Suk and Fulham

FAMILY COURT OF AUSTRALIA

SUK & FULHAM

[2019] FamCA 921

FAMILY LAW – PROPERTY – Where the parties have been separated for nine years – Where the wife has greater future earning capacity – Where the husband has the benefit of funds not accounted for in the balance sheet – Where the contributions are assessed as equal – Where there are no adjustments for s75(2).

Family Law Act 1975 (Cth) ss 75(2), 79.

Aleksovski & Aleksovski (1996) FLC 92-705
Williams & Williams [2007] FamCA 313

APPLICANT:

Ms Suk

RESPONDENT:

Mr Fulham

FILE NUMBER:

SYC

6579

2011

DATE DELIVERED:

5 December 2019

PLACE DELIVERED:

Sydney

PLACE HEARD:

Sydney

JUDGMENT OF:

Rees J

HEARING DATE:

25 & 26 November 2019

REPRESENTATION

COUNSEL FOR THE APPLICANT:

Mr Gardiner

SOLICITOR FOR THE APPLICANT:

Blanchfield Nicholls

COUNSEL FOR THE RESPONDENT:

Mr Fowler

SOLICITOR FOR THE RESPONDENT:

Crawford Ryan Lawyers Pty Ltd

Orders

IT IS ORDERED

That the parties do all things necessary to cause the funds held in the controlled monies account in the DD Bank to be divided as to $176,784 to the wife and the balance to the husband.
That other than as provided in these orders, each party will retain the assets in his or her possession.

Note: The form of the order is subject to the entry of the order in the Court’s records.

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

Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYC 6579 of 2011

Ms Suk

Applicant

And

Mr Fulham

Respondent

REASONS FOR JUDGMENT

Ms Suk (“the wife”) and Mr Fulham (“the husband”) commenced cohabitation in 1999 (according to the wife) or 1999 (according to the husband) and married in 2000.
They have two children, Ms Y who will be 18 years of age in 2020 who lives with the wife, and X aged 15 years. The wife asserts that X lives primarily with her and the husband asserts that X spends approximately equal time with him. It is not possible to determine which is the more accurate representation. Neither party was a persuasive witness.
The parties separated finally in July 2010 and were divorced in 2012.

HISTORY

When the parties started living together, the wife was a qualified health care worker and the husband was a professional.
The wife had a 1/3^rd interest in a property at C Street, Suburb D (“the Suburb D property”) as tenant in common with her two brothers. The property had been purchased for $230,000 in 1993 and was subject to a mortgage. The wife’s parents had provided $160,000 towards the purchase so I infer that the mortgage was about $70,000. The property was rented and the rent applied to the mortgage which was paid out in 2004. The wife’s equity at the time of purchase was about $53,333. There is no evidence of the equity at the commencement of co-habitation. The wife still has that interest.
The husband had a property at 1 E Street, Suburb F which he had purchased in 1996 for $298,294 with a mortgage of $145,000. The husband’s equity at the time of purchase was about $153,000.
The husband had 243 Company BB shares which he sold in 2000 for $4,032 and 844 Company CC shares which he sold in 2001 for $2,315.
At some time the husband had a 1/10^th interest in blocks of land at Suburb G or Suburb L. These blocks of land were sold prior to cohabitation. Whether the proceeds of sale formed part of the husband’s initial contribution needs to be examined.
In 1998, the husband refinanced the mortgage over 1 E Street, Suburb F, borrowing a total of $263,000 of which he placed $100,000 in a separate account, which he referred to as a “line of credit”. I infer that, at the time of the refinancing, the amount owed on the mortgage was about $160,000. There is no evidence of the value of the husband’s equity at the commencement of co-habitation.
The husband asserts that in 1999, shortly after the parties started living together, he undertook substantial renovations to the Suburb D property. The wife initially disputed that allegation. It was her case that there were no substantial renovations and that such work as was done was done by her father and brothers. However, in cross-examination, she conceded that the husband did all of the work he claimed to have done, with the exception of installing exhaust fans and installing the dishwasher.
The parties first lived together in the husband’s property at 1 E Street, Suburb F. The husband paid the mortgage. It is likely that he was able to do so because the wife paid for other household expenses as she claims.
In 2000 the parties purchased 2 E Street, Suburb F in their joint names for $405,000. The purchase price was borrowed and secured over both 1 E Street, Suburb F and 2 E Street, Suburb F.
In 2000, an adjoining property at H Street, Suburb F was purchased, in the husband’s sole name, for $15,000. The funds for the purchases were borrowed or came from the line of credit. The parties married in 2000.
In 2001 another adjoining plot at 3 E Street Suburb F was purchased, in the husband’s sole name, from the council for $5,000. The properties, which adjoined, are referred to in these reasons as “the Street E, Suburb F properties”. The husband continued to pay the outgoings on the Street E, Suburb F properties.
Ms Y was born in 2002. The wife returned to work after three or four weeks and the wife’s mother looked after Ms Y.
In 2002 the parties moved in with the wife’s parents. The wife’s mother cared for Ms Y while the wife worked.
After about two years, (according to the wife) the parties and Ms Y moved into the Suburb D property.
The husband asserts that rent of $280 per week was paid to the wife’s father for the Suburb D property in cash. The wife denies that rent was paid. However, it was the husband who paid and the wife in cross-examination said that she was not present during any conversations between the husband and her father about the payment of the rent. I accept that rent was paid.
In 2003 the parties set up a self-managed superannuation fund (“the SMSF”). Both were trustees and members. They both contributed to the SMSF.
In 2007 the husband’s mother died and left the husband a 1/5^th share in a property at Suburb K; a 1/3^rd share in a property at Suburb L and $26,310 in cash. The interests in real property were not realised until sometime later.
In 2009 an Apprehended Domestic Violence Order (“ADVO”) was made against the husband for the protection of the wife. The parties separated. That order was made final on 7 May 2009.
In 2009 the husband sold his share of the inherited Suburb L property to his brother for $226,667. The husband asserts that he paid $220,837 into the mortgage account. The wife disputes that assertion but the statements for the mortgage account confirm the deposit on 13 August 2009.
It is the wife’s case that the husband did not account for the inheritance and that he did not account for money otherwise drawn from the mortgage account. By the end of the trial, the husband had provided documents which accounted for a substantial part, but not all of the inheritance.
Also in 2009, the wife finalised negotiations for the purchase of a 1/3^rd share of an M Pty Ltd franchise in Suburb N. The negotiations had been ongoing for about a year. It was her evidence that the husband had no involvement in those negotiations. This was disputed by the husband.
The wife borrowed $30,000 from her mother and purchased a 1/3^rd interest in the M Pty Ltd franchise. The wife’s evidence that the husband refused to allow her to draw on the mortgage for the investment was not challenged.
The wife set up the Fulham Suk Family Trust as a vehicle for her investment in the M Pty Ltd franchise.
In 2009 they reconciled and lived together in rented property in Suburb J.
In July 2010 they separated finally and the husband moved to live in the Suburb K property of which he was a 1/5^th owner.
At separation, the wife stopped contributing to the SMSF.
Between April 2010 and June 2010, the wife drew $57,831 from the SMSF and paid that money into her own accounts. $11,576 was used to pay legal fees.
After the separation, the children lived on a week about shared care arrangement with each parent. There is a dispute about how the children’s expenses were paid.
The wife asserts that, when the parties separated, the husband stopped making payments on the mortgage. In early 2012 they were served with a Statement of Claim seeking possession by the mortgagee.
In March 2012 the husband withdrew $70,000 from the SMSF and paid those funds into the mortgage account. The wife signed the cheques.
Both parties improperly used the SMSF rendering it non-compliant.
The properties in Street E, Suburb F were sold on 5 June 2012 for a net amount of $951,463. Those funds were deposited and held pending the determination of these proceedings. The combined sale price of the properties was $1,800,000. Therefore the mortgage balance was about $800,000. In 1998 the mortgage was refinanced to $263,000, which included the sum of $100,000 that had been drawn from the mortgage and placed in a separate account. In 2000 it was increased by $405,000 to purchase 2 E Street, Suburb F. Presumably it was increased by a further $20,000 to purchase the remaining two properties. Thus roughly $688,000 was borrowed. How the balance at settlement could have been about $800,000 was not explained, particularly in the light of the payment of $70,000 from the SMSF into the mortgage account in 2012. However, this issue was not raised at trial and there was no cross-examination about it. It may be that the balance owed pursuant to the mortgage is a product of the husbands’ not having made regular mortgage payments. It serves, however, to contribute to the general unease about the manner in which the husband managed the finances relating to the Street E, Suburb F properties and whether he has ever made a full and frank disclosure of the funds available to him and their disposition.
In May 2013, the parties agreed to pay $189,816 from the proceeds of the Street E, Suburb F properties into the SMSF. This was a repayment of the funds impermissibly drawn by each of them. The balance was paid into a controlled monies account which had a balance at trial of $826,505.
In 2015 the Suburb K property was sold. The husband received about $475,000 according to him or $478,000 according to the wife.
The husband bought two properties in the United States of America for a total of $159,274 Australian dollars and he invested the balance of his money in managed funds. The wife asserts that the amount invested in managed funds was $359,838. If the wife is correct, and her figures were not challenged, then the husband must also have invested other funds in his possession.
The wife asserted that the husband has disposed of the properties in the United States and the managed funds and has not accounted for that money.
The wife has recently purchased a 1/3^rd interest in a second M Pty Ltd franchise. There was no evidence of the terms of the purchase or of the value of her interest in the business.
From the narrative set out above, the following issues arise for determination.
·    Did the husband’s initial contribution include the proceeds of sale of the land at Suburb G or Suburb L?
·    How, if at all, is the contribution of the wife’s mother to the care of the children to be treated?
·    Did the husband make any contributions to the acquisition, conservation and improvement of the M Pty Ltd franchise?
·    How were the children’s expenses paid after separation?
·    Has the amount of the inheritance been accounted for?

Did the husband’s initial contribution include the proceeds of sale of the land at Suburb G?

The husband deposed:
In 1996 I purchased a property at 1 E Street, Suburb F for $298,294. I financed this property by way of a home loan with EE Bank in the amount of $145,000 secured upon the Title of the property and the proceeds of sale of 6 out of 9 subdivided properties in Suburb L that were sold between mid to late 1996. I owned 1/10^th interest in these properties. From the sale of these 6 blocks I received approximately $160,000.
Thus the husband asserts that the money from the sale of the six blocks was used as the deposit for the purchase of 1 E Street, Suburb F.
In relation to the remaining blocks at Suburb L, the husband deposed:
Between 1997 and, 1998 the remaining 3 subdivided blocks at Suburb G were sold and I received my 1/10^th share from the proceeds of sale which I estimate to be $60,000.
The husband does not state that he had the $60,000 at the time of the commencement of co-habitation in 1999 or what became of those funds.
Accordingly, I am unable to assume that those funds were part of his initial contribution.

How, if at all, is the contribution of the wife’s mother to be taken into account?

Counsel for the husband relied on the decision of the Full Court in Aleksovski & Aleksovski (1996) FLC 92-705 where the majority stated:
... the trial Judge considered contributions made by the wife's mother in caring for the children from time to time and made reference to Gosper and Gosper (1987) FLC ¶91-818. It was argued by the appellant that Gosper (supra) has no application to contributions which a loving grandmother may make to the care of children and that in taking into account such contributions in favour of the wife, the trial Judge had in fact double counted.
In our opinion, the Gosper (supra) principle may extend to contributions by grandparents of a non-financial kind pursuant to s 75(2)(o). However, the issue which the appellant raises on this appeal is that the trial Judge double counted by giving significant weight to the wife's homemaking contributions, and, in addition, giving her credit for the grandmother's babysitting contribution. It was argued that one cannot have both...
The trial Judge's finding in relation to the wife's contributions as homemaker and parent was, as appears on page 12 of the appeal book as follows:—
``Mrs Aleksovski was the person responsible principally, if not exclusively, for the home making and parenting and she is entitled to [have] received credit for that as an additional contribution over and above her contribution of her wages.''
In relation to Mrs Aleksovski's mother's contribution, his Honour said, on page 13 of the appeal book:—
``A further contribution that is asserted is that during the course of the marriage and continuing, Mrs Aleksovski's mother has been a person who has contributed on behalf of Mrs Aleksovski by caring for the children both around the time of the children's birth and generally and on a continuing basis.''
Although the trial Judge does not appear to have made a finding strictly in accordance with the above-mentioned submission which was made to him, nevertheless the tenor of the comments which his Honour made under the heading on page 13, ``Mrs Aleksovski's Mother's Contribution'', indicates to us that his Honour proposed to recognise that contribution in the terms of the submissions made to him.
It seems to us therefore, that where the contribution of one party has ``principally, if not exclusively'', as his Honour found, in fact, ``covered the field'', in relation to the wife's contribution as homemaker and parent, the recognition of any contribution by the grandmother in the same area must be approached with considerable care, lest there be double counting.
Kay J. in a separate judgment, stated:
It seems to me that the extension of the Gosper principle to child-minding by grandparents is problematic. Whilst it is true that the catalyst for the provision of the services is the relationship between parent and child (that is, the grandparent and the parent), frequently the service is provided out of the natural love and affection between parent and grandchild and for the reciprocal benefits that flow back to the care giver in terms of personal satisfaction, relationships and ``occupational therapy''.
Absent any direct evidence as to the commercial considerations surrounding the arrangement with the care giving grandparent, in my view, it is generally inappropriate to place any significant weight upon such a contribution.
In the present case, it is not disputed that, from the time Ms Y was four weeks old, the maternal grandmother cared for her during the day while the mother resumed full-time work. At that time, the parties and Ms Y moved into the home of the maternal grandparents. They both worked full-time.
After two years, in about 2004, the parties and Ms Y moved into the Suburb D property. The maternal grandmother continued to care for Ms Y on a full-time basis. In addition, the husband concedes that she did most of the meal preparation.
After X was born in 2004, the wife took three months maternity leave and then returned to full-time work. The maternal grandmother then cared for both children while both parents worked.
Ms Y started day care on one or two days each week from 2005.
When Ms Y started school, the mother took the children to the maternal grandparents’ home on her way to work. In the afternoons, the grandmother cared for the children after school until the father finished work and was able to care for them.
The parents agree that, in the mornings, the father left early and the mother looked after the children until the grandmother took over. In the evenings, the father collected the children from the grandmother and cared for them until the mother came home from work.
This is not a case where either parent can be found to have been the primary carer of the children. Their availability to provide care was limited by their employment and it was the maternal grandmother who was the primary carer for the children while both parents worked full-time. This was not “babysitting” but rather it was substantial care, five days a week, for two children from the age of four months in the case of Ms Y, and three months in the case of X until the parties separated in 2009.
The care provided by the grandmother was not, as in Aleksovski, assistance provided to the mother in her role as primary carer.
It was a significant contribution to the family comprised of the husband, the wife and the children and enabled them to both work full-time.
The contribution should be given proper recognition pursuant to s75(2)(o).

Did the husband make any contributions to the acquisition of the M Pty Ltd franchise?

The wife deposed that she started negotiations in relation to the M Pty Ltd franchise in 2008. She deposed that the husband “was totally against the M Pty Ltd business model and me being involved with M Pty Ltd”. She deposed that the husband tried to discourage her from the deal and had no involvement in the negotiations.
I do not accept the wife’s evidence.
The husband tendered two emails indicating some involvement in the negotiations. An email from the M Pty Ltd negotiator dated 26 February 2019, attaching a contract, stated:
I hope I’m not creating a can of worms, however I’ve also attached the specs for the expansion of the store for [the husband].
An email from the husband to the wife’s prospective business partner dated 4 March 2019, when the wife was recovering from surgery, stated:
Please find below my initial draft summaring [sic] back to M Pty Ltd what I came away from the meeting and some sight negotiations. I am still reviewing documents etc and polishing the language/tone (soft business). I might cut back the detail...
I think that by me issuing this document as an interested third party is good.
I am also concerned regarding the timing of the finance meeting. Negotiations must be pursued. Do not lose the first opportunity. I suggest next Thursday night. I will attend and gather the information for my beautiful [wife]. I have already commenced an excel computer spreadsheet to assess. I have a number of queries. If required we can call [the wife] on the mobile. She will be resting at home. I can talk to her at home. My motives are to support [the wife] in her business desires above all.

There then followed a draft email to the negotiator asking for further detailed information and making detailed requests/suggestions in relation to the documents.
Those emails suggest that the husband had attended at least one meeting and intended to attend another and that he had a detailed understanding of the negotiations.
They also suggest, contrary to the wife’s evidence, that the husband was supportive of the venture.
However, the wife’s evidence that the husband would not permit her to draw $30,000 from the mortgage account to fund her contribution to the purchase was not challenged and neither was her evidence that her mother advanced $30,000 to enable her to go ahead.
The parties separated in July 2010. The M Pty Ltd franchise had been operating for a year. There is no evidence that the husband had anything to do with the business after it was commenced and he certainly never visited it or had any involvement after separation. Thus, with the exception of the husband’s involvement in the negotiations which has been set out above, it was the wife who made the contributions to the business that exists today.
The growing of the business was not part of the “enterprise” of the marriage. She grew the business in circumstances where the parties had equally shared care of the children and the husband was continuing to make parenting contributions. But his contributions were to parenting and home making and not to the business.
The contribution to the value of the business as found in the balance sheet is largely the wife’s contribution.

How were the children’s expenses paid after separation?

The wife deposed “Since separation, I have paid for the majority of the children’s medical expenses, school expenses, activities including music lessons and sporting expenses”.
It is accepted that the wife paid for the children’s school fees at a secondary school from 2014. It was the husband’s evidence that he had forwarded cheques to the wife to assist with school fees totalling $6,350. None of the cheques was presented. In May 2019 the husband wrote a letter to the wife stating that he had cancelled the earlier cheques and enclosing a cheque for $6,350. The wife in cross-examination said that she had not received the letter. Whether the cheques were ever sent or ever received is not known. However, if the husband had really wanted to contribute to the children’s school fees, he could have paid the money to the school. The fact remains, that the wife paid the fees.
There was no communication between the parties about the children’s expenses. The wife did not know what the husband paid. The husband did not know what the wife paid.
The husband tendered a bundle of receipts for dental treatment, riding lessons and chiropractic treatment for the children.
Otherwise the evidence does not enable a finding of what they each paid.
Doing the best I can, I propose to proceed on the basis that they each paid for the support of the children except that the wife paid for all of the secondary school fees, including extras, from 2014 for Ms Y and from 2017 for X.

Has the amount of the inheritance been accounted for?

In so far as there is a dispute about what became of the husband’s inheritance, there is no doubt that the husband has been the author of it.
Despite numerous requests for information and documents from the wife’s solicitors to his, the husband did not provide proper disclosure. Specifically, the husband did not respond to requests made in December 2018 and January 2019 for documents relating to the disposal of assets, his bank account statements, rental statements for his properties in the United States and other specified documents.
The inheritance, in 2007, consisted of a 1/3^rd share of land in Suburb G; a 1/5^th share of a property in Suburb K and $26,310 which was used to buy a car.
The inheritance realised $226,667 for the Suburb G property, $475,000 for the Suburb K property and $26,310 in cash, a total of $727,977.
The share in the Suburb G land was sold to the husband’s brother in 2009 and the proceeds, save a small amount, paid into the mortgage account.
The husband then withdrew $70,000 from the mortgage account. He deposed that those funds were used to buy a car and to buy new furniture for the unit in Suburb J into which the parties moved after they reconciled in 2009.
I am satisfied that the proceeds of the sale of the Suburb G land are accounted for.
The Suburb K property was sold in 2014. The husband received $475,000.
He then purchased two properties in the United States for $US64,900 and $US63,500. Both properties were tenanted and the husband received the rent although there is no evidence of the amount he received.
It appears not to be disputed that the balance of about $360,000 was invested in managed funds.
When the matter came for trial, the husband sought, and was granted, leave to rely on an affidavit sworn on 22 November 2019 (the trial commenced on Monday 25 November) setting out his evidence about the sale of two properties and annexing a document entitled “Closing Disclosure” in relation to each property. The husband deposed that he had received $127,273 for one property and $114,540 for the other. Those amounts were confirmed by the Closing Disclosure documents. The settlements took place in September 2019.
The $114,540 had been brought to Australia. The only evidence in relation to those funds was that $75,000 was deposited into an account with the National Australia Bank (“NAB”). Despite being asked for statements in relation to the NAB account, and pressed in cross-examination about his failure to produce statements, the husband did not make available any documentary evidence to substantiate his claim to have those funds deposited. He agreed that, if the deposit was $75,000, he had spent some $35,000 (in fact the amount would be $39,540) and claimed that the money had gone to “child support”. I do not accept that evidence. The husband has never paid child support and he was unable to produce any document to support that assertion. Whether the husband spent the $39,540 or still has it cannot be determined.
The husband asserted that the $127,273 has been left in the United States. Again he produced no document to substantiate that claim but the matter proceeded on the basis that the funds were still available to him.
From the sales of the properties in the United States, $127,273 and $75,000 are accounted for on the balance sheet.
As to the $360,000 in managed funds, until the trial, there was no attempt on his part to account for those funds.
A document tendered in the husband’s case showed a loss of $21,000 in the period ended 14 October 2015. The husband then transferred some of the money into an account with the FF Bank. In February 2017 he deposited $93,539 and $83,609, totalling $177,148 into the FF Bank account #...74. I am unable to find any other substantial deposits into the FF Bank which could be attributed to the managed funds.
Thus of the approximately $339,000 available to the husband in October 2015, $161,852 is not accounted for at all.
After February 2017 the husband withdrew substantial funds either from an ATM or in cash. For example, between 4 March 2017 and 15 March 2017, he made ten separate withdrawals of $950. From 28 March 2017 to 7 May 2017 he made 21 separate withdrawals of $5,000, one of $4,870 and one of $9,900.
That pattern of withdrawals is not consistent with the husband’s explanation of spending on living expenses or holidays. It is consistent with the money being removed to other places.
In cross-examination, the husband asserted that he had spent the whole of the funds on living expenses.
No attempt was made to explain how the funds were spent or on what except a vague allusion to “living” and “holidays”. He suggested that because he had to pay rent, and the wife did not, his spending of the funds was justified. His rent is $842 per week or $43,784 per annum. His gross income in the financial year ended 30 June 2017 was $169,407.
Whether the husband actually spent the whole of the funds or has retained some or all of the money cannot be determined.
On behalf of the husband, counsel conceded that $268,946 was not accounted for but submitted that it could be explained by way of rent, primary school fees, children’s costs and holidays. That may be so, in which case the husband has spent some $54,000 per year in addition to his earned income, but it may also be the case that he has some or all of those funds. I am unable to make a determination.
I am also unable to determine the disposition of the $39,540 from the sale of the property in the United States.
The husband has demonstrated that, from his inheritance, he contributed:
·    $26,310 towards the purchase of a car.
·    $220,837 paid into the mortgage account.
·    $127,273 from the sale of property in the United States.
·    $75,138 from the sale of property in the United States
·    $6,473 remaining in the FF Bank account.
Thus the husband has contributed a total of $456,031 out of the total of his inherited funds of $729,977.

THE TRIAL

The wife relied upon an affidavit sworn by her and a Financial Statement.
The husband relied on two affidavits sworn by him, the most recent sworn on 22 November 2019, and a Financial Statement.
A single expert accountant, Mr O, valued the wife’s interest in the M Pty Ltd franchise at Suburb N. He was not required for cross-examination.

SECTION 79(2)

Both parties have asked the Court to make orders distributing their various property between them.
They have separated and can no longer jointly enjoy that which they have acquired by their joint and several efforts.
It is just and equitable to make a distribution.

THE BALANCE SHEET

At the commencement of submissions, the parties tendered an agreed balance sheet which, with agreed amendments, is reproduced below:

ASSETS
Applicant’s Value	Respondent’s Value
1	Wife	1/3 interest in C Street, Suburb D	$483,333	$483,333
2	Joint	DD Bank controlled monies	$826,505	$826,504
5	Husband	P Pty Ltd	$NK	$127,273
6	Husband	National Australia Bank #...66	$NK	$ 75,138
7	Husband	Commsec portfolio	$ 1,360	$ 1,360
8	Husband	Motor Vehicle Q	$ 3,500	$ 1,000
9	Wife	Motor Vehicle R	$ 14,000	$ 14,000
10	Wife	Commonwealth Bank Streamline account #...11	$ 402	$ 402
11	Wife	Jewellery	$E 1,500	$ 11,000
12	Wife	Household contents	$ 5,000	$ 5,000
13	Husband	Household contents	$ 5,000	$ 5,000
15	Husband	Westpac Bank account #...80	$ 418	$ 418
16	Husband	Westpac Bank Account #...54	$ 36	$ 36
17	Husband	FF Bank account #...74	$ 6,473	$ 6,473
18	Wife	The Fulham Suk Family Trust	$ 22,865	$ 61,000
19	Wife	Shares in M Pty Ltd Suburb N Pty Ltd (33.33%)	$441,000	$441,000
20	Wife	Shares in M Pty Ltd Suburb S (33.33%)	$

Total

$E 1,811,392

$2,058,937

ADDBACKS
21	Husband	Funds invested by Respondent in U Franchise Fund, V Fund, T Funds Management and W Asset Management	$ 360,000	$ 0
22	Wife	Funds withdrawn by wife from Fulham Super Fund	$	$ 59,431

Total

$ 360,000

$ 59,431

SUPERANNUATION
Member		Name of Fund		Type of Interest		Applicant’s value		Respondent’s value
33	Husband		Fulham Super Fund		SMSF		$278,447	$278,447
34	Husband		Super Fund Z		Accumulation		$167,196	$167,196
35	Wife		Super Fund AA		Accumulation		$ 97,090	$ 97,090
36	Wife		Fulham Super Fund		SMSF		$ 70,089	$ 70,089
37

Total

$ 612,822

$612,822

I will deal with the issues of dispute which arise from the balance sheet using the item numbers from the document.

Items 5 and 6 – proceeds of the United States properties

I accept that there is no document to substantiate the balance of the bank account in Item 6. However, in accordance with the submissions of counsel for the husband, I propose to treat the amounts for which the husband contends as available. I have not assumed that they are either accurate or represent the amounts the husband actually has.

Item 8 – Motor Vehicle Q

There is no evidence of value. The husband’s admission against interest will be accepted.

Item 11 – wife’s jewellery

There is no evidence about the jewellery and no valuation. I will accept the wife’s value.

Item 18 – The Fulham Suk Family Trust

There is no evidence of the amount in the bank account of the trust, which is its only asset. The wife in cross-examination said that the amount had been reduced from an earlier figure to that which she contends.
There is no other evidence.

Items 20 and 21 - addbacks

There was no submission addressed to these items by either counsel.
The husband’s use of the managed funds and the wife’s use of the money withdrawn from the SMSF will be addressed in relation to contributions.
I therefore find the assets of the parties to be:

Wife	1/3 interest in C Street, Suburb D	$483,333
Joint	DD Bank controlled monies	$826,505
Husband	P Pty Ltd	$127,273
Husband	National Australia Bank #...66	$75,138
Husband	Commsec portfolio	$ 1,360
Husband	Motor Vehicle Q	$ 1,000
Wife	Motor Vehicle R	$ 14,000
Wife	Commonwealth Bank Streamline account #...11	$ 402
Wife	Jewellery	$ 1,500
Wife	Household contents	$ 5,000
Husband	Household contents	$ 5,000
Husband	Westpac Bank account #...80	$ 418
Husband	Westpac Bank Account #...54	$ 36
Husband	FF Bank account #...74	$ 6,473
Wife	The Fulham Suk Family Trust	$ 22,865
Wife	Shares in M Pty Ltd Suburb N (33.33%)	$441,000
Wife	Shares in M Pty Ltd Suburb S (33.33%)	$ Not valued
Total	$2,011,303
Superannuation
Husband	Fulham Super Fund (SMSF)	$278,447
Husband	Super Fund Z (Accumulation)	$167,196
Wife	Super Fund AA (Accumulation)	$ 97,090
Wife	Fulham Super Fund (SMSF)	$ 70,089
Total	$612,822

Of the assets, the wife has in her possession or control assets totalling $968,100 and superannuation of $167,179.

CONTRIBUTIONS

During the period of co-habitation and separation, both parties worked full time, both contributed to the care of the children and both engaged in home making, maintenance and conservation.
After separation, until September 2018, the children lived with each parent on a week about basis. From September 2018 Ms Y lived with the wife and X lived with the husband and both refused to see the other parent.
In 2019, X returned to live with the wife but since July 2019, she has also spent significant time with the husband.
Overall, the contributions of each party by personal exertion, in which I include the contribution made by the husband to the M Pty Ltd negotiations, are assessed to be equal.
The discrepancies in their contributions in favour of the wife are:
·    The wife’s initial contribution of her interest in Suburb D which is represented in the balance sheet at $483,333.
·    The contribution of the wife’s mother in relation to child care.
·    The $30,000 contributed by the wife’s mother to the M Pty Ltd franchise.
·    The wife’s contribution in building up the M Pty Ltd franchise.
The discrepancies in their contributions in favour of the husband are:
·    The husband’s initial contribution of 1 E Street, Suburb F, subject to mortgage which accounts for about half of the money in the controlled monies account or $413,000.
·    The husband’s Company BB and Company CC shares sold for $6,167.
·    $456,031 from the husband’s inheritance.
I do not accept the submission by counsel for the husband that the husband’s initial contribution of 1 E Street, Suburb F is represented in the controlled monies account of $826,505. Three of the four Suburb F properties were acquired after the parties commenced co-habitation. 2 E Street, Suburb F was purchased in 2000 for $405,000, all of which was borrowed. It was sold for $837,000 and the properties at 3 E Street Suburb F and H Street, Suburb F Street were sold for a further $72,000. 1 E Street, Suburb F represented about half of the sale price of the Suburb F properties.
Counsel for the husband relied on the Full Court decision of Williams & Williams [2007] FamCA 313 where the court stated:
We think that there is force in the proposition that a reference to the value of an item as at the date of the commencement of cohabitation without reference to its value to the parties at the time it was realised or its value to the parties at the time of trial, if still intact, may not give adequate recognition to the importance of its contribution to the pool of assets ultimately available for distribution towards the parties. Thus where the pool of assets available for distribution between the parties consists of say an investment portfolio or a block of land or a painting that has risen significantly in value as a result of market forces, it is appropriate to give recognition to its value at the time of hearing or the time it was realised rather than simply pay attention to its initial value at the time of commencement of cohabitation. But in so doing it is equally as important to give recognition to the myriad of other contributions that each of the parties has made during the course of their relationship.
The husband seeks an adjustment in his favour because of the wife’s use of $57,831 from the SMSF but I propose to consider that matter in conjunction with the balance of the s75(2) factors.
This leaves the husband’s contribution from the inheritance to be balanced against the contribution towards child care from the wife’s mother and the wife’s contribution in building up the M Pty Ltd franchise.
There is no evidence of the cost which the parents would have paid for commercial child care but, even if there was such evidence, cost is not the only consideration. This was not a commercial transaction and it is not appropriate to attempt to consider it in that way. These children were fortunate to have the love and care of their grandmother and the parents had the luxury of knowing, when they were working, that their children were in her care.
I consider that those contributions, over a long period of some 20 years from co-habitation to trial and where they have been separated for nine years, while different, are equal.

SECTION 75(2) ADJUSTMENT

Each party contends for an adjustment in her or his favour of about six per cent.
The wife is 48 years of age and the husband is 53 years of age. They are both working.
The wife’s earning capacity exceeds that of the husband and she will presumably have more working and earning years before retirement than does the husband.
In the financial year ended 30 June 2018, the wife’s taxable income was $291,094. Her income has increased steadily since 2010 when she started operating the franchise. It is likely that her income will continue to increase because of the acquisition of the second franchise. Her income from the Suburb N franchise steadily increased.
The wife has had the benefit of the funds drawn from the SMSF of $57,831 which was repaid by joint funds. However, the wife was entitled to half those funds so the net effect was that the wife had the benefit of about $29,000.
The wife will have the benefit of rent free accommodation at Suburb D for the foreseeable future. The husband pays rent although he may choose to use the funds he receives as a result of these proceedings to purchase a property.
The wife is likely to continue to bear the responsibility for X’s school fees.
The husband’s taxable income in the financial year ended 30 June 2018 was $165,585.
The husband has had the benefit of that portion of his inheritance which was not accounted for in the balance sheet. Counsel for the husband conceded that $269,000 had not been accounted for. This is equivalent to about 10 per cent of the total asset pool.

I accept the submission that this was his money and he was entitled to spend it if he chose to do so. I am unable to find, on the evidence as it was left, that the husband has not retained some portion of those funds.
There will be no further adjustment.

CONCLUSION

The husband prefers to retain his superannuation and for any adjustment to be made from the controlled monies account.
No submissions were advanced on behalf of the wife to the contrary.
The wife will receive 50 per cent of the assets including superannuation or a total of $1,312,063. She has assets and superannuation in her possession of $1,135,279. She will receive $176,784 from the controlled monies account and the husband will receive the balance. Otherwise, they will each retain the assets in her or his possession.

I certify that the preceding one hundred and forty-four (144) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Rees delivered on 5 December 2019.

Associate:

Date: 05/12/2019

[2019] FamCA 921

5 December 2019

Key Legal Topics

Areas of Law

Family Law

Equity & Trusts

Legal Concepts

Constructive Trust

Remedies