Suffolk v Suffolk
[2007] FamCA 797
•7 August 2007
FAMILY COURT OF AUSTRALIA
| SUFFOLK & SUFFOLK | [2007] FamCA 797 |
| FAMILY LAW - PROPERTY SETTLEMENT – Pool of assets – Contribution - Just and equitable |
| Family Law Act 1975 (Cth) Sections 75 & 79 |
In the Marriage of Hickey (2003) 30 Fam LR 355
In the Marriage of Coghlan (2004) 33 Fam LR 414
In the Marriage of Omacini (2005) 33 Fam LR 134
In the Marriage of Lenehan (1987) 11 Fam LR 615
In the Marriage of Norbis (1986) 10 Fam LR 819; FLC 91-712
In the Marriage of Zyk (1995) 19 Fam LR 797
Mallett v Mallett (1984) 9 Fam LR 449
In the Marriage of Ferraro (1992) 16 Fam LR 1
In the Marriage of Shewring (1987) l2 Fam LR 139
Chorn and Hopkins [2004] FamCA 633; (2004) FLC 93-204; 32 Fam LR 518
| APPLICANT: | Mrs Suffolk |
| RESPONDENT: | Mr Suffolk |
| FILE NUMBER: | SYF | 3632 | of | 2005 |
| DATE DELIVERED: | 7 August 2007 |
| PLACE DELIVERED: | Sydney |
| JUDGMENT OF: | Judicial Registrar Loughnan |
| HEARING DATE: | 18 & 19 June 2007 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr J. Millar |
| SOLICITOR FOR THE APPLICANT: | Karras Partners, Lawyers |
| COUNSEL FOR THE RESPONDENT: | Mr G. Foster |
| SOLICITOR FOR THE RESPONDENT: | Brown & Partners |
Orders
1.That within two months of the date of these Orders the husband pay to the wife $100,000.
2.In default of the payment pursuant to Order 1 the husband is to do all things and sign all documents necessary to sell the property situate at and known as T and to pay to the wife from the net proceeds of that sale the sum of $100,000.
3.That forthwith upon the payment to the wife of the sum of $100,000 pursuant to Order 1 or Order 2 above, the husband shall transfer to the wife the whole of his right, title and interest in the former matrimonial home situated at and known as B and thereupon the wife shall forthwith do all things and sign all documents necessary to discharge the mortgages currently encumbering that property and is thereafter to indemnify the husband against all or any liability in relation to the property including all payments in respect of the mortgage rates, taxes, charges, insurance and expenses in relation to repairs and improvements and any other sums due or accruing in respect of the said property.
4.In the event that the wife is unable to discharge the mortgages currently encumbering the B property in accordance with order 3, she is to forthwith do all things and sign all documents necessary to sell the property and to discharge those mortgages.
5.That other than as provided for by these Orders or as the parties may otherwise agree, the husband and wife be declared to have the sole right, title and interest in:-
5.1Any chattels, goods, furnishings and other property which are at the date hereof in their possession respectively.
5.2Any monies, shares, debentures and superannuation which stand in their sole name respectively at the date hereof.
6.That the husband and the wife do all acts and things and give all consent and execute all documents and writings necessary to give effect to the Orders made herein.
7.That in the event that either party refuses or neglects to execute any Deed of instrument, the Registrar of the Court be appointed pursuant to Section 106A to execute such Deed or instrument in the name of such party and to do all acts and things necessary to give validity to the operation of the Deed or instrument.
8.Leave is granted to both parties to re-list these proceedings by arrangement with the Associate to Judicial Registrar Loughnan on 7 days notice in relation to the form or implementation of these orders or in relation to legal costs, including the costs reserved on 7 November 2006.
| FAMILY COURT OF AUSTRALIA AT SYDNEY |
FILE NUMBER: SYF 3632 of 2005
| Mrs Suffolk |
Applicant
And
| Mr Suffolk |
Respondent
REASONS FOR JUDGMENT
After living together for about 4 years the parties cannot agree on a settlement of their property.
Applications
By a minute handed up at the commencement of the hearing the wife seeks:
That within one month of the date of these Orders the husband is to do all things and sign all documents necessary to transfer to the wife the whole of his right, title and interest in the former matrimonial home situated at and known as [B] and to pay to the wife by way of alteration of property interest the sum of $257,188[1] by bank cheque.
[1] This figure was supplied during final submissions
That after the said transfer and payment by the husband to the wife, the wife will do all things necessary to discharge the mortgages currently encumbering the property at [B] and is thereafter to indemnify the husband against all or any liability in relation to the property including all payments in respect of the mortgage rates, taxes, charges, insurance and expenses in relation to repairs and improvements and any other sums due or accruing in respect of the said property.
That other than as provided for by these Orders the husband and wife be declared to have the sole right, title and interest in:-
8.1Any chattels, goods, furnishings and other property which are at the date hereof in their possession respectively.
8.2Any monies, shares, debentures which stand in their sole name respectively at the date hereof.
That the husband and the wife do all acts and things and give all consent and execute all documents and writings necessary to give effect to the Orders made herein.
That in the event that either party refuses or neglects to execute any Deed of instrument, the Registrar of the Court be appointed pursuant to Section 106A to execute such Deed or instrument in the name of such party and to do all acts and things necessary to give validity to the operation of the Deed or instrument.
By a minute of orders handed up during submissions the husband seeks:
1.Each party to do all such things and sign all such documents necessary to place [B property] on the market for sale at a price no less than $570,000.
2.Proceeds of sale to be disbursed as follows:
(a)Payment of all outstanding rates, taxes, commission on sale, legal expenses on sale and mortgages encumbering [B property]
(b)Payment of $71,013 to wife
(c)Payment of all outstanding CGT liabilities with respect of [V property] (Est. $16,217)
(d)Balance to husband
3.Wife to hand over to husband within 14 days all items listed in annexure "B" to husband's affidavit of 22 November 2006, together with Thai cutlery set.
4.Husband to indemnify wife against all liabilities in respect of unit in [T], N Credit Union account number […], husband's American Express Gold Reserve, American Express Gold credit cards, Esanda Finance debts, Citibank Visa card and capital gains tax liability in respect of [V] property.
5.Wife to indemnify husband against all liabilities in respect of capital gains tax in respect of the sale of the [W] unit.
6.Husband to be declared the sole owner and beneficiary of superannuation entitlement [Z] super fund.
7.Wife to be declared the sole owner and beneficiary of superannuation entitlement [A] superannuation fund.
8.Wife to be declared the sole owner, to the exclusion of husband, of:
(a) 264 [I] shares
(b) Household contents listed in annexures "I" and "J" to the husband's affidavit of 22 November 2006.
(c) 1996 Toyota Corolla sedan
(d) All cash standing to the credit of wife with St George Bank
(e) Jewellery
9.Husband to be declared the sole owner, to the exclusion of the wife, of:
(a) 284 [I] shares
(b) Furniture listed in annexure "B" to his affidavit of 22 November 2006
(c) 1996 Kawasaki motorcycle
(d) Holden Astra motor vehicle
(e) [T] unit
(f) .
10.Wife to pay husband's costs in relation to Application in a Case filed on 6 October 2006.
Issues for determination
The issues for determination as settled by counsel are:
·The extent of the wife’s contributions during cohabitation;
·The amount the husband received from the proceeds of sale of M property;
·The amount the husband received from the refinance of the mortgages on the Land V properties;
·How the husband disposed of the proceeds of sale of the Nissan Pulsar motor vehicle and motor bike;
·The amount of the husband’s loan to his father;
·The extent of wasteful expenditure by the husband after April 2004;
·The husband’s loss of the time share;
·The extent of credit card tax and capital gains tax liabilities to be included in the net property;
·Whether the husband repaid to the wife, the funds advanced to pay out the lease on the prestige car and the loan for the Nissan;
·The extent to which W property was used as security;
·The extent of any finding of incapacity of wife’s ability to earn income, or of her health;
·The manner of disposition of the proceeds of sale of the W property;
·The value of the husband’s assets at the commencement of cohabitation;
·The extent of the wife’s capacity to engage in income earning activity;
·Value of husband’s and wife’s assets in pot;
·Wife’s ability to have taken in boarders from late 2004 to date and the effect of any such ability on her entitlements and whether such failure (to take in borders) amounts to waste;
·The extent of the wife’s ability to take in boarders in the future;
·Whether there should be any add backs;
·The husband’s costs in respect of the interlocutory application.
This was a five year marriage. Many of the issues identified call for an assessment of the facts that is not possible or realistic. The authorities would have it that this is not to be an accounting exercise. I will deal with those of the issues that are relevant to the task at hand.
Short History
The wife and husband are 51 and 52 years of age respectively. They were married on … October 2000, lived apart from April 2004 and finally separated on 31 October 2004. Their divorce became final on 15 December 2005.
Children
There are no children of the marriage.
Background Facts
The wife was the subject of a violent assault in 1995. She was hospitalised for 10 days.
In June 1998 the wife bought an apartment at W for $275,000.
In October 1998 the wife received $90,000 in workers compensation arising from the assault. In November 1998 the wife applied those moneys to reduce her mortgage on her apartment at W.
The parties started to live together in July 1999 in the wife’s W apartment.
The wife owned the W apartment. The wife’s equity in the property was about $220,000. The wife also had savings of $3,200 and $US2,000, a collection of jewellery worth about $10,000, a Toyota motor vehicle worth $18,000, household contents and furnishings and two small superannuation interests.
At or soon after the commencement of cohabitation the husband had $140,723.16 ($111,303 on settlement + $29,420.16 being the balance of the deposit) from the sale of a property at E, a prestige motor vehicle, a timeshare investment and various superannuation interests. He owed about $20,000 on the prestige motor vehicle and had credit card debts of about $11,000.
From April 1999 to October 1999 the wife was working 4½ hours per day, 5 days a week at S Company and as a casual at an Agency. At S Company the wife was engaged in sales, dealing with clients both on the phone and in person. She showed clients the floor plan of a property and sold off the plan. She contends that she was suited to this work because there was only one product and she had time to become familiar with it.
On 24 September 1999 the parties bought M property, in the sole name of the husband, for $403,500 subject to a mortgage of $320,000 with P Company. The husband contributed $111,000 from his savings. The wife extended the mortgage on the W apartment by $50,000 for the deposit on the M property. The husband later paid her back. The husband contends that the source of funds to repay the wife included the $29,420.16 from the deposit received on his E property.
From October 1999 the parties rented out the W property. From September 1999 to February 2006 the parties had paying boarders living with them.
In March 2000 the wife paid out the lease on the husband’s prestige motor vehicle for $19,369.60.
The parties were married on … October 2000.
In November 2000 the wife paid $9,000 to discharge the husband’s American Express account.
From January to April 2001 the wife worked 3 days a week with S Company at O, also in sales.
In February 2001 the parties purchased an investment property at V in joint names for $255,000. The parties borrowed the whole of the purchase price by way of mortgage from A Company in the sum of $258,900. The wife drew $8,000 on the W mortgage to pay the stamp duty of $7,425 on the V purchase. The W property was also used as security for the mortgage. The V property was then rented out.
From May 2001 to December 2001 the wife worked as a Sales Assistant for D Company 2 or 3 days a week. This involved selling storage items.
The wife contends that in May 2001 the husband left his position with N Company where he had been paid about $80,000 per annum and commenced with his current employer, F Company, on a package of about $128,000. The husband contends that in 2001 he left his position with N Company at $95,000 per annum and commenced with F Company. Nothing much turns on this issue,
On 16 November 2001 the parties sold the M property for $525,000. They moved into a rented property at W.
On 26 November 2001 the parties’ purchase of L property for $173,500, was completed. The property was bought in the joint names of the husband at 99% and the wife at 1%. The husband applied $53,950 from the M property sale to the purchase and borrowed $127,102 from P Company. The parties rented out the L property.
From February to July 2002 the wife worked with U Company on a full-time basis.
On 18 April 2002 the parties’ purchase of G property for $208,460, was completed. The property was bought in joint names with the husband at 99% and the wife at 1%. The parties borrowed $220,000 from the Commonwealth Bank and used the W property as security for the purchase. They rented the property out.
On 18 April 2002 the parties’ purchase of H property for $215,000, was completed. The property was bought in joint names with the husband at 99% and the wife at 1%. The parties borrowed $226,000 from the Commonwealth Bank and used the W property as security for the purchase. They rented the property out.
In May 2002 the parties refinanced the V and L properties. The wife contends and the husband disputes, that the husband retained the additional $78,830 that came from that refinance.
After mid 2002 the parties upgraded their holiday time share membership.
The wife left U Company in July 2002 and did not return to paid employment until January 2003.
In August 2002 the parties bought B property as joint tenants for $596,000. They borrowed $476,800 from the National Australia Bank. The balance of the purchase price and the costs of purchase came from the husband’s St George Bank account in the sum of $141,000 being part of the proceeds of the M property sale.
In January 2003 the wife joined TB company. Her work involved selling therapeutic products to Chinese clients through a call centre.
On 31 March 2003 the parties bought T property in the husband’s sole name for $310,000. The parties borrowed 90% from the St George Bank and drew the $31,000 deposit from a draw down of $45,500 on the mortgage on the W property.
From June 2003 to December 2005 the wife took casual employment with SM Company as a Receptionist. SM Company was a financial business. Again the clients and staff were mainly Chinese. The wife says that at first her work went well but later she made some mistakes. She is not good at filing and made some mistakes in that role. She forgot to cancel an appointment and her colleagues, clients and employers were not happy.
In October 2003 the parties began to deposit their salaries into an offset account with SP Company.
In March 2004 and with the wife’s agreement, the husband withdrew $10,000 from the joint SP Company account and lent that amount to his father.
On 8 April 2004 the husband ceased living full-time at the former matrimonial home at B.
On 10 April 2004 and with the wife’s agreement, the husband withdrew a further $5,000 from the joint SP Company account and lent that amount to his father.
From 20 April 2004 to 18 November 2004 the husband transferred $18,200 from the second offset account with SP Company to the first offset account.
On 17 May 2004 and with the wife’s agreement the husband withdrew a further $20,000 from the joint SP Company account and lent that amount to his father.
The wife says that she discovered the husband was having an affair with one of the boarders, Ms Q
The husband visited the Ms Q in China on three occasions in 2004. He visited her for about 3 days on a stop-over during a work trip and then for 5 days and 5-7 days on two other trips. For one of the two non-work trips the husband used frequent flyer points for the air fares.
On 28 May 2004 the husband transferred $5,000 from the second offset account with SP Company to the first offset account.
On 2 September 2004 the parties sold the L property for $230,000 and the net proceeds of $86,437 was deposited directly into the B property mortgage account with SP Company.
The parties separated on 31 October 2004.
Ms Q arrived in Australia on 15 November 2004.
On 18 November 2004 the husband transferred a further $5,000 from the second offset account with SP Company, to the first offset account.
It is the husband’s evidence that his father repaid the moneys lent to him by the parties. $10,000 was deposited to the husband’s St George Bank account on 22 September 2004, $5,000 on 18 November 2004 and $20,000 on 17 December 2004. The husband says that those sums came from his father.
On 24 February 2005 the parties sold the H property for $265,000. The sale was completed on 7 April 2005. The net proceeds of $255,716.76 were applied in reduction of the SP company mortgages.
The wife asserts that in March 2005 the husband stopped depositing his salary directly into SP company first offset account.
In May 2005 the wife stopped depositing her salary directly into SP Company.
On 19 July 2005 the sale of the G property for $280,000 was completed. The net proceeds of $268,721.96 were applied to discharge the SP Company mortgage on that property and to reduce the debt on the other properties.
At a cost of $5,000 the husband bought back the motor bike from the person to whom he sold it.
In September 2005 the parties sold the V property for $370,000 and applied $83,624.44 in reduction of the mortgage secured on the B property.
In October 2005 the husband stopped making withdrawals from the first offset account with the SP Company.
In November 2005 the wife transferred the balance of $50,000 from the offset loan account number two into the investment loan and then to her St George Bank account.
On 14 November 2005 a decree nisi of dissolution of marriage was granted.
From 9 January 2006 to 2 March 2006 the wife worked for BW Company. The principal of the BW Company, Mr F, is also the principal of SM Company. The businesses share premises and some telephone numbers. It is the wife’s case that the real change was in effect to move her from a salaried position to a commission-only position. From March to August 2006 her employment with BW Company was on a casual basis. I take it that that employment continues.
The last boarder left the B property in February 2006.
On 7 November 2006 orders were made by this Court by consent whereby the husband could draw down $55,072.04 and the wife could draw down $4,087.82 from the mortgage facility with SP Company for payment to the Australian Taxation Office in respect of outstanding tax assessments. Of the amount drawn by the husband he applied about $7,000 to an income tax debt.
Since September 2006 the wife sold the W property for $425,000 and received net proceeds in the sum of $104,865. Of those moneys she paid $30,000 (in payments of $20,000 and $10,000) to her solicitors in respect of the fees for these proceedings. She paid a further $2,125 for strata fees for the B property.
Credit and Submissions
The evidence of the witnesses
The witnesses called for cross-examination were the parties and Dr D.
The wife was not successfully challenged in cross-examination. Having said that, the process of cross-examination was difficult for her. She admits to a poor memory and English is not her first language. She asked for many questions to be repeated, particularly those involving dates. On some issues, however, she gave her evidence with confidence, even vehemence. For example she knows that the kettle barbecue was not, as was put to her, brought into the marriage by the husband, but that they bought it during their relationship. On that and on two other issues dealing with personalty, the husband later conceded that the wife was correct and he was wrong. The wife readily made concessions against interest. For example although not mentioned in the husband’s affidavit, she readily conceded that about $29,000 being the remittance of the deposit paid by the purchaser of the E property owned by the husband and his first wife, was an amount in addition to the approximately $111,000 paid on the settlement of that sale. She does not know if all of that amount found its way to the husband or ultimately, as he contends, to her, but nevertheless the concession was made. The only evidence about the husband’s contributions as a homemaker came in the form of concessions made in the wife’s affidavit. Cross-examination about the wife’s health was unhelpful. For example it transpires that the wife is unsure whether her headaches occur more frequently that those of the average person! As a general proposition, I accept the wife as a witness of truth.
There were significant problems with the husband’s evidence. Unfortunately much of his oral testimony repudiated aspects of his earlier evidence. It transpires that neither of his Financial Statements fully disclosed the real position in relation to his income. The pre-tax component of his car package was not disclosed, the fact or detail of his receipt of bonuses/commissions is omitted and the entry in relation to the employer’s superannuation contributions was carelessly handled. At first he said that he could not afford to keep up the payments on a time share investment in 2005 – 2006 and later conceded that the level of his discretionary expenditure at that time meant that he could afford those payments but elected not to make them. The husband’s case has been that he lent $30,000 to his father and not $35,000 as the wife asserted. When, during cross-examination, he was taken through the bank statements attached to the wife’s affidavit, he was forced to concede that he had advanced $35,000 to his father. It is concerning that in each instance the error in his evidence favoured the husband’s case. The husband made one concession and it is of significance. He conceded that the applicant was a hard working, diligent wife.
Dr D was cross-examined in relation to his report. The effect of his evidence is that the wife was seriously injured in the 1995 assault and her capacity for paid employment has been compromised to an extent by the consequences. His evidence was not successfully challenged.
Submissions
The written submissions made on behalf of the wife in relation to the case as it was finally argued are to the following effect:
·$35,000 should be added back to the pool because the husband has the onus in relation to the $35,000 lent to his father. Either he should not be accepted in relation to the repayment of that fund or it should not be presumed that the moneys were applied to family purposes.
·$23,200 of the $28,200 drawn by the husband from the Offset account after separation should be added back and the husband had the onus to identify the fate of those drawings and he is likely to have had a surplus of income over outgoings at that time and he concedes very significant discretionary expenditure then.
·$10,000 should be added back because of the wasted investment in the time share. $10,000 is an estimate based on $8,706 in upgrade charges paid from joint funds and some other allowance. The husband ceased making the payments in 2005 & 2006, did not ask the wife to make them and concedes that the reason he did not make the payments was not that he could not afford to do so.
·$6,467 should be added back as the husband applied that part of the $55,000 odd drawn pursuant to the orders of 7 November 2006 to his personal income tax. The wife did not benefit from the income - why should she contribute to the tax?
·As to the liabilities the husband’s evidence about his 2006 income tax is unsatisfactory. He has no assessment, just an estimate from his accountant. Again the wife had no benefit of the income, why should she contribute to the tax? As to his $4,400 odd interest bill from the ATO I am referred to the observations in Chorn & Hopkins about penalties and interest.
·It is submitted that the lists of assets and liabilities are as follows:
Non Superannuation Assets Value [B property] W says $425K $525,000.00 [T property] (H) $425,000.00 Wife’s St George account […] $2,000.00 Wife’s St George account $73,000.00 Wife’s 264 [I] shares $1,399.00 Wife’s 1996 Toyota Corolla motor vehicle $5,000.00 Wife’s jewellery $10,000.00 Husband’s St George account […] $6,000.00 Husband’s 284 [I] shares $1,732.00 Husband’s Holden Astra motor vehicle $25,250.00 Husband’s 1996 Kawasaki motor cycle […] $5,000.00 Add back loan repaid from Husband’s father $35,000.00 Add back money wasted by husband $23,200.00 Add back time share lost by husband $10,000.00 Add back for personal income tax paid by husband $6,467.00
Learned counsel for the wife put the total of those amounts at $1,158,848. I add them up to be $1,154,048 and I do not know where the discrepancy is. He then added in the legal fees paid by the parties as follows:
Wife paid $44,724
Husband paid $63,158
Total $107,882That came to $1,266,730
Superannuation Assets Value Wife’s [A] superannuation $10,521.00 Husband’s [Z] superannuation $187,027.00 Total $197,548.00
Liabilities:
Liabilities Amount [SPCompany] [B] mortgage $257,390.00 St George Bank [T] mortgage (H) $269,087.00 Husband’s [N] Credit Union $2,026.00 Husband’s American Express Gold Reserve $983.00 Husband’s American Express Gold $2,351.00 Husband’s Esanda Finance $20,965.00 Wife’s capital gains tax for [W property] $24,667.00 Husband’s Citibank Visa credit card $11,736.00 Husband’s borrowings to pay for legal fees $15,000.00 $604,205.00
From those calculations counsel for the husband had the net assets (including superannuation) at $860,073 ($1,158,848 + $107,882 + $197,548 - $604,205).
· It is submitted that the property should be divided in the proportions 70% to the wife and 30% to the husband because the contributions favour the wife 60:40 and there should be a 10% adjustment to the wife under section 75(2);
· The wife’s initial contribution exceeded that of the husband. She brought in $220,000 in the form of her equity in the [W] property, $3,244 and $US2,000 in cash (@ 70c $US2,000 was $A2,587), $10,000 worth of jewellery and contents and some superannuation. That is to be compared with the husband’s approx. $111,000 in cash, a car, time share and superannuation as well as a car lease and other debts. The initial contributions were something like 3:1 in favour of the wife;
· The [W] property was used as the asset base to obtain and secure various investments;
· The wife had paid employment during the marriage, mostly on a part-time basis and she managed the boarders who lived with the parties from time to time;
· The wife made the greater homemaker contribution, being primarily responsible for cooking, shopping, ironing, maintaining the gardens and caring for family pets;
· The husband conceded that the wife made a proper contribution;
· As to section 75(2) the wife’s health means that her earning capacity is significantly impaired and in any event the husband has a far superior earning capacity.
The written submissions made on behalf of the husband were as follows:
(A)PROPERTY SETTLEMENT CASE.
4. Contribution Entitlement
a.Initial contribution Assessment as a Percentage:
Husband 44.2% ($180000 / $407000)
Wife 55.8% ($227000 / $407000)
b.Contributions during the course of the marriage:
Husband: add 30%: 74.2% (adjusted)
Wife: 25.8%. (adjusted)
5. Relevant factors
The parties’ contributions during the course of the marriage pursuant to S. 79 (4) are as follows:
S. 79 (4) (a): i. The parties brought assets and resources into the marriage as follows:
Husband’s Assets: Husband’s Case (Wife’s estimations)
Motor Bike $ 5000 $ -
Furniture & Effects $ 10000 $ -
Net Proceeds [E property] $115000 $111303
Time Share Units $ 8000 $ N/K
Lease [prestige] Car [$ 18000] [$ 10369]
Credit cards [$ 10000] [$ 10000]
$110000 $ 90934
Superannuation $ 70000 $ N/K
$180000
Wife’s assets: Husband’s Case (Wife’s estimations)
Unit at [W] $220000 $224000
Money $ N/K $ 5000
Toyota Motor vehicle $ N/K $ 18000
Jewellery $ N/K $ 10000
Furniture & goods $ 7000 $ 10000
$227000 $267000
Superannuation $ N/K $ 612
$227000
ii.The parties also worked during the marriage. The husband’s Gross income for the years 01/02 to 04/05 are: $106095; $115890; $115,695; $121971 resp.
The Wife’s income details are not revealed in her documents, but it is assumed from her affidavit that her Gross income earned is not greater than $15000 pa.
iii.The Wife contributed to the purchase of investment property by allowing her [W] unit, in which she had significant equity, to be used as security for other purchases. This unit was used as security for the purchase of the [V] unit, and possibly the [G] and [H] properties. On the other hand, the Husband utilised the equity in the [M] unit (acquired via his funds) to acquire the [L] property. Funds from the subsequent sale of the [M] unit were probably also used for the purchase of the [G] & [H] properties
iv.Much of the income the Husband earned was utilised to support the loans for the various properties, thereby enabling him to also achieve reduced tax assessments. . He also paid for household expenses and eg., paid the outgoings including mortgage payments from when they moved into [B property] to August 2005.
S. 79 (4) (b):i. The parties acquired various rental properties and held them for some time before liquidating a number later. They each contributed to this exercise.
S. 79 (4) (c):i. The Husband worked full time. He was able however to assist the Wife with cooking, while she also performed cooking and other duties.
The Court should find that the Husband contributed well in excess of
the Wife pursuant to S. 79, particularly inasmuch as his income was
the foundation of the wealth created during the marriage, providing in
large part their ability to obtain and maintain significant loans for the
numerous purchases.
The Court should find non-financial and homemaker contributions
are equal.
The Court should adjust the initial contributions proportion by 30% in
the Husband’s favour.
6. Other Matters:
The Court should adjust the net % in favour of the Wife by: 2%
7. Relevant Factors:
S. 79 (4) (d): There is no evidence that any property adjustment will affect the earning capacity of either party.
S. 79 (4) (e):
S. 75 (2) (a): The parties are aged 51 (Wife) and 52 (Husband). There is no evidence as to the current state of the Husband’s health although he suffered significant stress, depression and mood swings in 2003. The Wife has been diagnosed by [Dr D] as suffering cognitive dysfunction, including poor attention and concentration and planning, forgetfulness, disorganisation and also quite severe port (sic)-traumatic headaches, plus occasional spinal pain.
The Wife sustained injury in 1995 for which she was awarded compensation of approximately $90000 net in 1998. This was paid into the [W] unit mortgage. Accordingly the Wife will obtain credit for this amount. It will be double counting to award the Wife anything more than a small adjustment for these incapacities and the Court should not award her more than 2%.
S. 75 (2) (b): The Husband has great capacity for gainful employment. The Wife has a history of employment in which she has demonstrated she can obtain and hold employment positions. Accordingly, she has a capacity for gainful employment not withstanding the conditions diagnosed by [Dr D]. See also comments in (a) above.
S. 75 (2) (g): Each party is entitled to have a standard of living which is reasonable in all the circumstances. This does not mean however that the Wife needs to be over compensated for injuries sustained in 1995, to enable her to remain in [B property] at the expense of the Husband who has already moved away from the [B]property. The Wife has now deliberately and unilaterally sold the [W] unit, the effect of which is to deny her, the Husband and the Court any option involving the Wife moving back to [W].
S. 75 (2) (k): The marriage was short and the period from initial cohabitation to final separation was approximately 5 years.
S. 75 (2) (o): Should the Wife retain [B property], it would appear she would be able to re-let the premises to boarders. Her evidence is that at separation there were 3 boarders, paying $100 - $150 pw cash. This is an income she would be able to generate to supplement her salary.
8. Effect of Orders Sought:
9. Case Law
A global approach is appropriate: In the Marriage of Norbis (1986) 11 Fam LR 302.
Compensation awarded to the Wife O’Brien & O’Brien
should be included as ‘property’ (1983) 91-316
The approach in proceedings under section 79
The case law reveals that there is a permissible approach to the determination of an application brought pursuant to the provisions of s 79. That approach involves four inter-related steps. First, I am to make findings as to the identity and value of the property, liabilities and financial resources of the parties at the date of the hearing. Second, I should identify and assess the contributions of the parties within the meaning of s 79(4)(a), (b) and (c) and determine the contribution based entitlements of the parties expressed as a percentage of the net value of the property of the parties. Third, I should identify and assess the relevant matters referred to in s 79(4)(d), (e), (f) and (g), (the other factors) including, because of s 79(4)(e), the matters referred to in s 75(2) so far as they are relevant and determine the adjustment (if any) that should be made to the contribution based entitlements of the parties established at step two. Fourth, I should consider the effect of those findings and determination and resolve what order is just and equitable in all the circumstances of the case. [2]
A separate pool for superannuation
[2] This summary of the effect of the authorities is paraphrased from the comments of the Full Court in In the Marriage of Hickey (2003) 30 Fam LR 355 at 370
In the Marriage of Coghlan (2004) 33 Fam LR 414 the Full Court opined that it is preferable for contributions to superannuation to be assessed separately from those made to other assets. However the Court allowed that superannuation may be included in the list of property drawn up as “the first step” in the determination of proceedings under s 79, whether or not a splitting order is sought in those proceedings. The Full Court suggests that that:
“… approach could be adopted where the parties agree that it should be adopted, or where the court is satisfied that the superannuation interest is indeed property within the meaning of the definition of property contained in s 4(1), or if the interest is not within that definition, but is of relatively small value in the context of the value of the other assets in the case, or there are features about the interest which leads the court to conclude that this would be an appropriate approach.”
Here the parties agree that there should be a global approach to the assessment of contributions.
The property of the parties at the date of the hearing
The Court is required to make a finding as to the property of the parties at the date of the hearing.
The husband is unsure whether or not he continues to have an interest in a time share apartment.
There are circumstances which the Court has found in other cases, to have justified the inclusion of property that no longer exists, in the pool of property for settlement. Similarly the Court has sometimes found that debts that do exist should not be included in the list that goes to make up the net pool of assets. In In the Marriage of Omacini (2005) 33 Fam LR 134 the Full Court noted:
[30] To date, three clear categories of cases have emerged where the court has determined that it is appropriate to notionally add back to the pool of assets, that is, assets that no longer exist. They are:
(a) Where the parties have expended money on legal fees. In In the Marriage of DJM and JLM (1998) 23 Fam LR 396; (1998) FLC 92-816; [1998] FamCA 97 the Full Court said at [11.6]:
[11.6] For reasons set out in Farnell, s 117 provides that each party to proceedings under the Family Law Act shall bear their own costs unless the Court otherwise orders. Failing to add back monies expended by parties on costs frequently has the effect of defeating the policy of s 117 by permitting the pool of available assets for distribution between the parties to be diminished by any monies that either of the parties have managed to spend on their costs up to the date of trial. We are of the view that the normal approach ought be to add costs already paid back into the pool. Whilst there may be cases where that approach is inappropriate, the reasons why it is not taken ought normally be spelt out.
(b) Where there has been a premature distribution of matrimonial assets. In In the Marriage of Townsend (1994) 18 Fam LR 505; (1995) FLC 92-569 Nicholson CJ as he then was with whom Fogarty and Jordan JJ agreed, said at Fam LR 509; FLC 81,654:
In my view, what occurred in this case, as I said during the course of argument was, in fact, a premature distribution of a proportion of the matrimonial assets. What the husband did was to distribute to himself an asset in which the wife had a legitimate interest. In such circumstances I consider that it would be unjust in the extreme to simply treat such conduct by the husband as a matter to which regard should be had under section 75(2). It seems to me that the husband has had the benefit of that money. Had he retained, for example, the taxi licence instead of selling it, that would have been brought into account as an item of property which would have been dealt with in the same way as the remaining items of property in this case. Accordingly, I am of the view that the correct way in which to deal with the husband’s receipt of those moneys is to bring them into the pool of assets on a notional basis and make a distribution accordingly.
(c) In the circumstances outlined by Baker J in In the Marriage of Kowaliw (1981) 7 Fam LN N13; (1981) FLC 91-092 at FLC 76,644:
As a statement of general principle, I am firmly of the view that financial losses incurred by parties or either of them in the course of a marriage whether such losses result from a joint or several liability, should be shared by them (although not necessarily equally) except in the following circumstances:
(a) where one of the parties has embarked upon a course of conduct designed to reduce or minimise the effective value or worth of matrimonial assets, or
(b) where one of the parties has acted recklessly, negligently or wantonly with matrimonial assets, the overall effect of which has reduced or minimised their value.
Conduct of the kind referred to in para (a) and (b) above having economic consequences is clearly in my view relevant under s 75(2)(o) to applications for settlement of property instituted under the provisions of s 79.
Dealing with the disputed claims that notional assets be included in the list of assets for division:
$35,000 lent by the parties to the husband’s father
The husband lent his father $35,000 during the marriage. He says that his father repaid that sum in 2004. In a letter dated 31 January 2006, the wife’s solicitors sought information as to the date of repayment, whether any interest was paid on the loan and how the husband applied the proceeds of the repayment. No answer was provided to that letter until the husband re-opened his case during submissions at the conclusion of the trial. It is the husband’s case that the repayment is reflected in three deposits made to his St George Bank account. Exhibit 5 has $10,000 deposited on 22 September 2004, $5,000 on 18 November 2004 and $20,000 on 17 December 2004. The husband was put to proof about the application of those funds and he gave no evidence on the subject. I cannot be satisfied that the moneys were applied for the purposes of the marriage. Having said that, the first payment was made before separation. It is one thing to make assumptions about the application of joint funds after separation and another entirely to revisit the family budget during cohabitation. Thus the husband received $25,000 from his father after separation and has not accounted for the application of those funds.
Care is also needed to avoid double counting assets in the pool. It is an agreed fact that the pool of assets includes $6,000 in the husband’s St George Bank account. Adding back $25,000 would double count the $6,000 already conceded. I will add $19,000 as a notional asset.
There is no double counting in relation to the add back of legal fees in the sum of $63,158 as the sources of those funds were $15,000 in borrowings, which is it self brought to account as a relevant debt and albeit not the stated purpose of the advance, the balance largely came from $55,000 paid to the husband from joint funds pursuant to the orders of 7 November 2006.
$23,200 drawn by the husband from the Offset account after separation
I accept the submission made on behalf of the wife to the effect that $23,200 of the $28,200 drawn by the husband from the Offset account after separation should be added back. The husband has not accounted for the application of those funds, he had the onus to do so. He had a significant surplus of income over outgoings and he concedes very significant discretionary expenditure at that time.
$10,000 wasted investment in the time share.
It is submitted on behalf of the wife that $10,000 should be added back to the pool of assets because of the wasted investment in a time share. The estimate of $10,000 is based on $8,706 in upgrade charges paid from joint funds and some other allowances. The husband ceased making the payments in 2005 & 2006. He concedes that he did not ask the wife to make the payments and that the reason he did not make the payments was not that he could not afford to do so. On that basis the pool of assets may well have been greater but for the conduct of the husband. Had the husband made the required payments he would have outlaid two lots of $1,100. I will include in the pool of assets the wasted upgrade payment minus the two unpaid instalments, in the sum of $6,506 ($8,706 - $2,200).
$6,467 applied to husband’s to his personal income tax
It is submitted on behalf of the wife that $6,467 should be added because the husband applied that part of the $55,000 odd drawn pursuant to the orders of 7 November 2006 to his personal income tax. The argument is that the wife did not benefit from the income, why should she contribute to the tax? In my view there should be no add back for this item. It is said that the obligation arose from the 2004/2005 financial year. Part of that year was prior to separation. In any event, had the payment not been made there would have been a debt owing by the husband to the ATO. It is likely that debt would have been allowed as a debt going to make up the net assets of the parties.
I find that the assets of the parties are:
Assets Value [B property] $525,000.00 [T property] (H) $425,000.00 Wife’s St George account […] $2,000.00 Wife’s St George account $73,000.00 Wife’s 264 [I] shares $1,399.00 Wife’s 1996 Toyota Corolla motor vehicle $5,000.00 Wife’s jewellery $10,000.00 Add back legal fees paid by the wife $44,724.00 Wife’s [A] superannuation $10,521.00 Husband’s St George account […] $6,000.00 Husband’s 284 [I] shares $1,732.00 Husband’s Holden Astra motor vehicle $25,250.00 Husband’s 1996 Kawasaki motor cycle […] $5,000.00 Add back legal fees paid by the husband $63,158.00 Add back loan repaid from Husband’s father $19,000.00 Add back money wasted by husband $23,200.00 Add back time share lost by husband $6,506.00 Husband’s [Z] superannuation $187,027.00 Husband’s [F] Super[3] $3,799.49 Total $1,437,316.49 [3] By a facsimile dated 21 June 2007 the parties’ solicitors notified my chambers that it is agreed that the husband has an interest with [F] Super of $3,799.49, which together with his [Z] superannuation of $187,027 brings his superannuation interests to $190,826.49.
Liabilities:
As to the disputed issues:
Husband’s foreshadowed income tax debt for 2006
The husband owes $19,369.31 in relation to his income tax for the year ended 30 June 2006. There have been significant add backs to the pool of assets in the husband’s name on the basis that he had access to joint funds, an apparent surplus of income over outgoings and the capacity for discretionary expenditure. In my view the income tax debt is a proper debt. It relates to the husband’s income since separation but it has to be paid. If it had been paid earlier there would be a smaller pool of assets now.
Husband’s interest debt to ATO
In Chorn & Hopkins [2004] FamCA 633; (2004) FLC 93-204; 32 Fam LR 518 the Full Court dealt with the question of interest owing on the unpaid tax debt of one of the parties as follows:
72.However, in relation to the unpaid interest, being items 33 and 34, we do not consider that the wife should bear any responsibility for the way in which the husband has chosen to organise his financial affairs to cause interest to accrue on the tax debt.
Those comments are apposite here. Among other things the husband maintained significant discretionary expenditure throughout the relevant period and chose to pay legal fees and other debts.
Husband’s Citibank Credit Card debt
The husband’s Citibank Visa credit card stands at $19,026. Of that sum, $6,000 was paid to his solicitors and $1,290 was paid to an accountant in relation to the proceedings. I have separately allowed $15,000 in borrowings for legal fees to balance the add back of paid fees. I am not able to determine whether the $6,000 and $1,290 are part of the $15,000 in borrowings or not. It is a matter for the husband to make that case and he did not. I will deduct $7,290 from the credit card balance to avoid double counting part of the $15,000 that the husband borrowed to pay legal fees. The debt will be recorded as $11,736 ($19,026 - $7,290).
I find that the relevant liabilities of the parties as at the date of the hearing are as follows:
Liabilities Amount Suncorp Metway [B] mortgage[4] $266,257.00 Wife’s capital gains tax for [W property] $24,667.00 St George Bank [T] mortgage (H) $269,087.00 Husband’s [N] Credit Union $2,026.00 Husband’s American Express Gold Reserve $983.00 Husband’s American Express Gold $2,351.00 Husband’s Esanda Finance $20,965.00 Husband’s Citibank Visa credit card $11,736.00 Husband’s borrowings for legal fees $15,000.00 Husband 2006 income tax debt $19,369.31 $632,441.31 [4] By a facsimile dated 26 June 2007 the parties’ solicitors notified my chambers that the agreed mortgage balance is $266,257 and not $257,390 as previously indicated.
Net assets
The net assets have a value of $804,875.18 [$1,437,316.49 – $632,441.31].
Financial Resources
The husband has about 200,000 frequent flyer points. Otherwise there is no evidence that either of the parties has any other financial resources.
Contributions
The obligations placed on the Court by s 79 call for an assessment of the respective contributions of the parties. The manner of assessing contributions has been the subject of previous decisions. The contributions of a parent and homemaker are to be assessed, not in any merely token way, but in terms of their true worth to the building up of the assets[5]. There are said to be risks in taking an overly technical approach to the assessment of the respective contributions of the parties in that the Court can become involved in questions of the quality of contributions which go far beyond the real world expectations of parties[6].
[5] Mallett v Mallett (1984) 9 Fam LR 449; In the Marriage of Ferraro (1992) 16 Fam LR 1
[6] In the Marriage of Shewring (1987) l2 Fam LR 139
As to whether the Court should assess contributions asset by asset or globally the authorities have it the latter approach is preferred, in appropriate circumstances either approach is permissible and sometimes the asset by asset approach is best. See In the Marriage of Lenehan (1987) 11 Fam LR 615; In the Marriage of Norbis (1986) 10 Fam LR 819; FLC 91-712; In the Marriage of Zyk (1995) 19 Fam LR 797.
Here the parties argued the case on a global basis.
Contributions
Section 79(4)(a) Contributions
The wife brought more net assets into the marriage than the husband. It is submitted in her case that her contributions, in the form of the equity in the W property, a motor vehicle and other personalty exceeded those of the husband in the proportions 3:1. The precise calculation depends on the value of personalty such as motor vehicles but the wife’s initial contribution was greater than that of the husband.
There was a significant focus of evidence on the parties paying debts for each other or repaying amounts to the other. For example there is evidence about the wife paying out the debt on the husband’s car and his credit card debt. There is said to be an issue as to whether the husband repaid to the wife the funds advanced to pay out the lease on the prestige vehicle and the loan for the Nissan. Once allowance is made for initial contributions and contribution by way of income from paid employment, there is little, if any, room for credit to be given for such payments.
Although care must be taken not to double count contributions, the fact is that the W property also provided a launching pad for the parties’ investments by its use as security for various loans. In addition, it provided rental income.
The parties each had paid employment during the marriage. The unchallenged evidence of the husband is that the wife had two periods totalling 9 months out of paid employment. The husband’s income was generally greater than that of the wife.
Section 79(4)(b) contributions
There is little evidence about non-financial contributions. The parties belonged to an investment club. Neither claims a greater contribution than the other associated with the investments. If anything, the husband would be heard to complain about the wife’s pre-occupation with building wealth.
Section 79(4)(c) contributions
The wife gave the only evidence on this issue. It is likely that the wife made the greater contribution as homemaker. The wife had some time out of paid work and other periods of part-time work and was thereby able to devote more time to those matters.
The wife made the greater contribution as homemaker.
Conclusion on Contribution
The husband argues that the parties’ contributions favour him in the approximate proportions 75% compared to 25% by the wife. That is calculated on the basis that the initial contributions favoured the wife by 55.8% compared to 44.2% by him and the imbalance in his favour during cohabitation warrants an adjustment of 30% in his favour. The wife argues that her contributions were greater than those made by the husband in the proportions 60% by her and 40% by the husband.
In my view the wife’s contributions overall exceeded those of the husband. It is an agreed fact that the wife’s initial financial contributions were greater than those of the husband. The husband earned more than the wife during cohabitation. He was in full time employment throughout the marriage whereas the wife had periods out of employment and periods of casual and part-time employment. There is no evidence of non-financial contributions. The wife made the only contribution as homemaker.
As to the contributions made during the marriage, this is not a case whereby there was a marked inequality of effort. In the course of his evidence the husband conceded that the wife was hard working and diligent.
As to the impact of the initial contributions, this was a short marriage and the impact of initial contributions may be seen as more significant when weighed against the other contributions. There is a relevant discussion about the approach taken to this sort of weighing exercise in In the Marriage Pierce (1998) 24 Fam LR 377. My task is not a mathematical exercise and there is no concept of erosion of contributions made earlier in the marriage. I am to assess the respective contributions and to give them appropriate weight.
In my view the contributions of the wife were of the order of 55% compared to 45% by the husband. That reflects a disparity of 10% or about $80,000 in this case. That is less than the dollar value of the initial imbalance of contributions but is the proper allowance here.
The other matters in Section 79
Dealing with the matters identified in the legislation:
Section 79(4) (d)
Pursuant to s 79(4)(d) I am required to take into account the effect of any proposed orders on the earning capacities of the parties. There is no such effect.
Section 79(4)(e) - Section 75(2) Factors
The relevant matters in Section 75(2) would seem to be paragraphs (a), (b), (d), (f) and (m).
(a) the age and state of health of each of the parties;
First, as to the age and state of health of each of the parties. The wife is 51 and the husband is 52 years of age. It is an agreed fact that the wife suffered from the effects of a violent assault in 1995. Dr D says that the wife’s capacity for paid employment has been compromised to an extent by the 1995 assault. There is no evidence about the husband’s health.
(b) the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment;
The wife’s income is her salary as a Receptionist at the BW Company of $250 per week. The wife lives alone.
The wife’s expenses are as follows:
Expense Amount Income tax $0.00 Mortgage to [SP Company] on the [B] property $264.00 Rates unit levies $87.00 Rates unit levies [W property] $62.00 Private health insurance – [R] $24.00 Landlord insurance – DX $6.00 Motor vehicle registration – Toyota Corolla motor vehicle […] $45.00 Living expenses $595.00 Total $1083.00
As to the wife’s earning capacity, she has not and cannot aspire to the sort of income the husband commands. The wife’s income has always been an aggregation of wages, board and rent. As best as one can say, she is exercising her earning capacity. She says that she does not feel capable of taking in boarders. There is no medical evidence in this regard.
Although the evidence about his income was not entirely apparent from his Financial Statement and had to be drawn from him to some extent, the husband’s income is about $2,690 per week made up of his salary of $2,300 per week plus commission bonuses as a manager for F Company. He also has a car package and $201 per week in superannuation payments from his employment and $390 per week in rent from the T property. He lives with his partner, Ms Q who earns about $53,000 per annum and who contributes $165 per week towards the rent. The husband’s fixed expenditure is as follows:
Expense Amount Income tax $599.00 Rent $195.00 Mortgage payments to St George Bank for [T property] $505.00 Rates and unit levies $30.00 Private health insurance – [R] $83.00 Life insurance – [TI] $47.00 Motor vehicle registration – Kawasaki motor bike […] $30.00 Novated lease to Esanda on Holden Astra […] $333,00 American Express Gold Reserve $125.00 American Express Gold $250.00 N Credit Union Visa card $50.00 Living expenses $200.00 Total $2447.00
The husband conceded in cross-examination that he contributes towards the food, telephone bill and electricity and gas bills from which his partner benefits. Evidence about his assets, liabilities and resources is set out earlier in these reasons. It is not suggested that the husband is not fully exercising his earning capacity.
(c) whether either party has the care or control of a child of the marriage who has not attained the age of 18 years;
There are no children of the marriage.
(d) commitments of each of the parties that are necessary to enable the party to support:
himself or herself; and
a child or another person that the party has a duty to maintain;
(e) the responsibilities of either party to support any other person;
I have set out the evidence about the outgoings of each of the parties. The husband has the benefit of his partner’s financial support. In cross-examination he conceded that he and Ms Q share expenses. That is not what he says in his Financial Statement.
(f) subject to subsection (3), the eligibility of either party for a pension, allowance or benefit under:
any law of the Commonwealth, of a State or Territory or of another country; or
any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia,
and the rate of any such pension, allowance or benefit being paid to either party;
Neither of the parties seeks a splitting order.
Of the parties, only the husband is likely to develop a significant superannuation interest.
(g) where the parties have separated or the marriage has been dissolved, a standard of living that in all the circumstances is reasonable;
There is little evidence in relation to the standard of living of the parties during the marriage. They both had trips overseas in recent years.
(h) the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income;
Neither of the parties added to their qualifications during the marriage.
(ha) the effect of any proposed order on the ability of a creditor of a party to recover the creditor’s debt, so far as that effect is relevant;
(j) the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party;
(k) the duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration;
There is no evidence to the effect that the marriage adversely the earning capacity of either party.
(l) the need to protect a party who wishes to continue that party's role as a parent;
This is not relevant.
(m) if either party is cohabiting with another person — the financial circumstances relating to the cohabitation;
The only evidence about this is the husband’s evidence to the effect that his partner pays more than her share of their rent.
(n) the terms of any order made or proposed to be made under section 79 in relation to the property of the parties;
(na) any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage; and
These provisions do not apply.
(o) any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account;
Waste
The parties have each made arguments about waste. The wife would have it that the husband did not fully account for the various capital sums that came into his possession during the marriage and since. She is concerned about expenditure on his partner both as to travel when she was in China and gifts. The husband contends that the wife did not take every opportunity to have boarders and she did not maximise the income available to her. I cannot make precise findings on these issues. There is an onus to be discharged in relation to these issues and I am not satisfied that waste has been established.
(p) the terms of any financial agreement that is binding on the parties.
There was no binding agreement made between the parties.
Section 79(4)(f)
There are no relevant orders.
Section 79(4)(g)
This provision is not relevant.
Conclusion
It is agreed that there should be an adjustment in favour of the wife. There is a dispute as to the extent of the adjustment. The wife submits it should be 10% and the husband argues for a 2% adjustment. The relevant matters arising from the remaining elements of s 79, which include the s 75(2) factors referred to above are:
Ø The calculation based on contribution would leave the wife with more assets than the husband;
Ø The parties are at a similar time of life;
Ø The wife suffers from the affects of a violent assault suffered in 1995;
Ø The husband lives with his partner who has paid employment;
Ø The husband has more of his assets tied up in superannuation interests and is likely to need to wait to access those funds. On the other hand they will receive favourable taxation treatment which, together with future contributions, will in turn contribute to a more secure retirement;
In my view the adjustment to the wife by virtue of the other matters in section 79(4) should be 5%. Again, in the context of this case that means a disparity of about $80,000. The difference in income between the parties will make short work of that sum but that is not the relevant test.
Just and Equitable
Based on their contributions and the other matters in s 79 the appropriate division of non-superannuation property is a division that is about 60% to the wife and 40% to the husband. Finally, I must consider whether it would be just and equitable within the context of s 79 if the net assets of the parties were divided in those proportions.
The net assets have a value of $804,875.18. The outcome of that division would be that the wife receives $482,925.11 and the husband $321,950.07.
The wife has or has had the benefit of:
Assets Value Wife’s St George account […] $2,000.00 Wife’s St George account $73,000.00 Wife’s 264 [I] shares $1,399.00 Wife’s 1996 Toyota Corolla motor vehicle $5,000.00 Wife’s jewellery $10,000.00 Add back legal fees paid by the wife $44,724.00 Wife’s [A] superannuation $10,521.00 Minus Wife’s capital gains tax for [W property] -$24,667.00 Total $121,977.00
In order to bring her to 60% she would need to receive a further $360,948.11. The net value of the B property is $258,743 ($525,000 - $266,257). The wife should receive a further $102,205.11 from the husband. I will round that figure down to $100,000. She would owe any unpaid legal fees for these proceedings.
That would leave the husband with the benefit of:
Assets Value [T property] (H) $425,000.00 Husband’s St George account […] $6,000.00 Husband’s 284 IAG shares $1,732.00 Husband’s Holden Astra motor vehicle $25,250.00 Husband’s 1996 Kawasaki motor cycle […] $5,000.00 Add back legal fees paid by the husband $63,158.00 Add back loan repaid from Husband’s father $19,000.00 Add back money wasted by husband $23,200.00 Add back time share lost by husband $6,506.00 Husband’s [Z] superannuation $187,027.00 Husband’s [F] Super[7] $3,799.49 Minus St George Bank [T] mortgage (H) -$269,087.00 Husband’s [N] Credit Union -$2,026.00 Husband’s American Express Gold Reserve -$983.00 Husband’s American Express Gold -$2,351.00 Husband’s Esanda Finance -$20,965.00 Husband’s Citibank Visa credit card -$11,736.00 Husband’s borrowings for legal fees -$15,000.00 Husband 2006 income tax debt -$19,369.31 Payment to the wife -$100,000.00 Total $324,155.18 [7] By a facsimile dated 21 June 2007 the parties’ solicitors notified my chambers that it is agreed that the husband has an interest with [F] Super of $3,799.49, which together with his [Z] superannuation of $187,027 brings his superannuation interests to $190,826.49.
He will owe any unpaid legal fees.
Conclusion under Section 79
The effect of the orders will be to give the wife the opportunity she seeks to retain the B home and to give the husband the opportunity he seeks to retain the T unit. If the husband is unable to pay the wife $100,000 then the T unit will be sold and the wife will be paid $100,000 from the proceeds. If, upon that payment, the wife is unable to refinance the B home, then it will be sold and any mortgage under which the husband is liable will be discharged.
The parties will otherwise retain what they have. In my view the outcome I have foreshadowed would be just and equitable pursuant to s 79.
No orders were pressed about household contents. The husband initially sought the return of items listed in annexure B to his affidavit. However, the list is vague (“other misplaced framed pictures 10 in total”) and confusing (separately listed double beds). Worse still, the wife disputes and the husband ultimately did not press his assertion that several items were brought into the marriage by him (the DVD player, the gas BBQ kettle and the small glass top and iron kitchen table). I take it that the wife does not dispute the husband’s claim to some of the items described in annexure B and trust that the parties will be able to resolve that issue.
I certify that the preceding one hundred and thirty nine (139) paragraphs are a true copy of the reasons for judgment of Judicial Registrar Ian Loughnan.
Associate:
Date: 7 August 2007
IT IS NOTED that this judgment for all publication and reporting purposes be referred to as SUFFOLK & SUFFOLK
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