Symon and Whiteley (No.2)

[2017] FCCA 2437

FEDERAL CIRCUIT COURT OF AUSTRALIA

SYMON & WHITELEY (No.2) [2017] FCCA 2437

Catchwords:
FAMILY LAW – Property settlement – pre-relationship and post-separation contributions.

Legislation:

Family Law Act 1975 (as amended) ss.90SM(4), 90SF(3)

Applicant: MR SYMON

Respondent: MS WHITELEY

File Number: CAC1288 of 2014

Judgment of: Judge Mead

Hearing dates: 2, 3, 4 & 5 May 2016

Date of Last Submission: 5 August 2016

Delivered at: Adelaide

Delivered on: 6 October 2017

REPRESENTATION

Counsel for the Applicant: Mr Miller

Solicitors for the Applicant: Farrah Gesini Dunn

Counsel for the Respondent: Ms Tonkin

Solicitors for the Respondent: Barker & Barker

ORDERS

1. That in full and final settlement of any claim that either party may have or hereafter have against the other for settlement of property:

   (a)That on or before 11 December 2017 the respondent pay to the Trust Account of the applicants solicitors on account of the applicant the sum of ONE HUNDRED AND EIGHTY THOUSAND DOLLARS ($180,000.00);

   (b)Contemporaneously with the payment referred to in paragraph 1(a) hereof the respondent refinance the (omitted) Bank mortgages in the joint names of the parties held over the property situate at and known as Property A in the Australian Capital Territory (“the Property A property”) and if applicable the property situate at and known as Property B in the State of Queensland (“the Property B property”) and indemnify the applicant and keep him indemnified with respect to those liabilities;

   (c)Contemporaneously with the provisions of paragraphs 1(a) and 1(b) hereof the respondent pay all rates, taxes, insurance, mortgage payments and like expenses due with respect to the Property A property and forever keep the applicant indemnified with respect to same;

   (d)That the applicant otherwise forego any interest in or any claim to any property, shares or other investments, motor vehicles, household or other chattels, furniture, furnishings, utensils and appliances in the possession of the respondent and any monies deposited in savings, banks or other financial institutions by or on behalf of the respondent;

   (e)That the respondent otherwise forego any interest in or claim to any property, shares or other investments, motor vehicles, household or other chattels, furniture, furnishings, utensils and appliances in the possession of the applicant and any monies deposited in savings, banks or other financial institutions by or on behalf of the applicant;

   (f)That in the event that the respondent fails to comply with the terms of paragraph 1(a) hereof, then and in such case the respondent shall pay interest to the applicant on the amount outstanding from time to time at the rate prescribed by the Family Law Rules to be calculated from the due date to the date of payment;

   (g)That in the event that the respondent shall default with respect to the payment to the applicant referred to in paragraph 1(a) hereof for a period exceeding six (6) calendar weeks then and in such case the Property A property shall be placed on the market for sale at such price as shall be agreed between the parties or in default of agreement as ordered by the court with the gross proceeds of sale to be apportioned as follows:

   (i)As to the amount required to pay all costs associated with the sale process;

   (ii)As to the amount required to discharge all mortgages secured over the said property;

   (iii)As to the sum of ONE HUNDRED AND EIGHTY THOUSAND DOLLARS ($180,000.00) together with interest in accordance with the terms of paragraph 1(d) hereof to the Trust Account of the applicant’s solicitors on account of the applicant;

   (iv)As to the balance remaining to the respondent.

Superannuation

1. That by way of superannuation splitting order:

   (a)That in accordance with section 90MT(4) of the Family Law Act 1975 (as amended), a base amount of ONE HUNDRED AND SEVENTY FIVE THOUSAND NINE HUNDRED AND TWENTY SEVEN DOLLARS ($175,927.00) be allocated to the applicant out of the respondent’s interest in the (omitted) Superannuation Scheme (“(omitted)”);

   (b)That, in accordance with section 90MT(1)(a) of the Family Law Act 1975 (as amended):

   (i)The applicant (or such other person to whom a splittable payment is payable) is entitled to be paid, using the base amount allocated in the immediately preceding order, the amount calculated in accordance with Part VI of the Family Law (Superannuation) Regulations 2001;

   (ii)The entitlement of the respondent in the (omitted) Super (or the entitlement of such other person who becomes entitled to receive payment out of the respondent’s superannuation interest in (omitted) Super) is correspondingly reduced by force of this order; and

   (iii)This order has effect from the operative time and the operative time shall be four (4) days from the date of service of a sealed copy of this order upon the Trustee of the scheme.

   (c)That the (omitted) Superannuation (“the Trustee”) shall do all such acts and things and sign all such documents as may be necessary to:

   (i)Calculate, in accordance with the Family Law Act 1975 (as amended) the entitlement awarded to the applicant in the preceding clauses of this order; and

   (ii)Pay the entitlement whenever the Trustee makes a splittable payment from the respondent’s interest in the (omitted) Super.

   (d)This order binds the Trustee of the (omitted) Super to observe the Trustee obligations set out under the said Act and Regulations, the Trustee having been afforded procedural fairness; and

   (e)That save as for the provisions of this paragraph each of the applicant and the respondent be declared the sole owner of any entitlements to superannuation that each may have, entitlements to payments for recreation leave, long service leave and any pension associated with superannuation and each will relinquish any claim to the entitlements of the other.

Miscellaneous

1. Subject to these orders, each party will be solely responsible for any liability in their name as at the date of these orders and will indemnify the other party and keep them indemnified with respect to those liabilities.

2. Pursuant to section 106A of the Family Law Act 1975 (as amended) that if either party refuses or neglects to comply with a direction to execute any deed, document, instrument or writing to give effect to these orders, then a Registrar of the Federal Circuit Court of Australia can be appointed to execute the deed, document, instrument or writing in the name of the person to whom the direction was given and to do all acts and things necessary to give validity and operation to the deed, document, instrument or writing.

3. Liberty to either party to apply as to consequential orders.

4. That all extant applications be otherwise dismissed.

IT IS NOTED that publication of this judgment under the pseudonym Symon & Whiteley (No.2) is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT CANBERRA

CAC 1288 of 2014

MR SYMON

Applicant

And

MS WHITELEY

Respondent

REASONS FOR JUDGMENT

Introduction

1. Mr Symon and Ms Whiteley were unable to reach agreement in their proceedings with respect to either parenting issues or property settlement. 

2. The trial in the proceedings commenced on 2 May 2016.  In circumstances where I heard the matter as a visiting Judge and where I was concerned as to completion of the proceedings in that circuit, upon completion of the evidence in relation to both aspects of the proceedings on 5 May 2016 the parties counsel made submissions with respect to parenting issues only.  Judgment was delivered ex-tempore with respect to parenting issues and final orders made on 5 May 2016.

3. The Court ordered written submissions with respect to property matters, which submissions were subsequently filed in accordance with orders by counsel for the respondent, counsel for the applicant and then by the respondent’s counsel in reply.

4. I take this opportunity to apologise to the parties and to counsel for my delay in delivering reasons and orders with respect to the property aspects of the matter.

5. I also take this opportunity to deliver contemporaneously with these reasons and this order a settled version of my ex-tempore reasons for judgment with respect to parenting issues delivered on 5 May 2016.

Background

1. Mr Symon and Ms Whiteley commenced a relationship on (omitted) 2003.  Approximately one month later the applicant, Mr Symon, moved into a property rented by the respondent at (omitted). 

2. At that time the applicant was aged 36 years, had previously been married but was separated and had two children, A then aged 8 years and B who was not quite 5 years of age. 

3. The applicant was at that time involved in a dispute with respect to property settlement and children’s issues with his former wife.

4. The respondent was aged 34 years and did not have children.

5. Both parties were employed full-time, with the applicant earning approximately $107,000.00 per annum and the respondent earning approximately $88,000.00 per annum.

6. In October 2003 the parties set up a joint (omitted) Bank account into which each of them contributed some of their wages to pay joint expenses including rent, food and utilities.

7. In September 2004 the parties purchased the former matrimonial home at Property A, moving into that property in December 2004.  The property was registered in the sole of the respondent but the mortgage was in the joint names of the parties.

8. In or about September 2004, at the time of the purchase of the Property A property, the parties opened a second joint bank account, this time with (omitted) Bank.  They closed the joint (omitted) Bank account and transferred the closing balance funds to the new joint account.  Both parties contributed to that account from their earnings.

9. The funds in that account were essentially used to meet all household expenses.  They were also used to reimburse the parties for household expenses paid by them on their individual credit cards, although at the time of trial they were in significant dispute as to whether that arrangement had been equitable.

10. It was the applicant’s case that the respondent had always managed to reimburse her card but that frequently there were insufficient funds to reimburse his, resulting in him having a credit card debt at the time of separation.  The respondent argued that the applicant was irresponsible with respect to financial matters generally but in particular as to the management of credit card debt.

11. It was clear from the cases of both parties that their financial arrangements during the period of the relationship and post-separation were a source of frequent conflict. 

12. The applicant worked on a full time basis throughout the relationship.  The respondent worked on a full time basis until (omitted) 2009, when she took maternity leave prior to the birth of the parties’ first child X, on (omitted) 2010.  The respondent returned to work part time for two and a half days per week between 13 December 2010 and March 2011 when her work hours increased to three days per week. 

13. On (omitted) 2012 the respondent again took maternity leave pending the birth of the parties’ second child Y, born (omitted) 2012.  She returned to work in September 2013 working a nine day fortnight. 

14. For a significant period of the respondent’s maternity leave she received income albeit at a reduced rate, only having unpaid leave for a period of three months between September and December 2010 and a further three months between June and September 2013. 

15. The parties remained living in the former matrimonial home at Property A with the children until a physical separation was effected in August of 2014 when the applicant vacated the former matrimonial home.  The parties had separated under the same roof in May of 2014.

16. At the time of trial, the applicant remained in full time employment. 

17. In January of 2015 the respondent was diagnosed with breast cancer.  The respondent’s trial affidavit was very difficult to follow in many respects, but she deposed in paragraph 325 to having been unable to work since her diagnosis.  She deposed to having been on some form of paid or partially paid leave since December 2014.

18. In answer to questions in cross-examination, she said that at the time of trial she was on leave, that it was unpaid and that she had recently taken some paid leave.  It was her evidence that that leave finished in late April or early May 2016.  When it was put to her in cross-examination that the trial was in early May, she said she had planned to take two weeks off prior to trial but in fact took four weeks.

19. She said she was returning to work the following Monday and would be working for six hours on each of Monday and Tuesday in each week, and did not know how long she would be working at that level.

20. She said prior to the most recent period of four weeks leave she had been working for six hours on each of Monday and Tuesday.  She deposed to having some twenty-five or twenty-seven days of long service leave left available to her.  I interpret the wife’s affidavit evidence and the submission of her counsel to be that her substantive position is one of part time employment for nine days per fortnight, but that she had, at the time of trial, been on some form of leave or another for most of the time since December 2014.

21. The respondent presented her case to a significant degree on a “mathematical” approach with her counsel contending that this was an appropriate case to approach on an asset by asset basis.  She submitted that in the alternative, if a global approach was taken by the court there should be a two pool approach, with the court to consider appropriate adjustments to the non-superannuation pool and the parties to retain without adjustment their superannuation entitlements.

22. By way of order, the respondent proposed a capital payment to the applicant in the sum of $170,000.00, with the respondent to refinance the mortgages held over the Property A and Property B properties and indemnify the applicant in respect thereof.  She sought that otherwise the parties retain all assets in their respective possession or control including their superannuation entitlements.

23. Her counsel submitted that overall such an order would represent the non-superannuation asset pool being divided between the parties 80%/20% in favour of the respondent.  This is an adjustment of 30% in favour of the respondent.  She submitted that if each party were to retain their superannuation without adjustment, it would represent an adjustment of 35% in the applicant’s favour.

24. The applicant’s approach was that the court should take a less “mathematical” approach and consider the matter globally, but with two pools and from the perspective of the parties living in a relationship for approximately 11 years and each accepting how the other conducted his or her financial affairs. 

25. The applicant’s counsel submitted that the parties approach to financial matters was not exactly the same and it was the applicant’s case that contributions to the non-superannuation pool should be assessed as 45% to the applicant and 55% to the respondent.  He submitted it was appropriate that there be an additional 2.5% adjustment on account of s.90SF factors in favour of the respondent, leaving an overall division of the non-superannuation pool as to 42.5% to the applicant and 57.5% to the respondent.

26. In addition it was submitted that the parties’ superannuation interests should be divided such as to effect equality between them, with a split in favour of the applicant from the respondent’s (omitted) superannuation scheme with a base amount of $115,000.00.

27. Overall, the applicant sought a capital payment to him in the sum of $550,000.00, in addition to the superannuation split.  He proposed that the respondent retain the Property A and Queensland properties, save in circumstances of being unable to refinance firstly the Property A and secondly the Property B property in her sole name.  In that case he proposed the sale of the properties, in that order.

Asset Pool

1. The written submissions of the respondent’s counsel included Annexure “A”, being her reconciliation of the evidence of the parties as to the asset pool.  The applicant’s counsel responded in his submissions to the effect that the majority of the values ascribed to the non-superannuation asset pool, the liabilities of the parties and the superannuation pools were agreed save as to the following:

   a)Motor Vehicle - Holden (omitted): this is an asset in the ownership of the respondent. The respondent ascribed a value of $10,500.00. The applicant ascribed a value of $11,650.00. Exhibit “M13” was a Redbook valuation certification with respect to the Redbook valuation of a 2011 Holden (omitted) motor vehicle.  The average trade-in “value” in that document was $11,650.00.  I accept the submission of the applicant’s counsel that there was no evidence before the Court to suggest the vehicle was in better or worse than average condition.  I find the appropriate value to ascribe to the vehicle to be $11,650.00.

   b)Motor Vehicle – Ford (omitted): This vehicle was in the possession of the applicant at separation.  The respondent ascribed a value of $20,000.00 to that vehicle.  Exhibit “M13” also included a valuation certificate being a Redbook valuation of a 2011 Ford (omitted) motor vehicle.  The applicant’s counsel submitted that the average value of $15,800.00 should be ascribed to that vehicle in circumstances where there was no evidence before the Court to suggest that the applicant’s vehicle was in better or worse than average condition.  I accept that submission and find the appropriate value to ascribe to the vehicle to be $15,800.00. 

2. Counsel for the applicant submitted that there was no inclusion in the respondents list of assets and liabilities of a value for the contents of the Property A property.  It was his submission that the respondent conceded in her financial statement sworn 22 April 2016 to a value of $20,000.00 for those items.

3. Counsel for the respondent submitted that no issue with respect to either parties household contents arose at trial and that there should be no inclusion of a value for either parties household contents for the purposes of these proceedings.

4. The amount of $20,000.00 for furniture and effects in Property A was a line item in the applicant’s case outline. The applicant’s case outline document excluded the sum of $5,000.00 he ascribed to the value of his household contents in his financial statement filed 22 April 2016.

5. It was not included as an item in the respondent’s case outline document.  The respondent did depose to the value of $20,000.00 for her household contents in her financial statement sworn 22 April 2016.

6. It was put to the applicant in cross-examination that he had about $20,000.00 worth of furniture and effects and he agreed with that proposition.  In those circumstances, I accept the submission of the respondent’s counsel that no value should be ascribed to either parties household furniture and effects, as their evidence suggests equal value.

7. With respect to liabilities the applicant disputed the inclusion of a liability of the respondent in the sum of $12,140.45 to the Department of Human Services with respect to purchased leave.  It was the submission of the applicant’s counsel that such a liability is not strictly a debt of the respondent in circumstances where it arose as a result of her having taken leave to which she was not yet entitled but would ultimately become entitled with continued service in the Department.  It was his submission that there was no current liability and the item should be deleted.

8. The respondent’s evidence was contained in paragraph 279 of her trial affidavit. She deposed to being approved to purchase four weeks recreation leave which would be repaid by reduction in her 2016 salary. I am not satisfied on the evidence of the respondent that the alleged debt should be included in the list of liabilities. There is no evidence that it is immediately repayable or repayable as a lump sum, although I accept that it may result in her receiving less than full pay of any salary to which she is entitled in 2016. I find that it is more appropriate to consider this issue in relation to s.90SF(3) factors[1].

   [1] Family Law Act 1975 (as amended) s. 90SF(3)

1. The applicant’s counsel submitted that the appropriate amount to include in the list of liabilities to be taken into account ascribed to the applicant’s (omitted) Visa Card is $19,300.00 and not $14,687.00 as submitted by the respondent’s counsel.

2. He referred to the figure of $19,300.00 being deposed to in paragraph 51 of the applicant’s financial statement filed 22 April 2016.  This was described in the list of liabilities as a post-separation liability of the applicant.  The applicant agreed in cross-examination that the liability did not exist at separation and that at the time of trial there was a liability of $19,266.00.  Exhibit “M15” was a copy of the (omitted) Credit Card statement for the period 22 February 2016 to 22 March 2016.  The closing balance on the account as at that date was $19,306.80.  I accept the submission of the applicant’s counsel, namely that $19,300.00 is the correct amount to ascribe to the debt.

3. In the respondent wife’s submissions in reply, her counsel submitted that a number of the parties’ liabilities were identified during the proceedings “as being referrable to liabilities arising during the relationship and to be taken into account against the assets”.

4. She went on to say “other liabilities were identified as arising post-separation” and that the husband had not objected to the manner in which she had identified the liabilities in Annexure “A” to her written submissions.  In those circumstances she submitted post-separation liabilities should be excluded from the calculation of the parties’ net assets. 

5. The items identified as post-separation liabilities were as follows:

Liability	Ownership	Value
(omitted) Mastercard	Wife	$13,680.00
(omitted) Bank Lending loan	Wife	$199,987.34 of which $45,000.00 (accrued post-separation)
(omitted) Credit Cards	Husband	$26,000.00 of which $7,300.00 (accrued post-separation)
(omitted) Visa Card	Husband	$14,687.00
(omitted) Credit Card	Husband	$2,181.00 of which $3,442.00 (accrued post-separation)
(omitted) Bank personal loan	Husband	$48,102.00 of which $11,276.00 (accrued post separation)

These liabilities were included in Annexure “A” to the respondent counsel’s written submissions.

1. I have found that the appropriate amount to include as a liability for the (omitted) Visa Card is $19,300.00.

2. I do not accept the submission of the respondent’s counsel that all of the post-separation liabilities should be excluded from a calculation of the net assets in circumstances where that was not the approach taken in cross-examination or in her initial final submission.  Although Annexure “A” to her written submissions identified post-separation liabilities, the calculation as to payment to the applicant was based on the inclusion of all such liabilities.

3. There was no dispute between the parties as to the appropriate amounts to ascribe to their various superannuation entitlements.  It is apparent from the said Annexure “A” that each of the parties hold bank deposits on trust, in the case of the applicant for his two children A and B, and in the case of the respondent, for the parties children, X and Y.  Although not an issue raised by either of the parties, I am satisfied that those accounts should be excluded from the calculation of the asset pool.

4. Taking all of those matters into account, I find the following is the appropriate list of assets, liabilities and superannuation entitlements for the purposes of these proceedings.

Assets	Ownership	Value
Property A Property	Wife	$650,000.00
Property B property	Wife	$395,000.00
Property C property	Wife	$387,500.00
Managed funds – (omitted) (formerly (omitted)) (number (omitted))	Wife	$56,007.95
Managed funds – (omitted) (number (omitted))	Wife	$129,503.41
Managed funds – (omitted)	Wife	$118,372.90
Motor vehicle – Holden (omitted)	Wife	$11,650.00
Motor vehicle – Ford (omitted)	Husband	$15,800.00
Motor vehicle – Racing car & tools	Husband	$24,000.00
(omitted) Bank Account Number (omitted)	Husband	$12,503.00
(omitted) Bank Account Number (omitted)	Wife	$12,180.00
(omitted) Bank Account Number (omitted)	Wife	$217.23
(omitted) Bank Account Number (omitted)	Wife	$3,270.13
(omitted) Bank Account Number (omitted)	Joint	$7.95
TOTAL		$1,816,012.57

Liabilities	Ownership	Value
(omitted) Bank Mortgage 1 Account Number (omitted)	Joint	$88,592.99
(omitted) Bank Mortgage 2 Account Number (omitted)	Joint	$116,086.57
(omitted) Bank Mortgage 3 Account Number (omitted)	Joint	$157, 173.56
(omitted) Bank Property B Mortgage Account Number (omitted)	Wife	$63,777.01
(omitted) Bank Property C Mortgage Number (omitted)	Wife	$102,438.27
(omitted) Bank Visa Debit	Wife	$10,767.55
(omitted) Mastercard	Wife (post-separation)	$13,680.00
(omitted) Bank Lending Loan Number (omitted) (Managed funds secure loan)	Wife ($45,00 post-separation)	$199,987.34
(omitted) Bank Personal Loan	Wife	$49,568.54
Ford (omitted) Motor Vehicle Loan (remaining on home loan)	Joint	$25,059.22
(omitted) Credit Cards	Husband ($7,300 at separation)	E$26,000.00
(omitted) Visa Card	Husband (all post-separation)	$19,300.00
(omitted) Credit Card	Husband ($3,442 at separation)	$2,181.00
(omitted) Bank Personal loan	Husband ($11,276 at separation)	$48,102.00
TOTAL		$922,714.05

Superannuation	Ownership	Value
(omitted)	Wife	$378,164.00
(omitted) Personal Super	Wife	$139,337.00
(omitted)	Husband	$84,613.00
(omitted) Superannuation	Husband	$198,865.00
TOTAL SUPERANNUATION		$800,979.00

Contributions

1. At the time the parties commenced their relationship in September/October 2003, the applicant had separated from his wife and was in the process of finalising property settlement proceedings with her, as well as continuing to be engaged in litigation with her with respect to children’s issues. 

2. It was the applicant’s case that he had savings of some $40,000.00 in a term deposit, a Holden (omitted) motor vehicle subject to lease payments with little or no equity, a racing kart worth approximately $3,000.00, a trailer valued at $2,000.00, tools valued at $2,000.00, ski equipment worth approximately $2,000.00 and limited household items. 

3. He also deposed to superannuation entitlements with (omitted) of approximately $57,000.00 and with (omitted) in the sum of approximately $27,000.00.

4. In cross-examination, the applicant conceded that when he met the respondent he and his former wife had sold the former matrimonial home and that his share of those net funds was $32,250.00.  He agreed that those funds were put into the term deposit.  He agreed that he had paid legal fees in respect of the matrimonial dispute between he and his former wife in 2004.

5. When it was put to him by the respondent’s counsel that most of the $32,000.00 that he had in his term account as at October 2004 had been utilised in paying legal fees and paying his former wife extra funds, he replied “probably”.  He agreed that it was probably the case that the only real direct financial contribution that he could be said to have made from his term deposit was approximately $8,000.00. 

6. It was the respondent’s position that the applicant’s contributions were minimal.  She did not take issue in relation to his superannuation entitlements with (omitted) at that time, or the values of the racing kart, the trailer, the tools, the ski equipment and his evidence of him having limited household items.  She agreed the Holden (omitted) motor vehicle was subject to a lease.  She said in her evidence that as well as the applicant’s liabilities for legal fees and additional settlement payments to his ex-wife at or about the time of the parties’ relationship commencing, he had an ongoing liability for child support.  These issues were all well known to the respondent at the time. 

7. In cross-examination the applicant conceded that he had been required to pay approximately half of his (omitted) superannuation entitlements to his former wife Ms K in or about 2006, and that in or about January of 2009 he had withdrawn the balance of the funds in that superannuation scheme and rolled them into his existing (omitted) superannuation benefit scheme.

8. The applicant was working full-time at the commencement of cohabitation and continued to do so throughout the period of the relationship until separation in or about May of 2014.  As at trial he continued to work full time.

9. The respondent came into the relationship in different financial circumstances.  She had been working by that time on a full-time basis for some sixteen years and had acquired two properties in Queensland, as well as managed funds, savings and furniture and effects.

10. Both of the Queensland properties were subject to mortgage, and the respondent was liable for a margin lending loan as well as having a credit card debt.  She had superannuation interests with (omitted) and (omitted).

11. The respondent had commenced full-time employment in 1987.  In 1994 she purchased a property at Property B in Queensland.  The property cost $140,000.00, together with additional fees and expenses of approximately $5,000.00.  She borrowed $126,000.00 by way of mortgage together with an additional $1,587.00 required for mortgage insurance and rented out the property.  By the time the parties commenced cohabitation, the mortgage balance had reduced from approximately $127,500.00 in 1994 to $63,000.00.  There was no evidence adduced as to the value of the property at the time the parties commenced cohabitation, but there was at least $120,000.00 in equity in that property by September of 2004 for the parties to utilise in the purchase of the Property A property. 

12. In 1998 the respondent purchased property in Property C in Queensland.  The property cost $168,000.00 together with stamp duty and fees totalling some $7,500.00.  The respondent paid a 20% deposit and borrowed the sum of $134,400.00.  Although the property was not used as security for the purchase of the Property A property, it was refinanced at that time, with the amount required to re-finance the mortgage being $105,000.00.  Without taking into account any increase in the value of the property at the commencement of cohabitation, the amount owing on the mortgage at that time was $63,000.00 less than the purchase price. 

13. In October 2000 the respondent had established a share portfolio, by way of taking a margin loan with (omitted) Bank with an initial credit limit of $100,000.00.  It was the respondents evidence, contained in Exhibit “M17” that as at September 2003 she owed $26,966.12 on the margin loan with the shares having a market value of $52,388.71 and as at September 2004 the respondent owed $38,829.15 on the margin loan with the market value of the shares being $85,351.95. 

14. The respondent conceded in cross-examination that she did not have any specific evidence as to these figures other than the spreadsheet annexed to her trial affidavit being Annexure “IC”.  She said she had prepared the document from her tax returns and was satisfied it was accurate.

15. In addition, it was not disputed that the respondent had savings.  She deposed to these being held in (omitted) Bank and in the sum of $28,000.00. 

16. The applicant’s counsel submitted that the court had no independent corroborative evidence as to the value of the respondent’s shares and associated margin loan, her savings in (omitted) Bank or the amount of equity in either the Property B or Property C properties at the commencement of cohabitation.  There was only that of the respondent herself contained in her trial affidavits.

17. I accept that submission with respect to the exact amount of any savings the wife had at that time but accept that she did have savings.  As to the value of her shares at that time and the associated margin loan, I find that the wife was extremely diligent as to her financial affairs.  I accept her evidence as to the value of her shares at the time of commencement of cohabitation and the liability in respect of the margin loan. 

18. I am able to find on the evidence of both parties that in respect of the Property B property there was at least $120,000.00 equity at September 2004, as that was the amount the parties were able to and did utilise towards the purchase of the Property A property. 

19. I accept that there is no objective evidence as to the amount owing in respect of the Property C mortgage at the commencement of cohabitation, but I accept that in accordance with the respondent’s usual financial practices, the initial borrowings would have been reduced to some extent.  I do find that by September 2004 when the property was refinanced there was equity in the property of about $50,000.00 to $60,000.00.

20. It was conceded by counsel for the applicant that the respondent had superannuation entitlements at the commencement of cohabitation in two funds, one with (omitted) and one with (omitted), totalling approximately $91,000.00.

21. Overall, it is clear that at the commencement of cohabitation the respondent brought a significantly greater financial contribution to the relationship than did the applicant, who effectively brought into the relationship approximately $8,000.00 in a term deposit, some $70,000.00 in superannuation, $9,000.00 in chattels and a limited quantity of household items.

22. The parties opened a joint account with (omitted) Bank in or about October 2003, to which they both contributed from their wages to pay joint expenses. That account was closed by the parties in December 2004 when they moved to the Property A property upon settlement of same.

23. They had purchased that property with a joint mortgage from (omitted) Bank in the sum of $366,000.00.  Those funds, together with a further loan of $120,000.00 secured by the Property B property resulted in total borrowings of $486,000.00. 

24. The Property A property cost $457,500.00, together with purchase costs including stamp duty of approximately $18,162.50, refinanced stamp duty on the Property B property of $1,000.00 and legal costs of approximately $1,000.00.  The mortgage was in the joint names of the parties and with (omitted) Bank.  The property was registered in the sole name of the respondent.

25. By email dated 25 October 2004 the applicant advised (omitted) Bank that although the parties were to be joint borrowers with respect to the Property A property, it was to be registered in the sole name of the respondent.  He conceded in cross-examination that that was to ensure that his former wife made no claim on that property. 

26. At the time of purchasing the property the parties opened a joint savings account with (omitted) Bank and transferred the balance of their (omitted) Bank savings account into that account.  From then until the parties separated they both contributed income to that account with the accumulated funds being utilised for shared expenses. 

27. It was the respondent’s evidence that the account was not utilised for holiday expenses, expenses relating to motor vehicles, hobbies and presents and other financial investments such as shares, rental properties or (omitted).

28. She also deposed to the funds not being used for individual personal expenses or alcohol and to the parties being responsible for their own health care costs, save as to pregnancy related costs, until the birth of the children and thereafter the joint fund only paying the children’s health costs.

29. It was the respondent’s evidence that the husband at no time made any financial contributions to the Property B or the Property C properties.  She deposed to all of the mortgage payments and expenses relating to those properties being paid by her together with rent from both properties. 

30. It was the applicant’s position that the joint savings account with (omitted) Bank was used to pay for the expenses asserted by the respondent but also for car expenses, holidays, entertainment, expenses for the rental properties and the share portfolio.  It was his evidence that for part of the relationship the rental income from the investment properties was paid into that joint account with the relevant mortgage payments and other associated expenses being deducted from it.

31. The respondent conceded that that was so between the time the (omitted) Bank offset account was set up until July 2006.  She deposed to changing the arrangements at that time after criticism from the applicant and to opening a new (omitted) Bank savings account in her sole name.

32. Much of the wife’s case was based on painstakingly calculating specific contributions made by each of the parties to the joint (omitted) account, the use by the parties of funds accumulated in that account, the proportion of the parties income that they each contributed to the account and the expenditure by the applicant on the purchase of tools, motor vehicles and school and health costs, in particular for his two children from this marriage. 

33. It was submitted by counsel for the applicant that notwithstanding budgets being prepared and meticulous records being kept as to what was spent on what expense by which party, it is not material to an assessment of contributions what one party spent on a particular kind of expense.

34. This was a relationship where the parties cohabited for approximately ten and a half years.  The respondent clearly brought significantly greater assets into the relationship than did the applicant at the commencement of same.

35. In addition, it was of significant financial benefit to the parties to be able to utilise the equity in an asset owned solely by the respondent prior to the commencement of cohabitation against which to be able to raise funds by way of mortgage to purchase the former matrimonial home. 

36. There is no doubt that throughout the period of the relationship the applicant’s income was greater than that of the respondent.  There is a dispute between the parties as to the amount each contributed to the joint account over the period of the relationship, with the applicant arguing that his contribution was in the sum of some $650,000.00 with the respondent’s contribution being some $360,000.00.  The respondent disputes that and says that her contribution was more in the order of $430,000.00 and that she was effectively contributing a higher proportion of her income.

37. It was part of her case that she had organised the leave she took at the time of having the parties’ two children in such a way as to maximise the time during which she was in receipt of income to benefit the family and there is no doubt that that indeed was the case.

38. The wife gave copious evidence about who drew what from the parties joint account for expenses outside of the joint budget.

39. The applicant argued that his greater direct financial contribution to the parties joint account because of his greater income and the fact that he continued working full time whilst the respondent was on maternity leave contributed to her ability to maintain her outgoings in respect of the Property B and Property C property and therefore he made an indirect financial contribution to those properties. 

40. He conceded he had never been to the Property C property, only visited Property B once and had no role to play in the management of the financial affairs relating to those properties.

41. Notwithstanding the respondent’s efforts to separate the parties financial affairs as of 2006, the reality of this parties relationship was that it was in existence for some ten and a half years and that both parties were employed to the extent of their physical and mental capacity for appropriate gainful employment.  There is no evidence of any wastage by either of the parties of income earned by either of them.  I do not accept the argument of the respondent that the applicant wasted funds on tools and motor vehicles.  The respondent was aware that these were hobbies of the applicant.  The fact that the applicant chose to spend moneys on purchases that provided a hobby for him whilst he was not at work I do not consider to be indicative of wastage.

1. There is no doubt that the applicant did expend significant funds on education and health expenses for his children A and B as well as paying child support.  I find that although these were funds that would otherwise have been available for the parties and the children of this relationship, the applicant’s financial responsibilities were known and understood by the respondent at the time the relationship commenced.  No doubt it was a matter that she took into account when deciding whether or not to enter into the relationship in circumstances where financial issues were clearly very important for her and remain so.

2. Each party kept funds in their own separate bank accounts over and above those that were contributed to the joint account.  Nevertheless, these were all funds that accrued from the efforts of the parties in their employment during the period of some ten and a half years of cohabitation. 

3. The parties had very different attitudes towards financial matters.  The issue of refunding to themselves joint expenses that they had incurred on their individual credit cards is a clear example of the different approach of the parties.  The respondent did so within about a week of the expenditure and the applicant took a less vigorous approach to keeping a track of and reimbursing those personal expenses.  It was the respondent’s position that many of the expenses that the applicant said he was unable to reimburse himself for because there was no available funds in the joint account were in fact personal expenses and not intended to be reimbursed to him. 

4. It is not the role of the court to examine item by item expenses of the parties to determine whether or not they were joint expenses.  In the absence of a finding of wastage on the part of either of the parties, this is a matter where the court should consider what the parties brought into the relationship, what they contributed during the relationship and what net assets they were left with at the conclusion of that relationship.

5. They clearly had many disputes as to financial issues.  Nevertheless, they did not choose to separate for some ten and a half years.  It was appropriate that both parties contribute to joint expenses.  It was likewise appropriate for both parties to be able to make individual decisions as to other expenditure.

6. As well as the financial contributions made by the parties during the period of cohabitation, they of course both contributed to the care of the parties two children, X and Y. 

7. The respondent was the primary care giver for the children for the first twelve months of both of their lives during which time she took maternity leave.  During that time the applicant continued to work on a full time basis.  The respondent did not return to full time work following the completion of each of her periods of maternity leave and accordingly, took the greater role with respect to caring for the parties children.  Nevertheless, there was no dispute that the applicant assisted as much as he was able and in that way, both parties made a significant contribution.  By virtue of the respondent taking the major responsibility for the care of the parties’ children, the applicant was able to continue to earn a higher income and in that way the parties contributions were again different, but equal.

8. The respondent made a significant contribution to the care of the applicant’s two children, A and B, between the time the parties commenced cohabitation and December of 2013.  She assisted with all aspects of the care of the children when they were in the parties home on the weekends and school holidays, other than the boys spending two weeks each January away with the applicant and on occasions when he took them (omitted) for several nights at a time.  During these periods of time of course she was solely responsible for the care of X and Y. 

9. Upon the parties’ physical separation in August of 2014, the respondent remained living in the Property A property.  The applicant ceased making payments into the monthly joint account as of June 2014.  The applicant ceased making payments towards the Property A property in September of 2014, with the respondent being solely responsible for the mortgage payments since that time.  She has had the primary care of the children since that time, and pursuant to current orders, will continue to do so until they attain the age of eighteen years. 

10. The mortgage over the former matrimonial home at Property A includes a loan in respect to the applicant’s motor vehicle.  The applicant conceded in cross-examination that in December 2013 he redrew $24,000.00 from the home loan mortgage account to purchase the Ford (omitted) second hand and he conceded that upon separation he had retained the motor vehicle.  He conceded in cross-examination that he had made $7,500.00 post-separation in repayments and that he had drawn down a further $8,000.00 on the account in May 2014. 

11. It was put to him that he had made the last payment towards the mortgage on 22 September 2014.  He agreed that was correct but said that he was contributing to the mortgage since then.  When asked how, he said he had agreed an arrangement with the respondent to cover the added amount of the mortgage payments each month accounted for by the car loan.  When he was asked how much he had paid into the mortgage account in relation to the Property A property since 22 September 2014, he was unable to provide an answer. 

12. The respondent conceded in paragraph 284 of her trial affidavit that the applicant had made a further $1,220.00 payment in or about October of 2015, but that he had failed to pay additional interest payments on a monthly basis as agreed.

13. The effect of the applicant’s actions in drawing down on the mortgage to the extent of $24,000.00 in December 2013 to purchase a motor vehicle which he retained upon separation and in respect of which he has effectively made no payments, is that the respondent has assumed a greater mortgage liability than is reasonable.  Her almost sole responsibility for repayments post-separation must be regarded as a significant post-separation contribution by her.

14. Post-separation the respondent has managed her investment properties and share portfolio without any financial contribution from the applicant.  The applicant has paid child support as assessed since approximately October of 2014, initially claiming credit from the Child Support Agency by way of non-agency payments for contributions to costs of the nanny.  For a period of time this resulted in a reduction of child support payments to the respondent. 

15. Post-separation the respondent has sold shares and taken a personal loan to meet legal expenses.  She has also utilised the margin loan to pay legal expenses as well as utilising savings and borrowed funds by way of credit cards.  It was her evidence that from the approximately $75,000.00 she obtained from the sale of shares, she had not utilised very much on legal fees, but spent a lot on health costs and living expenses. It was her belief that she had probably only expended $20,000.00 to $25,000.00 of those funds on legal fees.

16. Both parties have acquired debts post-separation that are included in the list of the parties’ liabilities.  I have earlier referred to my view that it would not be appropriate, as submitted in reply by the respondent’s counsel, to omit those post-separation debts from the calculation of the parties’ net assets.  In those circumstances, each party is indirectly contributing to the financial position of the other.

17. Taking into account in particular the respondent’s significantly greater financial contribution at the commencement of cohabitation, the significant direct financial contributions made by each of the parties during the relationship and that of the respondent post-separation, the respondent’s greater contribution to home making and parenting during the course of the relationship and post-separation, as well as post-separation contributions made by each of the parties towards the care of the parties children, the maintenance and preservation of the parties assets and ultimately their joint contribution to the liabilities of the other of them, I assess the parties overall contributions as to 62.5% to the respondent and 37.5% to the applicant.

Section 90SF(3) factors

1. At the time of hearing the applicant was aged 48 years and the respondent 46 years.  The applicant is in good health.  In January 2015 the respondent was diagnosed with breast cancer.  She underwent surgery in February of 2015 and commencing in March 2015 a course of radiation therapy and later chemotherapy.  At the time of trial she had returned to work for approximately six hours on each of Monday and Tuesday, but immediately prior to trial had taken leave.  Her substantive position remained part time and nine days per fortnight.

2. The respondent deposed in significant detail as to the state of her health, in particular from paragraphs 301 to 341 inclusive of her trial affidavit.  It was submitted by the respondent’s counsel that she remains at high risk of cancer and that further testing was required.  She further submitted that the respondent’s prognosis is uncertain, that she has suffered a reduction in her income earning capacity as a result of her serious ill health and that there is significant uncertainty about her ability to work on a full time basis into the future. 

3. It was of some concern to the court that no expert evidence was adduced by the respondent to support findings being made as submitted by the respondent’s counsel.

4. The respondent was diagnosed with cancer and undertook significant treatment throughout 2015.  It was submitted by the respondent’s counsel that for the period of leave taken by the respondent between 2014 and the expiry of that leave on 6 November 2015 she was receiving fifty percent of an annual income of $172,000.00 per annum.  The respondent’s evidence in this regard is contained in paragraph 279 of her trial affidavit.  There was no doubt that the respondent was by the time of trial suffering some financial stress, no doubt in part because of the extensive legal fees she had to meet which had resulted, inter alia, in her selling a significant parcel of shares. 

5. In paragraph 346 of her trial affidavit, the respondent referred to a medical report of 9 December 2015.  She deposed to it being attached to her affidavit. She does not refer in the affidavit to the letter identifying such attachment.  No such document was attached, nor was it referred to in the submissions of the respondent’s counsel. 

6. It was submitted by counsel for the applicant that in the absence of any expert evidence, the majority of the evidence concerning the respondent’s medical condition is that of the respondent herself and otherwise contains substantial amounts of hearsay evidence as well as opinions and conclusions of the respondent.

7. The applicant’s counsel submitted that in the absence of expert evidence to support the assertions of the respondent and in circumstances where in cross-examination she gave evidence that she had seen her general practitioner within a fortnight prior to the commencement of the trial, the court should infer that she did not have available to her medical evidence that would assist in supporting her assertion that her health condition would impact in the future on her earning capacity.

8. In cross-examination when asked how long she intended to work at a reduced level, she said that she did not know.  There is no doubt that the wife has suffered significant health difficulties.  What is not clear is to what extent those health difficulties will be ongoing and to what extent they will impact on her income earning capacity.

9. I find that if the wife had medical evidence that would support a submission that there would be a significant impact on her future earning capacity as a result of her medical condition, such evidence would have been put before the court.  I do find that her income earning capacity was significantly reduced in the eighteen month period leading up to trial. 

10. I also accept that during that time as a result of the severity of the health challenges faced by the respondent, that she would have had significant medical costs over and above those covered by health insurance and Medicare.  The respondent’s evidence does not satisfy me as to how long any health problems are likely to continue and what impact they may have on her income earning capacity.

11. I am satisfied that at the date of trial both parties were engaged in appropriate gainful employment to the extent of their physical and mental capacity.  Both parties earn significant annual income and both parties have, taking into account their respective ages, significant financial resources available to them in the future by way of superannuation entitlements.

12. As at trial the wife’s substantive position attracted an annual income of $172,000.00.  Prior to her illness she had been working approximately three days per week.  At the time of trial the applicant’s income was approximately $200,000.00 comprising of a base salary of $180,000.00 and then bonus commissions.

13. It was his evidence that he has targets and if he reaches those targets he receives bonuses.  He said he receives these partly in weekly instalments over the year rather than lump sums.  He conceded that the weekly income as deposed to him in his financial statement filed 22 April 2016 was reflective of an annual income of $211,016.00.  He said that the maximum he had ever received in bonuses was the sum of $50,000.00 some five or six years previously.  He said that in October of 2015 he had received a bonus of $25,000.00 and he expected to get another bonus which would be paid to him after 30 June 2016 that would cover time prior to that date. 

14. I am satisfied that at the time of trial the husband’s income was on average between $200,000.00 and $220,000.00 per annum. 

15. The parties’ net assets comprising non-superannuation and superannuation is overall modest.  The respondent has the primary care of the parties two children, who at the time of trial were aged six years and three years respectively.  This I find impacts on her income earning capacity.

16. At the time of trial the applicant was responsible for supporting himself also had ongoing responsibility to assist in the support of his son B, who was not quite eighteen years of age.  In cross-examination he agreed that he continued at that time to pay child support to his previous wife as well as paying medical expenses for not only B, but his older child, A, who at that time was twenty years of age. 

17. He agreed that had paid private school fees for A from approximately 2007 onwards in the sum of about $10,000.00 a year as well as health costs.  He disagreed with the proposition that he had paid approximately $28,000.00 per annum for B’s speech therapy from 2010 and said instead it was approximately $2,000.00 to $3,000.00 per year by way of out of pocket expenses. 

18. He agreed he paid some of his son A’s psychological treatment costs, but said that would probably be in the hundreds rather than the thousands of dollars. 

19. The applicant was of course also responsible to contribute towards the support of the parties two children, X and Y.  At the time of trial, the respondent was responsible for her own support as well as the support of X and Y.

20. Neither party included in their financial statements Part N which may have given more specific evidence to the court as to the commitments necessary for each of the parties to support themselves and the children, but I am satisfied that both parties have the capacity to support those commitments, albeit for the eighteen months or so prior to trial the respondent’s capacity was hampered by her ill health. 

21. The respondent has remained living in the former matrimonial home post-separation and I am satisfied has been able to maintain a standard of living that in all the circumstances is reasonable.  She has of course paid the mortgage with respect to that property, but the applicant was obliged to find alternative accommodation for which he has had a rental liability.

22. I find that both parties have maintained a standard of living that is reasonable in all the circumstances since separation and that they have the financial capacity and sufficient property to continue to do so in the future.

23. I find that in terms of the respondent’s wish to continue her role as the primary caregiver for the parties two children, X and Y, that it is not unreasonable for the respondent to work less than full-time in circumstances where both children are still very young.  The respondent has a history of full-time employment prior to the birth of the children, and there is no evidence to support a finding that she would not have the capacity to return to full-time employment as the children become less dependent on her primary care.

24. I find that child support arrangements as between the parties are proper and would not support any adjustment in favour of either of the parties.

25. Taking all of these matters into account, I find that there should be a minor adjustment of 2.5% in favour of the respondent on account of her wish to continue her role as the primary provider of care for the parties two children but in circumstances where as the children grow older I am satisfied she will have the capacity to return to full-time employment.

Conclusion

1. I do not find that this is an appropriate matter in which the division of the parties assets should be calculated on an “asset by asset” basis.  The parties were in a relationship for a period of eleven years, and although to a certain extent the parties finances were maintained separately, there is no doubt that there was a common approach to the purchase of the former matrimonial home, the operation of the joint bank accounts, the reimbursement for their various individual expenses from the joint funds and I do not consider that it would be possible to effect justice and equity to consider each of the assets separately.

2. I am satisfied however that it is appropriate to consider the matter on a “two pool” approach, separating the superannuation assets from the non-superannuation assets.

3. For the reasons I have given I am satisfied that the non-superannuation assets should be divided such that the wife retain the equivalent of 65% thereof and the husband 35%.

4. Taking into account the list of assets and liabilities in paragraph 49 hereof, the net non-superannuation assets of the parties have a value of $893,299.00, with 35% of that amount being $312,655.00 (rounded). 

5. The husband has retained assets to the value $52,303.00.  He also has retained debts in his sole name totalling $95,583.00. 

6. The wife has retained assets to a value of $1,763,702.00 (rounded and excluding $7.95 in a savings account).  The wife’s debts inclusive of the joint debts that she has assumed total $827,131.05.  The wife has therefore retained in her possession or control net assets to the value of $936,571.00.  Sixty five percent of the parties net non-superannuation assets totals $580,644.00. 

7. The wife therefore, in round figures and excluding the $7.95 in the savings account, would be required to pay to the husband $355,927.00.  When added to the assets to the value of $52,303.00 that I have found he has retained it results in him retaining assets to a value of $408,230.00.  When his liabilities of $95,583.00 are deduced it results in him retaining net non-superannuation assets in his possession or control to the value of $312,647.00 (taking into account the wife retaining the additional $8.00 in the savings account).

8. Although the wife has significant assets by way of real estate she also has a very high level of debt.  At the conclusion of the trial her counsel submitted that if the wife was required to pay an amount to the husband significantly different to that proposed by her in the sum of $170,000.00 it may well trigger a capital gains tax event that would require further submission.

1. An order that had the effect of requiring the respondent to sell real estate to discharge her obligation to the applicant by way of settlement of property would not only perhaps trigger a capital gains tax event in the event that either the Property B or Property C properties needed to be sold but in any event, would result in costs arising from the sale of the former matrimonial home and either of the other properties that may be necessary for her to sell resulting in the respondent wife receiving a lesser sum.

2. The wife proposed that each party retain their own superannuation entitlements without further adjustment.  She submitted through her counsel that if each retained their superannuation entitlements without further adjustment, it effectively represented an adjustment of 35% in the husband’s favour in circumstances where the wife’s superannuation interests at the commencement of the relationship were greater than the husband’s interests. 

3. I accept that the respondent had significantly more superannuation at the commencement of the relationship and find that her contributions to superannuation reduced during the course of the relationship as a result of her working on a part-time basis following the birth of the parties children.  In those circumstances her superannuation entitlements did not grow to the extent of the applicant’s. 

4. Although the applicant had less superannuation at the commencement of the relationship, his entitlements increased at a faster rate because of his full-time employment and his slightly higher wages as the relationship progressed.  Overall, I consider that it is just and equitable that there be no adjustment in favour of one party or the other with respect to their superannuation entitlements. 

5. I find however, overall, that justice and equity is better served in this matter, where the respondent is the primary caregiver for the children and where she had amassed a significant property portfolio prior to the commencement of cohabitation, that the payment to the applicant be a combination of a cash payment and a superannuation split in his favour from the respondent.

6. The parties are similar in age, but at the time of trial the applicant had superannuation entitlements in the sum of $283,478.00 and the respondent in the sum of $517,501.00.  I find that it would be just and equitable to frame the order in such a manner that effectively half of the payment to the applicant be made by way of a cash payment with the balance to be made up by way of a superannuation split in the applicant’s favour. 

7. In those circumstances I find the cash payment to the respondent should be $180,000.00, with a superannuation split in his favour in the sum of $175,927.00.  That would result in the respondent retaining superannuation entitlements in the sum of $341,574.00 but having a greater chance of retaining her real estate and share portfolios.

8. The husband’s superannuation entitlements would then increase to $459,405.00.  I am satisfied that although the proportion of assets by way of cash that he would retain would be modest, his income is such that he would have the capacity to purchase a home for himself.

9. It is for those reasons I make the following orders.

I certify that the preceding one hundred and forty nine (149) paragraphs are a true copy of the reasons for judgment of Judge Mead

Date: 6 October 2017