of the mortgage then the home will be sold.  Although I have made findings as to its value the nett proceeds cannot be known.  The total assets, excluding the home, are $218,822.86 and the total liabilities excluding the home mortgage are $39,194.  On this basis excluding the home the husband has assets worth $171,441.  He is entitled to $140,110.51.  Therefore on the sale of the home when the husband receives his 78 per cent share there will have to be an adjustment in the wife’s paid from his 78 per cent.  The adjusting figure is the amount needed to ensure that the wife receives 22 per cent of the net assets, referred to in this paragraph having regard to those she retains.  The adjusting figure is $31,330.49.  Pending settlement the husband must maintain the property and pay taxes, rates and mortgage instalments as and when they fall due.  If he defaults the default must be paid out of his share of the proceeds. 

6. For these reasons I make the orders identified at the start of this judgment.

I certify that the preceding one hundred and three (103) paragraphs are a true copy of the reasons for judgment of Ryan FM

Associate: 

Date:  5 December 2003