STEWARDSON & STEWARDSON

FAMILY COURT OF AUSTRALIA

STEWARDSON & STEWARDSON

[2012] FamCA 109

FAMILY LAW - PROPERTY SETTLEMENT – determining matrimonial asset pool – husband’s business debts included in matrimonial pool as liability – husband’s outstanding fees included in matrimonial pool as asset - parties superannuation interests treated as assets in matrimonial pool – both parties received significant inheritances from deceased members of their families of origin

FAMILY LAW - PROPERTY SETTLEMENT - contributions – adjustments – just and equitable orders - husband primary income earner – wife primary homemaker and carer for the children – wife’s ill-health – wife’s initial contribution was superior – parties agreed their respective contributions through personal exertion were equal – following separation the husband’s contributions were superior – finding parties’ overall contribution-based entitlements equal – wife has additional entitlement to payment of her ongoing medical expenses from a trust fund of $400,000 established by her late father – significant differential in the income-capacity of the parties – wife in receipt of disability pension and has no income-earning capacity – husband on high income - adjustment of 10 per cent in favour of wife warranted

FAMILY LAW - SPOUSAL MAINTENANCE – order for husband to pay to wife spousal maintenance until completion of the sale of the former matrimonial home

Family Law Act 1975 (Cth) ss 75, 79
Family Law Rules 2004

Brodie v Brodie (2009) 41 Fam LR 18
Coghlan & Coghlan (2005) FLC 93-220
Hickey & Hickey & Attorney-General for the Commonwealth of Australia (Intervener) (2003) FLC 93-143
Marriage of Bevan (1995) FLC 92-600
Marriage of Bonnici (1992) FLC 92-272
Marriage of Kessey (1994) FLC 92-495

APPLICANT:

Ms Stewardson

RESPONDENT:

Mr Stewardson

FILE NUMBER:

SYC

4504

2009

DATE DELIVERED:

8 March 2012

PLACE DELIVERED:

Newcastle

PLACE HEARD:

Sydney

JUDGMENT OF:

Austin J

HEARING DATE:

13 & 14 February 2012

REPRESENTATION

COUNSEL FOR THE APPLICANT:

Mr R Lethbridge SC & Ms M Falloon

SOLICITOR FOR THE APPLICANT:

Patrick Grimes & Co

COUNSEL FOR THE RESPONDENT:

Mr J Lloyd SC

SOLICITOR FOR THE RESPONDENT:

Aitken Lawyers

Orders

The parties shall do all such acts and things and sign all such documents as may be necessary to forthwith list for sale by private treaty the real property and improvements comprising Folio Identifier …, being the property more commonly known as … C Street, Suburb L, NSW (“the property”).
For the purposes of implementing Order 1 hereof:
(a)The listing agent shall be as agreed between the parties, and in default of agreement, with the agent chosen by ballot from the respective choices of the parties.
(b)The listing price for the property shall be as agreed between the parties, and in default of agreement, the price nominated by the listing agent.
(c)In the event of the property not being sold within 3 months from the date of its listing for sale then it shall be put to sale by public auction on the following terms:
(i)The auctioneer shall be as agreed between the parties, and in default of agreement, the auctioneer chosen by ballot from the respective choices of the parties.
(ii)The auction shall take place within six weeks of the deadline date for sale by private treaty.
(iii)The reserve price shall be as agreed between the parties, and in default of agreement, the reserve price nominated by the auctioneer.
(d)In the event that the property is not sold by auction, or private negotiation within a further seven days, then it shall be submitted to successive auctions within further six weeks periods until sold, otherwise upon the same terms and conditions as applied to the first auction.
Upon completion of the sale of the property pursuant to Orders 1 and 2 hereof, the proceeds of sale shall be applied as follows:
(a)Firstly, to pay all costs, commissions, and expenses of the sale, and to pay any Council and water rates and maintenance levies outstanding in respect of the property;
(b)Secondly, to discharge any registered encumbrance or any other liability affecting the property, including but not limited to:
(i)The National Australia Bank mortgage; and
(ii)The National Australia Bank overdraft account;
(c)Thirdly, to pay the sum of $474,925 to the wife;
(d)Fourthly, to pay 61.28% of the balance then remaining to the wife; and
(e)Fifthly, to pay the balance then remaining to the husband.
Pending implementation of Orders 1-3 hereof, the wife shall continue to keep the property in good repair and shall continue to meet the cost of mortgage repayments, rates, levies, and insurances as and when they fall due.
The husband is declared the sole legal and beneficial owner (as between the parties) of, and the wife shall forthwith execute all such documents as may be necessary to transfer to the husband, all legal and equitable title in the shareholdings of the parties in E Pty Ltd.
The wife shall forthwith execute all such documents as may be necessary to resign any and all positions currently held by her in E Pty Ltd.
Unless otherwise provided:
(a)Each party shall be the sole legal and beneficial owner (as between the parties) of all other assets in their respective possession as at the date of these orders, and for that purpose bank accounts are deemed to be in the possession of the person named as the account holder, investment accounts are deemed in the possession of the named investor, and superannuation entitlements are deemed in the possession of the superannuant; and
(b)Each party shall be solely liable for and shall indemnify the other against any and all debts attaching or relating to the property in their respective possession, and any debts in their respective sole names.
The husband shall pay to the wife the sum of $536 per week by way of spousal maintenance upon the following conditions:
(a) The first payment is due 7 days from the date of these orders;
(b)Payments shall be made by way of direct deposit to the wife’s account … 69 held with the Westpac Bank;
(c)This order terminates upon completion of the sale of the property pursuant to Orders 1-3 hereof.
In the event of either party refusing or neglecting to sign within seven days of a written request to do so any document necessary to implement the terms of these orders the Registrar of the Family Court of Australia at Newcastle is empowered to execute such documents on behalf of the parties pursuant to s.106A of the Family Law Act 1975 (Cth).
Costs are reserved for 28 days.
Any and all outstanding applications are dismissed.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Stewardson & Stewardson has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYC 4504 of 2009

Ms Stewardson

Applicant

And

Mr Stewardson

Respondent

REASONS FOR JUDGMENT

Introduction

The parties to these property adjustment proceedings had a long marriage, but have been separated for a long time. Their cohabitation lasted some 26 years and they have now been separated for approximately 10 years.
Despite separating in 2002, they were not divorced until 2006 and these proceedings were not commenced until 2009. The wife was granted leave to bring the proceedings out of time.
Ultimately, the parties’ dispute was reasonably narrowly confined and the trial was economically short.

Short background

The parties married in August 1976 and then began cohabitation in an encumbered apartment owned by the wife.
The wife was unemployed and the husband was a law student.
The husband graduated and commenced his legal career. He worked in that career continuously, supporting himself and the family.
The wife was employed intermittently due to various surgical procedures and recuperation periods. She ceased paid employment completely in about 1984 and thereafter bore the parties’ children in 1985 and 1988. The wife was the primary homemaker and carer for the children.
The parties enjoyed a comfortable lifestyle. They had a desirable home, which was renovated several times, owned a boat on which they spent leisure time, and the children attended private schools.
The marriage fell into difficulty by at least early 2002. Throughout 2002 the husband intermittently occupied a different section of the former matrimonial home or departed the home entirely. The husband finally vacated the former matrimonial home by December 2002 at latest.
Despite thereafter living elsewhere, until 2010, the husband continued to pay varying amounts of money to the wife for her discretionary expenditure on maintenance of the household, herself and the two children, who attained their majority in 2003 and 2006 respectively.
Since separation each party has received substantial inheritances from deceased members of their families of origin. In 2007 the father received monies from the deceased estate of his mother. Since 2009, the wife has received monies in tranches from the deceased estates of her father and step-mother.

Proposal and primary evidence of the wife

The wife abandoned reliance upon her Further Amended Initiating Application filed on 1 April 2011 and instead pressed for the orders set out in a minute of orders attached to her written Case Outline.
In essence, the wife proposed:
a)The transfer to her of sole proprietorship of the former matrimonial home, free from encumbrance, which was to be discharged by the husband (Orders 1-2);
b)Superannuation splitting orders (Order 5);
c)The transfer to her of sole proprietorship of all items of personal property currently in her possession (Order 6); and
d)The payment of spousal maintenance to her by the husband in the sum of $1,000 per week, indexed annually, until her death or remarriage (Order 7).
The wife again changed her position during the trial. She abandoned her proposals about her acquisition of the unencumbered former matrimonial home and the superannuation splitting orders. She desired the sale of the former matrimonial home and retention of her own superannuation interest.
In support of her case the wife relied upon her affidavit filed on 14 October 2011 and her two financial statements filed on 21 November 2011 and 8 February 2012.

Proposal and primary evidence of the husband

The husband pressed for the orders set out within his Amended Response filed on 5 September 2011, which provided for:
a)The wife’s retention of sole interest in E Pty Ltd (Orders 1-3);
b)Sale of the former matrimonial home and equal division of the net proceeds of sale between the parties, subject to an adjustment in favour of the husband as consideration for the wife’s retention of interest in E Pty Ltd (Orders 4-12);
c)Superannuation splitting orders (Orders 13-14); and
d)The parties to otherwise retain sole proprietorship of the assets currently in their possession (Order 15) and pay their own debts (Order 16).
By final submissions, the husband likewise abandoned his proposal for superannuation splitting orders, asserting each party should retain their own superannuation interests.
In support of his case the husband relied upon his affidavit and financial statement, both of which were filed on 9 February 2012. The wife took no issue with the late filing of those documents.

Process of property adjustment

In determining the property adjustment orders that should be made between spouses the Court follows a recognised four-step process (see Hickey & Hickey & Attorney-General for the Commonwealth of Australia (Intervener) (2003) FLC 93-143 at [39]).
Firstly, the Court should identify and value the matrimonial pool of property, comprised of assets, liabilities and financial resources at the date of the hearing.
Secondly, the Court should identify and assess the contributions of the parties within the meaning of ss 79(4)(a)-(c) of the Family Law Act 1975 (Cth) ( “the Act”), and determine the contribution-based entitlements of each party as a percentage of the matrimonial pool of assets.
Thirdly, the Court should identify and assess the relevant matters referred to in ss 79(4)(d), (e), (f) and (g), and s 75(2), and determine the adjustment, if any, that should be made to the contribution based entitlements of the parties.
Finally, the Court should consider the effect of those findings and resolve what order is just and equitable in all the circumstances of the case.

The pool of property and resources

I find the matrimonial pool of property comprises the following assets, liabilities and resources.

No.	Assets	Party	Value	Total
1	Former matrimonial home	Joint	1,300,000
2	Westpac acc … 14	Husband	12,632
3	Westpac acc … 27	Husband	766
4	Westpac acc … 05	Husband	638
5	Westpac acc … 69	Wife	2,129
6	NAB acc … 29	Wife	nil
7	Artworks held by wife	Wife	80,680
8	Collectibles held by wife	Joint	1,630
9	Artworks held by husband	Husband	3,650
10	2010 Hyundai car	Wife	19,000
11	1976 Alfa Romeo car	Husband	6,000
12	2000 Chrysler car	Husband	6,000
13	Boat “[…]”	Husband	35,000
14	Professional offices	Husband	76,034
15	Furniture/contents in professional offices	Husband	20,000
16	Furniture/contents in wife’s home	Wife	10,000
17	G investment	Husband	nil
18	Motor scooter	Husband	2,000
19	Bankwest acc	Husband	nil
20	Furniture/contents in husband’s home	Husband	3,000
Sub-total	1,579,159	1,579,159
Add-backs
21	Proceeds of sale of motor cycle	Husband	750
Sub-total	750	1,579,909
Liabilities
22	NAB mortgage	Joint	99,827
23	NAB overdraft	Joint	137,542
24	NAB – Law Society	Wife	nil
25	[omitted by agreement]
26	Westpac mastercard … 56	Husband	2,782
27	Westpac mastercard … 62	Husband	20,598
28	Westpac mastercard … 28	Wife	nil
29	Woolworths mastercard … 05	Wife	500
30	David Jones AMEX	Husband	5,200
31	Unpaid income tax	Husband	112,170
Sub-total	378,619	1,201,290
Superannuation
32	E Superannuation Fund	Wife	135,381
33	E Superannuation Fund	Husband	205,717
34	D Superannuation Fund	Husband	225,548
Sub-total	566,646	1,767,936
Net value	1,767,936

The finding as to the extent of the matrimonial pool is largely consistent with the balance sheet jointly tendered by the parties at the commencement of the trial.[1] However, some items require explanation.
[1] Exhibit A
Although item 8 was described by the parties as a jointly owned asset, it was common ground the assets comprising item 8 would be retained by the wife as part of her share of the property distribution.
There was residual disagreement between the parties about the value attributable to item 14. The husband acknowledged his leasehold interest in the professional offices was worth $25,000,[2] contrary to the estimate of $20,000 he included within his financial statement.[3] However, the wife asserted that allowance should also be made for the outstanding professional fees owed to the husband, which she calculated on the available evidence to be a net sum of $51,034.
[2] Husband’s affidavit, par 81
[3] Husband’s financial statement, par 43
The husband objected to incorporation of his outstanding fees as an asset in the matrimonial pool, notwithstanding his concession that he enjoyed the benefit of choses in action against his debtors. His submission was that he intended to continue legal practice and the outstanding fees due to him at any point in time will comprise part of his ongoing cash flow. Consequently, it was contended, it would be double-dipping to incorporate the outstanding fees as an asset in the matrimonial pool, thereby enlarging it, and to also assume continuity of his current income as a consideration relevant to any third-stage adjustment.
In response, the wife contended it would be illogical to count the debts the husband incurs in the conduct of his professional practice as liabilities in the matrimonial pool, but not the assets he accrues, when both have a bearing upon his annual income. For example, the husband was content to include as matrimonial liabilities his business overdraft account (item 23) and his taxation debt referrable to his income for the last financial year (item 31).
There is no doubt the overdue professional fees are an asset in the hands of the husband. I am persuaded the fees ought to be included as a matrimonial asset, just as the husband’s business debts ought to be included as matrimonial liabilities.
Attention must then turn to the value attributable to the outstanding gross fees. The husband produced an MYOB spreadsheet from his business records in response to the wife’s request. That document was tendered.[4] It shows the husband’s outstanding fees total a gross amount of $263,748, all of which have been outstanding for more than 90 days.
[4] Exhibit W2
The principal debtor is Business Y, by whom the husband is owed $166,540. The husband gave a detailed explanation as to how it is highly improbable he could ever recover any of those fees from that business. Even the wife found his explanation convincing and conceded the fees were probably not recoverable.
The husband also sought to suggest none of the residual fees of $97,208 were recoverable either, but his evidence was unpersuasive. It is unsatisfactory for the husband, who is a legal professional, to belatedly reveal relevant financial data during the course of the trial and then glibly seek to disavow its accuracy. The Family Law Rules 2004 require early and extensive disclosure of financial information, which did not seemingly occur, and the husband disobeyed procedural orders made by the Court requiring the timely exchange of evidence for the trial, for which no satisfactory explanation was proffered.
The MYOB spreadsheet was the husband’s own document. The records were maintained by him, or at least some other person on his behalf. He did not seek to adduce admissible evidence to prove the inaccuracy of his own records. Rather, he blithely said he had little recollection of the fees and could not understand why they still appeared in his accounting records.
The most reliable evidence is the husband’s own records, which he keeps for a reason. On the balance of probabilities, gross outstanding fees of $97,208 are recoverable by him. Of course, once recovered he will incur a taxation liability, which the wife conceded would be calculated at the highest marginal rate because of the quantum of the husband’s annual income. Making allowance for taxation calculated in that way, I accept that the net fees recoverable by him total $51,034, as was submitted by the wife.
Consequently, item 14 comprises the value of the leasehold ($25,000) and the net recoverable fees ($51,034), being a total of $76,034.
The husband contended a nil value should be attributed to item 19. The wife did not know the value of that asset, but she did not adduce alternate evidence or cross-examine the husband about his evidence. I therefore adopt the husband’s evidence of nil value.
The values of items 21 and 32 were agreed during final submissions.
There was slight disagreement about the value of item 33. The only evidence as to the value of the superannuation interest was contained within the husband’s financial statement, about which the husband was asked no questions.[5] That evidence of value is adopted as an admission against interest.
[5] Husband’s financial statement, par 45

The value of item 34 was proven by a statement issued to the husband by the superannuation fund trustee as at 30 June 2011.[6] The husband did not adduce any more recent admissible evidence of value, despite the opportunity extended to him by procedural orders.
[6] Exhibit W3
Although the husband sought adjustment orders in respect of shareholdings held by the parties in a corporation named E Pty Ltd, their shareholdings were not disclosed in the balance sheet as assets, even with nil value. The parties announced as agreed facts that the shareholdings have no value and it is their mutual intention for the corporation to be liquidated.
The Court is generally exhorted to treat the parties’ superannuation entitlements separately from assets, but that need not necessarily be the case (see Marriage of Coghlan (2005) 33 Fam LR 414 at 428-429; (2005) FLC 93-220). The parties did not directly address the issue in submissions, but inferentially, they both treated superannuation interests as assets. It is appropriate in the circumstances of this case to treat the superannuation entitlements of the parties as property because the entitlements represent only a modest proportion of the pool, both parties will soon attain an age when they may retire and crystallise their beneficial interest in the entitlements, and each party has substantial other resources available to them for financial support.
The balance sheet tendered jointly by the parties included extra assets which were described as “financial resources”. The mutual position of the parties was that those assets are traceable to the inheritances they each received following their separation and therefore ought to be quarantined from consideration as part of the matrimonial pool of property, because neither party made a recognisable contribution to the acquisition by the other of their respective inheritances. Such a position is consistent with authority (see Marriage of Bonnici (1992) FLC 92-272 at 79,020).
The parties agreed that the quarantined assets should only be available to meet any third stage adjustment one way or the other.
In the wife’s case, she has property worth $1,018,674.50 in that form, together with an entitlement to receive re-imbursement for any medical and prescriptive pharmaceutical expenses she incurs from a trust fund containing $400,000, constituted from her late father’s estate.[7]
[7] Exhibit A, items 35-36
As for the husband, he has other assets in that form valued at $923,551.[8]
[8] Exhibit A, item 37

Assessment of contributions

The final submissions of the parties about their contribution-based entitlements were quite similar.
The husband contended for equal entitlements (50/50), whereas the wife submitted for a differential of 5 per cent in her favour (52.5/47.5).
The parties addressed similar features of the evidence, most of which evidence was uncontroversial, in support of their submissions.
Each party introduced assets to the marriage, but the wife’s initial contribution was superior.
The wife owned an encumbered furnished apartment and had accumulated savings of $5,000.[9] The wife purchased the apartment several years before the marriage for $21,000, using a secured loan of $16,000.[10] The wife sold the property a few years after marriage and used the net sale proceeds of about $25,000 to reduce the debt over the former matrimonial home, which the parties had by then acquired.[11]
[9] Wife’s affidavit, pars 4, 7
[10] Wife’s affidavit, par 4; Husband’s affidavit, par 7
[11] Wife’s affidavit, par 16
By comparison, the husband introduced to the relationship his savings of $1,000 and two motor vehicles worth about $3,000.[12] Although the wife could not recollect the husband having any savings, the husband was not challenged about the savings he asserted and I accept his evidence.
[12] Husband’s affidavit, par 5; Wife’s affidavit, par 3
Over time, the parties have been respectively favoured by relatives with gifts and other financial benefits. There was no dispute that the parties should be accorded proper credit for such contributions originating from their families of origin (see Marriage of Kessey (1994) FLC 92-495 at 81,149-81,150).
Shortly after the parties’ acquisition of the former matrimonial home, the wife’s father either gave or loaned the parties $15,000 to undertake renovation work.[13] Although the parties had a different perception about the nature of the transaction, neither was challenged and neither was corroborated, making a finding of fact impossible. Probably the parties realised it makes little difference overall. Either way, financial accommodation of that magnitude afforded to the parties by the wife’s father was a matter of some moment. The parties had already borrowed the whole of the purchase price to acquire the property, which had cost $38,000,[14] so to receive a further $15,000 was a significant boon.
[13] Wife’s affidavit, par 13; Husband’s affidavit, par 22
[14] Wife’s affidavit, par 10; Husband’s affidavit, par 22
At around the same time, the wife received from her sister the sum of about $12,000 as consideration for the wife’s interest in the deceased estate of her grandfather, which monies the wife contributed to the former matrimonial home.[15]
[15] Wife’s affidavit, par 15; Husband’s affidavit, par 24
Much later, after the parties’ separation, the wife’s father gave the wife more money, which she partly spent on repairs to the former matrimonial home. However, the evidence does not make clear the amount spent on the property, as distinct from personal expenses of the wife, and there is no indication as to whether the expenditure on the property materially influenced its value.[16]
[16] Wife’s affidavit, par 80
During the marriage the parties were also given money by the husband’s mother, which the husband estimated at about $25,000.[17] The husband was not challenged about either the fact of the payment or his estimate as to value, which I therefore accept as accurate.
[17] Husband’s affidavit, par 50
The wife’s father gave to the parties a painting,[18] which is retained by the wife. It is currently valued at $75,000.
[18] Wife’s affidavit, par 27
Otherwise, the parties agreed their respective contributions through personal exertion were equal. The husband was the primary breadwinner and the wife was the primary homemaker and carer for the children.
Following separation in 2002, the financial arrangements between the parties continued as they had during cohabitation.
During the marriage, the wife was remunerated for administrative work she undertook for the service company that administered the husband’s professional offices.[19] The wife continued to be remunerated in that way following separation, at the rate of $4,000 per month,[20] until 2004.[21] The wife did continue to receive other payments from the husband after that time, as she admitted,[22] but they were gratuitous payments by the husband rather than wage payments by the husband’s service company.
[19] Husband’s affidavit, pars 30, 43
[20] Wife’s affidavit, pars 62, 71; Husband’s affidavit, pars 71, 73
[21] Husband’s affidavit, par 83
[22] Wife’s affidavit, par 76
The husband contended that the payments he ensured the wife received after separation were a significant feature of the case, as indeed they were.
The husband compiled a schedule of the payments he asserted the wife received post-separation.[23] All but an alleged payment of $10,000 in 2003, which the husband was unable to verify, were conceded by the wife.
[23] Husband’s affidavit, Annexure A
Ignoring that one payment of $10,000, the payments approximated a little less than $300,000 in the period between 2002 and 2009.[24]
[24] Husband’s affidavit, pars 71, 83, 95, 99, 100, Annexure A
The schedule compiled by the husband was apparently not comprehensive, because it accounted for the payments made by him only up until March 2009. The wife conceded the husband continued to make payments to her up until February 2010.[25] The husband agreed that was so in cross-examination, even though he had earlier deposed to ceasing the payments in early 2009.[26]
[25] Wife’s affidavit, par 111
[26] Husband’s affidavit, par 100
Importantly, the gratuitous payments made to the wife were additional to the monthly payments of $4,000 she received from the service company between 2002 and 2004, which must have totalled close to $100,000.
The husband also made other payments for the benefit of the wife and children, which included mortgage repayments on the former matrimonial home, the loan repayments on a car used by the wife, the wife’s credit card expenditure, the children’s private school fees, and medical expenses.[27] The state of the evidence did not permit quantification of those extra payments.
[27] Husband’s affidavit, pars 70, 73, 76, 89, 94, 96, 97; Wife’s affidavit, par 77, 82
As was submitted by the wife and conceded by the husband in cross-examination, some of those payments were made to maintain the wife and the children. No spousal maintenance orders were ever made and no child support assessment ever issued. Presumably the wife took the view there was no need to pursue them in light of the husband’s voluntary payments.
In any event, at least some of the payments made by the husband to or on behalf of the wife were funded from the husband’s overdraft account,[28] and the rest were inferentially paid from his income. Already counted within the pool of property as matrimonial liabilities are debts associated with the husband’s expenditure. They include his bank overdraft debit (item 23), his unpaid taxation liability (item 31), and his credit card debits (items 26, 27, 30). I accept the wife’s submission that those liabilities defray the credit attributable to the husband for his post-separation financial contributions.
[28] Husband’s affidavit, par 76
Following separation, the husband concedes the children saw little of him, and so the wife continued her contributions as carer for the children until they attained majority almost without assistance from him.
The wife also received an inheritance from her late step-mother’s estate, part of which was expended on the purchase of the car currently in the wife’s possession, diminution of her debts, repairs and maintenance for the former matrimonial home, and the acquisition of some chattels in the possession of the wife, all of which approximated $40,000.[29] The financial benefit derived from that inheritance was not encapsulated within the parties’ agreement to quarantine from consideration the inheritances comprising the wife’s late father and the husband’s late mother.
[29] Wife’s affidavit, pars 106, 114-115
Weighing those financial and non-financial contributions leads me to conclude that the parties’ overall contribution-based entitlements are equal. I regard the wife’s contributions during the cohabitation to have been slightly superior, but the husband’s post-separations contributions to have been sufficiently superior to off-set the discrepancy.
The parties’ 50 per cent shares of the matrimonial pool amount to $883,968.

Adjustment

The wife contended that an adjustment in her favour was warranted, and the husband did not disagree.
The quantum of the adjustment was the subject of dispute. The wife contended for an adjustment of approximately 10 per cent, whereas the husband contended it should not exceed 5 per cent.
Both parties agreed the percentage adjustment should be calculated upon the totality of assets, liabilities and resources in their hands, not just the constricted matrimonial pool constructed for the purpose of the second-stage assessment of contributions.
The matrimonial pool has an established net value of $1,767,936. The wife has other assets in her possession worth $1,018,674.50 and the husband has other assets in his possession worth $923,551. The total net value of assets in the hands of the parties therefore totals $3,710,161.50.
The wife has an additional entitlement to payment of her ongoing medical and prescriptive pharmaceutical expenses from the trust fund containing a corpus of some $400,000, but the evidence shows she has no entitlement to the underlying corpus.[30] The benefit of entitlement to re-imbursement for medical and prescriptive pharmaceutical expenses for the remainder of the wife’s life is significant and tangible. It will greatly relieve the drain on her resources, which would likely have been considerable in light of her past and current ill-health.
[30] Wife’s affidavit, par 101; Exhibit W1
The parties support themselves. Neither have any dependants.
The parties agreed the most salient factor affecting the quantum of the adjustment is the differential in their income-earning capacity.
The wife began receiving a disability pension in February 2007,[31] the present value of which is $336 per week.[32] During the course of these proceedings the husband conceded the wife had no income-earning capacity.[33]
[31] Wife’s affidavit, par 93
[32] Wife’s financial statement, par 12
[33] Notation A made on 18 May 2011
By comparison, the husband continues practice as a legal professional. He is 58 years of age, as is the wife, but he intends to continue working for the foreseeable future. He was appointed to an advanced level of his profession over 10 years ago and is head of his professional group.[34] He estimates his gross professional fees at over $500,000 per annum.[35] There was no evidence adduced to suggest the husband would earn much less or much more over the remainder of his professional career. I impute probable continuity of his income at that level into the future.
[34] Husband’s affidavit, pars 68, 77
[35] Husband’s financial statement, par 11
The husband submitted that an additional feature of the evidence, which should carry weight under s 75(2)(o) of the Act, was the wife’s quiet enjoyment of the former matrimonial home for the decade elapsed since the parties’ separation. Having regard to the credit already afforded the husband for his financial contributions which enabled the wife’s continued occupation of the former matrimonial home at the second stage of the property adjustment process, I am satisfied it would be double-dipping for the husband to also seek credit for it at the third stage. The husband submitted it would not be double-dipping, but the submission was only a bare proposition and no authority was cited to support his position. I attribute no weight to the issue as a consideration pertinent to the third stage adjustment.
No other factors were addressed by the parties as influential in the determination of the adjustment.
I am persuaded by the wife that an adjustment of 10 per cent is warranted. Calculated in the manner agreed by the parties, that percentage adjustment amounts to $371,016.15.
Although the husband argued an adjustment of that quantum was too large, it is as well to remember that the husband will likely earn gross fees of that amount within the next nine months, and he will continue to earn much more than that on an annual basis for years to come.
The total entitlement of the wife is therefore $2,273,658 (= 883,968 + 1,018,674 + 371,016), calculated to the nearest dollar. That represents her share of the matrimonial pool, her quarantined inheritance assets, and the cash adjustment in her favour.
The total entitlement of the husband is therefore $1,436,503 (= 883,968 + 923,551 – 371,016) calculated to the nearest dollar. That represents his share of the matrimonial pool and his quarantined inheritance assets, less the cash adjustment in favour of the wife.
Overall, the wife receives 61.28 per cent of the total assets and the husband receives 38.72 per cent.

Just and equitable orders

Attention then turns to the nature of orders that will justly and equitably achieve the proportional division.
Despite the wife’s proposal that she acquire sole proprietorship in the former matrimonial home, free from encumbrance, her evidence was quite different. In cross-examination she said she certainly did not intend to remain living in the former matrimonial home and desired its sale. She intended to use her share of the sale proceeds to complete the purchase of an apartment she has contracted to buy.[36] The wife was content to submit the former matrimonial home for sale as soon as possible, even if that meant her renting accommodation before she was able to occupy her new apartment.
[36] Wife’s affidavit, pars 121-122
As the husband also sought the sale of the former matrimonial home, the orders so provide.
The husband proposed that the wife acquire sole proprietorship of their shareholdings in E Pty Ltd, but in final submissions acknowledged such an order was inapposite. Although not the subject of evidence, the Court was informed of agreed facts that the corporation is associated with the husband’s professional practice, each party retains a shareholding in the corporation, which have no value, and it is intended that the corporation be liquidated. The husband is legally qualified, but the wife is not. It is more appropriate for the husband to acquire sole proprietorship in the shareholding and do with the corporation as he sees fit.
The parties agreed they would each retain the assets in their respective possession and their own superannuation entitlements. Neither party sought any order regulating the severance of their respective superannuation interests held within the E Superannuation Fund. Presumably their interests are segregated within the fund and one or both will take steps to roll-out their interest to another superannuation fund.
The wife will retain the assets (items 5, 6, 7, 8, 10, 16), liabilities (items 24, 28, 29), and superannuation (item 32) from the matrimonial pool with a net value of $248,320.
The husband will retain the assets (items 2, 3, 4, 9, 11, 12, 13, 14, 15, 17, 18, 19, 20, 21), liabilities (items 26, 27, 30, 31), and superannuation (items 33, 34) from the matrimonial pool with a net value of $456,985.
Upon sale of the matrimonial home (item 1) the proceeds of sale will be used to discharge associated liabilities (items 22, 23) and the balance distributed between the parties to achieve the appropriate proportional division. That will require payment of a cash adjustment to the wife of $474,925 (to the nearest dollar), with the balance divided in the ratio 61.28/38.72 in favour of the wife.
I am satisfied that the orders set out at the commencement of these reasons represent a just and equitable division of the parties’ interests in property and resources.

Spousal maintenance

The wife’s claim for spousal maintenance must be considered in light of the adjustment of property interests accomplished pursuant to s 79 of the Act (see Brodie v Brodie (2009) 41 Fam LR 18 at 37-38).
The first requirement for the wife to sustain her spousal maintenance application is establishment of her need to be maintained.
The wife deposed to her current weekly expenditure,[37] but I accept the submission that not all of that expenditure is reasonably necessary to support herself.
[37] Wife’s financial statement, par 60
It is not necessary that the wife bear “medical, dental and optical” expenses ($138) and “chemist/pharmaceutical” expenses ($25), because such expenses are paid from the trust fund established for her benefit. Although the wife said she paid such expenses and later sought re-imbursement from the trust fund on an annual basis, there is no evidence that she must adopt that procedure. There is no apparent reason why she cannot seek payment of such expenses directly on her behalf from the fund by the fund trustees.
Nor is it necessary for the wife to incur the expense of maintaining an aged or ill pet ($85).
Disallowing those amounts causes the wife’s reasonably necessary weekly expenditure to be computed at $536 in lieu of $784.
The wife’s only income is a disability pension,[38] which must be disregarded in the process of analysing her capacity for self-support (s 75(3)). It is uncontroversial she is unable to work and earn any income.
[38] Wife’s financial statement, pars 9-16

I am satisfied the wife has no capacity to support herself and the sum of $536 per week is the proper measure of her need for maintenance.
The wife submitted, in reliance upon authority (see Marriage of Bevan (1995) FLC 92-600), that she ought not be expected to diminish her capital in order to maintain herself. However, it should be noted the Full Court expressly there said that depletion of capital ought not be expected of a spouse seeking spousal maintenance when that spouse only has “comparatively meagre capital” (see Marriage of Bevan at 91,980). The wife will have ownership of capital worth $2,273,658 as a consequence of the property adjustment orders, which hardly bears accurate description as “meagre”.
In any event, as was pointed out by the Full Court more recently in Brodie v Brodie (at 37-38), different approaches may be found in the authorities about the requirement for a spouse to apply his or her capital to meet living expenses rather than such needs being met by a spousal maintenance order. There has been no uniform approach.
Implementation of the property adjustment orders invests the wife with substantial assets, but few of them are liquid and her receipt of cash will be delayed.
The wife could sell her artwork (item 7), but the most significant artwork is the painting given to her by her late father, which presumably has high sentimental value for her. In any event, there is no evidence about how quickly the wife’s artworks could be sold to generate cash. An auction would likely take some time to arrange.
Until the proceeds of sale of the former matrimonial home become available for distribution the wife must continue to meet the expense of its upkeep. It will not be a source of income for her discretionary use.
Lastly, the wife could call upon the independent trustees of her late father’s estate to release to her the share she enjoys in the undistributed portion of her late father’s estate. Although the deceased estate comprises real property which is unsold,[39] the estate also comprises large cash sums on term deposit. The wife’s declared interest in the current undistributed cash reserves of the estate alone is valued at $238,237.[40]
[39] Wife’s affidavit, pars 103, 113
[40] Exhibit A, item 35
The wife is one of the trustees of the estate.[41] Although she must be able to influence decisions made about distribution of the estate by the trustees as a group, she cannot act unilaterally.
[41] Wife’s affidavit, pars 100, 104
Although there is no evidence about the duration of the term deposits, the trustees have released cash from the estate to the wife in the past. In April 2011 the wife used $69,000 from money released to her in payment of the deposit on the purchase of her apartment.[42] The wife also conceded in cross-examination that more cash from the estate was released to her as recently as December 2011. History therefore suggests the wife is able to influence trustee decisions to release cash to the estate beneficiaries within a period of months. Presumably she could do so again.
[42] Wife’s affidavit, pars 121-122
The wife amended her spousal maintenance claim in final submissions. Instead of seeking periodic payments indefinitely, she instead sought periodic payments until the later of the sale of the former matrimonial home and the sale of the real property held within the deceased estate of her late father.
While it might be reasonably anticipated that the former matrimonial home could be sold pursuant to the property adjustment orders within the next few months, there is no evidence at all from which an inference can be reasonably drawn about the likely time at which the real property will be sold by the trustees of the deceased estate.
Upon sale of the former matrimonial home the wife will receive a cash amount of $474,925 together with 61.28 per cent of the residue net sale proceeds. That will likely be sufficient to enable her to complete the purchase of her apartment and have spare cash to support herself. If the money she receives from the sale of the former matrimonial home is not sufficient for that purpose, then the elapse of months in the interim should be sufficient time within which to arrange the release of further funds to her from the deceased estate in order that she can support herself.
Consequently, an order is made for the husband to pay to the wife spousal maintenance in the sum of $536 per week until completion of the sale of the former matrimonial home. There was no suggestion the husband did not have the financial capacity to make maintenance payments of that amount for that confined period of time.

I certify that the preceding one-hundred and eighteen (118) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Austin delivered on 8 March 2012.

Associate:

Date: 8 March 2012

[2012] FamCA 109

8 March 2012

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