Taunton and Fiore
[2013] FamCA 909
•22 November 2013
FAMILY COURT OF AUSTRALIA
| TAUNTON & FIORE | [2013] FamCA 909 |
| FAMILY LAW – PROPERTY – Contributions and adjustments – relationship of 16 years – husband had higher initial contribution - contributions during marriage equal – adjustment made in favour of the husband for injuries sustained in a car accident – balance of compensation payout included in asset pool – husband injured in car accident four months after separation - husband’s ability to work diminished – husband received compensation payment that is included in the matrimonial pool - 7.5 per cent adjustment made in favour of the wife – husband’s child support contributions substandard – wife has the majority of the care for the parties two children – wife in poor health - husband had exclusive use of the matrimonial home post-separation – wife’s standard of living dropped after separation – overall distribution of property interests 67.5 to the husband and 32.5 to the wife |
Family Law Act (1975) (Cth) ss 74, 79, 90MT, 106A, 117
Motor Accidents Compensation Act 1999
| Marriage of Biltoft (1995) 19 Fam LR 82 Marriage of Lee Steere (1985) 10 Fam LR 431 Omacini v Omacini (2005) 33 Fam LR 134 Stanford & Stanford (2012) 247 CLR 108 Williams v Williams (1985) FLC 91-628 |
| APPLICANT: | Mr Taunton |
| RESPONDENT: | Ms Fiore |
| FILE NUMBER: | (P)NCC | 2185 | of | 2009 |
| DATE DELIVERED: | 22 November 2013 |
| PLACE DELIVERED: | Newcastle |
| PLACE HEARD: | Newcastle |
| JUDGMENT OF: | Cleary J |
| HEARING DATES: | 22, 23, 24 & 26 April 2013 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Not applicable |
| SOLICITOR FOR THE APPLICANT: | Mr C Adamson |
| COUNSEL FOR THE RESPONDENT: | Mr Bates |
| SOLICITOR FOR THE RESPONDENT: | Stacks Lawyers |
Orders
That the husband pay to the solicitor for the wife on her behalf the sum of $365,827 (the “principal sum”) on or before 42 days from the date of these Orders.
That contemporaneously with the husband’s compliance with Order 1 hereof:
(a)the wife shall do all such acts and things and sign all such documents as may be required to transfer to the husband at the expense of the husband all of his right title and interest in the property situate at and known as B Street, C Town in the State of New South Wales, being the whole of the land more particularly described in Certificate of Title Folio Identifier … (“the real property”) subject to the encumbrance thereof.
That simultaneously with the wife’s compliance with Order 2 hereof the husband shall do all such acts and things and refinance the mortgage secured over the real property (if any) and release and indemnify the wife from the said mortgage.
That in the event that the husband fails, omits or neglects to comply with Order 1 hereof, then the parties do all acts and things and sign all documents necessary so as to effect a sale of the real property for the best price reasonable obtainable in the following manner:
(a)list the real property for sale by private treaty with such agent as the parties may agree to appoint and in default of agreement as to agent within 14 days with such agent as the President of the Real Estate Institute of New South Wales shall appoint (“the agent”) the costs of and incidental to such appointment to be borne by the husband as and when same fall due;
(b)the sale price at which the real property shall be listed shall be mutually agreed upon by the parties or, in the absence of agreement reached within 14 days of the date of these Orders shall be the price nominated as the fair market value thereof by a valuer appointed by the President for the time being of the New South Wales Division of Australian Institute of Valuers and Land Administrators (Incorporated) (“the valuer”), the costs of and incidental to such appointment and valuation to be borne by the husband as and when same fall due;
(c)the valuer shall, if required by either the husband or the wife at a date three calendar months after the date upon which the real property is first listed pursuant to pa (a) hereof and thereafter at three calendar monthly intervals until the real property is sold, nominate a sale price other than the originally nominated sale price;
(d)the parties shall each co-operate in every way with the agent including (without limiting the generality of the foregoing):
(i)making the key available to the agent;
(ii)allowing inspection of the real property at all reasonable times requested by the agent;
(iii)ensuring the real property including the grounds are in a neat and clean condition at the time of inspection by the agent and prospective purchasers; and
(iv)signing all documents requested by the agents in relating to the listing for sale of the real property except a contract or agreement for sale which has not been authorised by the parties’ solicitors;
(e)the parties shall each execute a contract for sale in the form prepared by the solicitors having the conduct of the sale at a price agreed upon by the parties or, in the absence of any agreement, at or above the price nominated by the valuer pursuant to pars (b) and (c) hereof;
(f)the parties shall instruct such solicitor as they agree upon to have the conduct of the sale on behalf of both parties or, in the absence of agreement reached within 14 days shall instruct such solicitor as may be appointed by the President for the time being of the Law Society of New South Wales (“the solicitor”) the costs of and incidental to such appointment to be borne by the husband as and when same fall due;
(g)neither party may confer on any agent without the consent of the other party any right to any sole or exclusive agency in respect of the real property or to any commission;
(h)the party not in possession shall be entitled upon reasonable notice once per fortnight to enter and view the state of repair of the real property;
(i)if the agent shall certify in writing to the parties’ solicitors it is reasonable necessary for the work specified in such notice to be carried out to the real property so as to assist in effecting a sale and provided the cost of any such work is less than $500 either party may cause such work to be carried out and the costs thereof shall be recoverable by that party from the proceeds of sale.
In the event the real property is not sold by private treaty within six calendar months after this Order comes into effect:
(a)the parties shall list the real property for sale by public auction with the agent appointed pursuant to order 4(a) hereof;
(b)the reserve price for the purpose of such auction shall be such as the parties agree upon within 14 days after the date upon which the real property is first listed for sale in accordance with Order 5(a) hereof or in the absence of agreement a price determined by the valuer appointed pursuant to Order 4(b) and (c) hereof;
(c)in the event the bidding at the auction does not reach the reserve price the parties may negotiate with the highest bidders or any other interested person and effect a sale of the real property at a price which is not more than 5 per cent below the reserve price;
(d)if the real property remains unsold, the parties shall do all acts and things and sign all documents necessary to immediately relist the real property for sale by public auction again, on a date nominated by the said agent.
On settlement of the sale of the real property to proceeds of sale be paid in the following manner and priority:
(a)all costs and expenses of sale including legal costs and disbursements, agents commission, valuers fees, and auction expenses (including payment of any such expenses as have been paid by either or both of the parties);
(b)the amounts required to discharge the mortgage(s) (if any);
(c)the amounts required to pay all municipal and water rates outstanding with respect to the real property;
(d)the amount required to repay to the party carrying out work for the real property for the cost of such work carried out in accordance with order 4(i) hereof;
(e)the balance then remaining shall be divided as follows:
(i)the principal sum to the Solicitor for the wife on her behalf together with interest thereon under the Family Law Rules from the date of default until date of payment;
(ii)the balance to the husband.
That pending the payment or completion of the sale:
(a)the husband have the sole right to occupy the real property;
(b)the husband pay all instalments pursuant to the mortgage and all rates, taxes and outgoings of the real property as they fall due;
(c)neither party encumber or further encumber the real property without the consent of the other party or prior order of the Court.
That liberty be granted to the parties on three days notice for implementation of these Orders.
In the event that the net proceeds of the sale of the real property do not satisfy the principal sum and interest the husband shall simultaneously with the completion of the sale pay the difference between such net sale proceeds and the principal sum with interest to the solicitor for the wife on her behalf.
The husband’s failure to comply with Order 9 shall constitute a default entitling the wife at her election to enforce the payment referred to therein or to serve a sealed copy of these orders upon D Pty Ltd being the trustee of the E Superannuation Plan and seek the splitting orders as provided for in Orders 10(a) and 10(b) herein.
(a)In accordance with section 90MT(1)(a) of the Family Law Act, 1975 (the Act) becomes payable to or on behalf of the husband from his interest in the E Superannuation Plan (the Fund) the wife is entitled to be paid by the Trustee of the Fund the amount calculated in accordance with Pt 6 of the Family Law (Superannuation) Regulations 2001 using a base amount of $100,000 and there is a corresponding reduction in the entitlement the husband would have received but for these Orders.
(b)The operative time for Order 10(a) above is four business days after service of the sealed orders on the Trustee of the Fund.
That within seven days of the date of these Orders, the wife do all acts and things and sign all necessary documents prepared by the husband at his expense to:
(a)transfer to the husband her shareholding in Taunton Pty Ltd Pty Ltd ACN … trading as Taunton Pty Ltd (formerly known as F Pty Ltd trading as G Pty Ltd) (“the company”);
(b)to resign as a director and/or secretary of the said company.
The husband do all acts and things necessary to indemnify and keep indemnified the wife against any proceedings or suits or claims of whatsoever nature brought against the wife:
(a)in respect of any liability of the wife under any debt due to the company, husband or his father Mr Taunton Snr (the “husband’s father”);
(b)in relation to or arising out of the wife’s shareholding in the company;
(c)in relation or arising out of the wife’s directorship or being an officer of the company;
(d)in relation to any liability of the wife to pay income tax to the Australian Taxation Office in respect of income derived by her from the company as a director, officer, employee or shareholder of the company;
(e)in relation to any personal guarantees including any personal guarantees to the Commonwealth Bank of Australia given by the wife in respect of any borrowings of money by her, the company, the husband or the husband’s father;
(f)in respect of any liability of the wife in relation to the construction and/or renovation and furnishing of the real property;
(g)in respect of any monies borrowed by the wife on the security of the real property.
Other than is specifically provided for in these Orders the husband indemnify the wife in respect of all liability to pay tax including income tax, goods and services tax, capital gains, penalty tax and interest which may arise in the future in respect of any tax returns lodged on behalf of the husband or any entity in which he has an interest to the date of these Orders or in respect of any transactions pursuant to these Orders.
Other than is specifically provided for in these Orders the parties are solely entitled to the exclusion of the other to all other property including superannuation and chattels of whatsoever nature and kind in the possession of each of the parties as at the date of the making of these orders.
In default of the parties or either of them doing all acts and things and executing all such documents as are necessary to give effect to these Orders, a Registrar of this Court be appointed pursuant to s 106A of the Act to execute all such documents in the name of the party in default and to do all such acts and things necessary to give validity and operation to the said orders.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Taunton & Fiore has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| FAMILY COURT OF AUSTRALIA AT NEWCASTLE |
FILE NUMBER: (P)NCC2185 of 2009
| Mr Taunton |
Applicant
And
| Ms Fiore |
Respondent
REASONS FOR JUDGMENT
Introduction
This is a dispute about the alteration of interests in property. The applicant is the husband Mr Taunton, aged 44 years. The respondent is the wife Ms Fiore, aged 39 years.
The parties began a relationship in 1992 and married in 1995. They separated on a final basis in January 2008. Accordingly there was a relevant relationship for between 13 to 16 years and more than five years of separation.
There are two children of their marriage, H (13) and J (11), who live with their mother. There are parenting orders in place by consent. The children live with their mother and spend time with their father for alternate weekends during term time and for half school holidays.
The parties were divorced in March 2011.
In April 2008, three months after separation, the husband was seriously injured in a head on collision motor vehicle accident. The main injuries were to his right leg and spine. He was hospitalised and subsequently in rehabilitation.
The husband made a successful claim for compensation pursuant to the Motor Accidents Compensation Act 1999.
The issue which divided the parties was the treatment of the balance of net proceeds of that award.
The husband strongly maintained the position that the compensation monies should be “quarantined” from the asset pool.
Short history of events
The husband was a public servant for two to three years after leaving school. In 1990 he began working in his parents’ family building business, apprenticed to his father.
In 1992, during his apprenticeship, the parties began their relationship. The wife was 17, the husband 22. It seems likely that they were a committed couple but did not formally set up house together until their marriage. They both saved to marry. The husband had his tools of trade, a motor vehicle and modest superannuation, perhaps from his time in the public service.
In 1994 the husband bought a block of vacant land at K Town for about $52,000 to $56,000. The purchase was financed by a $10,000 gift from the husband’s parents, and a bank loan for the balance of purchase price and for home building funds. The loan, secured by mortgage was probably about $120,000.
In May 1994 the parties became engaged and the husband transferred a half interest in the land to the wife. The husband and his father built a house on the land, the wife also contributing some manual labour.[1] The wife’s parents lent the parties $5,000 to buy furniture. That loan was jointly repaid.
[1]Affidavit of Wife filed 28/03/2013, par 17
In April 1995 the parties were married and moved into the house and lived there for about six years.
In 1996 the husband became a licensed builder and joined the Taunton Family Partnership. He continued in that work until his accident in 2008.
Also in 1996 the husband’s mother died. She had done most of the bookwork for the family business. Thereafter the husband took over that work and the wife asserts that she assisted him by paying accounts and collecting and sorting the mail.
In 2000 the parties’ first child H was born.
In 2001 the parties sold the K Town property. They bought land in C Town and rented locally while the husband and his father built a house on the land. Further funds were borrowed for that purpose. The wife was engaged in the process and selected items for inclusion; however she was mostly taken up with the care of H.
In early 2002 the parties moved into the C Town property. Their second child J was born towards the end of that year.
The parties and their children lived together in the C Town property for almost six years.
In April 2004 the husband and his father, trading as Taunton Pty Ltd, set up an account in the name of their partnership.[2] The parties’ home loan was paid out and funds were borrowed, secured on the home, for the running of the partnership business and later a separate venture.
[2]Exhibit 7
For two years (2007-2008) the husband was involved in a family owned business which proved to be unsuccessful and made significant losses. That was F Pty Ltd trading as G Pty Ltd.
For about nine months in 2007 the wife worked in the new venture as an unpaid sales assistant and also ordered stock. Unhappily the business failed at least in part because the husband’s brother took cash and goods from the business without authority. The business was sold, with the husband’s father bearing the losses.
On 9 January 2008 the marriage ended. The husband remained living in the home. The wife and children moved out to rented accommodation locally.
In April 2008 the husband suffered his car accident. The wife took the children to see their father in hospital.
He was soon transferred to a Sydney hospital then released into the care of his sister in C Town for several months.
On 4 September 2008 the wife moved to live with her partner Mr L. They have lived together with the children in rented accommodation in C Town since that time.
In 2009 and 2010 the husband tried unsuccessfully to return to work as a builder. He is not presently in employment. He suffers ongoing pain and restricted movement which affects his daily life.
On 8 August 2011 an assessment was made leading to a gross award of compensation to the husband of $1,193,633.
A payment of $143,000 was made to the wife from these funds.
The Evidence
The husband relied on the following documents:
a)Initiating Application of husband filed 28 August 2009;
b)Affidavit of husband filed 25 March 2013;
c)Financial Statement of husband e-filed 2 April 2013;
d)Affidavit of husband e-filed 15 April 2013;
The wife relied on the following documents:
a)Affidavit of wife filed 28 March 2013;
b)Financial Statement of wife filed 28 March 2013;
c)Affidavit of Dr M filed 28 March 2013,
d)Minute of Order contained in Case Outline Document of the wife;
The applicant, Mr Taunton
The husband was a reluctant witness in his own case.
The husband did not take the appropriate steps to fully disclose his financial position in his Financial Statement. The document relied on was e-filed to the Court signed by the husband but not witnessed.[3] There was no jurat on the document. It was neither sworn nor affirmed. He was unable to recall the circumstances of its signing.
[3]Financial Statement of husband filed 02/04/2013, Exhibit 21
Likewise the affidavit of the husband was signed but not sworn or affirmed. The husband was unable to recall where the documents were signed.
What is more significant than whether or not his solicitor was present when Court documents were signed is that there had not apparently been a meeting of minds between the husband and his solicitor over the material included in his documents.
The income of the husband was estimated at $850 and tax was left at TBA (to be advised). Average weekly income was stated to be E$835. Of that amount, only $83 in expenditure was itemised. Total of all other expenditure was stated to be E$766.88 without reference to any particulars at all of related expenditure. Liabilities were said to be nil. It was not a credible statement by the husband.
Without proper evidence a position was put forward through this document that the income of the husband was taken entirely by expenditure. I reject that proposition.
Further the husband referred to debts to third parties, especially said to be owed jointly to his father but also to two others who assisted him after his accident. The wife disputed those debts and further to the extent they were found to be repayable denied responsibility. There were no affidavits put forward. No witness was called by the husband on any of these disputed matters.
In his oral evidence, the husband was focused on his own financial contributions during the marriage and made slight and grudging concessions about the contributions of the mother through income and as a homemaker and parent.
My impression was that the husband was resentful about the Court proceedings, despite being the applicant, and failed to engage with his obligations to make full financial disclosure and to do his own case justice.
The respondent, Ms Fiore
The wife was a straightforward witness who had fully disclosed her financial circumstances through her documents. She made appropriate concessions about the contributions of the husband as a parent and the extent of her own financial contributions.
The wife suffers depression and severe anxiety for which she currently receives treatment both medication and through therapeutic intervention. She has been diagnosed with joint arthritis in her feet and knees. Possibly the condition is also present in her jaw neck and right hand. She experienced early onset menopause in her late twenties. She struggles with her health
The wife was extensively cross-examined about child maintenance. The wife had given receipts[4] for all payments received. She was not chRged on the accuracy of her record keeping.
[4]Exhibit 18
She was unnecessarily chRged with what was described as her failure to seek and take up fulltime work. There is no dispute that the wife has had most of the care of the children since the parties separated and has worked part time to accommodate that obligation.
Application of the law
In considering applications for alteration of property interests and transfer of property the Court must:
(i)identify the existing legal and equitable interests of the parties in property;[5]
(ii)consider whether it would be just and equitable in the particular circumstances to make an alteration; and
(iii)if an alteration should be made, to consider the matters contained in s 79(4) and s 75(2) of the Act in coming to an adjustment; and
(iv)analyse and consider whether the adjustment under consideration would be just and equitable.
[5] Stanford & Stanford (2012) 247 CLR 108
Identify the existing legal and equitable interests of the parties in property
The interests of the parties were identified in a joint Balance Sheet tendered into evidence:[6]
[6]Exhibit 3
Ownership Description Applicant’s value Respondent’s value Assets 1 J Matrimonial home B Street, C Town 2428 $427,500.00 $427,500.00 2 A 4WD Motor vehicle $0 $ 52,490.00 3 A Campervan $0 $ 20,000.00 4 R Hatch back motor vehicle $0 $ 36,100.00 5 R Home furniture and contents $ 5,400.00 $ 5,400.00 6 A Home furniture and contents $ 5,000.00 $ 5,000.00 7 A Value of tools and equipment $ 3,000.00 $ 3,000.00 8 R Jewellery (including jewellery given to R by her parents) $ 5,000.00 $ 5,000.00 9 A Funds in CBA … $ 15.00 $ 15.00 10 A Funds in CBA … $ 442.00 $ 442.00 11 R Funds in CBA Savings … $ 1,200.00 $ 1,200.00 12 R Funds in CBA Savings … $0 $ 23,560.00 Total $447,557.00 $579,707.00 Financial Resources 13 14 Liabilities Ownership Description Husband’s value Wife’s
value
15 A Amount owed to Ms N for care services given to husband after accident in 2008 $ 6,500.00 NK 16 A Amount owed Ms O for care services given to husband after accident in 2008 $ 500.00 NK 17 A Liability to Mr Taunton Snr $ 94,840.00 NK 18 R Liability to Mr Taunton Snr $ 94,840.00 Nil 19 R Wife’s liability to husband re CBA Home Loan Account payments post separation $ 26,891.47 Nil 20A R Liability to Applicant for share of Taunton Pty Ltd debts $ 19,163.63 Nil 21 R Liability to Applicant for Respondent’s share of rates paid for B Street C Town from 2008 to 2013 $6,589.40 NK 21 R Liability to Applicant for Respondent’s share of sewage connection $ 4,894.00 NK 22 A Equity Loan A/C CBA for legal fees $ 29,429.00 Nil 23 A Mr P accountancy fees $ 132.00 $ 132.00 24 A ATO Tax liability for E Super Fund $ 13,538.70 NK 25 A ATO $ 157.00 $ 157.00 Total $297,475.20 $ 289.00 Superannuation Member Fund and Interest Husband’s value Wife’s value 26 A Value of Applicant’s accumulated interest in E Superannuation Fund (excluding funds from personal injuries damages) E$ 80,000 $762,658.00 27 R Value of Respondent’s accumulated interest in Superannuation Fund $ 18,682.80 $ 18,682.00 Total $ 98,682.80 $781,340.00 Add backs Ownership Description Husband’s value Wife’s value 28 R Legal Costs $0 $ 77,709.00 29 A Legal costs CMA … $0 $ 85,000.00 29A A Legal costs Patton … $ 21,931.25 NK 29B R Trade in value Motor vehicle 1 $ 9,500.00 $ 9,500.00 A Trade in value of Motor vehicle 2 $ 4,000.00 $ 5,000.00 Total $ 35,431.25 $177,209.00 Summary of matrimonial financial position 30 J Total matrimonial assets including super and add backs $581,671.05 $1,538,256.00 J Less matrimonial liabilities $297,475.20 $ 289.00 Net matrimonial assets $284,195.85 $1,537,967.00
Notes to Balance Sheet
Item 1 Husband and wife have agreed to this sum being the midpoint between two expert valuations.
Items 2 The husband does not include the value of the 4WD motor vehicle because all monies used to purchase the vehicle came from the applicant’s personal injuries damages monies. Because the respondent has taken the view that the damages monies are included in the matrimonial assets, a Red Book valuation has been delivered to respondent and the husband advises that the condition is no longer excellent as the vehicle has been taken over rough terrain several times. All purchase documents have been requested and have been produced.
Item 3The husband does not include the value of the campervan in the joint balance sheet because all monies used to purchase the vehicle came from the husband’s personal injuries damages monies. Because the wife has taken the view that the damages monies are included in the matrimonial assets the applicant has given an estimated value. No Red Book valuation is available. The husband has used the campervan on several occasions in rough terrain. All purchase documents have been requested and have been produced. Value not conceded by the wife, purchase documents have been requested and any concession subject to the same. Value not conceded by the wife purchase documents have been requested and any concession subject to the same.
Item 4The husband says that the value of the wife’s hatchback motor vehicle should not be included in the matrimonial assets as the moneys used to purchase the vehicle appears to have come from the interim payment of $143,500.00 made to the wife in these proceedings. Instead the trade in value of the wife’s motor vehicle 1 in the sum of $9,500.00 (see par 31 of the wife’s affidavit sworn 26 March 2013 should be added back).
Items 2,3, & 4 Wife argues that such items should not be excluded from the balance sheet on the basis they may have been purchased from monies received by the husband pursuant to his damages award
Items 5, 6The parties have previously agreed upon an equal division of the contents of the former matrimonial home and personal effects.
Item 7This is the husband’s estimated second hand value of the tools and equipment. Many of the husband’s tools and equipment -valued at about $2000.00- were destroyed in the motor vehicle accident on 28 April 2008.
Item 8This is what the husband paid for the wife’s jewellery.
Items 9, 10, 11 & 12 CBA statements will be produced
Item 12Monies received from interim payment by husband should be deducted.
Item 15This is the amount to which the husband has agreed to pay his sister Ms N for care services in 2008. Wife says should be excluded from the balance sheet as such were claimed as gratuitous services to the husband.
Item 16This is the amount to which the husband has agreed to pay his sister Ms O for care services in 2008. Wife says should be excluded from the balance sheet as such were claimed as gratuitous services to the husband.
Item 17This is the value of the husband’s share of the liability to Mr Taunton Snr arising out of his payment to CBA of all of the debts of the husband and wife secured by mortgage over B Street C Town and because of their personal guarantees and indemnities given to the CBA pursuant to the principals of subrogation and/or equitable indemnity as between the sureties. Wife argues such should be excluded from the Balance Sheet.
Item 18This is the value of the wife’s share of the liability to Mr Taunton Snr arising out of his payment to CBA of all of the debts of the husband and wife secured by mortgage over B Street, C Town and their personal guarantees and indemnities given to the CBA pursuant to the principals of subrogation and/or equitable indemnity as between the sureties. Wife argues same should be excluded from the Balance Sheet.
Item 19This is the amount that the husband paid post separation in respect of the joint account with the wife t and in respect of which she was co surety. Wife argues not a balance sheet item as it is at best a contribution by the husband notwithstanding husband’s occupancy of the home
Item 20This is the sum for which the wife is liable to the husband and his father as co surety with them in respect of payments made by them in respect of loans obtained by them all from the CBA by Taunton Pty Ltd, which were secured over the former matrimonial home. Wife argues same should be excluded from the balance sheet. If it is relevant it is contribution issue.
Item 21Rates notices will be produced. Wife argues such is a contribution issue notwithstanding husband’s occupancy.
Item 22This is an amount, which the husband borrowed by way of overdraft form the CBA to pay part of his legal fees in these proceedings. Wife argues such should be excluded from the balance sheet otherwise the wife is making a contribution to the husband’s legal expenses.
Item 23This is an amount outstanding to the husband’s accountant.
Item 24This is the estimated tax liability of 15 per cent over the taxable part of the husband’s E Super Fund balance as per the Form 6 filed herein. Wife argues should be excluded subject to appropriate proof being provided by the husband
Item 25ATO assessment will be produced.
Item 26See Form 6 from E field and served herein. Wife argues that the whole of the husband’s interest in the E Super Scheme be included notwithstanding the bulk of the same has come from the husband’s damages award post separation.
Item 27Agreed amount based upon a letter from Rest Superannuation faxed from Stacks today and is the agreed balance but is subject to a Form 6 Superannuation Information Kit duly executed by REST being delivered to the wife. Wife says same has now been provided.
Item 29No add back because the husband paid his legal costs out of monies received from his damages claim a non-matrimonial asset. Wife argues same should be included notwithstanding source of monies being husband’s damages claim as such should not be quarantined in the circumstances of this case.
Item 29AThis is the amount of legal costs paid to James Patton lawyer predominately on respect of the husband for custody and who was the husband’s former solicitor. The wife asserts legal costs paid to James Paton to be $30,000 on the basis of that having been deposed to by the husband in his affidavit filed 25.3.2013 such being included item 29.
Item 29BThis motor vehicle was agreed to be part of the matrimonial property and has been traded in on the wife’s hatchback motor vehicle.
Analysis of Balance Sheet
Items 2, 3I include the value of the motor vehicles at the Redbook valuation obtained by the wife. There was no other comparable evidence of valuation. These vehicles were purchased from compensation funds.
Item 4I include the value of the motor vehicle purchased by the wife from the husband’s compensation funds.
Items 5, 6I exclude these items, the parties having previously divided the contents of their home.
Item 12I exclude this item by consent, as agreed between the parties during the hearing.
Item 26I include the husband’s E superannuation derived from his compensation payout.
Items 15, 16 I exclude the amounts said to be owed to Ms N and Ms O. No supporting evidence. Matters clearly in dispute. The husband has had capacity to pay for two years and has not done so.[7]
[7]Marriage of Biltoft (1995) 19 Fam LR 82
Items 17, 18,
20 & 20AI exclude these items from the balance sheet. No supporting evidence. The husband’s father could have been called. The husband’s own evidence does not support the proposition that such a debt is due and owing jointly or by the husband alone.
Items 19, 20 I exclude these items from the balance sheet. They are properly taken into account as a contribution to the husband in the assessment of contributions post separation.[8]
[8]Omacini v Omacini (2005) 33 Fam LR 134
Item 22I exclude this item which relates to borrowings for the husband’s legal costs. Whether there should be a departure from the general principal in s 117 of the Act is a separate issue.
Items 23, 24,
& 25I include these liabilities which relate to the taxable part of the husband’s E Superannuation Fund.
Items 28, 29I exclude these amounts which were paid by each party from compensation funds of the husband (the wife from her interim payment).
Item 29AI exclude this amount owed by the husband to his former solicitor relating to parenting proceedings.
Item 29BI exclude these amounts which relate to trade-in figures for vehicles included in the asset pool.
Liabilities
Item 23Mr P accountancy fees $ 132
Item 24Tax liability for E Super $13,538
Item 25Australian Taxation Office $ 157
Adjusted Schedule of Assets and Liabilities
1.
Matrimonial home
427,500
2.
4WD motor vehicle
52,490
3.
Campervan
20,000
4.
Hatchback motor vehicle
36,100
7.
Tools and equipment
3,000
8.
Jewellery
5,000
9 & 10
Funds in CBA (A)
457
11
Funds in CBA
1,200
26
Superannuation E
762,658
27
Superannuation
18,683
$1,327,088
Less liabilities
23
24
25
132
13,538
157
$ 13,827
Net assets
$1,313,61
Would it be just and equitable to make any alteration to interests or transfer property?
The parties have a jointly owned property, formerly the matrimonial home. The husband has lived in the home since separation.
The wife rents a property with her partner.
The children live with their mother.
The husband has invested funds remaining from the compensation for personal injury he received in 2011.
The way assets are held no longer represents a consensual agreement between the parties. They are divorced.
It is appropriate to alter interests in property and finalise the financial relationship.
That requires consideration of contributions by each party financial and to the welfare of the family.
Consideration of contributions pursuant to s 79 (4) and s 75(2)
Initial contributions
When they began their relationship the husband had a near new Commodore. Both parties had some savings and personal effects. The husband was his father’s apprentice and going to TAFE. The wife was a sales assistant. She had completed TAFE courses. They worked and saved.
By the time they married the parties had the property at K Town subject to a mortgage, motor vehicles, tools and household furniture.
The parties had worked together to build and furnish the home and repay the mortgage debt.
Nevertheless the initial contribution favours the husband. He bought the land the home was built on. He had financial help from his parents to buy the land and to build the house. The family business undertook the construction of the home which reduced the cost.
That property was the platform for further upgrading of home accommodation.
Contributions –financial and to the welfare of the family during the relationship
During the course of the relationship the parties worked in external paid employment and self-employment in the family business.
The wife stopped work for the birth of their first child and other than a three month period of work was caring for the children fulltime until 2007, when she assisted in the new Taunton business venture as well for about nine months. Sometimes the children attended paid child care.
The husband did not dispute that the wife was primarily responsible for the care and supervision of the children and for the domestic work of the household including shopping, cooking, washing, ironing, payment of accounts, arranging for family holidays and caring for the pets.
The husband was self-employed in his partnership with his parents. He was an engaged and interested father to his children regularly spending time with them at weekends and participating in family holidays. In the last 12 months of the marriage the husband looked after the children alone overnight on a few occasions when the mother went out with friends.
I consider that both parties contributed to the acquisition of assets and to the welfare of the family equally.
Accordingly after 16 years of relationship and taking into account the stronger initial contribution of the husband, I consider that the parties’ assets require an adjustment to reflect an overall contribution of 55/45 favouring the husband.
Contributions post separation
Within four months of separation the husband was badly injured in the car accident. He has been unable to work in his previous occupation as a builder since.
He has received compensation for past and future economic loss. I was referred to case law on the approach to the monies received by the husband.[9]
[9]Marriage of Jacobson (1988) 12 Fam LR 828; Williams v Williams (1985) FLC 91-628; Marriage of Lee Steere (1985) 10 Fam LR 431
The monies received are property in that broad sense, which property is defined in proceedings in this Court.
I accept that the lump sum compensation payment is an asset to which the wife made no contribution.
I also accept that the husband made minimal contribution to child support despite the component of future economic loss in his payout.
The husband has had exclusive use of the matrimonial home. Initially he paid $90 per week as mortgage repayments.
In November 2011 he repaid the outstanding home loan of $35,615. Since then he has had the rates outgoings and home maintenance, including connection to sewer to pay, but no other accommodation costs.
The wife has paid rent for herself and the children for the past almost six years.
For five years she has shared those costs equally with her partner, at an average of $150 per week for her half share of the rent.
The wife received $143,500 from the husband’s compensation payment which she used for legal costs, living expenses and a motor vehicle.
Child Support
The husband placed considerable emphasis, throughout cross-examination of the wife, and submissions, on his contribution to financial support of the parties’ two daughters in excess of child support assessments. Accordingly, I have carefully considered this aspect.
The husband has included the children in his health fund. The husband conceded that that was no significant additional cost to him in doing so.
He also paid child support to the wife as follows:[10]:
[10] Exhibit 18
$ per annum
Av weekly amount
09/01/2008 – 30/06/2008
820.00
34
01/07/2008 – 30/06/2009
*2,958.00
57
01/07/2009 - 30/06/2010
1,779.20.00
34
01/07/2010 – 30/06/2011
1,200.00
23
01/07/2011 – 30/06/2012
1,200.00
23
30/06/2012 – 22/04/2013
1,000.00
23
$9,057.20
*$289 of this amount was for particular items of equipment or extra curricular activities.
This is an overall average of $16.00 per week per child over the past five years four months. In fact, the husband paid more in the early years of separation.
The current rate of $12.50 per child per week for these two girls leaves the mother carrying the full financial burden of their care.
The Child Support Agency has assessed and re-assessed child support over the period.[11] The current assessment is at the rate of $48 per month. The upcoming assessment commencing 1 May 2013 for the nine months following is $53 per month. The husband therefore correctly asserts that he pays above what is assessed. However, the husband was entirely unwilling to acknowledge that the child support of $100 per month is manifestly inadequate as a contribution to their needs.
[11] Exhibit 20
Nor did he acknowledge that spending money on his daughters during weekends and holidays was not an additional contribution to their maintenance in the majority care of their mother.
During the course of re-examination and for the first time, the husband said he typically spent $100 to $200 per weekend when the girls were with him. Overall he guessed about $8,000 per annum that spending was on:
·birthday and Christmas presents - $200 each on birthdays (most recently an IPOD each to use);
·a trampoline ($2,000);
·going to the movies;
·hiring DVD’s;
·items of clothing;
·games;
·food and entertainment;
·pocket money (for jobs done around the father’s home);
·a trip to the Zoo (several hundred dollars spent for that day); and
·birthday parties.
If I accept this evidence, it is compelling about the ability of the husband to contribute far more than he does to the day to day necessities, accommodation, food, clothes, shoes, books, uniforms, school excursions, medical, dental and chemist expenses.
I conclude that the husband probably does spend money on gifts, outings and entertainment for the children because he chooses to do so when they are with him and chooses not to contribute to their basic needs in the care of their mother.
I do not consider that there has been a contribution by the husband to the welfare of the family, which should be taken into account. Conversely, the wife has borne the majority financial commitment to the children providing for their needs, with the limited contribution of the husband as set out above.
Accordingly, I consider that the contribution to welfare of the wife far outweighs that of the husband post separation. She has provided accommodation for the children and met the whole of their other financial needs for more than five years.
The husband has paid off the home but has had the exclusive benefit of living in it.
I consider that at date of hearing there should be an adjustment to the assessed contributions. I take into account the very significant compensation payment to the husband, his use of that money and his exclusive use of the family home. I also take into account the overwhelming contribution of the wife to the welfare of the family.
The ratio of contributions rebalanced should favour in the ratio of 75 to the husband and 25 to the wife. This is a global assessment of the parties’ property.
Relevant factors pursuant to s 75(2) for consideration
The matters to be taken into account are:
(a) The age and state of health of the parties
The husband is aged 44. He was a fit and healthy man prior to his accident. There is expert evidence from Dr Q, a Consultant Physician in rehabilitation medicine. In his report dated 19 October 2012 the doctor gives his opinion that:[12]
The husband continues to demonstrate significant disability and impairment arising from the heel fractures of his right ankle and foot. He continues to demonstrate impairment in the range of movement in the ankle and subtalar joints, the mid foot and toes. He continues to complain of significant low back pain, consistent with the multiple crush fractures of the lumbar spine. He continues to suffer significant disability in relation to prolonged standing and walking and his sleep remains seriously disturbed.
[12]Report of Dr Q, a Consultant Physician dated 19/10/2012
The doctor also repeated his assessment from an earlier report in 2010 that the husband is “unemployable on the open employment market”.
The doctor’s best estimate is that the husband will need to continue to see his general practitioner six times annually, be referred to a pain management disciplinary team, undergo physiotherapy, use a gym to maintain cardio-vascular fitness. He was assessed as unfit to carry out ordinary housekeeping duties and incapable of using public transport.
The doctor has twice recommended that the husband engage with a Pain Management Team and undertake a pain management course in order to facilitate a return to work. The husband has chosen not to do so.
It was submitted on behalf of the husband in the claims assessment process that “At most the husband may be able to work two to three hours per day with restrictions.”[13] In fact he has not engaged with paid work or self-employment to any extent.
[13]Affidavit of husband sworn 25/03/2013, par 40 of Annexure ‘GT5’
I accept the assessment that the husband is unemployable on the open market, I also accept that the husband is unwilling to take the recommended steps which would move him in that direction at least at this stage.
The wife is aged 39. There was expert medical evidence from her general practitioner, Dr R. The doctor has been consulting with the wife since July 2008 in relation to two illnesses. The doctor’s diagnoses are major depression, for which he has been treating the wife since July 2008, and generalised osteoarthritis.
The wife has been referred both to a psychologist and more recently a psychiatrist, Dr S. She has taken medication for depression and also engaged in cognitive therapy. Her arthritis has been treated mainly with pain killers.
In March 2013 Dr R expressed the view that further treatment and ongoing treatment will be necessary to allow Ms Fiore to function normally.
(b) Income property and financial resources of each of the parties
The husband received about $500 per week from his disability income insurance with Comminsure from the date of accident until September 2011. Thereafter he has drawn on his compensation money presently in an investment account. The current rate of drawing is said to be $850 per week.[14] (Item 26 in Balance Sheet).
[14]Financial Statement of Husband, Part D, Item 10
The wife has earnings of $330 and family assistance of $235 per week. Her partner is in paid employment.
The parties own the former family home unencumbered.
The husband has a lump sum which includes provision for his future economic loss.
(c) Care and control of the child under 18 years
The mother has the primary care of the parties’ two daughters aged 13 and 11.
(d) Commitments of each of the parties necessary to enable them to support themselves and any other person
The husband is supporting himself and no other person. The wife is in a relationship of mutual support with her partner, Mr L and she has taken on the obligation to provide for the needs of the children with nominal child support, as assessed, paid by the husband.
(f) Eligibility for a pension allowance or benefit
The wife receives the Family Tax Benefit of $235 per week.
(g) Standard of living
The husband in terms of accommodation has maintained his former standard of living. He has also used his lump sum compensation to purchase vehicles, which make it easier for him to travel without resort to public transport and also to travel to rural and bush areas for recreation and recuperation.
The wife has been living in suitable rental accommodation, but not at the standard that she and the children enjoyed during the marriage.
The husband asserts an obligation to repay his father for debts which arose out of a short lived business operated by the Taunton family. These orders will not have any particular effect on the ability of the husband’s father to recover that debt, being that it is not secured and a matter of an understanding between father and son.
(i) The duration of the marriage and the extent to which it has affected earning capacity
The parties enjoyed a relationship from 1992 until 2008. They were married between 1995 and 2011 when they were divorced. The relevant relationship endured between 1992 and January 2008.
The wife left the paid workforce in 1999 shortly before the birth of the parties’ first child. She stayed out of the paid workforce in order to care for the parties’ two children between that time and separation. To that extent she has been unable to maintain her skills in office administration or her place in the workforce.
The marriage of the parties has not had any impact on the earning capacity of the husband, other than the fact that he was free to work fulltime in employment and self-employment with the assistance of the wife, caring for the children and attending to all the domestic work of the household.
(j) The need to protect a party who wishes to continue their role as a parent
The parties have agreed that the children should spend the majority of their time in the wife’s care and that has been the arrangement all of their lives. The mother is dividing her time between work and care and supervision of the children and wishes to continue in that role.
The wife is cohabitating with Mr L and has been for about five years. Mr L earns an average weekly amount of $370.
(k) Child support under the Child Support Assessment Act
Due to the financial arrangements of the husband in relation to his invested compensation funds, he is assessed to pay an extremely modest amount of child support for his children. I have no doubt he will continue to meet payments in accordance with that assessment. He is also likely to continue to spend in a generous way on clothes, toys, trips and holidays for the children when they are in his care. This will not assist the wife in providing for the basic needs of the children such as food clothes and education.
(l) Any other fact or circumstances
The husband has been badly affected by the accident in which he suffered injuries with long term effects. Financially he has been provided for, first by his own insurance and then by a compensation payout, although not at a level that satisfies him. Nevertheless that is the award that he accepted.
In particular I take into account the wife’s health problems, financial circumstances, her reduced capacity to work due to her obligations to the children and the financial support, although modest, provided by her partner Mr L. She will continue to be responsible for the care, supervision and financial support of the children for at least another seven years until the younger child turns 18, but perhaps longer in the event they become students.
I also take into account the fact that the husband’s income is limited to his drawings from the fund and he has no capacity to improve his position in the way he may have done as a self-employed partner in a building firm. I also take into account his decision not to take up the recommendation of his specialist to engage with a pain management team which would be the step most likely to enable him to re-engage with paid work.
Accordingly although there should be an adjustment in favour of the wife on the basis of her future needs
Accordingly the overall ratio should be adjusted in favour of the wife to an overall division of 67.5 per cent to the husband 32.5 per cent to the wife.
(iv) Is the adjusted outcome just and equitable?
The husband will retain the following assets equal to 67.5 per cent of the net asset pool of $886,451.
1.
Matrimonial home
427,500
2.
4WD motor vehicle
52,490
3.
Campervan
20,000
7.
Tools and equipment
3,000
9, 10
CBA accounts
457
26
Superannuation balance of funds
762,658
$1,266,105
Less liabilities
23, 25
Tax debts
$ 13,827
Cash payment to the wife
$ 365,827
Total to husband
$ 886,451
The wife will retain the following assets equal to 32.5 per cent of the net asset pool ($426,810).
4
Hatchback vehicle
36,100
8
Jewellery
5,000
11
Funds in CBA
1,200
27
Superannuation
18,683
$ 60,983
Plus cash payment from husband
$365,827
$426,810
The husband will either have a debt secured on the former family home or a reduced sum in his E Superannuation.
There is no evidence before me that he would be unable to meet mortgage repayments if he chooses to retain the home property.
Conclusion
I am satisfied that the outcome is just and equitable for the reasons set out above and Orders are made accordingly.
I certify that the preceding one hundred and twenty-five dollars (125) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cleary delivered on 22 November 2013.
Associate:
Date: 22 November 2013
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