Theodorou and Theodorou
[2020] FamCA 251
•17 April 2020
FAMILY COURT OF AUSTRALIA
| THEODOROU & THEODOROU | [2020] FamCA 251 |
| FAMILY LAW – PROPERTY – Property Adjustment – Where both parties seek adjustive orders – Where appropriate to make adjustive orders – Where discussion of applicable principles – Where consideration of relevant contributions and s 75(2) factors – Where orders made for property adjustment. |
| Family Law Act 1975 (Cth) ss 75, 79 |
| Bevan & Bevan [2014] FamCAFC 19 Chapman & Chapman [2014] FamCAFC 91 Horrigan & Horrigan [2020] FamCAFC 25 Russell & Russell (1999) FLC 92-877 Scott & Danton [2014] FamCAFC 203 Stanford & Stanford [2012] HCA 52 Teal & Teal [2010] FamCAFC 120 |
| APPLICANT: | Ms Theodorou |
| RESPONDENT: | Mr Theodorou |
| FILE NUMBER: | PAC | 5644 | of | 2018 |
| DATE DELIVERED: | 17 April 2020 |
| PLACE DELIVERED: | Parramatta |
| PLACE HEARD: | Parramatta |
| JUDGMENT OF: | Foster J |
| HEARING DATE: | 23 and 24 January 2020 and 26 February 2020 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Fowler |
| SOLICITOR FOR THE APPLICANT: | Watts McCray (NSW) Pty Ltd |
| COUNSEL FOR THE RESPONDENT: | Mr Campton SC |
| SOLICITOR FOR THE RESPONDENT: | York Law Family Law Specialists |
Orders
That within four months from the date of these orders the wife pay to the husband the sum of $705,000 and in consideration of such payment the husband do all things necessary to transfer all his interest in the property at F Street, Suburb G (“the Suburb G property”) to the wife.
That in default of the wife complying with Order 1 by the due or a later date agreed to by the husband and wife in writing, then the husband and wife shall forthwith do all things necessary to sell the said property at the best price reasonably obtainable and pay the net proceeds of sale such as to effect an overall division of the asset pool as set out in Paragraph [71] of these reasons for judgment as to 52.5 per cent to the wife and to 47.5 per cent to the husband.
Liberty to apply as to implementation or enforcement of these orders.
Note: The form of the order is subject to the entry of the order in the Court’s records.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Theodorou & Theodorou has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).
| FAMILY COURT OF AUSTRALIA AT PARRAMATTA |
FILE NUMBER: PAC 5644 of 2018
| Ms Theodorou |
Applicant
And
| Mr Theodorou |
Respondent
REASONS FOR JUDGMENT
Introduction
The application for determination is one as to property adjustment between the applicant wife and the respondent husband.
In her Initiating Application filed 26 November 2018 and as set out in her Minute of Order, the wife sought orders, in summary:
a)That within 42 days of the date of these orders each party shall do all things necessary to cause the following simultaneously:
i)Transfer of the property situated at and known as F Street, Suburb G (“the Suburb G property”) to the sole name of the wife at the wife’s cost, such that the husband shall sign all documents presented to him by the wife and the husband shall do all other things necessary for such transfer; and
ii)Discharge all mortgages and encumbrances presently registered over the property at the cost of the wife such that the husband shall sign all documents presented to him by the wife and the husband shall do all other things necessary to cause such discharge; and
iii)The wife shall indemnify and keep indemnified the husband in respect of all liabilities in relation to the property whenever and however arising.
b)Pending transfer of the property the husband shall be responsible for all mortgage repayments, statutory rates and charges, other utilities, insurances, outgoings and expenses in relation to the property incurred prior to the date of transfer and shall make all such payments as and when they fall due and hereby indemnifies the other party in respect of all other liabilities incurred prior to the date of transfer;
c)That, as between the husband and wife, and subject to the above orders the husband and wife shall each respectively retain all interest in and entitlement to:
i)All personal property now in his/her respective possession or control;
ii)All shares, debentures, units in unit trusts, bank, building society or credit union accounts standing in his/her sole name respectively; and
iii)All interests in life insurance policies and superannuation funds standing in his/her sole name respectively.
d)That each party shall do all things necessary including providing all consents to give effect to these orders in the time periods prescribed in these orders;
e)That each party pay his or her own costs in relation to the proceedings; and
f)That in the event either party refuses or neglects to execute any deed, document or instrument necessary to give effect to all or any of these orders, then the Registrar of the Court shall be appointed pursuant to Section 106A of the Family Law Act 1975 (Cth) to execute such deed, document or instrument in the name of the said party and do all acts and things necessary to give validity and operation to the deed, document or instrument upon the Registrar being provided with verification of such refusal or failure by way of affidavit.
In his Response filed 18 January 2019 the husband sought orders in summary:
a)That the parties sell for the best price reasonably obtainable the Suburb G property in the following manner and priority:
i)List the Suburb G property for sale by private treaty or public auction (as recommended by the agent) with such agent as the parties may agree to appoint and in default of agreement as to agent:
(I)Within seven days the husband is to nominate three agents;
(II)Within seven days thereafter the wife is to choose one of the agents nominated by the husband; and
(III)If the wife fails, omits or neglects to choose one of the agents nominated within the time frame stipulated then the husband is at liberty to choose one of the agents he nominated;
ii)The sale price or reserve price (as the case may be) at which the Suburb G 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 recommended by the agent;
iii)The parties shall 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 Suburb G property at all reasonable times requested by the agent;
(III)Doing or saying nothing to hinder or prevent a sale being effected;
(IV)Ensuring the Suburb G property including the grounds are in a neat and clean condition at the time of inspection by the agent and prospective purchasers;
(V)Signing all documents requested by the agent in relation to the listing for sale of the Suburb G property except a contract or agreement for sale which has not been authorised by the parties’ solicitors; and
(VI)The parties 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 wife and husband or, in the absence of any agreement, at or above the price recommended by the agent.
iv)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 seven days from the date of these orders:
(I)Within seven days thereafter, the husband is to nominate three solicitors to act on the sale;
(II)Within seven days thereafter, the wife is to choose one of the solicitors nominated by the husband; and
(III)If the wife fails, omits or neglects to choose one of the agents nominated within the time frame stipulated then the husband is at liberty to choose one of the solicitors he nominated.
v)Neither the husband nor the wife may confer on any agent without the consent of the other any right to sole or exclusive agency in respect of the Suburb G property or to any commission;
vi)If the agent shall certify in writing to the parties’ solicitors it is reasonably necessary for the work specified in such notice to be carried out to the Suburb G property so as to assist in effecting a sale and provided the cost of any such work is less than $5,000 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;
vii)In the event the Suburb G property is listed for sale by auction and bidding at the auction does not reach the reserve price the parties are to negotiate with the highest bidders or any other interested person and effect a sale of the Suburb G property at a price which is not more than five percent below the reserve price; and
viii)If the Suburb G property remains unsold at auction, the parties shall do all acts and things and sign all documents necessary to immediately relist the Suburb G property for sale by public auction against, on a date nominated by the said agent.
b)That on settlement of the sale of the Suburb G property the proceeds of sale be applied in the following manner and priority:
i)all costs and expenses of sale including legal costs and disbursements, agent’s commission, valuers fees, and auction expenses (including repayment of any such expenses as have been paid by either or both of the parties);
ii)the amounts required to pay all municipal and water rates with respect to the Suburb G property;
iii)in discharge of the mortgage secured over the Suburb G property the Commonwealth Bank of Australia noting that the mortgage balance is nil; and
iv)the balance be divided as follows:
(I)55 per cent to the husband by way of property settlement; and
(II)45 per cent to the wife by way of property settlement.
At trial the wife relied upon the following documents:
a)Initiating Application filed 26 November 2018; and
b)Her Affidavit filed 24 September 2019.
The husband relied on the following documents at hearing:
a)Response filed 18 January 2019;
b)His affidavit filed 24 September 2019; and
c)His Financial Statement of 24 September 2019.
The trial was conducted over two days in January 2020 with final oral submissions on 26 February 2020 on which date judgment was reserved.
It is to be noted that many of the evidentiary issues could have been resolved by documents that mostly were in the control of both parties especially their long term joint account. Both parties has obligations for proper disclosure and discovery. Many requests to the wife for such was not the subject of a proper response. The wife failed to comply with Registrars’ orders as to same, in particular, as to her Supreme Court litigation referred to below. Neither honoured that obligation in some significant way until the trial itself. Otherwise, issues could have been substantially resolved by the issue of subpoena. The necessity for much of the cross examination arose, in part, from poor forensic preparation by both parties.
Context
At trial the wife was aged 58 and the husband 60.
The parties commenced cohabitation and married in 1986. The parties separated on a final basis in March 2013 and their divorce was granted in 2014.
The final trial as to property was five and a half years after their divorce was granted with proceedings having been commenced by the wife out of time but with the consent of the parties in November 2018.
The parties have two adult children of the relationship. The children are now aged 30 and 26.
The mother took significant maternity leave after the birth of both children. The husband continued in full time employment. The parties were assisted with early childcare by the paternal and maternal grandmothers. Both parents were engaged in the children’s care and their lives as their work obligations allowed.
The husband gives evidence as to his minor role in relation to renovations and, otherwise, his outside jobs around the home. He asserts no role in terms of general household tasks and duties such that it appears the wife assumed those obligations.
Background
The wife at the commencement of cohabitation had the following assets:
a)Interest as a beneficiary of the H Trust (“the family trust”);
b)A Motor Vehicle 1; and
c)Some public company shares.
The husband had no assets or property of significance at the time of marriage.
The parties initially resided in rental accommodation in Strathfield until they purchased a property at J Street, Suburb K (“the Suburb K property”) 1987 for $94,000. A mortgage was taken out with Commonwealth Bank for $55,000 with the balance of purchase price mostly provided from joint funds of $12,000 that earlier had been invested by the wife’s father in stocks and later realised for about $30,000. The mortgage was later paid out in February 1989 with loan funds from the wife’s sister who was repaid from household income.
On 24 July 1990 the parties sold the Suburb K property for $195,000 and applied the net sale proceeds to the purchase of F Street, Suburb G (“the Suburb G property”) for $265,000 shortly thereafter. The parties also obtained a mortgage to the Commonwealth Bank of $75,000 to fund the purchase over and above funds from the sale.
Various renovations were undertaken to the Suburb G property over the course of the parties’ relationship. The renovations were funded by increasing the parties’ mortgage liability and using capital from accumulated income. The wife contends that the renovations were possible solely because of her income and the distributions she received from the family trust.
In the period from purchase of the property in 1990 till discharge of the mortgage in 2007 the balance owing increased to $236,000, primarily to fund renovations.
Throughout the parties’ relationship, the husband worked at various organisations as a professional earning around $80,000 per annum. His income in the period July 2009 to June 2013 was reduced significantly by reason of salary sacrificing income to superannuation as referred to below. At various points in time, he also held a second position, increasing his income by $30,000 or $60,000 per year respectively during those periods. Exh “S” reveals his taxable income as follows:
2008 - $98,259, 2009 - $135,785, 2010 - $104,036, 2011 - $70,860,
2012 - $58,011.
In 2013 his salary at that time was $74,427. (Exh “R”)
It is more appropriate to holistically consider the funds received by the parties from all sources and applied to the matrimonial expenses of all kinds.
The wife: Trust distributions and income
The wife contends that she began receiving dividend income as a beneficiary of the family trust in 1983 which she continued to receive throughout the parties’ relationship. As well as the income she received as a beneficiary of the family trust, she also earnt an income from working in various roles at different points in time during the parties’ relationship. However, the wife’s income from other than trust distributions was modest for the period from 2000 to 2006. Thereafter she did not work until after separation.
Excluding the two final distributions which the wife describes as being a “tax free” distribution (discussed below), the wife asserts that her total assessable income including distributions from the family trust for the relevant financial years ending June 1986 to 2013 inclusive (excluding 1986 and 1995) was $2,007,375 with such sum not including final capital trust distributions received in 2007. Included in the wife’s taxable income were her trust distributions over the years. After 2007 the parties equally disclosed interest received on investments made from the final capital distribution received by the wife, such interest should be regarded as a contribution of the wife. These interest amounts disclosed in the husband’s tax returns (Exh “S”) were:
2008 $16,090
2009 $51,877
2010 $15,984
$83,861
Doing the best on the evidence available the wife’s income over the years of cohabitation from 1986 to 2013, being 27 years averaged about $77,000 per annum. This does not take into account two missing years and some interest received by her on her M Pty Ltd investments.
Overall her income into the household compares favourably to that of the husband.
The disputed trust distributions
The husband at trial took issue with two early distributions received by the wife that he asserts did not find their way into the matrimonial finances: 1996 ‑ $150,000 and 2004 - $200,000. The wife asserts that all distributions were paid into the joint account. The evidence from both sides is unsatisfactory. Relevant bank statements were not produced by either party notwithstanding it was a joint account. The wife’s oral evidence is emphatic as to receipt and household use of the funds especially a short time after 1996 when the children were both at private schools. The husband offers no alternate hypothesis save that the wife should prove the deposit of the funds. Yet the husband introduced into evidence a CBA bank statement (Acct #…18) and the parties’ joint account, evidencing the deposit of $150,000 on 17 July 1996 being the account to which the husband’s salary was paid and housing loan repayments were deducted: (Exh “N”). On balance the evidence of the wife on this issue is accepted.
The wife asserts that trust distributions prior to final capital distributions all went into family finances to meet living expenses for the household including private school fees and overseas holidays. The wife contends that the payment of the children’s private school fees from August 1998 to October 2011 totalled around $286,882 and were able to be paid by reason of her income from all sources coming into the household.
The wife’s final trust distributions
The wife received two final capital distributions from the family trust in November 2007 in the sum of about $1.778 million. From these funds it is agreed that the wife applied $236,231 to discharge the CBA mortgage over the Suburb G property, thus leaving a balance of about $1.542 million.
Of these funds $1.423 million was deposited in a joint cash investment account with the CBA (Acct #…25) on 21 November 2007 with a further $80,000 deposited on 11 March 2008 making a total of about $1.503 million (Exh “O”).
Otherwise, the parties acknowledge that funds were continued to be used to pay ongoing private school fees for the parties’ two children, living expenses for the household, credit card debts and overseas travel as evidenced by the relevant accounts. The children attended private school from years three and five through to year 12; a total of 18 years’ private school fees.
On 11 March 2008 $1.2 million of these funds were placed in the parties’ joint names on Term Deposit: (Exh “P”) earning about $48,000 in interest in six months. The balance of the cash investment account reduced to about $277,000. The term deposit and interest was rolled for a further six months earning again similar interest. Again principal and interest totalling $1.294 million was rolled over for a further three months accumulating to $1.311 million that was rolled over for another month to 11 August 2009. On 11 August 2009 about $1 million of the term deposit was not reinvested and a balance of only $310,000 was rolled over until 11 February 2010 on which date it was withdrawn (Exh “Q”).
By the time the parties separated, the CBA account #…25 had been expended by the parties such that there was but a few hundred dollars left in the account.
The wife asserts that in 2009 she deposited $250,000 from the trust distribution into the husband’s superannuation fund and $50,000 into her own. The husband’s superannuation statements (Exh “R”) reveal no such contribution, although it appears that the parties received advice to do so.
As at August 2009 the wife held the balance of her capital funds then being about $1 million in a M Pty Ltd Term Deposit that had been funded by the joint term deposit withdrawal.
Between 2010 and 2012 the husband salary sacrificed some of his income into his superannuation fund. He contends that the amounts each year were $24,500, $29,640 and $30,210. These contributions significantly reduced his available income coming into the household in those years but assisted in increasing his rollover/deferred benefit from about $405,000 as at June 2010 to about $584,000 as at June 2013. He conceded in oral evidence that this was most probably prompted by the availability of funds from the wife’s final capital trust distributions.
M Pty Ltd
In April 2010 the wife established a company named “M Pty Ltd” with herself being the sole director and shareholder of the company. In June 2010 this company purchased a business for $95,000. In June 2011 the business was sold for $120,000 and the M Pty Ltd ceased trading but remained an investment vehicle for the wife.
The wife in April 2011 received an inheritance of $122,222 from her late mother’s estate. These funds were initially deposited into the parties’ joint account but later found their way into M Pty Ltd.
After ongoing withdrawals to meet expenses of the household the wife held a capital balance on Term Deposit with M Pty Ltd as at 12 June 2013, about three months after separation, in the sum of $852,634.
Separation and thereafter
The parties separated in March 2013. The husband vacated the Suburb G property and the wife and adult children (who were aged 23 and 19 at the time) continued to reside at this property. The wife has remained in the property to the husband’s exclusion to trial. Post separation the wife has worked in different industries from time to time for about 16 months. She worked on a part-time basis in December 2019 after spending five months in Queensland. She clearly has capacity to work if motivated to do so.
At separation the husband had a superannuation resignation benefit of about $429,000 and a benefit should he rollover/defer his superannuation of $584,000. As at June 2016 when the husband ceased employment with S Organisation , his total superannuation benefit was $762,826. He rolled that benefit as a deferred benefit within his fund (Exh “R”). As at 30 June 2019, the husband’s deferred benefit had increased to $833,880 together with a minimal small accumulation superannuation fund balance (Exh “R”).
In December 2015 the husband somewhat precipitately exchanged an off-the-plan purchase of a property in Suburb N in the sum of $994,700. The husband paid stamp duty and a deposit from his then savings, the sum of $39,735 was loaned to him by his father and the sum of $40,271 stamp duty was paid with funds withdrawn by the husband from his superannuation that in all totalled $120,000 from 30 September 2016 to 6 June 2017 (Exh “R”). The husband at hearing conceded that he had no firm arrangements to fund the balance of purchase price but was expecting that the wife would allow the home to be used as security. She did not. The Contract for Sale for the property was later rescinded. The husband lost $22,770 in all.
In June 2016 the husband received an employment termination payment of about $100,000.
The wife’s use of funds post separation
In September 2016 the wife contacted the husband and said words to the effect “I’ve been scammed. Someone has used an overseas company to send monies to my bank account. They have taken the money out of my bank account and now my accounts are frozen”. The wife was later the defendant in Supreme Court proceedings between as a result of her being “an unwitting participant in a fraud”. Judgment was delivered in December 2018 which details how the wife met a person online called “Mr B” with whom she formed an online relationship. Mr B opened a bank account in the name of the company Q Pty Ltd using the wife’s identity and used this to steal funds from P Ltd. Even though accounts in the wife’s name were used in committing the fraud the wife was held not liable however she incurred significant costs having waived her right to costs in an agreement with the plaintiff in which they waived their right to appeal. The wife estimates her costs were $230,000.
At trial the wife held funds of $40,000 in her CBA account.
In July 2018 the husband sold some shares in R Limited and gave half the proceeds to each of the parties’ children such that each child received the sum of $6,967.
The wife’s dissipation of funds
At the time of separation in 2013, the wife had $1,157,575.90 in accounts in her sole name (Westpac e-Saver #…68) and in the name of M Pty Ltd (solely controlled by her as sole director and shareholder of the company). This consisted of:
a)$317,099.48 in her Westpac e-Saver account #…68;
b)$840,476.49 in a term deposit in the name of M Pty Ltd (Term Deposit #…76).
At 31 July 2015 the wife had:
a)$175.08 in her Westpac e-Saver account; and
b)M Pty Ltd Term Deposit #…76 depleted.
The wife asserts that the funds held the M Pty Ltd Term Deposit #…76 were expended on:
(a)Providing some financial assistance to her daughters;
(b)Living expenses over seven years since separation;
(c)In an online relationship in which she transferred a series of cash loans to the total of $370,000 which was never repaid; and
(d)Legal costs of Supreme Court proceedings as referred to of $230,000.
As to the dealing with the M Pty Ltd the term deposit funds held at separation (See [31] above):
a)On 23 December 2013 $869,372.28 (principal and interest) was transferred from Term Deposit #…76 into Term Deposit #…32.
b)On 7 May 2014 $880,408.40 (principal and interest) was withdrawn from #…32 with:
i)$350,000 transferred into the wife’s Westpac Choice account; and
ii)$530,408.40 was invested into Term Deposit account #…58
c)On 9 December 2014 $539,059.09 (principal and interest) was withdrawn and:
i)$10,000 was paid into an undisclosed account; and
ii)The balance of $529,059 was deposited into Term Deposit #…09.
d)On 17 December 2014 $529,100.26 (principal and interest) was withdrawn and:
i)$29,100.26 transferred into the Westpac Choice Account; and
ii)$500,000 invested in Term Deposit account #…26
e)On 29 December 2014 $500,058 (principal and interest) was transferred from #5026:
i)$100,058.36 was paid into the Westpac Choice Account; and
ii)$400,000 invested into Term Deposit #…25
f)On 19 February 2015 $401,823 (principal and interest) was transferred from #…25 to M Pty Ltd Westpac Business Cash Reserve Account #…16 (established in February 2015).
In summary, the wife deposited into the Westpac Choice Account #…16:
a)$134,431.16 from her e-Saver account #…68; and
b)$479,158.62 from M Pty Ltd Term Deposit Accounts.
Total: $613,589.78
The wife also received $171,447 into her Westpac Choice Account from various sources between 29 April 2013 and 31 July 2015. Various payments were made to her share trading accounts with little or no documents produced to trace the investments or disposition of them.
On 16 May 2014 the wife paid from her Westpac account $150,000 to her L Superannuation account. She withdrew these funds in May 2015 and paid them into her account.
As at 31 July 2015 the Westpac Choice Account had a balance of $1,412.
As at 31 July 2015 $4,861.78 remained in the M Pty Ltd Westpac Business Cash Reserve Account #…16 (the account which had $401,823 transferred into it in February 2015).
Review of the M Pty Ltd Business Cash Reserve Account #…16 reveals the following dealings by the wife:
a)$77,000 withdrawn in cash;
b)$273,221.87 transferred in foreign transfers; and
c)$47,000 withdrawn that is unable to be traced.
In July 2015 the husband transferred to the wife $10,000 into her Westpac Choice Account #…16 at her request on her asserting impecuniosity.
The parties’ present circumstances
The wife asserts that she is not working but her evidence reveals capacity for employment. Otherwise, her assets and liabilities are as set out below in the context of the asset pool for division. She remains living in the unencumbered home.
The husband is presently employed earning an income of about $75,000 per annum in the local government sector. He pays rent of about $27,000 per annum. Otherwise, his assets and liabilities are as set out below in the context of the asset pool for division.
Property Principles
The approach to the determination of an application under s 79 of the Act is set out in Stanford & Stanford [2012] HCA 52 and further considered by the Full Court in Bevan & Bevan [2014] FamCAFC 19, Chapman & Chapman [2014] FamCAFC 91 and Scott & Danton [2014] FamCAFC 203.
The Court must identify the existing legal and equitable interests of the parties in the property, the liabilities and financial resources of the parties at the time of the hearing and then whether it is just and equitable to make a property settlement order.
Such a consideration should not be guided by an assumption that the parties’ rights to or interests in property are or should be different from those that then exist. The question is whether those rights and interests should be altered.
There is no presumption that one or other party has the right to have the property of the parties divided between them or a right to an interest in marital property that is fixed by reference to the various matters in s 79(4).
The Court in the application of s 79(2) of the Act needs to conclude that it would be unjust or unfair to leave the parties’ property rights intact.
In many cases such as the present matter, this requirement is readily satisfied where the parties are no longer in a marital or de facto relationship and, thus, for example, the common ownership or use of property by husband and wife will no longer be possible or the express or implicit assumptions that underpinned existing property arrangements such as the accumulation of assets or financial resources by one for the benefit of both have been brought to an end with the relationship.
In particular, such a circumstance arises where both parties seek property adjustment orders but are unable to agree as to same. Here the wife seeks an order for adjustment of property so as to end the joint ownership of the matrimonial home as does the husband.
It would, in some circumstances, be unjust or unfair to leave property rights intact where there is common ownership and discrete assets are sought by each. Such is the case in this matter and the parties both agree that their common ownership of property is to be brought to an end so as to reflect their respective contentions as to entitlement.
It is appropriate that property adjustment orders be made.
Otherwise, a consideration of s 79(4) factors as discussed below reveals it would be unjust or unfair to leave the parties’ property rights as they are.
Section 79(4) requires a consideration of the contributions made by the parties as defined in s 79(4)(a) to (c). The Court must then consider s 79(4)(d) to (g), in particular, the subjective considerations as to the parties by having regard to the provisions of s 75(2) in so far as they are relevant: (s 79(4)(e)).
The Court can then consider the “justice and equity” of the actual orders to be made: Russell & Russell (1999) FLC 92-877; Teal & Teal [2010] FamCAFC 120, in the context of the Court’s obligation to make “appropriate orders” as provided for in s 79(1) of the Act.
The Property Pool
Following final submissions as to the working draft balance sheet (Exh “E”) the property pool for consideration representing the parties’ present assets and liabilities is as follows after consideration of items in dispute as discussed below.
Joint Home at Suburb G $2,200,000
Husband CBA #…14 $ 2,938
Husband CBA #…30 $ 7,285
Husband CBA #…16 $ 517
Wife CBA #…80 $ 40,000
Wife Westpac a/c $ 15,011
Husband C Company Shares $ 35
Husband D Company Shares $ 652
Wife Motor Vehicle 2 $ 18,000
$ 2,284,438
Superannuation:
Husband T Super Deferred Benefit $ 833,409
Husband T Super Accumulation Fund $ 380
Wife L Super $ 145,000
$ 978,789
Thus the total pool is: $3,263,227
As to the parties’ superannuation, it is to be noted that no present valuation evidence was provided. Information was derived from benefit statements referred to above. The figures are as agreed as to value by the parties. No superannuation splitting order is sought by either party.
Items in dispute
Wife Superannuation withdrawal $150,000: It is the husband’s contention that this sum since separation expended by the wife should be notionally included in the asset pool for division. The payment of this sum into her super was funded from money retained at separation by the wife. Those funds represented money retained by the wife to which he had made no contribution but that had provided significant interest income into the household before separation. Yet he, after separation, withdrew and used $120,000 of his superannuation for various purposes. The sum of $150,000 will thus not be added back.
Wife Funds dissipated after separation $1,344,531: The sum represents the balance of funds held by the wife in her own accounts or that of M Pty Ltd as at July 2014. Those funds have now been expended by her as discussed above. Regrettably, and notwithstanding the various accounts were those of the wife, her disclosure and discovery of relevant documents evidencing use of the funds was alarmingly lacking and only partially made at the trial. The funds represent final trust distributions paid to the wife and perhaps a balance remaining of her inheritance in respect to which the husband asserts no contribution. It will not be added back but will be considered in the context of s 75(2) factors thus reducing the significance of the wife’s contributions by reference to that sum.
Wife Loan funds received from cousin $40,000: this asserted post separation loan obligation is not the subject of evidence that would cause it to be included in the asset pool for consideration with the effect that the husband will bear some responsibility for same. It will be excluded.
Contributions
The Full Court again in Horrigan & Horrigan [2020] FamCAFC 25 emphasised the proper approach to assessment of contributions:
35.It is well established that an assessment of contributions is not a mathematical exercise, but rather involves the identification and assessment of all of the parties’ respective contributions, in a holistic way across the course of the relationship and in the post separation period to the point of assessment. (Pierce v Pierce (1999) FLC 92-844; Singerson & Joans [2014] FamCAFC 238; Dickons v Dickons (2012) 50 Fam LR 244 and Marsh & Marsh (2014) FLC 93-576; Lovine & Connor and Anor (2012) FLC 93-515 at [39]‑[42]).
At cohabitation there was little to distinguish the parties’ initial contributions. Over the period of a long marriage with two children there is also little to distinguish the parties’ non-financial contributions and homemaker and parenting contributions such that same should be regarded with equality.
Much is made of the issue of financial contributions by both parties. It is common ground that the husband has remained in local government employment throughout the marriage. His income was modest and at times supplemented by the inclusion of interest on funds of the wife invested in both names to reduce taxation liabilities. The wife’s contribution from her earned income from time to time was significantly supplemented by her unearned income in the form of franked dividends received regularly during the marriage and her final capital distribution received late in the relationship as detailed above.
The wife received about $1.778 million in November 2011. By separation some $620,000 of those funds had been expended in relation to the home mortgage and other expenses as detailed above leaving the wife with funds at that time as asserted by the husband of $1.157 million. This a significant contribution by the wife.
The husband made ongoing contributions to his superannuation from employment after separation. Yet his superannuation base at separation was enhanced by post tax deductions from his salary prior to the date of separation. In 2016 he rolled his then super into a deferred benefit. The wife had accumulated super but withdrew the capital sum she contributed post separation from the funds she retained at that time. Overall, super contributions must favour the husband marginally.
Yet the wife has remained in occupation of the unencumbered home since separation for seven years. The husband has been obligated to rent accommodation.
It is readily apparent that by reason of these circumstances contributions overall should favour the wife. Contributions are to be assessed as favouring the wife 52.5 per cent to the husband’s 47.5 per cent. This will see a disparity of about five per cent between the parties which in money terms is $163,000.
Relevant section 75(2) considerations
The wife is aged 59 and does not assert ill health. The husband is aged 60 and also does not assert ill health.
The husband is in employment and does not assert any incapacity for employment in the foreseeable future. The wife as discussed above has a demonstrated capacity to work when she chooses and does not assert any incapacity. However, historically when in employment she has earned only modest income.
The assets, liabilities and financial resources of the parties are set out above.
Both parties have relevant commitments for their own support.
The wife has an entitlement to a small accumulation superannuation benefit. The preservation condition of her super was not the subject of evidence but it is to be inferred are the same as apply to the husband as set out in Exh “F”. The husband has more significant superannuation that he can access now (age 60) if he left the work force permanently or at age 65 even though he remains in employment (Exh “F”). Both parties will thus have ready access to superannuation in the near future. Both superannuation amounts are included in the pool notional division.
Otherwise, the wife has had the use of funds to which the husband had made no contribution. She has used those funds as detailed above. Those funds would normally be available for her support for some years to come. She has dissipated them. She can make no complaint as to present financial circumstances such that would suggest she should receive a further adjustment in her favour by reason of this consideration.
There will be no further adjustment to the parties’ contribution based entitlements as discussed above.
Otherwise, the wife seeks to retain the home subject to a payment to the husband. The husband seeks to retain his super intact such that it will reduce any sum payable to him by the wife to acquire the home.
Orders to give the wife the opportunity to acquire the home in the circumstances are appropriate and just and equitable.
The husband has an overall entitlement of 47.5 per cent of the pool set out above. Such equates to a sum of about $1.550 million. He has presently in his possession or entitlement assets totalling about $845,000. The wife is to pay him the sum of $705,000 in consideration of which he will transfer his interest in the home to her.
Orders will be made accordingly.
I certify that the preceding ninety-one (91) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Foster delivered on 17 April 2020.
Associate:
Date: 17 April 2020
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