Sullivan and Cunez (No 2)
[2016] FamCA 360
•13 May 2016
FAMILY COURT OF AUSTRALIA
| SULLIVAN & CUNEZ (NO 2) | [2016] FamCA 360 |
| FAMILY LAW – PROPERTY – Small Asset Pool - Superannuation – Post separation liabilities not taken into account |
Family Law Act 1975 (Cth) s 79, s 75(2)
Stanford v Stanford (2012) 247 CLR 108
Hickey v Hickey and the Attorney General for the Commonwealth of Australia (Intervener) (2003) FLC 93-143
Bevan & Bevan (2013) FLC 93-545
Chapman and Chapman (2014) FLC 93-592
| APPLICANT: | Mr Sullivan |
| RESPONDENT: | Ms Cunez |
| FILE NUMBER: | HBC | 681 | of | 2013 |
| DATE DELIVERED: | 13 May 2016 |
| PLACE DELIVERED: | Hobart |
| PLACE HEARD: | Hobart |
| JUDGMENT OF: | Benjamin J |
| HEARING DATE: | 2 March 2016 Leave was granted on 9 May 2016 to re-open and tender material for husband |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Ms Daniels |
| SOLICITOR FOR THE APPLICANT: | PWB Lawyers |
| COUNSEL FOR THE RESPONDENT: | In Person |
Orders
BY CONSENT the husband is entitled to the following property, as against the wife, and such as the wife can reasonably find or discover, that property will be made available to the husband within four (4) weeks from the date of this order, namely the:-
(a)Chest of Draws;
(b)Students Desk;
(c)Cook’s Companion book and any other books which the wife identifies as the husband’s cook books;
(d)Toy metal aeroplane;
(e)Cross-stitch made by the husband’s mother and sister to mark [B’s] birth;
(f)‘Rabbit’ cross-stitch;
(g)Two (2) hand knitted cricket jumpers;
(h)Wok;
(i)Old fishing reel;
(j)any old pre-marriage photographs of the husband;
(k)Barbeque;
(l)Such books of the husband as the wife can find;
(m)Hip flask;
(n)Charts of and maps as are in the wife’s possession or control;
(o)Large wooden chess/backgammon set; and
(p)Brass old fashioned telescope;
BY CONSENT the husband will provide an electronic copy of any photographs which he has and if he can find an Officeworks box with a series of photographs in them, the husband will arrange to have the photographs scanned or placed onto a memory stick and made available to the wife as soon as is practicable.
IT IS NOTED
Some items were identified by the wife as no longer being in existence or the wife is unable to find them, however in the event that they are discovered at any time in the future the ownership as between the parties remains vested in the husband.
ORDERS MADE BY DETERMINATION
The parties do all acts and sign all documents to cause HH Lawyers to pay the proceeds of sale of the matrimonial home, at Suburb GG, of approximately $57,751 in equal shares as to one half to the wife and as to one half to the husband.
The Court allocate as required by Section 90MT(4) of the Family Law Act 1975 (Cth) (‘the Act’) a base amount of $74,758 to the wife out of the husband’s interest in the Retirement Benefits Fund Accumulation Scheme Account Member Number … (“the Accumulation Scheme Account”).
Pursuant to Section 90MT(1)(a) of the Act, whenever the Trustee of the Accumulation Scheme Account makes a splittable payment under the husband’s interest in the Accumulation Scheme Account, the Trustee will:-
i.pay to the wife or her legal personal representative, the entitlement calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001; and
ii.make a corresponding reduction to the entitlement to the person to whom the splittable payment would have been made but for this Order;
Paragraph 6 above has effect from the operative time and the operative time is the expiration of four (4) working days from the service of a certified copy of this Order on the Trustee of the Accumulation Scheme Account.
Except as is otherwise provided in these orders and as against the husband; the wife shall be solely entitled to the exclusion of the husband to retain free of any and all claims by the husband the following:
(i)the motor vehicle currently in her possession;
(ii)her superannuation entitlements;
(iii)all of her personal effects, jewellery, financial resources and choses in action in her possession or name.
Except as is otherwise provided in these orders and as against the wife; the husband shall be solely entitled to the exclusion of the wife to retain free of any and all claims by the wife the following:
(i)the motor vehicle currently in his possession;
(ii)his superannuation entitlements;
(iii)all of his personal effects, jewellery, financial resources and choses in action in his possession or name.
The husband shall be liable for and indemnify the wife in respect of:-
a.The ANZ Credit Card of about $5,144 in his name,
b.The GE Money Card of about $6,323 in his name,
c.The ANZ Simplicity Personal Loan in the names of the husband and his father of about $46,356, and
d.Outstanding bills at separation.
The wife shall be liable for and indemnify the husband in respect of any liabilities set out in the financial statement in her name.
Following the expiration of the appeal period, all subpoenaed documents be returned to the persons or institutions from which they emanated and all exhibits (except for the parties’ case summaries, submissions and expert reports) are returned to the person or persons who tendered the same.
All extant applications, except costs applications, be otherwise dismissed and these proceedings be removed from the list of cases awaiting finalisation.
IT IS CERTIFIED
Pursuant to rule 19.50 of the Family Law Rules 2004 (Cth) it was reasonable to engage counsel to attend in these proceedings.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Sullivan & Cunez (No:2) has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| FAMILY COURT OF AUSTRALIA AT HOBART |
FILE NUMBER: HBC 681 of 2013
| Mr Sullivan |
Applicant
And
| Ms Cunez |
Respondent
REASONS FOR JUDGMENT
INTRODUCTION
These are the reasons in relation to the property dispute between Ms Cunez (‘the wife’) and Mr Sullivan (‘the husband’).
The husband and wife have been engaged in acrimonious litigation regarding their children B, C and J. At the same time of delivery of these reasons I have delivered reasons in respect of the parenting arrangements for the children, in particular, J.
The parties had modest superannuation savings and very modest pool of non -superannuation property. The property hearing was determined after the conclusion of the evidence in the parenting hearing and in a short one day hearing which would otherwise have been heard in the Federal Circuit Court. However, given the extensive evidence given in the parenting proceedings and the cross-reference in respect of that the parties, sensibly, asked me to have regard to the relevant evidence in the parenting proceedings in the property determination. I have done so and I have referred to that in this determination.
THE ISSUES
The issues with regard to property were relatively broad in that it included the treatment of liabilities as at separation, the treatment of liabilities at present and what amounts should be credited to them. There were issues in relation to some motor vehicles, retained furniture and some sporting equipment.
The parties could not agree on the adjustment of property in terms of contribution, future needs, and what would otherwise be just and equitable.
BACKGROUND
I refer to the background set out in the parenting reasons delivered today. In a brief outline the wife is aged 45. She is currently in receipt of a pension and has the care of one of the children of the marriage most of the time and the other children for half the time, although there are difficulties with parenting.
The wife is a qualified professional. She is training in another industry and hopes that qualification will come through in late 2016.
The wife complained of poor health although adduced no medical evidence in this respect. The health difficulties have apparently been overcome.
The husband is aged 42 and is in senior management. He works hard and has no significant health issues.
The parties commenced cohabitation in about 1997. They married in 2005 and separated in July 2013. Their children are B aged 13, C aged about 10 and J aged 8.
B and C live equal time with their parents although that is a ‘moveable’ feast. As a consequence of the children’s orders, J lives primarily with the wife, but will spend some of the time with the husband.
The wife seeks the whole of the proceeds of sale of the parties’ property at Suburb GG (the ‘Suburb GG Property’) plus 75 per cent of the husband’s superannuation. This would give the wife, overall, in excess of 80 per cent of the parties’ accumulated superannuation and non-superannuation assets.
The husband is seeking that he receives the whole of the $57,000 proceeds of sale of Suburb GG and a superannuation splitting order to the wife of some $47,758 being on the basis set out in draft ‘effects of orders sought’.[1]
[1] Exhibit H2.
In terms of the assets, the husband asserts that the wife’s furniture has a value of $10,000, I have dealt with that elsewhere, and he values the debts now outstanding being those from separation in an ‘ad hoc’ manner.
This matter came before me on 9 May 2016 and leave was granted to re-open this proceeding so as to tender a letter from the husband’s solicitors to the Trustees of the Retirements Benefit Fund Board (the Trustees of a fund to which the husband contributed) and an email in reply from the Fund. Given that letter, I was satisfied there was procedural fairness. The wife was concerned that the procedural fairness contained in the letter may bind the Court, that was not the case. The letter and reply were tendered without objection and I had regard to them.[2]
[2]Exhibit H8.
On the same day I gave leave for the parties to tender the two volume bundle of documents prepared by the husband for the property proceedings.[3] Each of the parties had cross-examined from those documents and it was tendered by both parties without objection.
[3] Exhibit H7.
THE LAW
The law regarding the treatment of property has been clarified following the High Court decision in Stanford v Stanford.[4] Prior to that decision the preferred approach was the four step process as reflected by the Full Court in cases such as Hickey v Hickey and the Attorney General for the Commonwealth of Australia (Intervener) (2003) FLC 93-143.
[4] (2012) 247 CLR 108.
Following Stanford v Stanford (supra) the approach is that a Court must firstly be satisfied that before making any order it is “just and equitable”[5] to do so. Then consider what orders, if any, should be made having regard to s 79(4) of the Family Law Act 1975 (Cth) (‘the Act’).
[5] Section 79(2).
This approach was later adopted in Bevan & Bevan,[6] where Bryant CJ and Thackray J noted that the Stanford and Stanford (supra) decision:-
… serves to refocus attention on the obligation not to make an order adjusting property interests unless it is just and equitable to do so. [7]
[6] (2013) FLC 93-545.
[7] Ibid at para 65.
In Chapman and Chapman[8] the Full Court considered the independence of ss 79(2) and 79(4) and confirmed that Bevan v Bevan correctly stated the law in relation to the Courts consideration of s 79(2), whether the making of an order is just and equitable. At paragraph 19 of their joint reasons Strickland and Murphy JJ said:-
Section 79 demands a consideration, separately, of all of its requirements without conflation.
[8] [(2014) FLC 93-592.
However, their Honours disagreed with any intention of plurality in Bevan v Bevan, in that the Court must consider the matters in s 79(4) when addressing s 79(2) of the Act in terms of what order is to be made. To clarify, Bryant CJ said in a separate judgment:-
Whatever differences may exist as to the meaning of [84] and [85] of Bevan, I am in agreement with Strickland and Murphy JJ that it is not a requirement to take account of the matters in s 79(4) when considering the question of whether it is just and equitable to make any order under s 79(2). But as long as they are seen as separate and not conflated, the factors in s 79(4) have the potential to inform the decision under s 79(2) …
Given the history of these parties since their final separation in 2013 I am satisfied that in all of the circumstances it is appropriate to consider the settlement of property under Part VIII of the Act.
Accordingly, the approach I will adopt, when determining a division of property, is:-
1.Identify, in the context of ordinary legal principles, the existing legal and equitable interest of the parties in the property;
2.Consider whether in the circumstances of the parties it is appropriate and just and equitable for any order to be made having regard to s 79 of the Act; and
3.To consider and take into account any contributions and other matters, as are relevant, having regard to the provisions of s 79(4) of the Act and make such order as is appropriate. It is the function of the court to consider those relevant factors in the context of what is appropriate in all of the circumstances, provided always that it is just and equitable to do so.
THE PARTIES
I reiterate my views about the parties from the judgment in respect of parenting. Neither is a reliable witness. The wife is enmeshed in the proceedings and cannot answer a question seemingly without an attack on the husband or an assertion as to why she is right and he is wrong.
The husband is urbane, but I am troubled by some of the financial matters to which I will allude later in these reasons. As such I have treated the evidence of both parties with great care.
There is evidence from the husband’s father in relation to some contributions he made in terms of offering his property as security so that the parties could buy a house in Suburb GG some time ago. He was not required for cross-examination. I accept that his support assisted the parties in terms of the acquisition of that property and I have had regard to it in respect of contributions.
The husband relied upon the following documents:-
a)reply filed 29 January 2016;
b)affidavit of Mr F Sullivan filed 22 February 2016;
c)his affidavit filed 29 January 2016;
d)his financial statement filed 29 January 2016.
The husband also provided evidence as follows:-
a)Exhibit H1 – Husband’s case summary;
b)Exhibit H 2 - Document as to effect of orders sought;
c)Exhibit H3 – photographs of documents – Centrelink loan agreement (also see Exhibit W2);
d)Exhibit H4 - Bupa claim history;
e)Exhibit H5 – barrister’s account for parenting proceedings;
f)Exhibit H6 – solicitor’s account;
g)Exhibit H7 – the husband’s two volumes of tender bundles; and
h)Exhibit H8 – letter from PWB Lawyers to the Retirement Benefits Fund Board dated 26 February 2016 and email in reply from the Fund dated 1 March 2016.
The wife relied upon the following documents:-
a)her amended response filed 17 December 2015;
b)her affidavit filed 17 December 2015; and
c)her financial statement filed 17 December 2015.
The wife also tendered the following documents:-
a)Exhibit W1 – wife’s tender book;
b)Exhibit W2 – evidence relating to car loan from Ms M;
c)Exhibit W3 – child support documents;
d)Exhibit W4 – Citibank letter re: credit card; and
e)Exhibit W5 – email from financial advisor to the husband in March 2013.
Each of the parties gave oral evidence. I have considered the submissions made by the parties during the course of the proceedings and also the written submissions of the parties and the case outline of the husband.
THE POOL OF PROPERTY
-Proceeds of sale of former matrimonial home
Suburb GG (held in trust by HH Lawyers) $57,751
- Husband’s sports equipment acquired prior to
separation $2,150[9]
- Husband’s sports equipment acquired after
separation $5,650[10]
Total $65,551
Liabilities
[9] Page 13 of Exhibit H1.
[10] Paragraph 16 husband’s affidavit filed 29 January 2016.
- ANZ Credit Card (husband) $5,144
- GE Money Card (husband) $6,323
- ANZ Simplicity Personal Loan (husband and his father) $46,356
- ANZ Personal Loan (husband) $26,578
- Outstanding bills at separation (joint) $4,058
Total $88,459
Superannuation
- Q superannuation accumulation (husband) $71,608
- Q Super deferred amount (husband) $40,356
- RBF[11] Accumulation (husband) $89,910
- RBF Contributory Scheme (husband) $7,922
- RBF Compulsory Contribution (wife) $5,500
- RBF Tas Accumulation (wife) $54,780
- Q Super (wife) unknown
Total $270,076
[11] RBF is the Retirement Benefits Fund.
The wife did not accept the husband’s valuation of the sporting equipment at separation. There was no other expert evidence and I do not accept that the wife as an expert. Accordingly, I have accepted the value of those items as that asserted by the husband.
Superannuation
It was agreed that the parties had the superannuation assets, which I have set out earlier in these reasons
Given that the non-superannuation assets are very modest and that the superannuation of the parties is much larger I have determined two pools. The parties were informed of this during the hearing and raised no objection to me following this course.
I have determined, having regard to all of the facts and circumstances, that this superannuation ought to be divided on an equal basis between the parties.
One half of that sum is $135,038. The wife already has superannuation entitlements totally some $60,280. As the wife is to get half, there would need to be a split of the husband’s superannuation in the wife’s favour of $74,758.
I have reached this conclusion by having regard to all of the contributions and future needs, particularly in light of the approach I have adopted with regard to the husband’s liabilities and noting those liabilities. I have also had regard to the differential earning capacity of the parties and that the wife is at present not working. As a consequence, I am satisfied that this course, in the context of the superannuation and specifically in the whole of the adjustment of property, is just and equitable and otherwise appropriate.
OTHER PROPERTY
I have not included the parties’ motor vehicles in the pool or assets. Each of them had a car at separation of modest value and no evidence was adduced as to their value.
There was an issue in relation to a car being used by the wife. A new car had been purchased for the wife in mid-2015 as her old car had apparently failed mechanically. The car was purchased in the wife’s mother’s name and a loan for $13,000 was advanced to assist with this. Documents were produced in relation to that and there was vigorous cross-examination.
I need make no determination in relation to that because if the car was purchased for $13,000 and was subject to a liability of $13,000, then its net value was nil. If, on the other hand, the car was in fact the wife’s car and had been funded by her mother then the liability would not have been accepted and the result would have been the same.
Accordingly, I give the parties’ cars no value for the purpose of this property adjustment.
The husband asserted that he retained no furniture at separation and claimed the wife retained furniture to the value of $10,000. The wife’s evidence was that the furniture she retained was old and needed replacing and said, in any event, that the husband retained some furniture.
There is no doubt the husband spent a several thousand dollars after separation setting himself up. There is no independent evidence of the value of the parties’ furniture and accordingly, I will treat it as having no commercial value for the purpose of this hearing.
There was a significant issue relating to the liabilities. At separation the husband asserted he had a series of liabilities. These included:-
- ANZ Credit Card $5,144
- GE Money Card $6,323
- ANZ Simplicity Personal Loan (in the name of the
husband and his father) $46,356
- ANZ personal loan $26,578
- Outstanding bills at separation $4,058
TOTAL $88,459
The husband asked that these liabilities be taken into account.
Following the breakdown of the marriage the parties had been involved in intense litigation. There has been a six or seven day parenting trial and a one day property trial. There is evidence before the Court that the husband had expended about $50,000 in barrister’s fees and about $80,000 in solicitor’s fees.
As a result the husband refinanced his loans and put into those loans the liabilities to which I have referred above, that is: the ANZ credit card, the GE Money card, the ANZ personal loans and the outstanding bills at separation.
The ANZ loans now total $117,390 and $109,651 making a total of about $227,041.
Of that sum all but about $97,000 was extinguished in legal costs. The vast majority of that balance, about $97,000, was taken up in paying out the credit card liabilities and the personal loans.
The husband only sought to have regard to the liabilities as at the date of separation.
The husband relied upon exhibits contained in two volumes of financial documents and dated 26 February 2016. These books were referred to but were not formally tendered in evidence. As a consequence during the period that the reasons were reserved I asked my legal associate to write to the parties and ascertain their views as to those two volumes of books being tendered into evidence. Solicitors for the husband agreed to this course. The wife did not respond. Consequently the husband’s two volumes of financial documents are Exhibit H7.
ANZ credit card
The ANZ credit card statements from January 2012 until December 2015 were contained in reverse chronological order in Exhibit H7 pages 51 to 162.
They established that the husband had, at about the date of separation, a liability on this credit card of $5,144.58. What is also established is that significant monies following that time were applied to the husband’s lifestyle including the payment of legal costs, $1,800 sports equipment and $2,000 on intrastate travel.
I am satisfied, looking through those documents, that the husband had the capacity to pay off that loan but did not do so. As a consequence I will not allow his claim for the liability of $5,144.58.
GE Money Card
The GE Money Card had a liability of some $6,323 as at the date of separation. This had been added to by way of a deduction in May 2013 which the husband asserted was for a fence. He said the fence cost about $5,500.
The wife disputed this, although this was by way of submission rather than evidence.
The husband used funds to set himself up and given the age of that debt and his capacity to earn, I am not satisfied that an allowance should be made for the GE Money Card and I will not take that into account.
ANZ Personal Loan in the name of the husband and his father
There is an ANZ Personal Loan of $26,578.03. The details in respect of this loan, with the file reference number 69674, were contained in pages 37 to 50 in Exhibit H7. It showed that the parties had borrowed about $32,000 in August 2011 and as at the date of separation owed $26,578.30.[12]
[12] Page 44.
It went on to show that the amount of that liability had been reduced to about $22,000 by September 2014. This loan was subsumed in the later larger loan to which I have already referred.
I have treated the ANZ Personal Loan as being a liability of about $22,000, although it is difficult to assess what would have happened if the husband had continued payment of that loan in accordance with the previous arrangements. It may well have been down to less than $10,000 at the present time.
The husband also had an ANZ Simplicity Personal Loan which he had taken out with his father to pay for expenses of the family. This loan at the date of separation had a debit of about $46,356.03.[13]
[13] Exhibit H7 page 164.
There were a number of significant withdrawals from that personal loan account and the full details of that account were not provided to me. There was a transfer of $2,390 in August 2013 which the husband said was used for re-establishing himself. A further sum of $2,000 was withdrawn in March 2013 which the husband said was used for building a fence.
I do not know what would have happened to these accounts if the husband had continued to make appropriate payments. The husband has expended a large amount of money in legal costs in the context of the parenting and property proceedings. He conceded in cross-examination that he lived beyond his means as a consequence of that level of litigation and spending.
It is not clear to what level that loan would have been reduced had the husband had made appropriate payments in accordance with the loan arrangements. In many ways it would appear that this has been used to indirectly fund the husband’s litigation.
However, I accept that there was a liability of around $40,000 of the parties as at the time of separation.
What I have done in terms of these liabilities, given the extent of them, and my concerns about their origin and the like, is to not include them as liability for the purpose of adjusting this property.
I have considered this in the terms of contributions and the future needs of each of the parties, including the difference in earning capacity between the parties and the like.
The wife has a liability to her previous solicitors of $13,500. Given the approach adopted by me in terms of the husband’s property I have not made any further allowance in respect of this. The wife’s legal fees can be paid from her share of the division of the proceeds of sale of the Suburb GG property.
I have also not included the value of the husband’s post separation sporting equipment as that would be unjust given the view which I have adopted with regard to the ANZ Personal loans, the ANZ Credit Card loans and the GE Money Card loans. It could only be the case that those expensive sporting equipment were purchased out of the monies to which I have alluded above.
Given that approach I do not intend to make any further adjustment in relation to the value of the husband’s pre-separation sporting equipment which have a very modest amount value of about $2,000, particularly given that the wife retained the majority of the household furniture and effects.
The wife estimated the value of the furniture retained by her at some $3,400, although there is evidence that she needed to purchase some more whitegoods and borrow a refrigerator from her mother. The wife said that some items were taken by the husband. Given the approach adopted with the husband’s sporting equipment, I intend to simply leave these modest amounts of furniture where they are subject to the consent orders to which I have referred to earlier. This furniture included: a coffee table and art frames, art work, an aluminium boat and motor. I accept the wife’s evidence in that respect.
Fortunately the parties agreed to consent orders in respect of the outstanding items of furniture and I made those consent orders at the commencement of the property hearing.
The wife claimed a number of liabilities in her financial statement. One of those was the car loan to which I have alluded to earlier and to which I give no weight.
Another was an alleged loan from the wife’s sister, Ms M, to the family for renovations of bathrooms and other renovations prior to separation. I do not accept that that is a debt. I accept the evidence of the husband that it was a gift from Ms M to the family. I have considered that in terms of contribution.
Finally, the wife claims a set of liabilities, some of which have not been pursued for some years including $72 to Relationships Australia, $125 for removalist fees and some glazing charges.
I do not accept these liabilities are likely to be pressed and as such I have given them no weight.
Evidence of the wife
There was an attack on the credit of the wife in relation to the car she is now using. It was asserted by the wife that it was her mother’s car, but the wife claimed she owed her mother $13,000 for purchasing the car for her. The wife seemed to have little insight into the fact that she could hardly have one without the other.
It was put that the loan document was dated or created subsequent to request for particulars. The wife denied that assertion. There was a difference on the dates on Exhibit W1 and Exhibit H3.
It is quite possible that they could be different versions of the same document and that was the evidence of the wife. Whilst her evidence was at times ‘curious’ I do not make the finding asserted by the husband.
CONTRIBUTIONS
The husband claimed that at the commencement of his relationship with the wife, they did not have significant finances apart from some superannuation. I generally accept that assertion.
There is an issue about a credit card debt at the outset of the relationship. On balance I am not convinced that a large debt existed.
Each of the parties asserted that their contribution in parenting and on non-financial basis was greater than the other. The husband contends that his earnings were greater than the wife, and I accept that assertion.
There is an issue as to who took the children to school more and who travelled more. I accept that up until separation each of the parties had that significant involvement. Prior to the birth of the parties eldest child the wife worked and she did some part time work following that time.
The husband was the financial manager of the parties during the marriage and the parties’ expenses were highly geared.
Each of the parties received financial assistance from their families including the advances from the wife’s mother to which I have earlier referred, and the husband’s father in loans to enable the parties to manage their finances and assist them in purchasing the Suburb GG home.
The wife’s mother assisted with the purchase of that home in terms of expenses and providing her legal expertise.
The wife asserted that the husband had engaged in a deliberate program to hide funds in the year prior to separation and to run up debt or fail to meet debt after separation.
The husband specifically denied that assertion.
The wife raised a few issues of money being taken; however these amounted to about $5,000. The husband’s explanation was that these monies were essentially applied to a building of a fence at the Suburb GG property which cost about $5,500.
The wife asserted that this fence cost about $2,000, of which the parties only had to pay one half. No documentary evidence in relation to the building or cost of the fence was provided. As such the wife did not establish to the requisite standard, the balance of probabilities, that this was the case.
Given the husband’s evidence, if it is later discovered that he has hidden thousands of dollars, it is available for the wife to set these orders aside in appropriate circumstances.
However, in the absence of that evidence, the wife’s contention that the husband hid money in the year prior to separation and that this was a pre-planned process is not established.
The wife tendered a letter from Citibank dated 16 December 2009[14] as evidence that the husband had such a credit card. It is it not clear from that letter whether it was an offer for a credit card or relating to an existing credit card. There are no other documents and it does not assist me further in this determination.
[14] Exhibit W4.
The wife also tendered an email between the husband and a financial advisor dated March 2013[15] as some sort of evidence of pre-planning. The substance to the letter does not say that.
[15] Exhibit W5.
There is evidence that the husband continued a significant lifestyle after separation. He spent $2,000 on airfares in 2015. He bought at least piece of sports equipment for $1,800 and has acquired other sporting equipment.
The husband spent a few thousand dollars re-establishing himself after separation as the larger items of furniture were left with the wife.
I do not accept that this evidence is sufficient to establish the conclusion which the wife seeks, that is that there was a deliberate effort by the husband to ‘run up debt’ prior to separation as the wife was asserting.
However, I have had regard to the approach adopted by the husband since separation.
The husband chose to spend at least $130,000 on legal costs in these proceedings, including about $50,000 for senior counsel to appear for him at the parenting hearing. I make no criticism of the husband in that respect. He decided to run up debt and borrow money to provide himself with that level of representation. He is entitled to do so however, it ought not to be visited upon the wife and, in fairness to the husband, he has not done so.
Counsel for the husband also asserted that the legal fees the husband has incurred as a result of the marital breakdown are not the only legal fees he has incurred. She submitted that it is open for the Court to find that the legal fees he incurred as a result of having to instruct a criminal barrister, in respect of the instigations by Tasmania Police as a result of J’s disclosure, were in addition to PWB Lawyer’s fees. Counsel for the [husband] submitted that given the conduct of the wife in relation to J’s disclosures and the fact that no charges arose from that investigation; these fees are a relevant consideration. She goes onto assert:-
Further, it is undisputed that the [husband] was charged with assault of [B] and that charge was before the Magistrates Court… Prosecutions were not successful. It is open to find that the [husband] incurred further legal fees on that matter.
With the criminal proceeding it was initiated by police and the reason it did not proceed was that B declined to give evidence. There was no rejection of the wife’s evidence nor that of the husband. I note the findings I made in respect of the B incident in the parenting proceeding.
However, by adopting that course regarding representation and by maintaining a lifestyle which I am satisfied is beyond his means, the debts which could have otherwise been significantly reduced remain essentially in place and as a consequence the husband’s debt load has increased.
The husband gave evidence that but for his legal costs he would have lived within his means. Given the extent of the liabilities over and above the husband’s legal costs, and having regard to those in the context of the reduction of those debts prior to separation, I do not accept his evidence in that respect.
Following separation the wife had the primary care of J and some care of the boys, although that primary care moved for some time to that of the husband and is now, at least pursuant to the orders, equal or approaching equal time. I am satisfied that the husband provided more in practical terms and has had far more of the day to day care of B and C since separation.
The husband has legitimately, from time to time, reduced his child support contributions by claiming deductions for the personal loan repayments and the credit card and GE Finance payments.[16]
[16] Exhibit W3 and part of Exhibit W1.
Prior to the sale of the matrimonial home the husband met the loan repayments however, the child support that would otherwise have been payable to the wife was reduced as a result of those repayments. That reduction appears to be quite lawful and appropriate.
The husband also continued to pay medical insurance for the children since separation.
As such each has contributed since separation.
Having considered all of the facts and circumstances of the parties both before and after separation, I am satisfied that contribution to both superannuation and non-superannuation assets was equal. This is in light of the approach which I have adopted with regard to the debts of both parties and also in consideration of the exclusion of the wife’s furniture from the list of assets and the exclusion of the husband’s pre and post separation spending on sporting equipment.
OTHER FACTORS
Each of the parties is aged in their forties. It is significant that the husband is and has been employed as a Chief Executive Officer for many years. He has a total income of about $160,000 per year.
I am satisfied that he is in good health and that he has actual earnings and an earning capacity far greater than that of the wife.
The wife is a trained teacher and was a good teacher. She claims that she has lost confidence and does not wish to return to teaching.
She claims that she has had a history of cancer. There was a history of some cancer in earlier years however, no medical evidence was adduced as to an outcome of that cancer other than in a positive sense. I accept that she is in good health and well able to work.
These proceedings and the intensity of the conflict between these parties have had a marked impact upon her health.
The wife has been undertaking some studies in the finance area and completed one part of it in 2015. She will complete the other part in 2016. The wife says that she hopes to find part time employment in late 2016 or early 2017 and find employment, hopefully at a wage similar to that which she would have earnt as a teacher.
The wife says that she may not be able to work as a teacher because she sent an angry text to the husband in 2015 and a family violence order was made against her which would preclude her working as a teacher. There was no independent evidence of that circumstance. It was not a criminal conviction rather it is simply a statutory caveat. That family violence order apparently expires in March 2016 and the wife has not convinced me that this would impact on her ability to obtain employment.
She initially asserted that her income as a teacher would have been between $70,000 and $90,000, but later said it would probably be $50,000 to $60,000.
In relation to the future needs of the wife, counsel for the husband submitted that the “fact that the wife is a qualified teacher with numerous years of experience yet she will not seek work in that field is highly relevant to these proceedings. The husband asserts the wife has a capacity to work as a full time teacher but chooses not to do so”.
Counsel for the husband submitted that it was open for the Court to draw an adverse inference from the wife’s failure to present evidence regarding the course she is undertaking at TAFE in that it may not result in her earning as much as she would in her current profession or alternatively that she was not undertaking TAFE study this year and was choosing to do nothing.
I am satisfied that the wife has a capacity to work full time and earn a salary in the vicinity of at least $60,000 per year. All of the parties’ children are of school age and her skills as a teacher are such that she could obtain employment in that field which would fit in well in terms of the needs of the children at the times they spend with her.
Consequently, I am satisfied that the wife has an earning capacity but certainly not to the level of the husband.
The impact of the orders I propose will mean that each of the parties will be left with virtually no savings or small savings, in the case of the wife. The husband will be left with the liabilities given his lifestyle choices, the monies that he spent on legal costs and the remainder of the debt from the marriage.
As discussed earlier it is impossible for me to guess what that debt would have been. I am satisfied that the credit card debts would have been wholly repaid but for the matters to which I have alluded earlier.
I am of the view that the other debts would have been significantly reduced, particularly given the reduction in the smaller of the ANZ personal loans between 2012 and 2014, of some $8,000.
In considering the future needs of the parties I have had regard to the circumstances that the husband firstly is earning significant income, but secondly will need to repay those debts and also the debts which he chose to incur with regard to the legal proceedings.
Given the parenting arrangements I am satisfied that overall the parents will each be contributing equally to the physical and financial care of the children. Due to the husband’s earnings he is likely to be paying child support to the wife for the care of J.
The husband asserted that the wife has not made proper disclosure in relation to her pension. I do not accept that submission. It is my view that the wife has made adequate disclosure.
Given the balancing of all of those circumstances with particular reference to the husband’s greater earning capacity but his liability to pay the remaining part of the debt from the marriage, whatever that happened to be, I have determined that there ought not to be further adjustment in respect of these factors.
JUST AND EQUITABLE
The only asset to which I will be making an order in terms of the non-superannuation property is the division of approximately $57,000 being the proceeds of sale of the Suburb GG Property in equal shares to the parties.
As to the superannuation I intend to make an equal distribution in respect of that.
This will mean that there will need to be a splitting order of some $74,758 so that each party ends up with approximately $135,038, representing equality in terms of the superannuation.
Overall I am satisfied that this will be just and equitable.
I certify that the preceding one hundred and thirty two (132) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Benjamin delivered on 13 May 2016 .
Associate:
Date: 13 May 2016
Key Legal Topics
Areas of Law
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Family Law
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Civil Procedure
Legal Concepts
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Consent
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Remedies
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Discovery
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