Trent and Jollie
[2014] FamCA 544
•30 June 2014.
FAMILY COURT OF AUSTRALIA
| TRENT & JOLLIE | [2014] FamCA 544 |
| FAMILY LAW – PROPERTY – division of property – superannuation – s 79 Family Law Act – s 75(2) Family Law Act |
| Family Law Act 1975 (Cth) |
| Bevan & Bevan [2013] FamCAFC 116 Coghlan v Coghlan ((2005) FLC 93-220 Ferraro and Ferraro (1993) FLC 92-335 Hickey and Hickey (2003) FLC 93-143 McLay and McLay (1996) FLC 92-667 Stanford v Stanford (2012) 87 ALJR 74 |
| APPLICANT: | Mr Trent |
| RESPONDENT: | Ms Jollie |
| FILE NUMBER: | SYC | 7583 | of | 2012 |
| DATE DELIVERED: | 30 June 2014. |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | Le Poer Trench J |
| HEARING DATE: | 17 December 2013 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Connor |
| SOLICITOR FOR THE APPLICANT: | Rockwell Olivier Sydney Pty Ltd |
| COUNSEL FOR THE RESPONDENT: | Mr Greenaway |
| SOLICITOR FOR THE RESPONDENT: | Dignan & Hanrahan Solicitors & Attorneys |
Orders
The husband’s superannuation interests with B Super Fund (the Fund) shall be split to create a superannuation interest for the wife as follows:-
(a)Pursuant to section 90MT(2) of the Act and Regulation 27 of the Family Law (Superannuation) Regulations the Court determines the amount in relation to the husband’s superannuation fund is $254,000 (as at 30 June 2012).
(b)Pursuant to section 90MT(4) of the Act the court allocates a base amount to the wife in respect of the husband’s superannuation interest in the fund of $128,734.
(c)Pursuant to section 90MT(1)(a) of the Act whenever a splittable payment becomes payable in respect of the husband’s superannuation in the fund the wife is entitled to be paid an amount calculated in accordance with the Family Law Regulations where the base amount is $128,734 and there is a corresponding reduction in the entitlement of the husband at the time of the splittable payment.
(d)The operative time for the payment under this order is 28 days after the date of the order.
This order binds the Trustee of the Fund.
Otherwise than as specified in these orders each party is declared the absolute owner of property which stands in their name.
Should there be any application for an order for costs then any applicant party must file and serve within 28 days of the orders herein made any such application that they might wish to make. Any application is to be accompanied by any affidavit material setting forth any evidence in chief on which they wish to rely together with any written submission in support of that application. Any respondent party must file within a further 14 days a response, together with a written submission in support of that response, and any affidavit material, setting forth any evidence in chief on which they wish to rely. Any applicant will have a further 7 days in which to file any submission or evidence in reply.
In the event that no application for costs is filed within the time limit there will be no order as to costs.
Each party is granted leave to seek any further orders which may be required to implement these orders.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Trent & Jollie 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 SYDNEY |
FILE NUMBER: SYC 7583/2012
| Mr Trent |
Applicant
And
| Ms Jollie |
Respondent
REASONS FOR JUDGMENT
Introduction
This is a relatively straightforward property division case where the parties by consent have divided the major real estate assets by order made 20 December 2013. They could not agree upon the final division notwithstanding that the difference between their respective positions is fairly small. They did agree that whatever the adjustment necessary to complete the proceeding it should be by way of splitting order effected against the superannuation entitlements of the husband.
The hearing concluded 17 December 2013. I reserved my decision. I was not able to work on the orders to be made in this case until April this year. When I was able to devote some time to the determination I found there were some questions which I had to ask about the balance sheet following the partial resolution of the case which had been achieved at the time of the hearing before me. I made a request for information which was provided in May this year. In the last stages of determining the case I could find no evidence of the trustee of the husband’s superannuation fund having been given notice of the splitting orders sought in the matter. Evidence of such notice having been given and the response thereto was received finally on 26 June 2014.
Background Facts
Where in this judgment I make statements of fact they are, unless otherwise specified, my findings of fact.
The applicant husband was born in 1972 and the respondent wife was born in 1976.
The parties married in 1996 and separated on approximately 17 July 2012, thereby creating a 16 year cohabitation (and possibly more). There is evidence to suggest the parties cohabited in Queensland for some unspecified period before the marriage. There are two children of the marriage: C born in 2002, and D born in 2004.
At the time of the hearing the children were living with the wife and spending time with the husband pursuant to orders made 25 November 2013. By those orders the children were to spend time with the husband on alternate weekends from after school Friday to Sunday evening. The children also are to spend time with the husband each Wednesday afternoon and during school holidays. There is telephone time and special occasion time for the children with the husband.
At the commencement of cohabitation each of the parties owned some assets which I will refer to later.
Each of the parties worked during the cohabitation. Details of their contributions from such employment will be canvassed later in these reasons.
The parties purchased a vacant block of land in February 1997, and built the former matrimonial home on that site at E Street, Suburb F (“the former matrimonial home”). They purchased the land for about $65,000. A house was erected on the site. The parties borrowed $260,000 secured against the property.
The parties bought and sold a number of properties during the course of the relationship. Those transactions were profitable for the parties. The funds were applied to the acquisition of further property, reduction of liabilities, and payment of living expenses. To the extent that history is challenged I will refer to it in these reasons.
In general terms the parties purchased and sold property at Suburb G in the ACT; a block of land at Suburb H; a unit in Suburb I ACT. As those investments realised a profit, or surplus on sale, the proceeds were applied to reduce the mortgage on the former matrimonial home.
In 2006 the parties purchased a property at J Street, Suburb F (“the investment property”). The purchase price was about $190,000 which was borrowed from Bendigo Bank. The parties then spent about $30,000 to $35,000 to fit out and stock the property for the wife to conduct a jointly owned business called K Pty Ltd. Further money was borrowed to use as capital in the business. The loan with Bendigo Bank is an interest only loan and has a balance owing of about $260,000.
In 2007 the parties extended the loan from Bendigo Bank to carry out improvements to the former matrimonial home and provide further capital for the K Pty Ltd. The parties borrowed a further $110,000.
In May 2009, the wife received a compensation payment of $115,000 in relation to an injury she had suffered at work. Since that time, she has received $200 per week from the relevant insurer. Details of how the $115,000 was calculated are not available.
The husband was made redundant from his employment in July 2009 and received a redundancy payment of $47,000.
The wife’s grandmother died in 2010. The wife subsequently received distributions from the estate as a beneficiary. The first distribution was on 6 October 2010 and consisted of a motor vehicle valued at $7,000, furniture and effects to the value of $1,250 and a cash payment of $29,319.16. The second was a payment of $54,643.79 in November 2011. The wife gave the motor vehicle to her mother. The money received by the wife from her inheritance was deposited to the parties joint account with the Bendigo Bank.
In June or July 2012, the parties separated.
The husband was made redundant from his employment in August 2013, and received a redundancy payment of $81,000.
In her affidavit the wife alleged the husband had been a gambler during the cohabitation. No evidence was led to support this assertion and no cross-examination of the husband touched on this subject.
On 10 October 2013 the parties were divorced.
On 17 December 2013 I made the following order:
IT IS ORDERED THAT
1. I note that the parties are in agreement that the two properties identified as [E Street, Suburb F] and [J Street, Suburb F] are to be conveyed to the wife within two months as part of a partial property order. The second part of the order is that the wife, simultaneously with the transfer of the two properties, discharge the husband’s liability for any mortgage or loan secured against the properties and otherwise indemnify him in respect of any outgoings as and from the date of transfer. The third part will be the release of the injunction made by the court on 25 November 2013 in relation to the funds deposited by the husband with his solicitor. Such discharge is to be as and from the date of the transfer of the subject properties being effected.
2. I direct that each of the parties send a minute of the consent order to my associate in Word document form by close of business tomorrow, and upon that happening, I will make the interim orders on a by consent basis.
3. I direct that each of the parties’ legal representatives provide to my associate their cost disclosure documents by close of business Thursday in word document form. I direct that each party provide a copy to each other, and those documents will become exhibits in the proceedings.
4. I otherwise reserve judgment in relation to the balance of the outstanding property applications and will deliver same as soon as possible.
On 20 December 2013 I made the following orders by consent:
DEFINITIONS | NOTATIONS
‘The Bendigo Bank liabilities’ – refers to:
1.1Mortgage to Bendigo Bank Ltd Account No … secured against the home;
1.2Mortgage to Bendigo Bank Ltd Account No … collaterally secured against the home and [J Street]
1.3Equity loan secured against the home being No …
BY CONSENT IT IS ORDERED:
Transfer of Property
That within 2 months from the date of these orders and by way of partial property order, the husband shall do all acts and things and sign all documents as may be necessary to transfer to the wife all his right, title and interest in the following properties:
2.1[E Street, Suburb F] (home) being the whole of the land contained in Certificate of Title Folio Identifier …, together with the contents therein.
2.2[J Street, Suburb F] ([J Street]) being the whole of the land contained in Certificate of Title Folio Identifier ...
That simultaneously with the husband complying with order 2 herein:
3.1the wife shall do all acts and things and sign all documents as may be necessary to discharge the Bendigo Bank liabilities and indemnify the husband in respect of the Bendigo Bank liabilities as and from the date of the transfer.
3.2that the orders made in Exhibit B of the orders of 25 November 2013, be
3.3discharged.
On the 28 April 2014 I had the following email sent to the parties.
Good Afternoon,
His Honour has asked me to write to you and obtain from you the following clarification in relation to the following matters.
1. In relation to the Balance Sheet: HH made orders on 20 December 2013 in relation to mortgages with Bendigo Bank (Numbers … and …) and an equity loan (number …). In relation to the Balance Sheet (exhibit X1) could the parties jointly advise which items these mortgages refer to, as the account numbers do not appear to appear on the Balance Sheet.
2. In the wife's affidavit, at paragraph 63, the wife seems to indicate that she paid $20,000 off the personal overdraft account and subsequently paid $140 per month to that liability, however, at paragraph 58 and 59 of the same affidavit, it is set out that the personal overdraft was overdrawn $65 at the time of separation and $2056 at the time of the wife's affidavit. There was no cross-examination of the wife on this topic. On the face of if, it appears to be an error as it does not seem that the account was ever overdrawn to the amount of $20,000. HH asks that you provide a joint statement of agreed fact as to what the debt was at the time of separation in relation to the personal overdraft liability.
3. On 25 November HH made an order that the husband place $15,000 into a trust account, and that from those monies he pay $600 per week in child support and half of the mortgage payments. That order was discharged on 20 December 2013. HH asks that a statement be provided setting out what monies were disbursed from that account between 25 November 2013 and 20 December 2013 and where were they paid to (for what purpose).A response to that email was received together with a copy of a trust account statement from the husband’s solicitors on 2 May 2014 showing payments made against the husband’s $15,000 between the date of the orders in November 2013 and 20 December 2013. That statement shows that payments were made for child support and also to meet the husband’s commitment in relation to the mortgage on the former matrimonial home and the investment property as follows:
·5/12/13 child support $600;
·5/12/13 home equity loan $275;
·6/12/13 child support $600;
·6/12/13 Investment loan $888;
·9/1/14 child support $600;
·9/1/14 home loan payment $610;
·9/1/14 child support $600.
All the above payments are designated in the account provided as payments due before 20 December 2013. Those payments total $4,173. However, the record shows that between 20 December 2013 and the exhaustion of the funds held in the trust account the following further payments were made.
·Seven payments of $600 for child support totalling $4,200.
·Five further payments in relation to the loans totalling $2,936.
Having said that, I note the parties have now provided me with a statement of agreed facts in answer to my request for further information. It is an agreed fact that the total payments made from the husband’s $15,000 amount to $12,519. The husband received a refund of $2,481.
It is further agreed that the wife has paid out items 18, 19, 20 and 22 on the balance sheet when she complied with the orders of 20 December 2013. Those sums add up to $505,019.
In relation to the question in paragraph 2 of the questions I caused to be sent to the parties, I am informed that the wife did not pay $20,000 rather she paid $140 per month in reduction of the loan.
I also asked for the parties to be requested to provide evidence that the trustee of the B Super Fund had been afforded procedural fairness, as required by the Act, through notice being provided of the splitting order sought.
Orders Sought
The wife sought the following orders:
1.Within 2 months the husband transfer to the wife all his right title and interest in the properties
1.1 [E Street, Suburb F]
1.2 [J Street, Suburb F]
2.Simultaneously with order 1, the wife discharge the mortgages on each of the properties with
2.1 loan from the Bendigo Bank in the sum of about $19,998, and
2.2the overdraft facility with the Bendigo Bank in the sum of about $110,237.
3. There be a splitting order in relation to the Husband’s Superannuation entitlements in the sum of a base sum of $200,000.
4.In the event that the wife fails/neglects to comply with order 2 herein, the properties be sold forthwith and from the proceeds of sale, the ordinary sale expenses be deducted and the mortgages and loans referred to in order 2 be discharged, and the balance paid to the wife.
5.Pending transfer pursuant to order 1 herein, or sale pursuant to order 4 herein, the parties shall continue to each pay one half of the required payments necessary to service the mortgages, loans, and overdraft facilities referred to in order 2 herein.
6.Each party otherwise be declared as against each other, the sole owner of all items of personalty in their possession or control including bank accounts, shares and the like.
7. Order pursuant to section 106A.
The husband sought the following orders:
DEFINITIONS | NOTATIONS
1.‘The Bendigo Bank liabilities’ – refers to
1.1Mortgage to Bendigo Bank Ltd Account No … secured against the home;
1.2Mortgage to Bendigo Bank Ltd Account No … collaterally secured against the home and [J Street]
1.3Equity loan secured against the home being No …
Transfer of Property
2.That within 28 days from the date of these Orders, the husband shall do all acts and things and sign all documents as may be necessary to transfer to the wife all his right, title and interest in the following properties:
2.1[E Street, Suburb F] (home) being the whole of the land contained in Certificate of Title Folio Identifier …, together with the contents therein.
2.2[J Street, Suburb F] (J Street) being the whole of the land contained in Certificate of Title Folio Identifier ...
3.That simultaneously with the husband complying with Order 2 herein, the wife shall do all acts and things and sign all documents as may be necessary to discharge the Bendigo Bank liabilities.
4.That in the event that the wife fails to comply with Order 3 herein then the parties shall forthwith do all acts and things and sign all documents as may be necessary to cause the home and [J Street] to be sold pursuant to the conditions in Annexure “A” herein.
5.That upon the sale of the home and [J Street], the proceeds of sale shall be distributed as follows:
5.1Firstly, in payment of agent's commission, advertising expenses and legal costs in relation to the sale.
5.2Secondly, in relation to the discharge of the Bendigo bank liabilities.
5.3Thirdly, the balance then remaining to the wife.
Superannuation splitting order
6.That in accordance with Section 90MT(1)(b) of the Family Law Act 1975:
6.1The wife is entitled to be paid the specified percentage of each splittable payment out of the husband’s entitlement and the entitlement of such other person to whom a splittable payment may be made out of the husband’s interest in [B Super Fund] is correspondingly reduced;
6.2The husband’s interest in [B Super Fund]; and
6.3The specified percentage for the purposes of this Order is 45 per cent;
6.4That this order have effect from the operative time and the operative time is the date of this order;
6.5That the trustee of [B Super Fund] shall do all such acts and things and sign all documents as may be necessary to:
6.5.1Calculate in accordance with the requirements of the Family Law Act 1975 the entitlement created by clause 6.3 of this order; and
6.5.2Pay the entitlement whenever a splittable payment becomes payable out of the husband’s interest in the [B Super Fund];
6.6That after service of the payment split notice pursuant to Rule 7A.03 of the Superannuation Industry (Supervision) Regulations 1994, the wife shall do all such acts and things as may be necessary, including but not limited to, exercising her request pursuant to Rule 7A.06(1) of the Superannuation Industry (Supervision) Regulations 1994 for the rollover or transfer of the transferable benefits out of the husband’s interest in [B Super Fund] to a fund of the wife’s choosing in accordance with Rule 7A..12 of the Superannuation Industry (Supervision) Regulations 1994.
6.7And the Court notes that:
6.7.1The value of the transferrable benefits from the husband’s interest in [B Super Fund] are calculated in accordance with Rule 7A.12 of Superannuation Industry (Supervision) Regulations 1994; and
6.7.2Pursuant to Rule 14F of the Family Law Superannuation Regulations 2001, any payments made from the husband’s superannuation interest made after the trustee has rolled over or transferred the transferable benefits to a fund of the wife’s choosing and not splittable payments; and
6.7.3The trustee will be relived of its obligations to calculate and split payments under clause 6.5 of this order in the event that the transferrable benefits are transferred to a superannuation fund of the wife’s choosing in accordance with the requirements under the Superannuation Industry (Supervision) Regulations 1994.
7.That within 28 days from the date of these orders, the wife shall do all acts and things as may be necessary and give all consents and execute all documents and writings to authorise the banking institution(s) at which [C] and [D] have bank accounts to enable the husband to operate any such accounts jointly with the wife.
Declarations
8.That subject to these orders the husband be declared to be the legal and beneficial owner of the following:
8.1His bank accounts;
8.2His motor vehicle;
8.3His superannuation entitlements with B;
8.4His shares;
8.5All other property in his possession, custody and/or control.
9.That subject to these orders the wife be declared to be the legal and beneficial owner of the following:
9.1The home;
9.2The [J Street] property;
9.3Her bank accounts;
9.4The contents of the home;
9.5Her superannuation entitlements;
9.6The motor vehicle 1;
9.7All other property in her possession custody and/or control.
10.Both the husband and the wife hereby release the other from all actions, proceedings, claims, demands, costs and expenses whatsoever and howsoever arising which either of them had or may have against the other for or by reason of or in respect of any act, cause, matter or thing.
11.That the parties shall do all acts and things necessary and give all consents and execute all documents and writings to give effect to these Orders in the time periods prescribed.
12.That in the event that either party refuses or neglects to execute any deed, document or instrument necessary to give effect to these Orders, the Registrar of the Family Court of Australia, Sydney Registry be appointed pursuant to Section 106A of the Family Law Act 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.
13.That each party be responsible for payment of their own costs of the property proceedings.
The Issues
The parties identified the issues at the commencement of the hearing as follows:
·There were very few issues of fact in the matter. Any issue of fact which is important in the determination of the case I will refer to in these reasons.
·The outstanding issue remains as the amount of superannuation split the wife should receive from the husband’s superannuation entitlement.
Credit
The husband gave oral evidence. He gave that evidence in a straightforward and apparently honest manner. I did not detect any aspect of his evidence which caused me to consider he was being untruthful.
There were aspects of the husband’s evidence which were unsatisfactory. I will set out hereafter those aspects.
The wife gave her evidence in an apparently straightforward and honest manner. I do have some reservations about the wife’s evidence in relation to the exact nature of her relationship with Mr L. I will detail those concerns and determinations when I come to deal with s 75(2) matters.
The wife’s mother gave oral evidence. Her name is Ms M. She gave her oral evidence in a straightforward and apparently honest manner. There was nothing to suggest she was not doing her best to give her evidence in a truthful way.
The husband relied upon an affidavit sworn by his fiancé Ms N. She was not required for cross-examination.
Evidence
Affidavit Evidence
Applicant Husband
The husband relied on the following evidence:
a)Affidavit of the husband, sworn 12 December 2013 and filed 13 December 2013
b)Financial Statement sworn 13 December 2013; and
c)Affidavit of Ms N, sworn 21 November 2013 and filed 21 November 2013.
In his affidavit sworn 12 December 2013 the husband set out the following information.
The husband said that at the start of cohabitation he held some savings, to which a value was not attributed, a motor vehicle 2 valued at $8,000, and a superannuation interest worth $21,420.30. He says the wife owned a car with an estimated value of $1,000.
The husband stated he made the following financial contributions during the marriage and before separation.
·At the commencement of cohabitation, he was working as a tradesman. He continued in that role until August 2009.
·In the six years prior to separation, he earned the following amounts, which he said he used entirely to provide for the family.
30 June 2007
$118,880 (gross)
30 June 2008
$112,605 (gross)
30 June 2009
$107,762 (gross)
30 June 2010
$165,180 (gross)
30 June 2011
$194,865 (gross)
30 June 2012
$208,318 (gross)
·From 2007 he worked seven days per week, working two jobs: one being shift work and the other as a project manager in his parents’ business.
·In July 2009, he was made redundant from the O Pty Ltd and received a payout of $47,000. He used this money for a family holiday and to pay down the home mortgage.
·Together with the wife he purchased a block of land in February 1997 in Suburb F, on which the former matrimonial home was constructed. The husband says the land and building purchases were financed by way of a loan from Bendigo Bank of $260,000. The parties later extended the mortgage to the sum of $110,000 as an equity loan in order to undertake improvements to the home and fund the K Pty Ltd business.
·Together with the wife he purchased a series of investment properties. Each was funded entirely by way of a loan from Bendigo Bank.
oSuburb G property: purchased in 1999 for $285,000 and sold in 2001 for $330,000. The net proceeds of $30,000 were applied to the loan on the former matrimonial home;
oSuburb H block: purchased in 2001 for $175,000 and sold in 2004 for $310,000. The net proceeds of approximately $110,000 were applied to the loan on the former matrimonial home;
oSuburb I property: purchased in 2004 for $195,000, and sold in 2006 for the same amount. The losses occasioned as a result of having to pay legal and real estate costs of sale were funded by drawing down money from the loan on the former matrimonial home.
·Together with the wife in 2006 he purchased a property in Suburb F from which it was intended the wife would operate their business “K Pty Ltd”. Together with the wife he borrowed the entire amount for that venture from Bendigo Bank, being the cost of the property, the fit out, and a later extension to purchase stock. The entirety of the monies borrowed was $260,000.
The husband said that he made the following non-financial contributions during the marriage and before separation:
·he assisted with the day to day care of the children;
·he cared for the children during the wife’s overseas holidays (shortly before separation);
·housekeeping duties, including assisting the wife with housework following her back injury in 1998;
·maintaining the matrimonial home and garden;
·installing timberwork around the pool at the matrimonial home; and
·fitting out the shop at the investment property (with some help from friends)
The husband said that his post-separation financial contributions included servicing the two mortgages which were secured against the matrimonial home and the investment property, and servicing the overdraft facility. Specifically, the husband states his contributions to addressing the liabilities were:
·approximately $1,800 per month for the investment loan by way of interest payments;
·$1,200 to $1,260 per month for the home mortgage;
·approximately $600 per month for the overdraft facility;
·non-assessed child support of $800 per week for four months following separation, then $600 per week until 25 November 2013.
Following separation, the husband stated he borrowed $150,000 from his mother to cover legal fees.
In August 2013 a redundancy payment of $81,000 was received by the husband. He stated he applied this money to liabilities of the parties and to living expenses. Those payments were largely detailed in his evidence and will be specified later in these reasons.
The husband said that his “present situation”, as it is relevant to section 75(2) factors. is:
·In 2013 he set up a consulting business, and from this business he invoices $5,000 to $6,000 per month;
·He expects to develop this business and to secure additional clients;
·He secured temporary employment between December 2013 and January 2014, and from this employment earned $5,000 per week;
·He has applied for a variety jobs;
·He has continued to pay the liabilities referred to above;
·He pays rent of $1,700 per month; and
·His fiancé, with whom he lives, also pays rent.
Ms N
In her affidavit sworn 21 November 2013, Ms N said that she and the husband live together, lease a house, and share joint expenses. However, she says that she and the husband maintain separate bank accounts and own separate property.
The balance of Ms N’s affidavit concerned parenting matters.
Respondent Wife
The wife relied on two affidavits:
a)Affidavit of the wife, sworn 13 December 2013; and
b)Affidavit of Ms M, sworn 13 December 2013.
In her affidavit sworn 13 December 2013, the wife set out the following information.
The wife said that at the start of cohabitation she owned a motor vehicle 3 valued at approximately $3,000, savings, personal property of nominal value, and a superannuation interest, again of nominal value. She asserted the husband had credit card debts, to which a value was not attributed.
The wife provided a history of the acquisition of the former matrimonial home. She and the husband purchased vacant land at Suburb F in or about 1997 for $65,000. This was funded by way of a loan of $58,500. The parties then built a house on this land, and borrowed a further $260,000 for construction costs.
The wife’s account of the parties’ property investments is:
·House in Canberra: purchased in 2000 for $270,000 and sold in 2002 for $328,000.
·Unit in Canberra: the wife cannot recall the purchase figure. She asserted the purchase was funded by a loan. She and the husband subsequently sold this unit for a small profit.
·Suburb H land: purchased and subsequently sold. The net proceeds of between $90,000 and $100,000 were applied to the acquisition of the Suburb F property.
·Suburb F shop: purchased in 2006 for $200,000. This purchase was financed by way of a loan for $260,000, being for the purchase of the property and for refurbishing the shop.
Following the refurbishment of the shop, the wife said that she and the husband established a second hand children’s clothing business known as “K Pty Ltd”. The wife said that this business did not produce income of any significance.
The wife recited the following financial contributions she claimed she made during the marriage and before separation.
·Between 1997 and 2002 she worked in a variety of retail jobs, and earned $30,000 to $36,000 per annum.
·Following the birth of the parties’ eldest child in 2002, the wife worked on a casual basis for several months. She worked in the “K Pty Ltd” business between 2006 and 2008.
·In May 2009 the wife received a lump sum payment of $115,000 following a compensation claim she made for a workplace injury. In addition to this sum, the wife began to receive a payment of $200 per week from an insurer.
·In 2010 and 2011 the wife received two distributions from her grandmother’s estate by way of inheritance. These distributions consisted of a motor vehicle 3 valued at $7,000 (which she gifted to her mother), furniture and effects valued at $1,250, and cash payments of $83,962.95.
The wife listed the following non-financial contributions she claimed she made during the marriage and before separation:
·She was the children’s primary carer, and was responsible for maintaining their routines;
·She prepared meals;
·She would take the children to and from school, assist with their homework, and attend school events;
·She would take the children to and from their extra-curricular activities; and
·Housekeeping.
The wife said that the husband provided little assistance in relation to caring for the children, and that he worked considerable overtime.
The wife said that her post-separation financial contributions have included:
·Payment of $140 per month for a personal loan;
·Payment of rates and outgoings (utility expenses) in relation to the matrimonial home;
·In November 2013: payments of $1,220 on the mortgage and $600 on the overdraft for the Suburb F property;
·From 25 November 2013 (pursuant to interim Orders): half of the payments for the mortgage and overdraft facility; and
·Payment for the bulk of the children’s day to day expenses.
The wife asserted that following separation and to date, she has borrowed $59,475.45 from her mother to cover legal fees.
The wife said that she has not received any payments of child support from the husband, and that the husband has not applied any money towards the outstanding loans. This evidence appeared to relate to the time immediately before the hearing at the end of 2013.
The wife alleged that the husband spent significant amounts of money on gambling, both during the marriage and following separation. No acceptable evidence of this allegation was provided.
The wife specified the following matters as relevant to s 75(2):
·She, following separation, the primary carer of the children;
·She has ongoing physical limitations resulting from the workplace injury, for which she received the lump sum compensation payment;
·She contends that her physical condition prevents her from returning to full-time work;
·The husband earns, and has the capacity to earn, a significantly higher income than she has earned or is likely to earn;
·Her contributions during the marriage enabled the husband to obtain extra qualifications, and therefore to earn a higher income.
The wife said that in 2013 she commenced a relationship with Mr L. She claimed she does not live with him, he does not provide her with financial support, and that she does not own any property jointly with him.
Ms M
In her affidavit sworn 13 December 2013, Ms M (the wife’s mother) said that she has lent money to the wife for the payment of legal fees. She also said that she has serviced the wife’s car loan. She requires the wife to repay these amounts.
She is able to and will assist the wife with refinancing the Suburb F properties, provided that the wife retains those properties.
PROPERTY MATTERS
PROPERTY: GENERAL PRINCIPLES
Section 79 of the Family Law Act 1975 (“the Act”) enables the court to make orders with respect to the property of the parties to the marriage. In considering what order, if any, should be made the court is required to take into account the matters under s 79(4).
In decisions such as Ferraro and Ferraro (1993) FLC 92-335; McLay and McLay (1996) FLC 92-667; Hickey and Hickey (2003) FLC 93-143 the court referred to a mapped pathway for the determination of a s 79 application. That pathway featured a four step process:
·firstly, identify and value the net property, liabilities and financial resources of the parties at the date of the hearing;
·assess the contributions of the parties pursuant to s 79(4);
·consider the relevant s 75(2) factors; and
·lastly, consider whether such an order, in all the circumstances, is just and equitable. The final consideration is a reflection of the requirement under s 79(2).
The High Court in the case of Stanford v Stanford (2012) 87 ALJR 74 specified another step in the pathway, which is referred to above. In that case the High Court set out the approach to be taken to the determination of property cases so far as the meaning and application of section 79(2) of the Act is concerned. Extract from that decision is set out below in the quotation from the Full Court decision in Bevan.
The Full Court has had the opportunity to discuss the decision of Stanford in a determination of the court Bevan & Bevan [2013] FamCAFC 116. There the Full Court referred to the special facts found in the Stanford case and quoted paragraph 42 of the High Court judgment as follows:
42.In many cases where an application is made for a property settlement order, the just and equitable requirement is readily satisfied by observing that, as the result of a choice made by one or both of the parties, the husband and wife are no longer living in a marital relationship. It will be just and equitable to make a property settlement order in such a case because there is not and will not thereafter be the common use of property by the husband and wife. No less importantly, the express and implicit assumptions that underpinned the existing property arrangements have been brought to an end by the voluntary severance of the mutuality of the marital relationship. That is, any express or implicit assumption that the parties may have made to the effect that existing arrangements of marital property interests were sufficient or appropriate during the continuance of their marital relationship is brought to an end with the ending of the marital relationship. And the assumption that any adjustment to those interests could be effected consensually as needed or desired is also brought to an end. Hence it will be just and equitable that the court make a property settlement order …
The Full Court said further:
70. In our experience, the circumstances described in the paragraph above encapsulate the vast majority of cases. Hence, the reminder in Stanford of the pivotal role of s 79(2) is unlikely to have any impact in most cases, although it will serve as a reminder to trial judges that the precondition to making any order is a finding that it is just and equitable to do so
71. Stanford will also serve as a reminder that the four step process “merely illuminates the path to the ultimate result”. Any future restatement of that process should incorporate acceptance of the fact that the power to make any order adjusting property interests is conditioned upon the court finding that it is just and equitable to make an order.
72. It follows that judges would be well advised to avoid what we consider to be arid discussion of the “stage in the process” at which “adjustments” are permissible. Such discussion tends to elevate the four step process to the status of a statutory edict, when in fact it is no more than a shorthand distillation of the words of a statute which has but one ultimate requirement, namely not to make an order unless it is just and equitable to do so.
73. The High Court in Stanford has laid down three “fundamental propositions” which will provide useful guidance to trial judges in approaching the task under s 79. These were recited above, and could be summarised thus:
1.Determination of a just and equitable outcome of an application for property settlement begins with the identification of existing property interests (as determined by common law and equity);
2.The discretion conferred by the statute must be exercised in accordance with legal principles and must not proceed on an assumption that the parties’ interests in the property are or should be different from those determined by common law and equity;
3.A determination that a party has a right to a division of property fixed by reference only to the matters in s 79(4), and without separate consideration of s 79(2), would erroneously conflate what are distinct statutory requirements.
74. The first “fundamental proposition”, which requires identification of existing legal and equitable interests in property, is nothing new, since “property” has always been understood as incorporating equitable, as well as legal, interests.
In the recent Full Court decision of Chapman & Chapman [2014] FamCAFC the Full Court made the following statement about the determination in Bevan:
The relevant principles emanating from Bevan
18. As to inference, the plurality in Bevan said (at [89]) “[u]ltimately, however, appellate error will not be demonstrated if it is possible to ascertain, either by reference to an express finding or by necessary inference, that the trial judge has given separate consideration to the two issues” (emphasis added). Similarly, the plurality firmly rejected (at [86]) the notion that s 79(2) forms a “threshold issue” – which their Honours described as a “misleading” description – or that error is demonstrated by a failure to deal with s 79’s separate requirements in a particular order.
19. Section 79 demands a consideration, separately, of all of its requirements without conflation. Provided a trial judge has done so, and the reasons demonstrate that this has been done, no error is demonstrated by a failure to follow a particular order in doing so. Further, the breadth and depth of the consideration of the s 79(2) issue, and the extent of an adequate exposition of it in the reasons, will vary from case to case. In that respect, the plurality in Bevan said, at [82], that the separate s 79(2) issue will, “…in many cases … [be] … effectively answered in the affirmative by the way the parties present their cases.”
20. Each of those conclusions conforms entirely with what was said about those issues by the High Court in Stanford v Stanford (2012) 247 CLR 108.
21. First, it is “…not possible to chart [the] metes and bounds” of the relevant discretion. Just as importantly, it was recognised specifically that the characteristics of individual marriage unions, in so far as they acquire, hold and deal with property, differ. In “many cases”, the union is underpinned by “…stated and unstated assumptions between the parties to a marriage that the arrangement of property interests, whatever they are, is sufficient for the purposes of the husband and wife during the continuance of their marriage” (Stanford, at [41]). And, in “many cases”, (but, not all) the “…just and equitable requirement is readily satisfied…” by the fact of separation: “[i]t will be just and equitable to make a property settlement order … because there is not and will not thereafter be the common use of property by the husband and wife” (Stanford at [42]).
22. “Ready satisfaction” of the s 79(2) requirement “in many cases” by reference to separation and its consequences brings with it a necessary further consequence; in those “many cases” the parameters, breadth and depth of the s 79(2) inquiry will be curtailed accordingly. It is those who lived within the “stated and unstated assumptions” who understand them best. As a result, satisfaction of the s 79(2) requirement can be inferred, at least in part, from the issues joined and, importantly, not joined, between the parties.
23. Nothing to which we have been taken by senior counsel for the wife suggests, in respect of the challenges raised by the wife, that what was said by this Court in Bevan was wrong, much less compels any such conclusion.
24. In light of the broad sweep of the wife’s arguments on this issue, mention should also be made of what the plurality said in Bevan at [84] and [85]. The opening to the latter paragraph and its reference to a “…requirement to consider the s 79(4) matters…” (emphasis added) in answering the s 79(2) question suggests that those factors must mandatorily considered. Their Honours support that conclusion in [84] by reference to the words used in s 79(4);
…it would be a fundamental misunderstanding to read Stanford as suggesting that the matters referred to in s 79(4) should be ignored in coming to that decision. Indeed, “..such a reading would ignore the plain words of s 79(4), which make clear that in considering “what order (if any)” to make, the court must take into account the matters referred to in that subsection.
(Bold emphasis in original).
25. If the plurality intended that a consideration of the s 79(4) matters is mandatory in answering the s 79(2) question, we respectfully disagree.
26. The judgment in Stanford points, in our view, to the opposite conclusion. In particular:
• The “…range of potentially competing considerations” and the consequent impossibility of charting the “metes and bounds” of what is just and equitable (at [36]);
• The ready satisfaction of the s 79(2) requirement in “many cases” by the fact of separation (at [42]);
• The statement that “it will be just and equitable” to make an order in “many cases” by reason of the “…choice made by one or both of the parties…” to end the marriage (at [42]);
• Equally, the statement that “it will be just and equitable” to make an order “in many cases” because “…there is not and will not thereafter be the common use of property by the husband and wife” (at [42], emphasis in original);
• The reiteration that: “…nothing in these reasons should be understood as attempting to chart the metes and bounds of what is ‘just and equitable’ (at [46]); and,
• The further reiteration that nothing in their Honours’ reasons is “…intended to deny the importance of considering any countervailing factors which may bear upon what, in all the circumstances of the particular case, is just and equitable” (at [46]).
27. Further, and crucially, in “applying s 79 in this case” the Justices of the High Court did not themselves take into account the matters in s 79(4). Indeed [51] of the judgment suggests they eschewed those s 79(4) matters relating to contribution. If, as the plurality held in Bevan, it is a “…requirement to consider the s 79(4) matters…” (emphasis added) in determining if, pursuant to s 79(2), it is just and equitable to make any order it is, respectfully, inconceivable that their Honours in Stanford would not have done so.
Assessment of the s 79(4) contributions
In considering the alteration of property interests I am required to consider the contributions made by the parties in accordance with the matters outlined under s 79(4).
Section 75(2)
One of the requirements of s 79(4) is the necessity to take into account the matters referred to in s 75(2) of the Act so far as they are relevant.
DETERMINATION
The first step I must undertake is to identify the property of the parties or either of them.
The Court at the commencement of the hearing was provided with the balance sheet set out hereunder for its consideration.
The Balance Sheet
The parties provided a jointly prepared balance sheet. Most of the entries were agreed. The Joint Balance Sheet was marked as an exhibit in the hearing as X1.
I will now address the items of dispute in X1.
The wife sought to include in the balance sheet an entry at item 17, being the amount of redundancy payment received by the husband post separation. The amount received was $81,000. I find the husband has accounted for a significant part of the expenditure of that sum. At the time of the hearing he claimed to have $15,000 only left from the fund. That sum was then the subject of an order requiring the husband to pay same to a trust account against which certain payments were to be made. This item in the balance sheet calls for a consideration of the decisions of the Full Court about notional property.
In Bevan & Bevan [2013] FamCAFC 116, Bryant CJ, Finn and Thackray JJ considered the High Court’s decision in Stanford v Stanford (2012) 247 CLR 108 insofar as it related to the process of adjusting property interests. In Stanford v Stanford, the High Court held that three “fundamental propositions” should guide the application of s 79.
In Bevan & Bevan (supra), Their Honours summarised these propositions at [73]:
1.Determination of a just and equitable outcome of an application for property settlement begins with the identification of existing property interests (as determined by common law and equity);
2.The discretion conferred by the statute must be exercised in accordance with legal principles and must not proceed on an assumption that the parties’ interests in the property are or should be different from those determined by common law and equity;
3.A determination that a party has a right to a division of property fixed by reference only to the matters in s 79(4), and without separate consideration of s 79(2), would erroneously conflate what are distinct statutory requirements.
At [79] Their Honours considered the application of these propositions to the concept of notional property:
We observe that “notional property”, which is sometimes “added back” to a list of assets to account for the unilateral disposal of assets, is unlikely to constitute “property of the parties to the marriage or either of them”, and thus is not amenable to alteration under s 79. It is important to deal with such disposals carefully, recognising the assets no longer exist, but that the disposal of them forms part of the history of the marriage – and potentially an important part. As the question does not arise here, we need say nothing more on this topic, save to note that s 79(4) and in particular s 75(2)(o) gives ample scope to ensure a just and equitable outcome when dealing with the unilateral disposal of property.
Notwithstanding that the last mentioned extract from Bevan is obiter dicta it is clearly of significant importance and supports earlier, perhaps less specific, statements.
The wife in submissions conceded that Bevan was applicable and the redundancy payment should properly be included as a s 75(2) consideration.
In light of the above I propose to consider the redundancy payment when I come to consider the post-separation contributions. To the extent that the fund was applied to meet expenses which were not matrimonial debts I will consider those under s 75(2).
Item 24 on the balance sheet was an entry for monies borrowed by the wife from her mother. It is expressed as a debt of $72,096. Also at that point in exhibit X1 is an entry for a debt of the husband to his mother of $80,000. Both of these debts, I accept, were largely incurred in order to meet very substantial legal costs associated with the proceedings in this Court. Some of the funds went to other expenses or payments, as I have later referred to.
In relation to the debt due to the wife’s mother, the husband says this is a matter which should be considered when the Court looks at s 75(2) matters. He submits that the parties’ legal costs are not included in the balance sheet as a notional asset and therefore it would lead to an error to include liabilities which were significantly incurred to pay those legal fees. The wife made no submission to the contrary however it is clear that both the debt by the wife to her mother and the debt by the husband to his mother should both be considered in the same way. I propose to consider both under section 75(2).
Both parties submitted that the court should approach this case on a one pool basis. That is there should not be a separate pool for superannuation. In the event that approach was not acceptable each submitted the contributions to the superannuation pool should be assessed to be the same as the contributions assessed in relation to the asset pool.
In Hickey v Hickey (2003) FLC 93-143 and Coghlan v Coghlan ((2005) FLC 93-220 the Full Court said the court should consider a separate pool wherever a splitting order was sought. It was not an error to look at a one pool approach however it was strongly recommended that the two pool approach in such cases should be undertaken.
In this case the net asset pool is very small $136,312. The superannuation pool is much larger at $262,000. Both parties have submitted that any adjustment between the parties should be reflected in a splitting order. There is little difference between the parties in relation to the order they each seek. As will be seen from earlier history provided in these reasons the parties have already agreed to orders which transfer the available real estate to the wife. Those orders were made on 20 December 2013 by consent.
In the very unusual circumstances of this case I propose to follow the course of action sought by each party and make an assessment of contributions of the parties across both the asset pool and superannuation pool as if the pools were one.
I find the assets, liabilities, superannuation and resources of the parties are as follows:
JOINT BALANCE SHEET
| Assets | |||
| 1 | Joint | E Street, Suburb F | 500,000 |
| 2 | Joint | J Street, Suburb F | 130,000 |
| 3 | Joint | Bendigo Bank Account | |
| 4 | Wife | Bendigo Bank Account | |
| 5 | Husband | Savings Account | |
| 6 | Husband | Mediguard shares (20,000 shares) | 400 |
| 7 | Husband | Vital Metals Limited (1,125 shares) | 47 |
| 8 | Husband | Eldore Mining Corporation Ltd (20,000 shares) | NIL |
| 9 | Husband | Cullen Resources Limited (20,000 shares) | 70 |
| 10 | Husband | Golden State Resources Limited (10,000 shares) | NIL |
| 11 | Husband | NIB (1,600) | 3,584 |
| 12 | Husband | Motor Vehicle 4 | 2,000 |
| 13 | Wife | Motor Vehicle 2 | 33,000 |
| 14 | Husband | Boat | 10,000 |
| 15 | Wife | Contents (Antique Furniture) | 10,000 |
| 16 | Wife | Wife’s St George Bank Account | nominal |
| Total | 689,101 | ||
| Addbacks | |||
| 17 | Husband | Redundancy/termination payment received by husband | Nil |
| Liabilities | |||
| 18 | Joint | Mortgage | 114,784 |
| 19 | Joint | Mortgage | 260,000 |
| 20 | Joint | Loan Bendigo Bank | 19,998 |
| 21 | Wife | Loan | 45,114 |
| 22 | Joint | Overdraft Facility Bendigo Bank | 110,237 |
| 23 | Wife | Personal Overdraft – Bendigo Bank | 2,656 |
| 24 | Wife | Debt to Ms M | |
| Husband | Debt to Mother | ||
| Total | $552,789 | ||
| POOL 1. NET ASSETS | $136,312 | ||
| Superannuation | |||
| Member | Fund & Interest | ||
| 25 | Husband | B Super (as at 30/06/2012) | 254,000 |
| 26 | Husband | MLC | 8,000 |
| Total | $262,000 | ||
| Financial Resources | |||
| NIL | |||
The net assets of the parties together with the superannuation totals $398,312.
Stanford: Is it appropriate to make any property order?
This is a case which falls into that vast majority of cases which the High Court in Stanford referred to in paragraph 42 of their judgment as above recited. The parties separated from each other in July 2012 some 18 months before the hearing. They have now been divorced. The parties each seek a property alteration pursuant to s 79 of the Act. The parties have consented to an interim property adjustment order. I conclude that it is just and equitable to proceed to consider further the orders each of the parties are seeking.
Section 79(4) contributions to date of separation
Initial Contributions
In his affidavit the husband said that he and the wife commenced to live together on 26 October 1996, which was the date of their marriage. In his oral evidence he said the parties had lived together before that date in Queensland however, no further details were given. The wife, in her affidavit evidence, said that she commenced her cohabitation in Queensland with the husband. She said they were there for about 18 months before returning to Sydney. She does not however, provide any dates so that the reader of her affidavit can see when the marriage took place relative to the period of cohabitation in Queensland. Her oral evidence did not progress the evidence in relation to that matter further.
The husband said that at the start of cohabitation he owned: some savings to which a value was not attributed, a motor vehicle 2 valued at $8,000, and a superannuation interest worth $21,420.30. He says the wife owned a car with an estimated value of $1,000.
Given that the husband did not provide any evidence to establish the value of the motor vehicle 2 I cannot give weight to his estimate of value. The wife however made an admission in her affidavit that the vehicle was worth about $6,000. The wife’s ability to value a vehicle at that time, or at all, was not in evidence. I can, however, use the wife’s admission against interest, as a guide. The husband did provide evidence as to the value of his superannuation at about the date of marriage. The evidence was not challenged.
The wife said that the husband’s liabilities included substantial credit card debts, to which a value was not attributed. This was not put to the husband in cross-examination.
I find the husband’s initial contributions to be as follows:
·Some unquantifiable savings;
·A motor vehicle 2 with a value at the time of around $6,000;
·Superannuation worth $21,420.30
The wife said that at the start of cohabitation she owned a motor vehicle 5 valued at approximately $3,000, savings and personal property of nominal value, and a superannuation interest, again of nominal value.
I cannot give weight to the wife’s estimate as to the value of her motor vehicle, however, the husband made an admission that it had a value of about $1,000. I can take that into account as a guide to value, although his ability to value a motor vehicle at that time or otherwise was not in evidence. The amount of her savings was not challenged.
I find the wife’s initial contributions to be:
·A motor vehicle with a value at the time of around $1,000.
·Savings and personal property of nominal value.
Financial Contributions
Both parties worked in various capacities during the cohabitation.
The husband had the following employment during the cohabitation and earned the following incomes which I accept he predominantly provided to the marriage.
Between the date of marriage and August 2009 the husband worked as a tradesman. At the time of the marriage he was earning about $1,400 per week after tax and other deductions.
In July 2009 the husband was made redundant from his then employment. He received a payment of $47,000. Some of that money was spent on a holiday and the balance was deposited against the home mortgage.
From About mid-2009 until August 2013 the husband worked as a manager and in other capacities.
In 2007 the husband commenced working seven days per week. He worked Monday to Thursday for his parents company as a project manager. He worked Friday to Sunday on his primary job. He worked night shift.
In the financial years ended 30 June 2007 to 30 June 2012 the husband’s gross income was as follows: $118,880; $112,605; $107,762; $165,180; $194,865; $208,318.
When the cohabitation commenced the wife moved to P Town in Queensland to be with the husband. He was employed there at that time. The wife obtained part time employment two to three days per week on average.
When the parties returned to Sydney the wife obtained employment with Q Pty Ltd earning $30,000 per annum gross. After six or eight months, the wife obtained a position as a manager with R Pty Ltd and her income increased to about $36,000 per annum gross.
The wife worked until shortly before C was born in 2002. After her maternity leave she returned as a part time for a few months. The wife then cared for C and then D on a full time basis until she commenced work in the parties business.
In about late 2006 the wife commenced to work in the parties business named K Pty Ltd. The wife described the business as “the parties business”. She operated this business for about 18 months. The shop was open from Tuesday to Friday all day and on Saturday for half a day. The wife took D to work with her on Tuesday and Friday. On Saturday both children accompanied her to work. On some occasions the husband cared for the children.
No income of significance was received by the wife from the business.
Whilst working for R Pty Ltd in 2000 the wife suffered a work injury. In May 2009 she received a compensation payment of $115,000. She also received from that time a weekly compensation payment of $200. I accept that during the cohabitation these funds were applied to family purposes.
On 6 October 2010 the wife received a payment of $29,319.16 from the estate of her grandmother. In November 2011 she received another payment of $54,643.79 from that estate. The wife also received some personal property of small value (about $1,250) and a motor vehicle 4. She gave the car to her mother. The funds received were deposited to the joint account of the parties with the Bendigo Bank.
During 2007 the parties borrowed $110,000 from the Bendigo Bank and effected improvements to the former matrimonial home. The improvements included a swimming pool, a pergola, fencing and landscaping.
As stated earlier the parties jointly acquired and sold real estate during the cohabitation.
Non-Financial Contributions
The parties conducted a business of K Pty Ltd. The husband effected improvements to the property the parties acquired in which to conduct the business. The improvements were in the nature of installing shop fittings and generally preparing the premises to operate as a shop. The list of work carried out by the husband is contained in his affidavit and is extensive. I accept that evidence.
The husband over three and a half months built and installed timber work around the pool which was installed at the former matrimonial home.
Homemaker and Parent Contributions
The wife claimed to be the person primarily responsible for the day-to-day care of the children during the cohabitation. I find she cared for them providing most of their supervision until they commenced pre-school and school. She organised for them to participate in extracurricular activities. She took them to their activities. She supervised their home-work. She worked in the school canteen. The wife acknowledges the husband took C to cricket for a season. She also recognises that the husband’s work roster made it difficult for him to participate in the children’s extra-curricular activities.
The wife acknowledged the husband did assist with the children, however, she said the assistance was “little”. The wife acknowledged that the long work hours of the husband made it difficult for him to assist in the care of the children.
The wife asserts she attended to the housekeeping including cooking, washing, ironing and shopping. I find it was the wife who largely attended to those domestic tasks during the cohabitation. She also attended to some maintenance of the gardens as did the husband. She said the husband mowed the lawns.
The husband said he was responsible for the maintenance of the homes the parties lived in. I accept the husband assisted with some housekeeping chores when he was able. He assisted in grocery shopping. He hung out the washing and brought it in when he was available. He said this was necessary due to the wife’s back injury. He did some cleaning and general house chores.
The husband assisted in the care of the children as he was available. He fed and bathed them when they were smaller. He played with them prior to bed time. He attended some medical appointments. He took one of the children to school on most mornings. He attended school functions.
During times when the wife travelled overseas on shopping trips the husband cared for the children. On one occasion the wife’s mother cared for them.
There were occasions when the husband was away on trips and the wife cared for the children alone. In 2009 the husband had a trip to Europe. He also had fishing trips to Queensland. Those trips were for a week at a time.
In cross-examination the husband conceded he worked long hours during the cohabitation. He left home at 5.00 a.m. and was not home until between 6.00 p.m. and 9.00 p.m. He also worked in his parents business at times when he was rostered off work.
I accept the evidence of both parties as to their contributions as home makers and parents. They both have different views as to how much of a contribution in this area each made, however, this is understandable.
I find that the wife made a much greater contribution in this regard than the husband. However, the husband’s contribution was not insignificant.
Section 79(4) contributions post separation
Post separation, the husband has continued to make financial contributions.
Until November 2013 the husband paid:
·Approximately $1,800 per month for the investment loan;
·Between $1,200 and $1,260 per month for the home mortgage;
·Approximately $600 per month on the overdraft facility.
(note some of these payments were sourced from the husband’s redundancy payment referred to hereafter)
The husband has also paid child support at the rate of $800 per week for the first four months of the separation and then $600 per week until 25 November 2013 when an order was made requiring $15,000, being part of the funds from the husband’s redundancy payment, to be deposited to a trust account and the account to be drawn upon to meet one half of the instalments on the home loan, the shop loan and the overdraft facility. A payment of $600 per week was to be made by way of child support from the fund. That order ceased to operate (upon the happening of certain events) after 20 December 2013 when I made a consent order which transferred property to the wife and provided other partial property orders. It seems clear that it took a short while following the orders of 20 December 2013 to complete the transfers of property specified in the order and thus payments continued to be deducted from the $15,000 until February 2014. As stated earlier the parties have agreed the husband contributed all but $2,481 of the fund. The wife acknowledges in her affidavit that the husband has paid for C’s dancing fees.
On 6 August 2013 the husband received a redundancy payment in the sum of $81,000. That fund, I accept was applied as contribution as follows.
·$20,000 to repay a personal loan.
·$10,800 in payments on loans/mortgages on the former matrimonial home and the investment property.
·Child support $10,200.
As to the balance of the fund the husband also used some of the fund to meet rental bond, rent and living expenses, including expenses for the children when they were in his care. As stated earlier I propose to take that expenditure into account when I consider the s 75(2) matters.
The husband has spent time with the children as permitted by arrangements between the parties and the court orders. The children have spent most time with the wife post separation.
At the time of the separation the wife was driving, and thereafter retained, the motor vehicle 1.
Post separation the wife’s mother has been paying the monthly payments on the motor vehicle 1. The payments are $1,611.23 per month. This payment has added to the debt the wife owes her mother as recorded in the balance sheet. The car payments are contributions made on behalf of the wife.
Since separation the wife has paid $140 per month to the Bendigo Bank in relation to an overdraft.
The wife has paid council rates and water rates. She has paid other outgoings on the former matrimonial home. In her Financial Statement the wife sets out payments made for gas and electricity. She shows “Nil” as payment for rates. The husband in his Financial Statement shows payments of $23 per week for rates and unit levies. It would appear on the evidence that the husband is meeting at least some proportion of rate payments. I accept the wife may well have contributed to the payment of council rates on the former matrimonial home.
In November 2013 the wife commenced making payments on the mortgage for the former matrimonial home and also an overdraft facility. She paid $1,220 on the home mortgage and $600 on the overdraft. Since the orders of 20 December 2013 she will be responsible for the payment or discharge of the mortgages and liabilities named in that order.
Post separation, the wife has been responsible for the care of the children for the majority of the time. She has had to meet the cost involved with that care and she has provided her time in relation to the supervision of the children. The husband cared for the children at times they were in his care. Both therefore have made contributions to the care of the children post separation.
Contributions to Superannuation
As stated earlier I propose to consider the assessment of contribution to superannuation as part of one pool of the parties’ net assets. The total of the parties’ superannuation is that of the husband. As stated earlier the husband had a superannuation interest at the time the cohabitation commenced. That will be taken into consideration as part of the overall assessment of contribution. Further all of the entitlement to superannuation arose as a result of the husband’s employment. Offset against that employment are contributions made by the wife in varying forms including her own contribution from employment and her contribution as principal home maker and carer of the children.
Conclusion on assessment of contributions
In relation to the parties contributions made during the cohabitation I assess the husband’s initial financial contribution as greater than that of the wife. I assess the husband’s financial contributions from income as greater than the wife’s. I assess the contributions made by the wife from her compensation payments and her inheritance as greater than that of the husband through his redundancy payment. As submitted by the wife’s attorney between May 2009 and November 2011 the wife contributed $198,962 in compensation payment and inherited assets. I assess the non-financial contributions of the parties to favour the husband. I assess the home maker and parent contributions of the wife as significantly greater than those of the husband.
In relation to the post-separation contributions, I assess the husband’s contribution to the mortgage debts of the parties as greater than that of the wife. It must be remembered, though, that the husband retained a significant asset of the parties at the date of separation, namely his earning capacity which had been built up during the course of the cohabitation. Further, the husband has contributed to the family through the payment of child support and also through spending time with the children.
I also need to take into account the effort the wife put into running the K Pty Ltd business even though it was ultimately unrewarding in a financial sense.
The wife submitted that the assessment of contribution should favour the wife by a determination which sees her receive 52.5 per cent to 55 per cent. She submits her contributions during the marriage should be assessed as greater than the husband’s largely because of the receipt of her compensation payment of $115,000 and the inherited property from her grandmother. She submits that although the husband has made a greater financial contribution post separation, she has made a greater contribution as a carer for the children. No adjustment should be made because of the post-separation contributions.
The husband provided a case outline document in which he submitted the final orders should see the wife receive 70 per cent of the parties’ real estate equity and 40 per cent split of the husband’s superannuation. It is not entirely clear whether the husband was submitting the wife should receive 70 per cent or 60 per cent of the parties’ real estate equity because he also said the husband should receive 40 per cent of the real estate equity. The husband in his oral submissions said the assessment of contribution should be equal and the wife should thereafter receive an adjustment of 10 per cent in her favour for the s 75(2) matters.
All in all I assess the contributions of the parties to be 52.5 per cent to the wife and 47.5 per cent to the husband as at the date of the trial. In reaching that decision I have assessed the wife’s contributions overall to be slightly greater than those of the husband. The contribution, which in my view, pushes the wife’s assessment past a determination of equal is the combined capital contribution from her compensation payment and from her inheritance.
Section 79(4)(d),
No submission was made to suggest any order sought by a party or which might be made by the court would have impact upon the earning capacity of either party. No evidence before the court would lead to such a conclusion.
Section 75(2) considerations
The husband was made redundant from his position in August 2013. He received a redundancy payment which is detailed above. He had $15,000 remaining on 25 November 2013 when he was ordered to have the fund invested for the purpose of meeting specific monthly payments. On 20 December 2013 that order was discharged, providing that once the husband had fulfilled his obligations under the order made that day then the balance of the $15,000 would be released. As stated earlier the husband had deducted from the $15,000 the sum of $12,519 before the order ceased to operate. That payment has been taken into consideration as a post separation contribution by the husband.
There was some argument around whether the husband’s redundancy package should be included as an “add-back” in the balance sheet. There is also the nature and makeup of the redundancy payment to be considered, however, in this case, no submission was addressed to that matter nor was there any evidence to show details of how the payment was calculated.
I propose to now address the receipt of the redundancy payment by the husband.
On 6 August 2013 the husband received a redundancy payment in the sum of $81,000. Some of those funds have been considered as a post-separation contribution above. I now take into account the balance of the fund was spent by the husband on the following matters:
·Rental Bond for his current residence $5,000;
·Rent on the husband’s residence $1,700 per month;
·Living expenses and other expenses associated with commencing his business.
I also take into account the husband received a refund from the $15,000 paid to the trust account pursuant to orders of 25 November 2013 of $2,481 and the husband has been able to use those funds as he chooses.
In cross-examination the husband told the court he had a bank account with no funds in it and an over-draft with Bendigo Bank. The overdraft was for a facility of $20,000, however, the amount owing on the overdraft is only $3,000. This evidence was at odds with what he had said in his Financial Statement sworn only days before the hearing however, it seems the Bendigo Bank overdraft was probably the $20,000 personal loan he repaid from his redundancy payment received in August 2013.
At the time the hearing concluded the husband was seeking employment. He received a 6 to 8 week contract with a company at about the time he swore his affidavit on 12 December 2013. The husband was paid $5,000 per week before tax for this employment.
After he was retrenched the husband established a business titled S Pty Ltd. This business is in its infancy and the husband is averaging $5,000 to $6,000 per month from the business at this time. The husband was cross-examined about the income from this business, however, I am satisfied his estimate of income from the business is broadly correct. The cross-examination related to alleged statements in the husband’s affidavit that the income was $5,000 to $8,000 per month, however, that arose from a misreading of the husband’s affidavit.
The husband is actively seeking full-time employment. I am satisfied that into the future he will be able to earn a good income somewhere in the vicinity of that earned by him over the last few years.
The husband shares the rental of his accommodation with his partner Ms N. They each pay $1,700 per month. They plan to marry.
The husband has incurred legal costs of $110,386 thus far and there is still the parenting case to conclude. He has paid $77,965 in legal costs. Of that sum his mother has paid $70,000. The wife has incurred legal costs of $42,857. Of that sum $37,602.75 has been paid. The wife has received funds to a total of $59,475.45 from her mother to pay her legal costs and meet expenses largely associated with leasing and maintenance of her car. The costs do not include costs estimated for the parenting hearing.
In order to meet his legal costs, the husband borrowed $150,000 from his mother. There is a loan agreement dated 24 October 2013. Of that sum the husband has applied $70,000 to meet his legal costs. At the time the husband swore his Financial Statement (13 December 2013) he stated he was indebted to his mother in the sum of $80,000. In cross-examination the husband told the court his mother has paid legal fees of $70,000 and has also advanced him $10,000 in cash. Given that he only owes his mother $80,000 I can only assume that is the extent of his draw on the loan. The current liability to his mother is not included in the balance sheet and I take it into account here.
The wife has a significant debt to her mother which she says she will pay from the property settlement. The wife’s mother Ms M gave evidence by affidavit and orally. In her affidavit she said the total debt owed to her by the wife at 13 December 2013 was $59,475.45. Of that amount, $35,402 was paid for legal fees and most of the balance went to meet car payments or car service costs. The amount of the loan from the wife’s mother has not been included in the balance sheet and I take it into account here.
The wife still has a health legacy arising from the injury she received at work in 2001. She suffers from pain in her lower back, numbness in her left leg. A number of other associated restrictions. She controls her pain and discomfort with medication.
At the time of swearing her affidavit in December 2013 the wife said she proposed to continue as a full time parent to the children. She had not engaged in employment since she ceased working in K Pty Ltd in 2008. She said she did not think she could return to work because of her back condition. However, in her oral evidence given on 17 December 2013 the wife disclosed she was studying with a view to employment. She said she was planning to work in sales. She had made enquiries and had ascertained that her income from working in sales would depend on selling homes (commission payment). The wife’s mother told the court she had known the wife was studying to become a sales person for about a year.
The wife impressed me as a determined person and for her to take on the study necessary to obtain the relevant qualifications I consider shows a level of determination which is likely to translate itself into success and ultimately into some employment. She will still need to care for the children during the school week and that may interfere in some manner with her employment. In any event, I consider the wife will be able to earn some income from employment sometime in the next couple of years.
I also need to take into account that the wife will continue receiving her compensation payment ($200 per week) at least until she is earning income from other sources which she has told the court will affect the amount she receives from the insurance company.
The division of net assets and superannuation based upon assessment of the parties’ contributions will see the wife receiving $209,114 of the assets and superannuation and the husband receiving $189,198 in assets and superannuation. The wife therefore receives $19,916 more than the husband. The wife also receives different property to the husband in that she will receive all of the parties’ equity in their real property ($235,218). This arises because of the relative size of the husband’s superannuation compared to the equity the parties have in their other assets. In the normal course, neither party will be able to access their superannuation for many years and probably not until they have retired from full time employment. The exact terms and conditions relating to the husband’s superannuation are not in evidence.
Although there will be a superannuation splitting order in favour of the wife so that she will have a fund for her future I take into account that the wife will probably not have the same ability to grow her superannuation entitlements as the husband over the next few years because of their probable different earning capacities.
The wife and the children have had the use of the former matrimonial home since the separation. This was a period of about 18 months at the time of the hearing.
The wife has formed a relationship with Mr L. The exact nature of the relationship is difficult to determine having regard to the evidence of the wife. It was the evidence she gave about the nature of her relationship with Mr L which left me with the impression that she was not being completely open with the court and the husband in relation to her disclosure about that relationship. She said in her affidavit that at Easter 2013 her friendship with Mr L developed into a boyfriend/girlfriend relationship. She said he stays with her on alternate weekends when he has care of his daughter. He does, on occasions, spend other weekends with the wife and he has spent nights, on occasion, mid-week.
The wife knows, from the evidence given by the husband in the parenting proceedings and from communications made by him and other statements made to the court, that the husband is most concerned about Mr L being in the company of the children. This may lead her to understate the time Mr L spends in the proximity of the children.
In cross-examination it was put to the wife that Mr L lived at her house on weekends. She said “Usually every second weekend when he has his daughter”. She said sometimes he stays overnight in the week time. She said he works in T Town and he earns $32 per hour for 40 to 50 hours work each week.
In relation to his financial support of the wife and/or children, the wife said that he has given her cash for payment of electricity bills. He has possibly paid her $1,000 in the last 6 months. She said he also quite often pays for groceries.
When it was put to the wife she has understated the nature of relationship between she and Mr L she answered by saying “We have been in a relationship since Easter 2013.”
The wife said Mr L would happily marry her, however, she is not interested in marriage. She believed he would contribute to the mortgage payments on the house once she was required to meet the mortgage payments on the house.
Having recorded the wife’s evidence, as above set out, I note that in the wife’s sworn Financial Statement, (13 December 2013) sworn some 4 days before her cross-examination, Mr L’s name does not appear in paragraph’s 17 or 18 of the document.
I conclude that the evidence of the wife about the nature and longevity of her relationship with Mr L is probably understated. I consider it more probable than not that the relationship of girlfriend/boyfriend, as she described it, was in existence before Easter 2013. I consider it more probable than not that the amount of time the wife and Mr L spend together is more extensive than that disclosed by her.
The impact of the above finding (relevant to what the extent of the wife’s relationship with Mr L has been) on the outcome of the proceeding is minimal. At the end of the consideration of the circumstance of the wife in relation to her relationship with Mr L it is the future nature of the relationship which in my view is the most significant matter. I find that the relationship between the wife and Mr L will probably progress to a full time domestic relationship where the wife will have his financial support well into the foreseeable future.
In the affidavit evidence of the wife’s mother she said she will continue to assist the wife with the payment of her car loan. Further, she said if the wife was given the opportunity to acquire the Suburb F properties she would assist the wife in refinancing the mortgages on the properties. She confirmed she had the financial capacity to do that.
The orders made on 20 December 2013 provide for the two Suburb F properties to be transferred to the wife, subject to the mortgages secured against the properties. The evidence of the wife’s mother is that she will take a transfer of the properties and will meet the mortgage payments. The shop premises will be listed for sale immediately. The wife will be able to live in the house for the next three to five years and then pay out her mother.
The husband has formed a new partnership with Ms N. They are engaged to be married. In the husband’s Financial Statement he said he did not know what the income of his fiancé was. Although Ms N filed an affidavit it did not provide details of her income. In cross-examination the husband told the court Ms N has a base salary of $150,000. He said she also receives a performance bonus. This is clearly a significant income.
During the marriage the parties enjoyed a good standard of living. The former matrimonial home provided comfortable accommodation for them with swimming pool installed after 2007. They had a number of overseas holidays. The wife also had some cosmetic surgery in 2011. This style of living is at a fairly elevated standard.
Post separation the investment property at J Street was rented and the rental received by the husband. Until November 2013 the husband met all mortgage instalments on both the former matrimonial home and the investment property.
One of the difficulties in this case is that there is still outstanding the determination of the parties’ parenting case. In that case the husband seeks further time to spend with the children than that which he currently enjoys. I have set out earlier what the current orders provide for the husband to spend time with the children. Each of the parties has approached the case on the basis that the children are spending time and living the parties as the current orders provide.
In many cases the court has to take into account that as time goes by and the children become older it may well be that the time they spend living with each parent may change.
In the circumstances of this case the parties clearly consider that even if the husband was to be wholly successful in his parenting case (an increase in the time the children spend with him) the result of the property case should not be different to any significant degree. There could be other consequences of the husband’s time increasing such as a reduction in child support. These are matters which are difficult to work into a final determination.
If the circumstances of the children are to be considered as they now stand then I must take into account that the wife will have a greater responsibility for the supervision and care of the children than the husband. I must also take into account that the husband is paying child support for the children at a significant level and is likely to continue to do so into the future.
The wife submits there should be an adjustment in her favour to bring her to a division of the assets and superannuation in her favour in proportion 65 per cent to herself and 35 per cent to the husband.
The husband concedes there should be an adjustment in favour of the wife however that adjustment should not see her receiving more than 60 per cent of the asset and superannuation pool.
Conclusion on section 75(2)
I agree with the proposal of the parties that there should be an adjustment in favour of the wife under s 75(2). I conclude that the adjustment should be 10 per cent. That would mean the wife will receive 62.5 per cent of the parties net assets and superannuation and the husband will receive 37.5 per cent of same. The factors which particularly weigh in favour of the wife are as follows:
·The husband’s receipt of his redundancy payment;
·The difference in the earning capacity of the parties into the foreseeable future;
·Capacity of each to grow their superannuation over the next few years;
·The resources each party has in their new partners;
·The present arrangements for the care and support of the children.
The factors which particularly weigh in favour of the husband are as follows:
·The payment of child support into the future;
·The occupation of the former matrimonial home by the wife since the separation;
·The resource the wife has in her mother (this offset to an extent by the resource the husband has in his mother).
Any other orders s 79(4)(f)
As stated earlier there have been orders relating to interim property distribution and also interim parenting orders. The effect of those orders has been considered in these reasons as set out above.
Any child support s 79(4)(g)
The evidence shows the husband has paid child support since the separation and I have set out detail of those payments. The payment of child support past and future is considered above.
Section 79(9)
The proceeding has been before the court since 2012. The parties have attended a conference with the registrar. I am also satisfied the parties through their lawyers have negotiated extensively and have been able to reach a partial settlement as these reasons demonstrate. It would be impractical at this time to require the parties to conference further for the purpose of seeking to reach agreement in respect of the remaining outstanding issues between them.
Overall division of assets
The above determination will see the wife receive $248,945 of the parties’ assets and superannuation with the husband receiving $149,367 of same. In the result the wife receives $99,578 more than the husband.
Just and equitable
The parties have agreed that the wife will take her equity in the assets which she will retain from the balance sheet and will top up her entitlement through a splitting order in respect of the husband’s superannuation.
In the circumstances of this case I determine that result to be just and equitable.
Orders which should be made
The parties have agreed that the property order should reflect a circumstance where the wife receives the balance of the parties’ net real property assets and the adjustment between their positions should be reflected through a splitting order in relation to the husband’s superannuation.
I propose orders which will give effect to the following division.
The wife will retain:
| Assets & Superannuation | ($) |
| · E Street, Suburb F | 500,000 |
| · J Street, Suburb F | 130,000 |
| · Motor vehicle 1 | 33,000 |
| · Contents | 10,000 |
| · Superannuation | Nil. |
| Total Assets | $673,000 |
| Liabilities | |
| · Mortgage | 114,784 |
| · Mortgage | 260,000 |
| · Bendigo Bank Loan | 19,998 |
| · Bendigo Bank loan · Loan | 110,237 45,114 |
| · Personal overdraft Bendigo Bank | 2,656 |
| Total Liabilities | $552,789 |
| Net Assets (including superannuation) | $120,211 |
The wife is to receive $120,211 in net assets and superannuation. The determination by me requires that she receives $248,945 in net assets and superannuation. She therefore needs to have a splitting order for the sum of $128,734.
The husband will receive the following items attributed with a value:
| Assets | ($) |
| · Mediguard shares (20,000) | 400 |
| · Vital Metals Ltd (1,123) | 47 |
| · Cullen resources Ltd (20,000) | 70 |
| · NIB (1,600) | 3,584 |
| · Motor vehicle 3 | 2,000 |
| · Boat · Superannuation | 10,000 262,000 |
| Total Assets (including superannuation) | $278,101 |
| Liabilities | Nil |
| Total Liabilities | $Nil |
| Net Assets (including superannuation) | $278,101 |
The husband is entitled to $149,367 in net assets and superannuation pursuant to my determination as above set out. He therefore needs to transfer to the wife $128,734 in property and superannuation.
The parties have requested that the adjustment between the husband and the wife be provided in the form of a splitting order. The order will therefore be for a split of the husband’s B Super to the wife in the sum of $128,734 as the base amount.
The husband sought an order that the parties be the trustee of certain bank accounts in which funds are retained for the children. The wife sought no order in relation to the accounts.
There is no evidence which I can see in either party’s affidavit about the existence of trust accounts for the children. In the cross-examination of the wife she was asked about the accounts. She said there were accounts for each of the children which she controlled. One had about $3,000 in it and the other about $3,800. The funds in the accounts came from gifts from the wife’s father and also income earned by the children as actors.
No reason was advanced in submissions as to why the order sought by the husband should be made. On my part I can see no reason why the wife should not continue to administer the accounts for the children. I would not make the order sought by the husband.
Costs
Should there be any application for an order for costs then any applicant party must file and serve within 28 days of the orders herein made any such application that they might wish to make. Any application is to be accompanied by any affidavit material setting forth any evidence in chief on which they wish to rely together with any written submission in support of that application. Any respondent party must file within a further 14 days a response, together with a written submission in support of that response, and any affidavit material, setting forth any evidence in chief on which they wish to rely. Any applicant will have a further 7 days in which to file any submission or evidence in reply.
In the event that no application is filed within the time limit there will be no order as to costs.
I certify that the preceding two hundred and eight (208) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Le Poer Trench delivered on 30 June 2014.
Associate:
Date: 30 June 2014
Key Legal Topics
Areas of Law
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Family Law
Legal Concepts
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Costs
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Remedies
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Statutory Construction
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