Taft and Taft
[2010] FMCAfam 335
•19 April 2010
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| TAFT & TAFT | [2010] FMCAfam 335 |
| FAMILY LAW – Property – marriage of seven years and three months – second or subsequent marriage for both parties – modest pool – where the pool consists largely of the former matrimonial home owned by the husband prior to the marriage and superannuation accrued by the husband prior to, during and after the marriage – where the husband made a substantial contribution to the support of the wife’s adult daughter during the marriage – whether relevant to the assessment of contributions – whether relevant as a s.75(2) factor – where the wife relocated to Australia from the United States at the time of the marriage – where the wife maintains that the relocation has had a detrimental effect on her financially – where the wife has not paid anything in respect of her legal fees and will owe a substantial debt to her solicitors at the conclusion of the proceedings – whether any adjustment should be made in the wife’s favour for s.75(2) factors. |
| Family Law Act 1975, ss.75, 79 |
| NHC & RCH (2004) FLC 93-204 C & C (2005) FLC 93-220 D & D (2003) FamCA473 Hurst & Weber (2009) FamCAFC137 Kennon & Kennon (1997) FLC 92-757 Kowaliw & Kowaliw (1981) FLC91-092 Mallet v Mallet (1984) FLC 91-507 Mehmet & Mehmet (1986) FLC91-730 |
| Applicant: | MR TAFT |
| Respondent: | MS TAFT |
| File Number: | NCC 2062 of 2008 |
| Judgment of: | Terry FM |
| Hearing dates: | 4 September & 27 November 2009 |
| Date of Last Submission: | 27 November 2009 |
| Delivered at: | Darwin |
| Delivered on: | 19 April 2010 |
REPRESENTATION
| Counsel for the Applicant: | Mr Bateman |
| Solicitors for the Applicant: | Peter Blackwell & Associates |
| Counsel for the Respondent: | Mr Hamilton |
| Solicitors for the Respondent: | James Richardson Family Lawyers |
ORDERS
That all previous orders are discharged.
That within 60 days of the date these orders the husband pay to the wife the sum of $94,280.23.
That contemporaneously with the payment referred to in order (2) the wife shall:
(i)provide to the husband a duly executed withdrawal of caveat in registrable form in respect of the caveat lodged over Property T (“the [T] property”);
(ii)vacate the [T] property with all her possessions and ensure that all members of her family vacate the property with all their possessions.
That in the event that the husband fails to comply with order (2) the husband and wife shall do all acts and things and execute all deeds, documents, instruments and writings necessary to sell the [T] property on the following terms:
(a)the property be listed for sale with a real estate agent agreed between the parties;
(b)in the event that the parties cannot agree on the nomination of such agent they shall jointly approach the President of the Real Estate Institute of New South Wales and accept his or her nomination of a real estate agent to sell the property;
(c)in the event the parties are unable to agree on a listing price, the time of listing, the method of sale and conditions of such sale in respect of the property they shall accept the recommendations of the real estate agent appointed pursuant to these orders for the sale of the property in respect of each such matter;
(d)upon completion of the sale the proceeds of sale shall be applied as followed:
(i)firstly to pay all costs, commissions and expenses incurred in respect of the sale;
(ii)secondly to pay all outstanding municipal rates and other levies due in respect of the property;
(iii)thirdly, to pay the amount required to discharge the mortgage registered over the property;
(iv)fourthly to pay the remaining balance as to 82.5% less $8,145.75 to the husband and 17.5% plus $8,145.75 to the wife.
That the husband, forthwith upon the wife presenting the documents to him, shall sign the documents necessary to transfer to the wife at the expense of the wife the whole of his right title and interest in the Hyundai motor vehicle Registration No: [omitted].
That the wife is declared the owner to the exclusion of the husband of the furniture and effects and jewellery in “Schedule A” attached to the wife’s “Short Minute of Orders Sought” (Exhibit N).
That the husband is declared the owner to the exclusion of the wife of the remainder of the furniture and effects and jewellery itemised in the valuation of Mr B dated 1 May 2009.
That unless specified in these orders and except for the purpose of enforcing payment of any money due under these orders or subsequent orders, each party be solely entitled to the exclusion of the other to all property (including choses-in-action) in possession of each party and superannuation standing in their respective names.
That in the event that either party refuses or neglects to comply with the provisions of these orders the Registrar of the Federal Magistrates Court of Australia at Newcastle is hereby appointed to execute all deeds and documents in the name of the defaulting party.
IT IS NOTED that publication of this judgment under the pseudonym Taft & Taft is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT NEWCASTLE |
NCC 2062 of 2008
| MR TAFT |
Applicant
And
| MS TAFT |
Respondent
REASONS FOR JUDGMENT
Introduction
Mr Taft and Ms Taft married in 2000, when they were 50 and 42 respectively. It was a second marriage for the husband and a third marriage for the wife.
They separated in either April 2007 (according to the husband) or August 2008 (according to the wife) and following the end of the marriage made competing applications for property orders.
At the final hearing the parties were agreed that the husband should have the opportunity to retain the former matrimonial home, which he brought into the marriage, and they were agreed that they should each keep their own superannuation. They were also largely agreed about the division between them of the motor vehicles, furniture and jewellery.
Their disagreement was over how much the husband should be required to pay the wife.
It was the husband’s case that the wife should receive no more than 10% of the net asset pool. He proposed that he pay the wife $20,000.00.
It was the wife’s case that she should receive 25% of the net asset pool. She proposed that the husband pay her $175,000.00.
The Evidence
The husband relied on his amended application filed on 11 August 2009 and his affidavit and financial statement filed on 13 August 2009.
The wife relied on her amended response filed on 25 February 2009, her affidavit and financial statement filed on 11 August 2009 and the affidavit of her daughter Ms J filed on 3 September 2009. The wife handed up a Short Minute of Orders Sought at the hearing.
The husband, wife and Ms J were cross-examined.
The husband was the more reliable witness about factual matters. His evidence was carefully and thoroughly presented and was corroborated by documents.
For reasons to be given later in the judgment, I do not accept that the husband failed to make full and frank disclosure.
The wife was not always a reliable witness about factual matters and her evidence was sometimes contradicted by documents. She gave evidence for example that she and not the husband paid the rent for the apartment in which her daughter lived between July 2007 and October 2007, but was obliged to concede that her bank statements did not support this evidence. Her evidence about the extent to which she paid the rates and other outgoings during the marriage was also not supported by the documents, documents which were available to her when she prepared her affidavit.
The wife had a tendency to exaggeration and overstatement and to the use of emotive evidence, reminding the court repeatedly for example that she had the care of a disabled dog.
Where I have made findings of fact in the judgment consistent with the husband’s evidence it is because I prefer his evidence on the relevant issue to that of the wife.
Background
The husband and wife met online in about September 1999. The husband’s first marriage had broken down some time previously, and he was living at Property T. The wife was separated from her second husband and was living in California.
In October 1999 the wife flew to Australia and the parties met face to face for the first time. By January 2000 they were married and living together in the [T] property.
At the time of the marriage the wife had two adult children, who remained living in the United States after the wife came to Australia. The husband also had adult children from his previous marriage.
The husband maintained that he had misgivings about the marriage almost from the start but his recollection of the past may well be coloured by the bitterness and anger he now feels toward the wife. The outward evidence suggests that the parties lived together uneventfully for the first four years, from January 2000 to December 2003.
It was a different story altogether between January 2004 and the final separation.
In January 2004 the wife’s daughter, Ms J and Ms J’s daughter, [X], came to Australia and they moved into the [T] property. This was the catalyst for a rapid deterioration in the relationship between the husband and the wife, culminating in a separation under one roof in January 2004.[1]
[1] I do not accept the wife’s evidence that separation occurred on 20 March 2004. The husband sought legal advice about property matters in January 2004. Further, in the wife’s AVO application filed on 10 March 2004 and signed by the wife on each page (annexure F to the husband’s affidavit) it is stated that “the parties marriage has been in difficulties for some time and they have now separated. The parties have continued to reside under the same roof since separation and this has been productive of a great amount of stress and anxiety for the [wife]”
On 10 March 2004 the wife applied for an apprehended violence order against the husband and on 20 March 2004 the husband moved out of the [T] property.
The wife registered a caveat over the title and in April 2004 filed an application in this court seeking orders for interim spousal maintenance, sole occupancy and property settlement.
Interim orders for spousal maintenance and sole occupancy were made and the property proceedings were listed for final hearing in October 2004. However as a result of overtures made by the wife the parties reconciled, and the husband returned to the [T] property in September 2004, and the court proceedings were discontinued and the caveat withdrawn.[2]
[2] I prefer the husband’s evidence that the separation ended in September 2004 when he moved back into the former matrimonial home, to the wife’s evidence that it ended on 10 August 2004, which was when the parties started to re-establish a friendly relationship.
Ms J agreed/decided to return to the United States, and she left Australia with [X] in January 2005.
In February 2005 the wife’s son Mr D died suddenly. The husband and wife travelled to the United States for his funeral.
In May 2005 the wife arranged for Ms J and [X] to return to Australia. It was her wish that they should return to live in the [T] property. The husband was vehemently opposed to this and it was subsequently agreed that Ms J would rent an apartment.
In September/October 2005 however the husband agreed to Ms J and [X] moving into the [T] property. They continued to live there for the remainder of 2005 and throughout 2006. Ms J’s second child [Z] was born during this period.
Ms J applied for permanent residency in Australia. Approval of her application was contingent on her finding a sponsor who would agree to be responsible for her financial support for two years. The wife was willing to act as sponsor but the Department of Immigration and Multi-Cultural Affairs would not accept her on her own because they considered her earnings history unsatisfactory. The husband initially refused to act as a co-sponsor but finally agreed to do so, and in April 2006 he and the wife signed a legally binding document accepting full responsibility for the financial support of Ms J and her children for two years.
By October 2006 however the relationship between the husband and wife had deteriorated to the point where the wife again registered a caveat over the title. In November 2006 the husband moved out of the [T] property and commenced living in a rented apartment in [E].
However the parties again reconciled. In January 2007 the husband returned to the [T] property and Ms J and her children moved into the apartment.
The marriage was still rocky and in February 2007 there was a brief separation of four days.
On 12 April 2007 a watershed event occurred. The wife informed the husband that [X], aged 4, had allegedly disclosed to her mother that the husband had sexually interfered with her. The husband denied the allegations. The following day the wife rang the police to inform them about the alleged disclosures. The husband was outraged. It was his case that he considered the marriage over as of that date. He voluntarily made a statement to the police, but Ms J, in whose hands the police decided the matter rested, declined to proceed with the complaint and the police closed the case.
The wife conceded that the parties separated under one roof in 2007, but she said that this occurred in June, not in April. She further alleged that they reconciled in October 2007.
On 12 August 2008 the husband filed an application for a property settlement and also for a divorce, claiming that the parties had been separated under one roof since 13 April 2007.[3]
[3] Cf the Information Sheet also filed by the husband on 12 August 2008 which gives the separation date as 12 March 2007.
The wife filed a response to the property proceedings and also to the divorce application. The wife opposed the granting of the divorce, on the basis that separation had not occurred until on or about 1 August 2008.
The parties continued to live under one roof after proceedings were commenced and they were still doing so during the hearing in 2009.
In June 2009 the wife brought her mother Ms F to Australia. The wife moved Ms F into the former matrimonial home without consultation with the husband, and Ms F was also living in the home at the time of the hearing.
The date of separation
The contested divorce was listed before me for hearing on 4 September 2009. By that time the parties had been separated for more than twelve months on any view of the facts. The husband as a matter of expediency elected to withdraw his original application and file a fresh application, alleging that separation had occurred no later than August 2008. I granted the divorce order on 27 November 2009.
It was not necessary to make a finding about the precise date of separation in order to finalise the divorce, but in the context of the property proceedings I do need to make a finding about whether or not the parties separated on 13 April 2007 as the husband claimed.
The wife agreed that the parties separated under one roof in 2007 but she said that it did not occur until June.
The parties had a heated and lengthy argument in June in which the allegations concerning [X] were raised once again, but the assertion by the wife that this marked the date of separation is not consistent with the contents of a letter she wrote to the husband dated 14 May 2007. In that letter she asked him to move out of the [T] property and “turn the house back over to [her] and the children” while the solicitors worked out a property settlement, as she doubted that she would be able to find an affordable rental property for “2 adults, 2 children and a disabled dog.”[4]
[4] Annexure M to the Husband’s Affidavit filed on 13 August 2009
I am satisfied that the parties separated on 13 April 2007 when the wife rang the police.
The next issue is whether the parties remained separated after that or whether they reconciled in October 2007 as the wife maintained and then did not finally separate until about 1 August 2008.
It was the wife’s case that a sexual relationship resumed in October 2007 and that thereafter she and the husband interacted as they had previously done. As corroboration she pointed to the fact that she and the husband exchanged presents at Christmas 2007, that the husband gave her a bunch of flowers on Valentine’s Day 2008 and that they exchanged anniversary cards.
The wife said that she and the husband had coffee with a member of the husband’s family during this period, and that this person was not told that the husband and wife were separated.
Ms J gave evidence that she had seen a Christmas card and was aware of Christmas gifts. However Ms J did not visit the [T] property at any time between Easter 2007 and December 2007. Her visits to the home after that time were rare and when she visited she had no interaction with the husband.[5] Ms J’s belief about the state of the relationship between the husband and wife from April 2007 onwards is based on information given to her by the wife.
[5] Ms J’s affidavit filed 3 September 2009 paragraph 23e
The husband denied vehemently that sexual relations had resumed or that the parties in any way resumed their marriage after 13 April 2007. He said that between December 2007 and February 2008 the relationship between he and the wife improved, and conceded that they exchanged Christmas presents and that he gave the wife flowers on Valentine’s Day 2008, although his evidence was that they went into the bin two days later after an argument. He did not see the improvement in their relationship between December 2007 and February 2008 as amounting to reconciliation.
I accept the husband’s evidence that he regarded the marriage as over after the wife rang the police on 13 April 2007. I am not satisfied on the balance of probabilities that the husband and the wife did reconcile again after this separation.
The accusations by the wife and Ms J about the husband’s conduct toward [X], and the wife ringing the police, were a watershed in the marriage. The husband was outraged about the allegations and he actively sought to have the police investigate them. In June 2007 after the matter had been closed by the police because Ms J declined to proceed, the wife threw the allegations up at the husband during an argument. Even at the hearing of the property matter in 2009 the wife said that she would never be sure whether the husband was guilty or innocent of the conduct complained off. It is impossible to accept that the parties reconciled when this issue remained unresolved.
I am satisfied that the marriage was of seven years and three months duration.
The husband’s counsel submitted that the two significant periods of separation should be deducted from the total span of the marriage and that the resulting figure (about six years and five months on my calculation) should be treated as the length of the marriage.
I am not convinced however that taking such a mathematical approach to the length of the marriage, perhaps with the purpose of dragging it back towards the “five year mark” which is sometimes used to define short marriages, will assist me to determine these proceedings.
The law applicable to the resolution of disputes about property settlement
Pursuant to s.79 of the Family Law Act, a court can make such orders as it considers appropriate altering the parties’ interests in property. Section 79 (2) provides that the court shall not make an order under this section unless it considers that it is just and equitable to do so.
The procedure usually adopted in determining applications for property settlement is:
i)to identify and value the assets and liabilities of the parties;
ii)to assess the contributions of the parties under ss.79(4)(a), (b) and (c) and to express those contributions as a percentage;
iii)to consider the matters set out in ss.79(4)(d),(e),(f) and (g), which include the matters in s.75(2), so far as they are relevant, and to determine whether any adjustment should be made as a result to the contribution based entitlements;
iv)to consider the effect of those findings and resolve what orders are just and equitable in all the circumstances of the case.
The assets and liabilities
I am satisfied that the non-superannuation asset pool consists of the following:
Description
Ownership
Value
Property T Husband 675,000.00 Triumph Motorcycle Husband 2,600.00 Hyundai motor vehicle Joint 4,000.00 Benelli motor scooter Wife 1,000.00 Jewellery Sought by wife 3,490.00 Jewellery Not sought by the wife 2,910.00 Husband’s watch Husband 1,200.00 Furniture and chattels Sought by the wife 16,322.00 Balance of furniture and chattels Not sought by the wife 21,198.00 Total 727,720.00
The following issues concerning the composition of the asset pool required determination:
i)whether the husband’s post-separation savings should be included in the pool;
ii)whether the husband’s paid legal fees of $24,041.58 should be included in the pool as a notional add-back;
iii)whether a diamond ring valued at about $6,000.00 (or alternatively the proceeds of an insurance claim in respect of that ring) should be included in the pool;
iv)whether a Toyota Corolla purchased post-separation by the wife should be included in the pool.
In his financial statement filed on 13 August 2009 the husband declared savings of $30,743.00. Prior to the commencement of the hearing on 4 September 2009 he paid about $10,000.00 to his lawyers. The wife submitted that the remainder of his savings should be included in the pool, although there was some confusion, evident during submissions and never cleared up, as to exactly how much the husband had left of his savings after payment of legal fees.
The husband had no significant savings in April 2007 or indeed in August 2008 when proceedings were commenced.[6]
[6] Wife’s affidavit filed 11 August 2009 paragraph 37
Prior to October 2008 the husband’s wages were paid into a Viridian line of credit account secured by mortgage over the [T] property. In October 2008 the bank froze the line of credit at the behest of the wife. The husband was unable to deposit his wages into the account and he began to accumulate savings in his personal account.
The wife’s counsel submitted that the savings should be included in the pool because the husband had been able to accumulate them at the expense of reducing the mortgage.
There was no clear evidence however that this was the case. There was no historical evidence that the balance of the Viridian account had been gradually reducing prior to October 2008, as opposed to the interest being kept under control.
It also seems that the interest must have been kept under control after October 2008, because the loan balance was $183,000.00 in June 2007 (I do not have a figure for April 2007) and $182,803.00 at the time of the hearing.
Between October 2008 and the date of the hearing the wife and the husband both lived in the [T] property and they both used their income at their own discretion. The husband saved some of his income. I do not intend to include the husband’s post-separation savings in the pool as an asset available for distribution, although I will take the fact that the husband has been able to accumulate savings into account when considering s.75(2) factors.
As at 26 November 2009 the husband had paid his legal fees in the amount of $24,041.58. The wife sought to have this amount added to the pool as a notional asset.
In NHC & RCH[7] the Full Court said as follows:
“If funds used to pay legal fees have been generated by a party post-separation from his or her own endeavours or received in his or her own right (for example, by way of gift or inheritance), they would generally not be added back as a notional asset…”
[7] NHC & RCH (2004 FLC93-204
The husband paid his legal fees from post separation income, and his post-separation income was from his employment as a [occupation omitted], the same employment he had at the commencement of the marriage.
If the husband had paid his legal fees at the expense of the mortgage this would be different, but there was no clear evidence that this was the case. I am not satisfied that the husband’s paid legal fees should be added to the pool as a notional asset.
The parties’ were in dispute about whether a diamond ring valued at about $6,000.00 still existed. I cannot be satisfied about the whereabouts of the ring and I do not propose to include it in the pool.
The wife sought an order that the parties jointly make an insurance claim in respect of the ring. It is impossible to know if such a claim would be successful and making such a claim would require the parties to co-operate to pursue the claim.
Given that the amount in question is only about $6,000.00, that a claim would require co-operation between two bitterly divided parties and that there is no guarantee that any claim would be successful, I do not intend to make this order.
There was also the issue of the wife’s Toyota Corolla. This was purchased post-separation by means of a loan. The vehicle is worth $17,000.00 and the balance owing on the loan is $18,000.00. The husband made no contribution to the purchase and there is no reason why he should be burdened with the liability. I consider it appropriate to leave this post-separation purchase and the loan attached to it out of pool.
A reading of the wife’s affidavit suggests that the Benelli motor cycle was also a post-separation purchase but both counsel included it in the list of assets and neither made any submissions about excluding it. Given the small amount involved I have therefore left it in the pool as a relevant asset.
I also mention here, because it was raised during the proceedings, that the husband has accrued long service leave with his employer [W]. However the husband’s employer has a policy of not approving payment in lieu of long service leave[8] and unless the husband retires with unused long service leave he can only take his long service leave as paid leave. In final submissions the wife did not press to have any value attributed to these entitlements included in the asset pool.
[8] Exhibit A
I am satisfied that the relevant liabilities are as follows:
Description
Ownership
Value
Commonwealth Bank Viridian line of credit secured by mortgage over the [T] property Husband 182,803.00 Credit card debts Wife 15,000.00 Personal Loan Wife 9,000.00 Total Liabilities 206,803.00
The amount owing on the [T] mortgage was agreed, but the following required consideration in respect of the liabilities:
i)whether the total amount of the wife’s current credit card debts (about $32,000.00) should be included as a relevant liability;
ii)whether the wife’s personal loan should be included as a relevant liability;
iii)whether the wife’s US student loan should be included as a relevant liability.
The wife’s credit card debts stood at $32,000.00 at the date of the hearing but at only $15,000.00 in June 2007. There was no evidence about the balance owing in April 2007.
The wife made no attempt to explain why her credit card debts had increased so significantly since separation. They may have increased because of her decision to bring her mother to Australia, or to provide financial support for her daughter after her legal obligation to do so expired in April 2008 or because of other spending choices the wife made independently of the husband. In my view there is no justification for the husband being forced to share these post separation debts by means the total amount of $32,000.00 being included as a relevant liability.
The wife did not provide any information about how the credit card debts were built up prior to separation, but she was not challenged by the husband’s counsel during cross-examination about this issue and I intend to include the wife’s credit card debts in the pool at the amount at which they stood in June 2007 namely $15,000.00.
This is somewhat arbitrary, as I do not have the figures for April 2007 and I have no information about whether the credit card debts decreased after separation and then increased again but it is the best that I can do on the available evidence.
The wife has a personal loan the balance of which stood at $18,000.00 in June 2007. $9,000.00 was still owing on about 11 August 2009.[9]
[9] Wife’s financial statement filed 11 August 2009
The wife described the loan as “wife’s debt incurred on behalf of her daughter.”
Regardless of the purpose for which the loan was taken out, the debt is the wife’s and not Ms J’s and it was incurred during the marriage. I intend to include it in the list of liabilities at $9,000.00, the current amount owing. I will revisit the issue of this debt however when considering contributions and s.75(2) factors.
The wife has a US student loan the balance of which is currently about $AU273,000.00. She proposed that this be included as a relevant liability.
The wife owes this money because of study she undertook between 1989 and 1993, long before she met the husband. There was no evidence that she had ever made any repayments in respect of this loan and when she met the husband the loan was “in deferment.”
The wife took the loan out of deferment after the marriage, perhaps to create a situation where she could ultimately declare bankruptcy in the United States and be absolved of the debt. She has made no repayments on the loan since the marriage.
The wife will only be pursued for this debt if she returns to live in the United States and she was very clear that she did not intend to do this. I do not consider that this debt should be included as a relevant liability.
The superannuation pool was agreed and is as follows:
Description
Ownership
Value
Account 1 [W] Superannuation Scheme Husband 107,644.00 Account 2 [W] Superannuation Scheme Husband 81,007.00 ING Master Fund Husband 6,817.00 First State Super Husband 6,142.00 [Ms Taft] Superannuation Fund Wife 38,000.00 Total $239,610.00
I have included the superannuation in a separate pool even though no splitting order is sought, a step recognised as legitimate by the majority in the Full Court decision of C & C.[10]
[10] C & C (2005)FLC93-220
The net non-superannuation assets of the parties are therefore $520,917.00 and the superannuation is worth $239,610.00. The total net pool is $760,527.00.
Contributions
When the parties married the husband was employed by [W] as a [omitted] and he continued in this employment throughout the marriage. In 2000 he was earning $51,000.00 per annum and by the 2008/9 financial year his base salary was $84,000.00 per annum, although his actual income that financial year with overtime was $127,000.00. A breakdown of the husband’s income on a yearly basis is contained in his affidavit.[11]
[11] Husband’s affidavit filed 11 August 2009 paragraph 72
In January 2000 the husband owned the following unencumbered assets jointly with his first wife:
i)Property T;
ii)Property Y;
iii)furniture at Property T.
At this time the husband also had:
i)$21,000.00 in the Commonwealth Bank;
ii)a 1996 Triumph Trident motor cycle;
iii)an interest in his deceased mother’s estate.
The husband’s interest in the estate crystallised in April 2000 in the form of $29,600.00 cash and shares valued at about $3,000.00, a total of $32,600.00.
In May 2000 the husband finalised a property settlement with his first wife and as a result he became the sole owner of Property T, then valued at $375,000.00.[12] He also received the furniture and personal items situated at [T] (then valued at $10,440.00) and a cash payment of $163,500.00 (after payment of legal fees).
[12] This was verified by the valuation carried out for the purposes of the husband’s property proceedings with his first wife. I reject the wife’s evidence that the [T] property was valued at $350,000.00 at this time.
I am therefore satisfied that at or about the time of the marriage the husband had non-superannuation assets to a value of about $602,540.00 and in addition he owned the Triumph motor cycle.
The husband also had superannuation which he had been accruing for twenty six years, as follows:
Description
Value
Account [1] [W] Superannuation Scheme as at 30 June 1999 70,947.85 Account [2] [W] Superannuation Scheme as at 30 June 1999 13,335.75 ING Master Fund as at 1 October 1999 5,321.87 First State Super as at 30 June 1999 3,726.26 Total 93,331.73
The husband’s total net assets at or about the time of the marriage were therefore about $695,871.73.
The husband used $20,000.00 from his inheritance to repay the personal loan he took out in December 1999 to fund a trip to the United States for himself and the wife so that the wife could wind up her affairs in the United States prior to the parties marriage. I am not certain what happened to the savings or the balance of the inheritance.
The husband used some of the $163,500.00 to buy furniture for the [T] property (in excess of $30,000.00) and buy a BMW motor vehicle ($40,000.00).
By December 2001 all but $20,000.00 of the $163,500.00 had been used up.
The wife’s counsel was critical of the husband for being unable to account for the disposal of about $73,500.00 of this money. In my view the husband was not hiding anything but was genuinely unable to now remember how all of the money, which went out of the account in bits and pieces, had been used up.
In March 2002 the husband obtained a Viridian loan from the Commonwealth Bank which was a line of credit secured over the [T] property giving him access to up to $150,000.00. The husband took out the loan with the intention of investing in managed funds and he used at least $45,000.00 for this purpose.
$8,000.00 was used to purchase a Hyundai motor vehicle for Ms J’s use in January 2004, and I accept the husband’s evidence that in January 2005 he used money from this source to fund Ms J’s return trip from Australia to the United States in January 2005 and to provide her with some money to re-establish herself.
The husband had other expenses during the 2004 - 2005 period including payment of the legal costs of both himself and the wife for the property proceedings which were commenced in April 2004 and subsequently discontinued, and expenses of about $16,000.00 incurred in the parties travelling to the United States in February 2005 when the wife’s son Mr D died.
By April 2005 the line of credit had been used to its maximum, and the BMW motor vehicle and the managed funds had been sold to pay down debt.
In October 2006 just prior to the parties’ second significant separation the husband extended the line of credit by $40,000.00. He used some of this money to buy furniture for the apartment into which he subsequently moved and used some for living costs.
When the parties finally separated in April 2007 the husband still owned the [T] property, which had risen in value by $300,000.00 but was encumbered by a mortgage of about $183,000.00. The parties did not make any improvements to the property during the marriage and the increase in value was due to a windfall increase in property prices. The husband still owned the Triumph motorcycle and he also had his superannuation, which had increased greatly as a result of consistent contributions during the marriage.
The wife immediately prior to the marriage was operating a business, “[G]” which generated revenue from approximately a dozen US immigration attorneys. It was her evidence that its income was about $USD1000.00 per month during 1999. This was not sufficient for the wife to live on (even if it was clear profit and there was no evidence of that it was). The wife’s evidence was that she had been reliant on her brother-in-law for many years, even during her second marriage, to supplement her income.[13]
[13] Cf Ms J’s evidence that the benefactor was the wife’s mother-in-law, not her brother-in-law
It was the wife’s evidence that at the time of the marriage she owned:
Asset USD AUD Cash 200.00 307.00 Savings 2,213.00 3,403.00 Hyundai Elantra 14,000.00 21,500.00 Furniture and effects 35,000.00 53,846.00 Corporate Investment Certificate for Business [G] 10,261.00 15,786.00 Total 94,842.00
The values above were estimated.
The wife’s evidence was that she also had the following liabilities:
Liability USD AUD Car Loan 7,654.00 13,846.00 AMEX Card 7,500.00 11,538.00 US Student Loan
(in deferment)
85,000.00 131,384.00 Total debts 156,768.00
Absent the student loan the list of assets and liabilities above shows an excess of assets over liabilities.
I do not however accept the wife’s case that she was in a reasonable financial position at the time of the marriage.
In my view it is highly likely that the wife has overstated the value of her furniture and I do not accept that the amount on the investment certificate for the business in any real sense reflects the value of the business assets.
The husband’s evidence was that when he visited the United States shortly prior to the marriage he observed that the wife was living in a rented apartment with only a modest amount of furniture. Soon after the marriage he saw correspondence addressed to the wife pursuing her for small debts to telephone companies, IT companies and medical practitioners among others and also saw several promissory notes valued at several thousand dollars undertaking to repay loans made to her by family members. This evidence suggests that the wife’s level of debt at that time was higher than she now admits.
I accept the husband’s evidence concerning his observations of the wife’s assets and concerning statements the wife made to him at the time about her financial position.
The flavour of the evidence is that while living in the United States immediately prior to the marriage the wife was earning minimal income, had limited assets and was in considerable debt.
Save for a few specific personal possessions such as some Japanese woodcuts, the wife’s assets did not flow through into the marriage. She left her furniture in storage in the United States and later gave it to her mother, and she gave the Hyundai to her mother subject to the debt. The wife was sued in the United States for the unpaid AMEX debt.
After she came to Australia the wife continued to operate her consultancy business but did not make any net income. In August 2000 she obtained employment in [H] with [M], which gave her some income, but her employment became part time shortly thereafter and eventually ceased in April 2001.
In May 2001 the wife commenced operating her own business based in Australia and she continued to do this until March 2003. The business failed to generate an operating profit, indeed it was the husband’s evidence, which I accept, that the business generated losses of $38,200.00 and that the husband met the losses. While the husband may have gained a reduction in his tax as a result, I am satisfied that any tax refund he may have received was used for family purposes.
The net effect was that during the first three years and three months of the marriage the wife received income for a period of eight months only, while employed at [M].
In April 2003 the wife obtained casual employment at [omitted] and this continued until September 2003. In December 2003 she accepted a full time position as [omitted] in Sydney on a commencing salary of $63,000.00 per annum. This employment ceased however in February 2004.
In April 2004 while the parties were separated the wife applied for and obtained an order for spousal maintenance and the husband paid her spousal maintenance in accordance with the order.
In early 2005 the wife commenced employment with [N]. In 2006 she cut her work back to four days a week and on 18 July 2008 she resigned from this position.
In her affidavit the wife provided details of her income on a yearly basis.[14] I am not convinced that the details for the early years are accurate. For example the wife claimed that she received wages of $19,164.00 in 2000-2001 but she did not disclose any employment in that financial year save for her business and it was her case that between 2000 and 2003 she did not draw a salary from her business.[15]
[14] Wife’s affidavit filed 11 August 2009 paragraph 40
[15] Wife’s affidavit filed 11 August 2009 paragraph 50
When the parties separated in April 2007 the wife had little in her sole name. She had superannuation (total amount at around that time $21,000.00). She also had personal debts of about $33,000.00.
During the marriage the parties jointly acquired the Hyundai ($4,000.00 at the date of the hearing) furniture and effects ($37,520.00) and jewellery ($7,600.00).
The husband’s financial contribution was thus overwhelming. He brought in the [T] property and superannuation. These assets both increased in value during the relationship and standing alone exceed the total net value of the asset pool which now exists. The husband paid the vast majority of the rates and outgoings for the home and I am satisfied that he paid the majority of the parties living costs. After the line of credit was obtained in 2002, his wages which were paid into the Viridian account and at the very least kept it under control by covering the interest due.
It is important not to lose sight of the fact however that the wife did work during the marriage and she did make financial contributions to day to day living costs during part of the marriage.
The business ventures the wife operated during the first three years were unsuccessful and did not generate any income, but their operation was part and parcel of the person the husband married and there was no evidence that he objected to the wife’s activities at the time. For a period in 2000-2001 and for much of the period from 2003 onwards the wife worked in paid employment.
As to non-financial contributions, it was the husband’s case that he made a substantial contribution to the homemaking chores during the relationship, doing cleaning, ironing, cooking and gardening. It was his case that he did most of the cooking and gardening, and as much cleaning and ironing as the wife.
The wife described herself as the primary homemaker.
I consider it likely that the wife was the primary homemaker. I accept that husband did his share, but he was employed full time outside the home throughout the marriage. In contrast there were lengthy periods when the wife was not employed outside the home or was employed part time and there were also periods when she was operating her business from home.
It was the wife’s case that she made a significant contribution to the welfare of the family by being pro-active in identifying the correct treatment for the husband’s high blood pressure and cholesterol and in caring for him in late 2006 when he was ill.
I accept that the wife did make those contributions, but the husband also contributed to the welfare of the family by supporting the wife on a number of occasions when she faced family problems or tragedies. He travelled to the United States to support her when her daughter faced criminal charges in 2002 and he travelled again to the United States and supported her following the tragic death of her son in 2005.
The husband’s counsel submitted that the husband should in particular receive credit for the support he provided to the wife’s adult daughter, Ms J, during the marriage.
There is no doubt that Ms J received extensive financial and non-financial support from both the husband and the wife during the marriage. The details are as follows:
·The husband gave Ms J $2000.00 to enable her to travel to Australia to visit the husband and wife early in the marriage;
·The husband and wife travelled to the United States in 2002 to support Ms J when she was facing a criminal charge;
·Ms J was permitted to live rent free at the [T] property between January 2004 and September/October 2005;
·In January 2004 Ms J was provided with a motor vehicle for her use, initial cost $8,000.00, and the source of the funds was the line of credit secured over the [T] property;
·In January 2005 the husband paid for Ms J’s return travel to the United States and provided her with $5,000.00 cash, a total of over $11,000.00;
·Ms J was permitted to live rent free at the [T] property from September/October 2005 until January 2007;
·The husband and wife sponsored Ms J’s application for permanent residency in Australia;
·The husband paid rent for the apartment occupied by Ms J between January 2007 and October 2007 and paid some other expenses for Ms J into early 2008;
·Between January 2007 and August 2008 Ms J had the use of the furniture purchased by the husband for the apartment;
·Between January 2004 and January 2007 the wife provided financial support for Ms J to the tune of $20,000.00 and she provided further financial support to the tune of $22,688.00 between February 2007 and May 2008;[16]
·The wife took out a personal loan of $18,000.00 for her daughter’s benefit, although it is unclear to me whether this amount was included by the wife when she calculated her contributions to her daughter at the point immediately above.
[16] Wife’s affidavit paragraph 45
The husband voluntarily (although perhaps at times grudgingly and unhappily) provided extensive financial and non financial support for Ms J during the marriage. It was of particular importance to the wife that Ms J be taken care of, and by providing that support the husband made an important contribution to the welfare of the family unit constituted by himself and the wife, a contribution which deserves to be recognised pursuant to s.79(4)(c).[17]
[17] Mehmet & Mehmet (1986)FLC 91-730
Although the wife also provided support for Ms J, I do not accept that she made a corresponding contribution to the welfare of the family as a result, because the husband, unlike the wife, had no vested interest in Ms J being supported.
After the end of the marriage the husband continued to make a contribution to the welfare of the family through his contributions to the support of Ms J, and her children, and from June 2009 the wife’s mother and he continued to contribute to superannuation. The wife also made contributions to her superannuation post separation.
Conclusion concerning contributions
The husband’s contributions clearly exceeded those of the wife. He was the primary and consistent income earner during the marriage. He brought substantial assets into the marriage, assets which stand in a proportion of 90:10 to the current net asset pool. The nature of his initial contributions were important, as they included the home in which the parties lived throughout the marriage and a large superannuation entitlement which was built on during the marriage. The parties accumulated little during the marriage and the fact that they have anything to divide at all is because of the husband bringing in the home and superannuation. The husband also made a very strong contribution to the welfare of the family.
The wife did not bring any net assets into the marriage, but she did make a financial contribution during the marriage. She was in paid employment for part of the marriage, and the failure of her businesses does not mean that her efforts in attempting to generate an income can be ignored. I am also satisfied that the wife made the primary contribution as homemaker.
Although the husband now has a totally bleak view of the marriage, the evidence suggests that it was uneventful during the first four years. During that period, and during periods of calm and reconciliation in the remaining three and a half years, the husband enjoyed the benefits of having the wife as a helpmeet and companion, the benefits he no doubt expected to receive when he married. She performed her expected role as “wife and homemaker.”
Similarly to the situation on which the majority of the Full Court commented in Kennon:
“The wife did not bring into the marriage property or significant income. She brought into the marriage qualities which appealed to the husband and which both understood were to be her contributions to their married life together”. [18]
[18] Kennon & Kennon (1997)FLC92-757
The parties have net assets of $760,000.00. The husband’s contributions both financially and non-financially were particularly strong, but the wife’s financial and non financial contributions must be given adequate recognition at the end of the seven year marriage, regardless of the failure of the marriage to thrive financially. In my view contributions should be assessed as being 12.5% by the wife and 87.5% by the husband. The wife would thus be entitled to $95,065.88 and the husband to $665,461.12.
Section 75(2) Factors
As required by s.79(4)(e) I now turn to consider the matters in
s.75(2) of the Family Law Act. Sub-sections 79(4)(d) and (f) have no relevance to these proceedings and there any no children nor any child support issues.
The husband is 59. He intends to continue working until he is at least 65, if his health allows.
The wife accepted that the husband suffered from the health conditions he described in his affidavit, but there was no medical evidence to indicate one way or the other whether the husband’s health problems were more or less likely to affect his ability to work during the next few years.
The husband income in 2008/2009 was $127,296.00. I accept his evidence that his base salary was $84,123.00 and that he earned more during the 2008/9 financial year because he had the opportunity to do substantial overtime on a particular project. I accept that he believes that he will not have the opportunity to earn such an income in the future. Regardless, the husband has the capacity to earn an income sufficient to support himself in reasonable comfort until he retires and there was no compelling evidence that he might be forced into early retirement.
The husband will have the opportunity at the end of these proceedings to retain the former matrimonial home, although he will have to increase his mortgage to pay the wife the amount to which she is entitled. It may well be that he takes a mortgage into retirement.
The husband has been able to accumulate savings since separation. Prior to paying some of his legal fees in August 2009 he had savings of over $30,000.00. He has paid $24,000.00 of his legal fees. I accept that his final bill in total may be similar to the wife’s i.e. about $51,000.00.
The husband has not re-partnered and is not responsible for the support of any other person.
The wife is 52. She is in good health.
The wife established a business, “[Ms Taft] and Associates” in July 2008. Her income at the time of the hearing was estimated by her to be equivalent to $75,000.00 per annum. Prior to commencing her own business the wife was in paid employment and her income was $58,427.00 in the 2008 financial year and $75,450.00 in the 2007 financial year.
I am satisfied that the wife has the capacity to earn an income sufficient to meet her reasonable needs in the future.
The wife has contracted to pay her legal fees at the conclusion of the proceedings. Her costs to the conclusion of the second day of the hearing were estimated to be $51,581.76.[19]
[19] Exhibit L
It is necessary to consider the impact on the wife of these unpaid costs. In Hurst & Weber[20] one of the facts of the case was that the wife owed $50,000.00 to a litigation lender arising out of the property settlement proceedings. At first instance the decision of the Federal Magistrate hearing the case was that the wife should receive no payment from the husband, effectively leaving her nothing with no means of paying this debt.
[20] Hurst & Weber (2009)FamCAFC137
The husband’s counsel in Hurst and Weber argued that this debt should not be taken into account when considering s.75(2) factors because to take it into account was effectively to require the husband to pay the wife’s legal costs. The Full Court disagreed and said as follows:
“…the common treatment of legal fees in respect of an asset pool for division, is designed to avoid one party effectively bearing a proportion of the other party’s legal costs, as a matter of mathematics. In contrast, the recognition of a debt for legal fees, when the court is considering s 75(2) factors and the justice and equity of orders, is consistent with the terms of s 75(2)(b) and is part of the discretionary (as distinct from mathematical) exercise.
The costs of disentangling the financial affairs of formerly married persons are a common consequence of marital breakdown, even if the parties behave reasonably. Though the wife’s application, after she succeeded in having the financial agreement set aside, was dismissed by Baumann FM, we see nothing frivolous or ill-considered about it. It was not suggested at trial, or before us, that costs were in any way inappropriately incurred by the wife (save that her application failed).”
In the case before me the wife is entitled on the basis of contributions to $95,065.88. She will retain her superannuation, the Hyundai, motor scooter, jewellery and furniture and will retain debts of $24,000.00 therefore the cash payment she can expect from the husband is $57,065.88.
The wife’s lawyers will take $51,581.76 of this amount and the wife will walk away with very little cash with which to re-establish herself once she leaves the former matrimonial home. Only the Hyundai, a second motor vehicle for the wife, could realistically be sold to provide the wife with some extra cash.
The wife has considerable debt in addition to her unpaid legal fees. She owes $32,000.00 on her credit cards and I have only taken $15,000.00 of this into account in the asset pool as a relevant liability. She also owes $9,000.00 on a personal loan, and she has her car loan. With careful management the wife may be able to reduce these debts by regular repayments but they will be a considerable burden for her into the future.
Since separation the wife has continued to provide support for her daughter and grandchildren. Between May 2008 and October 2008 she outlaid $15,000.00 for clothing and ancillaries and home furnishings for them. However this was a choice of the wife’s. Her legal obligations to support her daughter expired in April 2008.
Apart from saying that her daughter was studying, the wife provided no information about other sources of income available to her daughter, or about her daughter’s reasonable needs, or about why she needed to continue supporting her daughter.
The wife mother Ms F who is 75, has been living with the wife since June 2009. The wife incurred costs of $10,000.00 bringing her mother to Australia and buying bedroom furnishings for her.
The wife’s evidence was that her mother had advanced dementia and breast cancer. She said that her mother had an income of about $US1500.00 per calendar month. The wife said that she was provided care for her mother and was paying some expenses for her but she described these in her affidavit as “not much.”
The wife may need to factor in the provision of accommodation for her mother when she leaves the former matrimonial home and finds alternative accommodation, but she did not provide sufficient evidence for me to make findings about the extent if any to which the care of her mother might be a burden on her in the future, either financially or non-financially. There was also no convincing evidence that other members of the wife’s family (such as her sister) were not in a position to help with care of Ms F.
Section 75(2)(k) requires me to take into account the duration of the marriage and the extent to which it has affected a party’s income earning capacity. It was the wife’s submission (presented as evidence in her affidavit) that:
“while [the husband’s] assets have grown in value since our marriage, my assets and earning potential have decreased over nine years….and [I] am worse off financially at 51 than when I married Mr Taft at age 42.”
In my view the evidence does not support this submission.
First of all, the submission that the husband’s assets have grown in value is only partially accurate. The husband’s assets have grown in value by $405,000.00 if the increase in the value of the matrimonial home and the increase in his superannuation are considered in isolation. However the husband had $216,000.00 in cash at or about the time of the marriage and there is now only furniture and some jewellery to show for it (which he will have to share with the wife). The formerly unencumbered home is now encumbered with a debt of $182,300.00. A division on the basis of contributions will see the husband leaving the marriage with less than he had at the start.
Secondly, I do not accept that the wife’s earning potential has decreased as a result of the marriage, or that she is worse off financially as a result of the marriage, rather it is the reverse.
The wife’s own evidence about her circumstances prior to the marriage was as follows:
“my cash receipts during the first nine months of 1999 averaged approximately US$1,000.00 (AU$1,500.00). Between March and July 1999, my family also contributed about US $12,000.00 toward my business to help sustain ongoing marketing and set up costs and in addition was providing ongoing financial support with my living expenses. (Note: my sister and her in-laws, a wealthy banking family had been supporting and supplementing our family income for over 20 years)”
…..
My family had continued to supplement my income even while married to Dr L [the wife’s second husband]….”[21]
[21] Wife’s affidavit filed 11 August 2009 paragraphs 71a, 71d
Immediately prior to the marriage the wife was operating a business which was not profitable and she was dependent on her family for support. In contrast the wife’s income for the last three financial years in Australia was $75,450.00 in 2006/7, $58,427.00 in 2007/8 and an estimated $75,000.00 in 2008/9. The relocation to Australia has had a very positive effect on the wife’s capacity to earn an income.
I am not satisfied that the wife did have substantial assets prior to coming to Australia in 2000, and she was burdened by the student loan. The wife has acquired some assets in Australia, including jewellery, a share in the furniture at [T], the Hyundai motor vehicle and superannuation and while she has incurred substantial debts she has as a result of her residence in Australia, effectively been relieved of the need to repay the debt to the US Government of over $AU230,000.00.
Pursuant to s.75(2)(o) of the Family Law Act I am required to take into account any other fact or circumstance which the justice of the case requires to be taken into account. Both parties raised issues which they said the justice and equity of the case required me to take into account.
First of all the wife submitted that the husband had failed to make full and frank disclosure. This submission was based on the fact that the husband did not explain where an amount of about $73,000.00 which existed at the beginning of the relationship had gone.
Being unable to account for where money went and failing to make full and frank disclosure are not the same thing. I am satisfied that the husband was genuinely unable to reconstruct what happened to money which went out a bit at a time over a period of time. There was no evidence to suggest that the husband had hidden assets, or that he had used money for some purposes of his own such as gambling.
Secondly, both parties were aggrieved about the failure of the marriage to thrive financially, and sought to have the other party brought to account for allegedly wasting money.
The wife claimed that the husband consumed excessive alcohol and that this had its effect on the finances. However there was no evidence about the economic effect of the husband’s alcohol consumption or evidence that it regularly went beyond acceptable recreational consumption.
The wife complained that the husband spent excessive amounts on furniture, trying to replicate what had existed during his first marriage. She also criticised him for making poor investment choices.
The husband did spend a lot of money on furniture and did make expensive choices but he did not buy the furniture secretively or over the wife’s protests. The wife was also aware of his intention to invest in managed funds at the time he made the investment.
The husband and wife certainly went backwards financially during the marriage. The cash the husband brought in disappeared and the unencumbered former matrimonial home became the subject of a mortgage, but in my view both parties contributed to this situation. The wife’s businesses failed to make a profit and incurred losses. The husband was the sole income earner for half the marriage. The wife’s family commitments soaked up a considerable amount of money.
The husband complained bitterly about the particular drain on the parties’ finances represented by the support of Ms J. Not only did the husband contribute financially to the support of Ms J, but part of the wife’s income was diverted for this purpose and the $9,000.00 personal loan taken into account in the asset pool is the balance of a loan taken out for Ms J.
However, the marriage was a second or subsequent marriage for both parties. The husband was aware that the wife had adult children when he married her, and it must have been reasonably foreseeable that the wife might provide some support or even generous gifts to her adult children in the future, human nature being what it is. The husband had some inkling that the wife was not in a strong financial position, and he went ahead with the marriage anyway.
In D & D,[22] the Full Court said as follows:
“By and large, marriage is a joint venture where parties can expect to buffer each other from the winds of misfortune that blow during the course of their relationship. The degree of the buffer may depend on how much individual sailing they do without consultation or indeed contrary to the wishes of the other. But there can be no certain answer to how much that should be when applying s. 79 principles.”
[22] D & D (2003) FamCA 477
There was no secretive diversion of funds by the wife toward the support of Ms J. While the burden of Ms J and her children and indeed the money which had to be spent as a result of the wife’s family obligations in the United States ultimately turned out to far greater than anything the husband or perhaps even the wife could have anticipated and while it undoubtedly did have an effect on the parties ability to accumulate assets, I am not persuaded that it should lead to an adjustment in the husband’s favour.
I am also not persuaded that the husband acted “recklessly, negligently or wantonly with the matrimonial assets”[23] during the marriage with the result that an adjustment should be made in the wife’s favour.
[23] Kowaliw & Kowaliw (1981)FLC91-092
The husband’s counsel argued that there should be no adjustment in the wife’s favour for s.75(2) factors. On the basis of contributions she would be entitled to a small capital sum in addition to receiving some assets in kind. She would leave the marriage with more assets than she had at the start and her income earning capacity was much better now than it had been ten years ago.
Neither Ms J nor the wife’s mother had any legal claim on the wife for support, and the wife would simply have to adjust her expenditure on her daughter and mother to suit her income, or in the case of her mother call on other family members who also had a moral obligation in that regard to help out.
It was not the husband’s problem, his counsel effectively argued, that the wife had contrived to spend so much money post separation and as a result had such large credit card debts, and she would just have to repay those debts from her income.
The husband would come out of the marriage in a much stronger financial position than the wife but there was nothing inherently wrong with that. He went into the marriage with a good income earning capacity and with assets developed and built up over a twenty six year working life. As Wilson J said in Mallet v Mallet:[24]
“The objective of the section (s 79) is not to equalise the financial strengths of the parties. It is to empower the Court ... to effect a re-distribution of the property of the parties if it be just and equitable to do so ...”
[24] Mallet & Mallet (1984) FLC91-507
Finally, although the husband would emerge in a stronger financial position than the wife, he was eight years older than her and thus the wife had eight years more than the husband to acquire assets to aid her in retirement.
If the wife were indeed to come out of the marriage with $57,000.00 in cash and some assets in kind there might be some strength in the husband’s argument that there should be no adjustment in the wife’s favour for s.75(2) factors. But most of the $57,000.00 will go straight to the wife’s lawyers, an impact on the wife which I cannot ignore, particularly in circumstances where she will also be left with other large debts.
An adjustment of 5% in the wife’s favour for s.75(2) factors will give the wife an additional $38,000.00. It will enable the wife to pay her legal fees and still leave her with some cash to re-establish herself when she vacates the former matrimonial home.
In my view there should be an adjustment of 5% in the wife’s favour for s.75(2) factors. This would entitle the wife to 17.5% of the pool or $133,092.23 and the husband to $627,434.77.
Just and Equitable
The wife will receive the Hyundai ($4,000.00) motor scooter ($1,000.00) jewellery ($3,490.00) and furniture and effects ($16,322.00) and her superannuation ($38,000.00). She will be left with the debts of $24,000.00 used to calculate the asset pool and the husband will be required to make a payment to her of $94,280.23.
The husband will need to borrow additional money on top of the existing mortgage to make this payment. This may result in him going into retirement with a mortgage, which is regrettable, but there was no evidence that it was beyond his capacity to borrow this amount or that this outcome might cause him to lose the home.
The husband may well perceive this outcome as unfair. He will emerge from the marriage with fewer net assets than he had ten years ago, despite a $300,000.00 rise in the equity in the former matrimonial home and contributions of $108,000.00 to his superannuation. The wife in contrast will emerge in a better financial position than she was in at the time of the marriage.
However the husband married the wife with his eyes open and for better or for worse. The wife made contributions during the marriage which must be properly recognised.
The orders of the court will therefore be as set out at the beginning of this judgment, and I am satisfied that the orders and the outcome are just and equitable
I certify that the preceding one hundred and ninety-nine (199) paragraphs are a true copy of the reasons for judgment of Terry FM
Associate: Barbara Cameron
Date: 19 April 2010
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