Thukral & Trishna (No 2)
[2022] FedCFamC1F 698
Federal Circuit and Family Court of Australia
(DIVISION 1)
Thukral & Trishna (No 2) [2022] FedCFamC1F 698
File number(s): SYC 3986 of 2019 Judgment of: ALTOBELLI J Date of judgment: 16 September 2022 Catchwords: FAMILY LAW – PROPERTY – Contributions assessment – Where the husband made greater financial contributions but wife made greater non-financial contributions – Future needs assessment – Where husband has greater earning capacity – Where the child lives with the father – Where the wife’s earning capacity is not hindered but will not be proportionate to the husband’s income – Just and equitable property alteration. Legislation: Family Law Act 1975 (Cth) ss 75, 79 Cases cited: Bevan & Bevan (2013) FLC 93-545; [2013] FamCAFC 116
Chorn and Hopkins (2004) FLC 93-204; [2004] FamCA 633
Hickey and Hickey and Attorney General for the Commonwealth of Australia (Intervener) (2003) FLC 93-143; [2003] FamCA 395
Norbis and Norbis (1986) 161 CLR 513; [1986] HCA 17
Stanford v Stanford (2012) 247 CLR 108; [2012] HCA 52
Trevi & Trevi [2018] FamCAFC 173
Division: Division 1 First Instance Number of paragraphs: 61 Date of last submission/s: 12 April 2022 Date of hearing: 18–22 October 2021, 12 April 2022 Place: Sydney (via videoconference) Counsel for the Applicant: Mr Jackson Solicitor for the Applicant: Sharah & Associates Solicitors and Conveyancers Counsel for the Respondent: Mr Alexander Solicitor for the Respondent: Acorn Lawyers ORDERS
SYC 3986 of 2019 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MR THUKRAL
Applicant
AND: MS TRISHNA
Respondent
order made by:
ALTOBELLI J
DATE OF ORDER:
16 September 2022
THE COURT ORDERS THAT:
1.Within 21 days of the date of these orders, the parties submit to chambers an agreed joint minute of order reflecting an alteration of property interests as to 60 per cent to the applicant husband (“husband”) and 40 per cent to the respondent wife (“wife”) as outlined in the reasons for judgment delivered today.
2.In the event that the parties fail to reach an agreement pursuant to Order 1, then within 28 days of the date of these orders, each party is to submit to chambers his/her proposed orders reflecting an alteration of property interests as to 60 per cent to the husband and 40 per cent to the wife as outlined in the reasons for judgment delivered today.
The Court Notes that:
A.The Court has today determined that an alteration of property interests as to 60 per cent to the husband and 40 per cent to the wife is just and equitable.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Thukral & Trishna has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
ALTOBELLI J:
INTRODUCTION
These reasons for judgment explain the Court’s intention to make orders by way of alteration of property interests in this case.
BACKGROUND
Mr Thukral (“the husband”) is the applicant in this case. He is a health professional born in Country T, aged 51 years, now living in a coastal region south of Sydney. Ms Trishna (“the wife”) is the respondent. She is a full-time university student born in the United Kingdom, but is of Country T descent. She is 43 years old and also lives in a coastal region south of Sydney.
The parties have one child, X, born in the United Kingdom in 2011. He is 10 years old. He lives with the husband and spends time with the wife in accordance with parenting orders made by this Court.
The husband commenced work in the United Kingdom in 2001. This is when he began contributing to his pension scheme (“United Kingdom pension”), which is the most valuable asset on the parties’ joint balance sheet. In 2003 the husband purchased a property located at AB Street in City AC (“the AB Street property”). The AB Street property is the second-most valuable item on the joint balance sheet. It is subject to a mortgage, but is rented out, and the impression formed from the evidence is that the rent pays the mortgage.
The parties married in a civil ceremony in early 2009 in the United Kingdom, and then in a religious ceremony later that month. Cohabitation commenced in early 2009. Later that year the parties purchased, in the husband’s name, a property situated at AD Street, City AC (“the AD Street property”), and it was at that point that the AB Street property was rented out. Later in 2009 the husband transferred one-half ownership of the AB Street property into the wife’s name.
In early 2014 the family decided to immigrate to Australia. The father arrived in mid-2014 and commenced work shortly thereafter. The wife and X arrived some months later in 2014. By mid-2015 they had all become permanent residents of Australia.
At all relevant times the husband worked as a health professional in his own business in a suburb of a coastal region south of Sydney.
In early 2018 the wife commenced university studies in Sydney. Late in 2018 the parties separated, but continued to reside under the same roof. It was not until June 2019 that they physically separated, with the wife leaving the former matrimonial home, initially with X.
The former matrimonial home is located in a coastal region south of Sydney. It was purchased as land in 2016. The parties built a home on it. That home was subsequently sold, and the net sale proceeds are represented in item 2 of the joint balance sheet.
tHE cOMPETING pROPOSALS
The orders sought by the husband are found in exhibit A11, being his minute of orders sought. The orders proposed by the wife are found in her Further Amended Response to Initiating Application filed 4 October 2021 (“further amended response”). In very general terms, the wife proposed an adjustment the effect of which would be to give her half of the available superannuation and non-superannuation assets of the parties. This was predicated on the basis that X would live with the husband and spend time with the wife. As part of this she contended that contribution would be assessed in the husband’s favour as to 55 per cent, but that future needs would be assessed in her favour as to five per cent. If, as the wife originally contended but not as the Court has ordered, X were to live with her, then the adjustment in her favour would be an extra 10 per cent, resulting in a division of 60:40 in her favour.
The husband sought an overall adjustment as to 60:40 in his favour based primarily on the greater contribution that he made, but also reflecting a future-needs adjustment in the wife’s favour. He contended that the contribution would be assessed as to 75 per cent in his favour, and then there would be a 15 per cent adjustment in the wife’s favour for her future needs.
There is a difference in the detailed orders sought by the parties in relation to how their proposals would be implemented. Both parties propose that the AB Street property be sold, albeit with different proposals for the division of the sale proceeds. Both parties sought splitting orders in relation to the husband’s superannuation fund.
The wife sought an order for spousal maintenance in her further amended response, but no submissions were made about this by her counsel either orally or in the written submissions dated 8 April 2022.
Given that the Court has ordered that X live with the husband, and having regard to the future needs adjustment the Court will make in favour of the wife, the Court will consider the spousal maintenance claim to have been abandoned but, having regard to the evidence, it would not have made the order in any event.
There are some issues about addbacks on which the Court will need to adjudicate.
THE EVIDENCE
In support of his case, the husband relied on the following material:
(a)Amended Initiating Application filed 11 October 2021;
(b)His affidavit filed 5 October 2021;
(c)Financial Statement filed 5 October 2021;
(d)Case outline filed 11 October 2021; and
(e)Documents tendered and marked as exhibits A1–A11.
In support of her case, the wife relied on the following material:
(a)Further Amended Response to Initiating Application filed 4 October 2021;
(b)Her affidavit filed 4 October 2021;
(c)Financial Statement filed 4 October 2021;
(d)Affidavit of Mr U filed 4 October 2021;
(e)Affidavit of Ms W filed 30 October 2020;
(f)Case outline filed 8 October 2021;
(g)Written submissions on property filed 8 April 2022; and
(h)Documents tendered and marked as exhibits R1–R6.
The Court notes that the mother relies on the affidavits of a number of witnesses, namely, her brother Mr U and United Kingdom-based barrister Ms W, however they were not called to give oral evidence and their evidence would have made no difference to the outcome of this case.
THE APPLICABLE LAW
This is an application under s 79 of the Family Law Act 1975 (Cth) (“the Act”) which relevantly provides:
79 Alteration of property interests
(1)In property settlement proceedings, the court may make such order as it considers appropriate:
(a)in the case of proceedings with respect to the property of the parties to the marriage or either of them—altering the interests of the parties to the marriage in the property; or
(b)in the case of proceedings with respect to the vested bankruptcy property in relation to a bankrupt party to the marriage—altering the interests of the bankruptcy trustee in the vested bankruptcy property;
including:
(c)an order for a settlement of property in substitution for any interest in the property; and
(d)an order requiring:
(i) either or both of the parties to the marriage; or
(ii) the relevant bankruptcy trustee (if any);
to make, for the benefit of either or both of the parties to the marriage or a child of the marriage, such settlement or transfer of property as the court determines.
…
(2)The court shall not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.
(4)In considering what order (if any) should be made under this section in property settlement proceedings, the court shall take into account:
(a)the financial contribution made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last‑mentioned property, whether or not that last‑mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(b)the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last‑mentioned property, whether or not that last‑mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(c)the contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage and any children of the marriage, including any contribution made in the capacity of homemaker or parent; and
(d)the effect of any proposed order upon the earning capacity of either party to the marriage; and
(e)the matters referred to in subsection 75(2) so far as they are relevant; and
(f)any other order made under this Act affecting a party to the marriage or a child of the marriage; and
(g)any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage.
Section 79(4) incorporates the provisions contained in s 75(2) of the Act, which states:
(2) The matters to be so taken into account are:
(a)the age and state of health of each of the parties; and
(b)the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment; and
(c)whether either party has the care or control of a child of the marriage who has not attained the age of 18 years; and
(d)commitments of each of the parties that are necessary to enable the party to support:
(i)himself or herself; and
(ii)a child or another person that the party has a duty to maintain; and
(e)the responsibilities of either party to support any other person; and
(f)subject to subsection (3), the eligibility of either party for a pension, allowance or benefit under:
(i)any law of the Commonwealth, of a State or Territory or of another country; or
(ii)any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia;
and the rate of any such pension, allowance or benefit being paid to either party; and
(g)where the parties have separated or divorced, a standard of living that in all the circumstances is reasonable; and
(h)the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income; and
(ha)the effect of any proposed order on the ability of a creditor of a party to recover the creditor’s debt, so far as that effect is relevant; and
(j)the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party; and
(k)the duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration; and
(l)the need to protect a party who wishes to continue that party’s role as a parent; and
(m)if either party is cohabiting with another person—the financial circumstances relating to the cohabitation; and
(n)the terms of any order made or proposed to be made under section 79 in relation to:
(i)the property of the parties; or
(ii)vested bankruptcy property in relation to a bankrupt party; and
(naa)the terms of any order or declaration made, or proposed to be made, under Part VIIIAB in relation to:
(i)a party to the marriage; or
(ii)a person who is a party to a de facto relationship with a party to the marriage; or
(iii)the property of a person covered by subparagraph (i) and of a person covered by subparagraph (ii), or of either of them; or
(iv)vested bankruptcy property in relation to a person covered by subparagraph (i) or (ii); and
(na)any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage; and
(o)any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account; and
(p)the terms of any financial agreement that is binding on the parties to the marriage; and
(q)the terms of any Part VIIIAB financial agreement that is binding on a party to the marriage.
In Bevan & Bevan (2013) FLC 93-545 (“Bevan”), the Full Court considered the High Court’s decision in Stanford v Stanford (2012) 247 CLR 108, which provided guidance on how s 79 was to be interpreted and implemented. Bevan endorsed the continuing application of the four-step approach articulated by the Full Court in Hickey and Hickey and Attorney General for the Commonwealth of Australia (Intervener) (2003) FLC 93-143 (“Hickey”), but on the basis that it is a shorthand distillation of the words of s 79, as opposed to being a statutory edict. The four steps articulated in Hickey at [39] are:
(1)Identify and value the property, liabilities and financial resources of the parties;
(2)Identify and assess the contributions of the parties and express them as a percentage of the net value of the property;
(3)Identify and assess the other factors relevant under s 79(4)(d)–(g) including s 75(2) and determine the adjustment (if any) to be made to the contribution entitlements at step two; and
(4)Consider the effect of the above and resolve what order is just and equitable in all the circumstances.
One of the legal issues that arises is whether I should adopt a global or asset-by-asset approach to contribution. The authority in this regard is the High Court’s decision in Norbis and Norbis (1986) 161 CLR 513 per Wilson and Dawson JJ at 534–535. It is clear from this statement of the law that either approach is available to the Court, in part or in whole. The Court’s discretion in this regard should be exercised having regard to the facts of this case.
Another legal issue that arises is whether I should notionally add back assets to the property pool. In the Full Court’s decision of Trevi & Trevi [2018] FamCAFC 173, Murphy J explains at [27]:
The Full Court held in Omacini and Omacini that addbacks fall into “three clear categories”: where the parties have expended money on legal fees; where there has been a premature distribution of matrimonial assets; and “waste” or wanton, negligent, or reckless dissipation of assets.
Relevant to this case is the first category, that is, the question of adding back expenditure on legal fees. In this regard, the Full Court in Chorn and Hopkins (2004) FLC 93-204 at [55] and [57] states:
55.This decision appears to confirm the principle that where the payment of legal costs can be regarded as a premature distribution of funds (in which both parties have an interest), it is appropriate to add back those costs as a notional asset. It also confirms the principle that where funds have been borrowed to pay legal fees, and such liability is still outstanding, neither the payment of the fees nor the liability should be taken into account. The decision also supports the proposition that where it is determined that a payment of legal fees should be taken into account as a notional asset, any outstanding liability in respect of those fees should also be taken into account.
…
57.If the funds used existed at separation, and are such that both parties can be seen as having an interest in them (on account, for example, of contributions), then such funds should be added back as a notional asset of the party, who has had the benefit of them.
THE BALANCE SHEET
The joint balance sheet became exhibit A1 and is reproduced below with the incorporation of amendments to values arising from revisions made by consent after closing submissions in relation to items 2, 9, and 10.
Ownership Description Husband’s value Wife’s value ASSETS J AB Street, City AC $ 360,000 $ 360,000 J Settlement monies with Acorn Lawyers $ 129,898 $ 129,898 H Commonwealth Bank Accounts and…00 $ 30,036 $ 30,036 H Motor Vehicle 2 $ 36,000 $ 36,000 H Contents $ 5,000 $ 5,000 W Motor Vehicle 1 $ 20,000 $ 20,000 W ANZ Bank Accounts $ 2,191 $ 946 Total $ 583,125 $ 581,880 ADDBACKS Total $ $ LIABILITIES J Mortgage AB Street, City AC $ 228,000 $ 224,000 Total $ 228,000 $ 224,000 SUPERANNUATION Member Name of Fund Type of Interest Husband’s value Wife’s value H Superannuation Fund 1 Accumulation $ 81,730 $ 81,730 H UK Self Invested Personal Pension (SIPP) with Bank 1 Accumulation $ 814,569 $ 814,569 W Superannuation Fund 2 Accumulation $ 37,224 $ 37,224 Total $ 933,523 $ 933,523 FINANCIAL RESOURCES Ownership Description Husband’s value Wife’s value Total $ 0 $
There was a dispute about item 7, being ANZ Bank accounts in the wife’s name. The documents tendered into evidence do not assist the Court to make findings and, accordingly, the wife’s value will be taken as an admission against interest and will be adopted for present purposes.
There was an issue about addbacks. Curiously, the husband’s case did not seek an addback of monies withdrawn by the wife in mid-2019 in the sum of either $104,000 or $114,000. The husband’s counsel submitted it should simply be taken into account under s 75(2)(o) of the Act. The wife did press the addbacks issue. The wife’s counsel conceded that the evidence demonstrated that of the $114,000 withdrawn from joint savings, $90,000 was applied towards the wife’s legal expenses. Moreover, it was submitted the evidence demonstrated that the husband had paid his legal fees of $276,000, $200,000 of which was derived from joint assets, whether from the mortgage or sale of shares or drawdowns from the bank. The Court finds this to be the case.
In both cases the Court is satisfied that the payment of legal fees was a premature distribution of matrimonial assets and, thus, there should be an addback to reflect this and to overcome the unfairness that would otherwise be created. Counsel for the wife suggested a broad-brush approach of simply adding back $100,000 as notional property of the husband to reflect the difference between the amounts of money that the husband and wife respectively had access to. The Court agrees. There will be an addback of $100,000 as notional property of the husband.
There was a dispute about the value of item 8, being the mortgage on the AB Street property. The husband’s value will be adopted as an admission against interest.
Accordingly, the final balance sheet will be as follows:
Ownership Description Value ASSETS J AB Street property $360,000 J Settlement monies with Acorn Lawyers $129,898.39[1] H Commonwealth Bank accounts (…00) $30,036 H Motor Vehicle 2 $36,000 H House contents $5,000 W Motor Vehicle 1 $20,000 W ANZ Bank accounts $946 Total $581,880.39 ADDBACKS H Legal fees $100,000 Total $100,000 LIABILITIES J Mortgage secured against the AB Street property $228,000 Total $228,000 SUPERANNUATION Member Name of Fund Type of Interest Value 1. H Superannuation Fund 1 Accumulation $81,729.98[2] 2. H UK Self Invested Personal Pension with Bank 1 Accumulation $814,568.66[3] 3. W Superannuation Fund 2 Accumulation $37,224 Total $933,522.64 NET POOL (INCLUDING SUPERANNUATION): $1,387,403.03 [1] This figure has been amended from $148,404 by consent following correspondence from the parties on 16 June 2022.
[2] This figure has been amended from $90, 868 by consent following correspondence from the parties on 16 June 2022.
[3] This figure has been amended from $868,000 by consent following correspondence from the parties on 16 June 2022.
ASSESSMENT OF CONTRIBUTION
The husband’s case is that contribution should be assessed in his favour as to 75:25. The wife’s case is that it should be assessed in the husband’s favour as to 55:45.
The main indicators in favour of an assessment of contribution in favour of the husband include the following matters. He had been contributing towards the United Kingdom pension since he commenced work in 2001, about eight years before cohabitation. The AB Street property had been purchased about six years before cohabitation. The AD Street property was financed primarily through the husband, as the wife made few initial financial contributions.
In the wife’s case, her contention was that she applied the entirety of her savings, the exact value of which she could not recall, towards the wedding, which cost approximately £80,000. Her case is that her parents and siblings also contributed to these costs. The difficulty in the wife’s case is that when she was challenged about this contribution in cross-examination her evidence lacked specificity and particularity, and there was no independent corroborative evidence. The contention of spending about £80,000 on a wedding is by no means far-fetched, but it was only in 2009, and it is hard to believe that after nearly three years of litigation the wife could not do anything better than to provide vague evidence. Someone paid for the wedding, and it is possible that the wife and her family contributed towards this cost, but it is not possible to be specific, and it follows that it is not possible to make findings about what savings the wife had at cohabitation.
As at the date of cohabitation, the husband’s financial contribution was significantly greater than that of the wife. The husband’s greater financial contribution is represented at items 1 and 11 of the final balance sheet.
Up to the date of separation the husband made the greatest financial contribution, but the wife’s contribution was significant in other respects. After X was born and through to the date of separation, the Court accepts that she was the primary homemaker and parent, though not without the assistance of the husband when he was not working. She also contributed financially by working in the husband’s business.
It is very hard to see in these circumstances how the wife’s case could contend that the husband’s contribution should only be assessed at 55 per cent. Doing the best the Court can, a more realistic assessment of his contribution as at the date of separation is 70 per cent.
The Court is satisfied that nothing occurred in the post-separation period which would change this assessment of contribution. There were times when X was in the wife’s care and then in the husband’s care. Child support was paid to the best of the capacities of both the husband and the wife. The Court accepts that during the COVID-19 pandemic, the husband’s practice as a health professional was adversely affected. The Court also accepts that having regard to the case that the wife ran against him in the parenting proceedings, it would have been exceedingly difficult for him to focus solely on his work.
Thus, contribution is assessed in the husband’s favour at 70:30.
AN ADJUSTMENT FOR FUTURE NEEDS
In the husband’s case he contended that if contribution was assessed in his favour at 75 per cent, there would be a 15 per cent adjustment in the wife’s favour to represent the disparity between them as regards their future needs.
In the wife’s case she contended that if contribution in her favour was assessed at 45 per cent, her future needs would be assessed at five per cent.
From the Court’s perspective, and given the very wide parameters proposed by the parties, the Court considers itself at large to decide what future needs adjustment should be made in the wife’s favour, having regard to the evidence.
There is no doubt that the husband and the wife have significantly different capacities to earn income. Even if and when the wife completes her studies at university, it will reasonably take many years before she earns an income that even remotely approaches that of the husband as a health professional. She is currently Centrelink-dependent. Her capacity to earn income during her studies is limited. Subject to any adjustment for her future needs, her contribution has been assessed at 30 per cent in her favour, which she would no doubt regard as quite modest.
There is nothing about the age and state of health of the parties that would indicate an adjustment.
The father will have the care and control of X for many years, and whilst the wife will no doubt pay child support as assessed, having regard to the Court’s findings about her lack of earning capacity, this is unlikely to be a significant contribution towards the costs of maintaining X, even if it is meaningful.
Neither party has any commitment towards any other person.
Any orders made will need to allow both parties to access superannuation entitlements to fund their retirement.
Whilst the wife’s earning capacity is not as great as the husband’s, even with her university studies, she still has an earning capacity.
The Court does not accept certain contentions in the wife’s case. The Court does not accept that this is a case where, for example, the standard of living of the parties during the marriage is a factor to be taken into account, either as a maintenance consideration or as a future needs factor. The strong impression formed from the evidence is that the parties lived a comfortable suburban life, but hardly a lavish or luxurious lifestyle. Moreover, the Court rejects the wife’s argument that her earning capacity was affected by the husband actively discouraging her from engaging in paid employment. In the parenting proceedings, the Court rejected the wife’s case about the husband’s coercive and controlling violence. The more likely scenario in this case is that the parties adopted the roles they did in their marriage because it worked best for both of them and probably maximised taxation advantages, which benefited both of them.
Nonetheless, the Court agrees that an adjustment in the wife’s favour is still required, particularly to take into account the differential in the income-earning capacities of both parties.
Doing the best the Court can, the Court assesses the wife’s future needs at 10 per cent.
A JUST AND EQUITABLE ORDER
Having regard to the Court’s findings above, an assessment of 60:40 in the husband’s favour is the result. This produces a 20 per cent difference. Is that just and equitable? If the pool of assets is $1,387,403 net, this means that the husband receives $277,481 worth of assets more than the wife. The Court considers that this is just and equitable, having regard to a number of factors. Firstly, whilst the husband came into the marriage with substantial assets, it is not as if the wife did not make contributions to the increase in value of the assets, particularly the husband’s superannuation. Secondly, the value to the husband of the differential is largely tied up in superannuation, which he cannot access for the time being, in any event. In the circumstances an order as to 60:40 in favour of the husband is considered just and equitable.
IMPLEMENTING THE ADJUSTMENT AND ORDER ALTERING PROPERTY INTERESTS
The net pool of assets is found to be $1,387,403. The husband will receive 60 per cent of this, being $832,442 and the wife will receive 40 per cent of this, being $554,961.
In relation to the AB Street property, the husband proposed the sale of this property with the wife receiving the net sale proceeds. The wife proposes the sale of this property and her receiving 55 per cent of the net sale proceeds after payment of all costs and disbursements, including anticipated capital gains tax. It is unusual that the husband would not refer to capital gains tax in his orders or in submissions. The liability does not appear on the balance sheet. As both parties proposed the sale of this property, if capital gains tax is payable, either the liability needs to be identified and quantified by consent or, alternatively, a mechanism for payment needs to be identified in the orders. The wife makes some attempt to do so in her orders. It may be that the framing of the husband’s orders are actually intended to leave the wife with the liability, but the quantum nonetheless needs to be established and provision made for payment.
Subject to this liability being established and quantified, it seems to the Court that the wife’s greatest need is for short-term financial provision, preferably in the form of cash. For her to receive the net sale proceeds in its entirety should not be problematic, subject to establishing how that is quantified.
In relation to the monies held by Acorn Lawyers, the husband proposes that he receive $60,000 and the wife receive the balance. The wife proposes that she receive all of this money. The Court accepts that the husband also has a need for some access to cash and, thus, the principle of dividing up the cash in such a way that the wife receives more than the husband is a reasonable one to apply in this case. The final orders made should provide for the wife to receive 55 per cent and the husband the remainder.
In relation to the husband’s Australian superannuation fund, which on the final balance sheet appears to have a balance of about $81,730, at first impression it seems that the wife sought no order in relation to the same. At Order 37.1 of her further amended response she rather confusingly, and possibly erroneously, seeks a splitting order in relation to the Superannuation Fund 2, but that fund is her own. She seeks a splitting order as to $40,000 in her favour, but the balance of her fund is, in fact, only approximately $37,000. The Court concludes that at proposed Order 37 the wife, in fact, intended to refer to the husband’s Australian superannuation fund, and the Court will proceed on this basis. Thus, she would receive $40,000 by way of super split and the husband the remaining $41,730. The husband proposed a much greater proportion to the wife, but in circumstances where her financial circumstances are so inferior to his, her long-term needs will not be a priority. On that basis, the orders should reflect the wife’s proposal.
In relation to the husband’s United Kingdom pension, he proposes that the wife receive $188,000 and he receive the balance. The wife proposes that she receive $400,000 and the husband $414,569. The split will necessarily need to reflect the balance of the husband’s entitlement having regard to the division of the other assets.
In the wife’s orders she turned her mind to the process of enforcing a super splitting order in another jurisdiction. On 8 August 2022, my chambers received proposed consent orders from the parties relating to the implementation of any super splitting order this Court makes in respect of the husband’s United Kingdom pension. It is likely that the process will be time-consuming and expensive.
The precise amount of the super-split of the husband's United Kingdom pension will need to reflect the cost of splitting the United Kingdom pension under English law and the need to ensure that the overall entitlement is in accordance with the Court’s findings above. Complex orders will be needed to implement this.
On the assumption that the order for alteration of property interests is implemented in the manner described above, the husband and wife will be left with the following respective assets and liabilities, based on the final balance sheet. It must nonetheless be emphasised that the values are approximations as the cash figures will have changed. Similarly, the values of the United Kingdom pension are to be treated as notional values only, to be confirmed after the parties ascertain the cost of enforcing the super splitting order under English law.
Assets to be retained by the husband Value 45 per cent split of the money held on trust with Acorn Lawyers $58,454 Super split of husband’s superannuation interest in Superannuation Fund 1 $41,730 UK Self Invested Personal Pension (SIPP) with Bank 1 $561,222 Commonwealth Bank accounts (…00) $30,036 Motor Vehicle 2 $36,000 House contents $5,000 Addback for legal fees expenditure $100,000 Liabilities to be retained by the husband Value Capital gains tax for the sale of the AB Street property Unknown Total: $832,442 Assets to be retained by the wife Value Net sale proceeds on the sale of the AB Street property $132,000 55 per cent split of the money held on trust with Acorn Lawyers $71,444 Super split of husband’s superannuation interest in Superannuation Fund 1 $40,000 UK Self Invested Personal Pension (SIPP) with Bank 1 $253,347 Motor Vehicle 1 $20,000 ANZ Bank accounts $946 Superannuation Fund 2 $37,224 Liabilities to be retained by the wife Value Capital gains tax for the sale of the AB Street property Unknown Total: $554,961 Pool total: $1,387,403
Having regard to the variables and uncertainties identified above, the Court believes the safer and more certain procedure is for the parties to submit orders that reflect the Court’s intentions as set out in these reasons for judgment. The parties are encouraged to reconfirm all aspects of the proposed splitting order of the husband’s United Kingdom pension.
I certify that the preceding sixty-one (61) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Altobelli. Associate:
Dated: 16 September 2022
2
3
0