Tsui and Padelford
[2017] FamCA 254
•27 April 2017
FAMILY COURT OF AUSTRALIA
| TSUI & PADELFORD | [2017] FamCA 254 |
| FAMILY LAW – PROPERTY – Where the parties were married for approximately three years and have one child –Where the husband made significant direct financial contributions by way of superannuation benefits, income generated from overseas employment and the introduction of unencumbered property to the marriage– Where the wife assumed responsibility for the parties’ special needs child – Where the Court finds the parties’ contributions should be assessed at 90 per cent to the husband and 10 per cent to the wife – Where the Court finds section 75(2) factors favour an adjustment of 17.5 per cent in favour of the wife due to the ongoing responsibility on the wife to provide primary care for their special needs child – Orders made for the husband to retain the former matrimonial home – Where the husband must pay to the wife a sum of $366, 105 in order to retain the former matrimonial home |
FAMILY LAW – COSTS – Where the husband sought that the wife pay his costs of approximately $48,000 and that the wife reimburse the husband for interim payments previously ordered to be paid by him on the basis that the parties’ issues would have been resolved at an early stage if the wife had adopted pre-action procedures –Where the Court finds there is no valid basis for any such Orders
| Family Law Act 1975 (Cth), ss 75(2), 79(4) |
| Stanford v Stanford [2012] HCA 52 |
| APPLICANT: | Ms Tsui |
| RESPONDENT: | Mr Padelford |
| FILE NUMBER: | SYC | 442 | of | 2014 |
| DATE DELIVERED: | 27 April 2017 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | Stevenson J |
| HEARING DATE: | 14-16 November 2016 |
| WRITTEN SUBMISSIONS: | 8 December 2016, 31 December 2016, 17 January 2017 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Livingstone |
| SOLICITOR FOR THE APPLICANT: | Armstrong Legal |
| THE RESPONDENT: | In Person |
Orders
Within three calendar months of the date of these Orders, the husband will pay to the wife a sum of $366,105.
Subject to Order 1, each of the parties is declared to be solely entitled to all items of property and superannuation which are presently in his and her respective possession.
Note: The form of the order is subject to the entry of the order in the Court’s records.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Tsui & Padelford has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).
| FAMILY COURT OF AUSTRALIA AT SYDNEY |
FILE NUMBER: SYC 442 of 2014
| Ms Tsui |
Applicant
And
| Mr Padelford |
Respondent
REASONS FOR JUDGMENT
The proceedings
The applicant wife, Ms Ms Tsui, and the respondent husband, Mr Padelford, are parties to proceedings concerning alteration of property interests and parenting orders. Their son, M, was born in 2010 and is currently six years of age. The parties resolved all parenting issues and I made the following orders by consent on 15 November 2016:
1.That all previous parenting orders be discharged.
2.That subject to Order 3, the mother have sole parental responsibility for [M], born … 2010, ("the child").
3.That in exercising parental responsibility the mother shall:
a.notify the father of any proposed decision relating to the long term care and welfare of the child, including:
·proposed decisions about any school the child shall attend
·proposed decisions about medical interventions for the child including surgical procedures, overnight admission to hospital, any ongoing medical treatment for the child including treatment for Spastic Diplegia
b.ensure that such notification is given to the father in writing and is given not less than twenty-eight (28) days before a final decision is made, except in the case of an emergency in which case she shall notify the father as soon as practicable
c.allow the father an opportunity to provide, in writing, his views in relation to such decision
d.take into consideration any views expressed by the father in respect of such proposed decisions and
e.notify the father of the final decision in writing within 7 days of the decision being made.
4.That the child shall live with the mother.
5.That the child spend time with the father as agreed but failing agreement as follows:
a.each alternate Sunday from 10.00 am to 2.00 pm commencing 18 December 2016
b.commencing 19 March 2017, the father's time in Order 5(a) shall be extended from 10.00 am to 4.00 pm.
6.That the father's time shall be supervised by [Ms D Padelford].
7.That in the event that [Ms D Padelford] is unavailable to supervise then the father shall nominate to the mother in writing two alternate supervisors and provide to the mother the contact details of such persons.
8.That the mother shall make contact with any alternate supervisor to discuss supervision and shall not unreasonably withhold her consent for such persons to supervise the father's time.
9.For the purposes of supervision of the father's time the Court notes that the supervisor:
·shall be present during the entirety of the father's time
·ensure that the child is safe during the period of time he spends with the father
·facilitate the child's contact with the mother if he so requests.
10.That the mother is at liberty to provide to any alternate supervisor a copy of these Orders.
11.That the father's time shall be supervised until 18 June 2017 at which time it shall become unsupervised.
12.The parties will effect changeovers at [I Town] Railway Station or such other place as they agree in writing from time to time.
13.That no later than 30 May 2018 the parties shall attend upon a family dispute resolution practitioner as agreed and failing agreement at Interrelate [Suburb O] to consider the child spending overnight time with the father, and that for the purposes of this process the parties shall have regard to any available medical report or opinion in relation to the child's readiness or otherwise to extend the time he spends with the father.
14.That, in any case, prior to the commencement of any overnight time the father shall participate in a support program for parents as run by the Cerebral Palsy Alliance and shall provide to the mother written confirmation of his attendance at such program.
15.That the father shall have Skype communication with the child each Wednesday between 4.00 and 5.00 with the father to initiate the communication and the mother to do all things necessary to facilitate the communication.
16.That the mother shall provide to the father in writing the names and contact details of any medical or other health professional that the child may attend upon from time to time and the father shall be permitted to contact such persons to discuss and obtain information about any diagnosis, treatment and recommendation made in relation to the child.
17.That the father is authorised to make contact with any school that the child may attend from time to time and obtain information including school photos, reports and other information that is normally made available to parents, at the father's expense.
18.That the father is permitted to attend school functions to which parents are normally invited conditional upon the father providing the mother of at least 7 days written notice of his intention to do so.
19.That each party shall comply with any recommendations made by the child's medical and health practitioners.
20.That each party is restrained from denigrating the other party in the presence of the child and shall ensure that no other person denigrates the other party in the child's presence.
21.That each party is restrained from physically disciplining the child.
The wife sought the following orders by way of alteration of property interests:
26.That within forty-two (42) days of the date of these Orders, the following take place simultaneously:
26.1The Respondent Husband pay to the Applicant Wife, or as otherwise directed by the Applicant Wife in writing, the sum of $788,946 by way of bank cheque; and
26.2The Applicant Wife provide or cause to be provided a Notice of Withdrawal of Caveat in respect of the Caveats (dealing numbers … and …) registered on title of the [Town B] Property to the Respondent Husband, and the Respondent Husband otherwise do all things necessary to register the Notices of Withdrawal of Caveat.
27.That in the event of the Respondent Husband's failure to comply with Order 26 above, Orders 28 and 29 below applies.
28.That the parties do all things necessary to sell the property located at and known as [C Street, Town B] in the State of New South Wales (being the whole of the land in Lot … in Deposited Plan …) ("the [Town B] Property") forthwith and for that purpose the following will apply:
28.1The [Town B] Property be sold at the best price reasonably obtainable.
28.2The [Town B] Property will be listed for sale by way of a public auction, with a real estate agent and/or auctioneer of the Applicant Wife's choosing.
28.3The public auction take place within ten (10) weeks of the date of these Orders.
28.4In the event the parties cannot agree as to whether an offer to purchase the [Town B] Property should be accepted and/or the reserve price at auction, then the parties or either of them appoint the President for the time being of the Australian Institute of Valuers or his or her nominee to assess whether any offer made represents the best price reasonably obtaining (sic) and/or determine the reserve price at auction, and the parties be bound by such assessment determined and paid by the Respondent Husband.
28.5In the event that the President for the time being of the Australian Institute of Valuers or his or her nominee assesses that the offer made to purchase the [Town B] Property is equal to or greater than the best price reasonably obtaining (sic) as determined in accordance with the previous paragraph of this Order, then the parties do all things necessary to sell the [Town B] Property to the purchaser and otherwise give effect to this Order.
28.6The Respondent Husband pay the advertising costs and/or any other costs of the real estate agent and/or auctioneer required prior to sale.
28.7The Respondent Husband must cooperate in every way with the real estate agent and/or auctioneer in relation to the marketing of the [Town B] Property for sale, including:
28.7.1making the keys available to the real estate agent and/or auctioneer;
28.7.2allowing inspection of the [Town B] Property at all times reasonably requested by the real estate agent and/or auctioneer;
28.7.3not doing or saying anything to hinder or prevent the sale being effected; and
28.7.4ensuring the [Town B] Property (including the lawn and gardens) are in a clean and neat condition at the time of inspection by any prospective purchasers.
28.8The solicitor or conveyancer to have carriage of the sale of the [Town B] Property is of the Applicant Wife's choosing.
28.9That upon agreement being reached for the sale of the [Town B] Property, the Respondent Husband executes the Contract of Sale and all other documents necessary to complete the sale upon it being provided to him.
28.10The Contract of Sale provide for completion within
forty-two (42) days after the date of the Contract, or such other time as agreed between the parties.28.11At settlement, the Applicant Wife provide or cause to be provided Notices of Withdrawal of Caveat in respect of the two Caveats (dealing numbers … and …) registered on title of the [Town B] Property to the incoming purchaser.
29.That on settlement of the [Town B] Property, the proceeds of sale be paid in the following manner and priority:
29.1In payment of all costs and disbursements associated with the sale, including legal costs and disbursements, agent's commission, auctioneer fees and advertising expenses;
29.2In payment of the amounts required to pay all municipal council, water rates and any other levies outstanding with respect to the [Town B] Property; and
29.3In payment of the balance then remaining:
29.3.1To the Caveators: The amount necessary for them to discharge the Caveat (dealing number …) registered on title of the [Town B] Property ("the Caveat Cost");
29.3.2To the Applicant Wife: The amount calculated by reducing $788,946 by the Caveat Cost, plus interest (calculated pursuant to the Family Law Rules 2001 (Cth), accruing from the 42nd day after the date of these Orders to the date of settlement); and
29.3.3The remaining balance be paid to the Respondent Husband.
30.That the Respondent Husband procure for the Applicant Wife a release from the liabilities, if any, up to and including the date of the making of this Order, pursuant to all mortgages, financial facilities and charges in relation to the business entities, directors or personal guarantees to any creditors in relation to the business entities ("the Guarantees") and the receipt by the Applicant Wife of a letter from the creditors stating she is released from all personal liabilities in respect of any actions, claims, suit and demands arising under the Guarantees the sufficient evidence of compliance by the Respondent Husband with this Order.
31.That the Respondent Husband indemnify and keep indemnified the Applicant Wife in respect of all liabilities in relation to any business entities in which he has an interest, whenever and however arising, including but not limited to all taxation liabilities of the business entities and either party personally arising in connection with any interest, loan account, office or employment in relation to the business entity.
32.That the Applicant Wife retains sole legal and beneficial ownership of the [4WD] motor vehicle (registration number …).
33.That, as between the parties, and subject to the above Orders, the Respondent Husband retain sole legal and beneficial ownership of the following:
33.1his interest in the [Town B] property;
33.2his interest in the company namely "[P] Pty Ltd".
33.3the artwork collection in his possession;
33.4the stamp collection in his possession;
33.5the coin collection in his possession; and
33.6the microscope in his possession.
34.That the Applicant Wife and the Respondent Husband is responsible for payment of or her/his credit card liabilities held in their respective sole names and any other personal debts, and will indemnify the other party and keep them forever indemnified in respect to same.
35.That as between the parties, and subject to the above paragraphs of this Order, the Applicant Wife and the Respondent Husband each retain sole legal and beneficial ownership of:
35.1All real or personal property now in her/his respective names, possession or control;
35.2All shares, debentures, units in unit trust, bank, building society or credit union account standing in her/his sole names respectively; and
35.3All interest and life insurance policies and superannuation funds standing in her/his sole names respectively.
36.That subject to the above provisions of these Orders to the contrary:
36.1The Applicant Wife indemnify and keep indemnified the Respondent Husband from and in respect of all actions, claims, suits and demands as may be made against the Respondent Husband in relation [to] all liabilities in the name of the Applicant Wife and any other liabilities in relation to any property that vest with the Applicant Wife pursuant to these Orders; and
36.2The Respondent Husband indemnify and keep indemnified the Applicant Wife from and in respect of all actions, claims, suits and demands as may be made against the Applicant Wife in relation to all liabilities in the name of the Respondent Husband and any other liabilities in relation to any property that vest with the Respondent Husband pursuant to these Orders.
37.The Respondent Husband pay to the Applicant Wife within fourteen (14) days of the date of these Orders, all arrears in relation to spouse maintenance payable to the Applicant Wife, pursuant to Orders dated 10 February 2014.
Costs
38.The Respondent Husband pay the Applicant Wife's cost of and incidental to these proceedings.
In written submissions dated 8 December 2016, counsel for the wife indicated that she sought an equal division of the net pool of assets and superannuation. It was contended on behalf of the wife that the appropriate finding as to contribution was 75 per cent to the husband and 25 per cent to the wife. It was submitted further that there should be an adjustment of 25 per cent in favour of the wife on account of section 75(2) factors.
The respondent husband set out his proposal for settlement of property in a Minute of Orders Sought in the following terms:
12. That the property pool be divided such that either:
a.the Applicant Mother receive half of the value of the improvement of the property pool in the time between marriage and separation, less monies already transferred by the Respondent in response to interim Orders, and less the Respondent's costs
or
b.The Applicant Mother receive one third of the value of the improvement of the property pool in the time between marriage and the present time, less monies already transferred by the Respondent Father in response to interim Orders, and less the Respondent Father's costs
13.That the Applicant Mother do all that is required to remove caveats placed by her and her prior solicitors on the Property [C Street]
14.That transfer of funds be completed by the Respondent Father within 2 months following the removal of the second caveat.
Initially, the husband indicated this outcome would mean that he pay to the wife an appropriate sum of $70,000 and retain the Town B property.
In his written submissions the husband purported to amend the orders which he sought, without leave, so as to seek the following:
129.All prior Financial Orders sought to be dismissed.
130.That the Respondent make available $140,000 to the Applicant or to the Child [M] to be used as a deposit towards the purchase of a property.
131.The Applicant should pay the Respondent $90,000 in respect of his legal costs and interim payments to the mother (see Items 119-121 above), and these monies be returned to the Respondent.
132.The funds for the Applicant / [M] to be released by the Respondent and be placed in a trust account under her Lawyer' (sic) supervision within 42 days of the completion of the following two tasks:
i.Written confirmation by NSW Government Land and Property Information of the removal of 2 caveats placed by the Applicant and by her solicitors.
ii.Contracts are exchanged on a property, with unredacted written copies of the contracts to be provided to the Respondent
133.That neither party shall have any further claim on the property owned by or interests of the other party.
The husband stated in his written submissions that he "proposed a cash settlement of $150,000." He deposed that he sought, however, a payment of $91,000 from the wife "in respect of his legal costs and interim payments to the mother." These "interim payments" would appear to be a lump sum of $10,000 and spouse maintenance of $328 per week.
Background
The husband was born in 1950 in Europe and is currently 66 years of age. The wife was born in 1975 in Asia and is presently aged 42 years. The parties met in Asia in 2000 and married in 2010 in Country J.
The wife contended that the relationship ended finally on 16 November 2013. The husband deposed that he travelled overseas on 16 November 2013 and that, when he returned on 3 January 2014, the wife had left the Town B property with M and her daughter K. K was born in 2005 and is now 12 years of age. Her father lives in Asia.
The husband also has children from previous relationships. He has an adult daughter, Ms D, who was born in 1994 and is presently 23 years of age. Ms D lives at the Town B property with the husband and recently completed a degree. The husband has a son, Q, who was born in 2001 and is presently aged 16 years. Q lives with his mother in R Town and does not spend time with his father, despite efforts on the part of the respondent to promote a relationship.
As appears below, the parties lived in the same place for a very limited period during their marriage. In summary, they cohabited in Australia for 40 days and the husband travelled to Australia from the United States for approximately 106 days between 2011 and 2013. For substantial amounts of time, the parties lived in different countries.
The husband and his then partner Ms S, the mother of Ms D, purchased the Town B property in 1993, utilising borrowings from the Commonwealth Bank. Ms S died in a motor vehicle accident in 1994. The husband discharged the Commonwealth Bank mortgage in January 1995, using funds which he and/or Ms D received from her estate.
The husband is a senior academic and holds a number of degrees. The husband was also employed in the US between 2004 and 2013.
The wife holds post-graduate qualifications, which she obtained in Asia. In April 2010 the wife took on a post-doctoral position in Country J.
Between 2002 and 2009 the wife was employed as an academic in Asia. She deposed that her role included administration and work within a research team. Between September 2009 and April 2010 the wife held a position as a post-doctoral research fellow in Country J. The wife was a senior academic in Asia in 2010 and 2011.
In January 2013 the wife applied for a position as project co-ordinator in the US (Exhibit 3). In her application, the wife described herself as "a trained and experienced [academic] with considerable administrative responsibilities and business experience."
In September 2013 the wife undertook a few days of paid employment at the T Institute. She received payment of $25 per hour but left this employment due to difficulties with child care.
After the parties' marriage in 2010 in Country J, the wife was denied entry into the United States. She continued to live and work in Country J and the husband maintained his employment and residence in the United States.
In May 2011 the wife obtained a spouse visa which enabled her to live in Australia. The family travelled to Australia in May 2011 and the wife, K and M moved into the Town B property. The husband stayed for approximately three weeks, before returning to his employment in the United States. Between 2011 and 2013 the husband spent 106 days with the family in Australia and otherwise lived and worked in the United States. The husband provided funds to the wife to meet the living costs of the family during this period.
On 26 August 2013 the husband returned to Australia and took up residence in the Town B property. It seems that difficulties arose in their relationship almost immediately upon the husband's return to Australia.
On 20 September 2013 the wife travelled to Asia with K and M. While in Asia, the wife arranged treatment for M in relation to developmental difficulties. They returned to the Town B property on 3 November 2013.
On 16 November 2013 the husband travelled to the United States, returning to Australia on 3 January 2014. The wife, K and M vacated the Town B property, during the husband's absence, on approximately 2 January 2014.
Upon return to Australia M saw a number of medical practitioners, including Dr U, a paediatric neurologist. In a report dated 1 May 2013, Dr U described M's symptoms as follows:
On examination [M] looked well. He was not dysmorphic and had no neurocutaneous features. He made good eye contact and was engaging. He did scream every time his mother spoke, which made communication a little difficult. His growth parameters showed a weight of 11.8kg and height of 86.1cm. His head circumference was 47.2cm. These are all between the 10th and 25th centiles. I observed him weight-bearing and walking with one hand held. He does pronate both his ankles doing so. I thought overall his lower limbs were slimmer and less well-developed in comparison to his upper limbs. He had very significant increased tone at the hips and knees, less so at the ankles. I thought his reflexes were brisk, with spreading of his knee jerks all the way down his shins. His ankle jerks were less obviously brisk. He had an upgoing plantar response bilaterally. I thought reflexes in his upper limbs were normal. His tone was a little more difficult to assess, as he was resisting me. I thought his facial movements were symmetric. His gag response was normal. His eye movements were full. His pupils were equal and reactive. I was unable to examine his fundi.
Dr U has referred to M's condition as "spastic paraplegia" and "spastic diplegia."
In February 2014 interim orders were made which provided that the husband pay to the wife a lump sum of $10,000 and spouse maintenance of $328 per week. The husband complied with these orders by withdrawals from a superannuation fund until November 2015. He made the last payment of interim spouse maintenance on 30 November 2015.
When the wife received this lump sum of $10,000 the husband was paying spouse maintenance. In these circumstances, I will characterise the sum of $10,000 as a partial property distribution.
In October 2015 the husband advised the wife that he had ascertained that M is eligible for financial support from the United States Social Security agency. The wife indicated that in her Financial Statement of 14 July 2016 that she receives $100 per week from this source.
On 20 September 2000 the husband incorporated a company known as P Pty Limited. This company was dormant while the husband was employed in the United States. The husband deposed that he considered that there was a conflict of interest with American institutes with whom he had dealings during that period.
The husband deposed that this company has now been "reactivated". The husband deposed further that the company receives income by way of royalties from academic writings and activities carried out by his daughter Ms D.
Profit and loss statements for the company for the years 2014 and 2015 (annexures 139 and 140 to the husband's affidavit) showed that the company's gross income for the years 2014 and 2015 was respectively $24,063 and $46,684. These profit and loss statements indicated that the company operated at a net loss in each of these years.
It was common ground that M is a child who has special needs. There has been considerable dispute and debate between the parties in relation to his diagnosis and appropriate treatment regime during the course of these proceedings.
After the wife left the Town B property with K and M on about 2 January 2014, they lived in a women's refuge initially and then stayed with various friends. Ultimately, the wife secured Department of Housing accommodation.
In his written submissions, counsel for the wife acknowledged that the husband paid a sum of $10,000 on account of arrears of spouse maintenance on 7 December 2016. The husband had said in cross-examination that he proposed to approach his retirement benefit fund in the United States to obtain a release of funds for that purpose.
Approach to these proceedings
In Stanford v Stanford [2012] HCA 52 the majority of the High Court of Australia held as follows:(paragraph 35)
It will be recalled that s 79(2) provides that “[t]he court shall not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order”. Section 79(4) prescribes matters that must be taken into account in considering what order (if any) should be made under this section. The requirements of the two sub-sections are not to be conflated. In every case in which a property settlement order under s 79 is sought, it is necessary to satisfy the court that, in all the circumstances, it is just and equitable to make the order.
Their Honours further observed as follows:
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. What order, if any, should then be made is determined by applying s 79(4).
I am satisfied that it is just and equitable that there be orders for alteration of property interests. Most of the assets and superannuation are held legally and beneficially by the husband and thus are inaccessible to the wife without orders for alteration of property interests. Each of the parties proposes that there be orders for payment of a sum of money to the wife by the husband. The marriage of the parties broke down over three years ago and there is no prospect of any future intermingling of economic resources.
It is first necessary to determine the nature, value and ownership or extent of assets, liabilities and financial resources of the parties. All relevant contributions of each of the parties, within the meaning of paragraphs (a) to (c) of section 79(4) must be identified and weighed against each other. The matters set out in paragraphs (d) to (g) of section 79(4), particularly paragraph (e) which takes up by reference the provisions of section 75(2), must be considered and a determination made as to what if any alteration should be made to the entitlements of the parties as earlier assessed on account of contribution.
The assets, superannuation, liabilities and financial resources
The applicant wife submitted the following balance sheet:
ASSETS
Ownership Description Wife/de facto partner’s value 1 H Property located at and known as [C] Street, [Town B], NSW, … (Lot … in DP …)
$1,150,0002 H Interest in the company namely "[P] Pty Ltd" $Not Known 3 H Motor vehicle $7,500 4 W [4WD] motor vehicle (registration number …) $5,000 5 H Cash savings held in [DD] Bank… (account number …59)
$1506 H Cash savings held in [Z] Bank Account (account number …42)
$2137 H Cash savings held in Natwest Helpful Bank Account (account number …22)
$3,8108 H Cash savings held in Commonwealth Bank of Australia Bank Account (account number …64)
$1,1209 W Cash savings held in Commonwealth Bank of Australia NetBank Account (account number …35)
$1,82610 W Cash savings held in Commonwealth Bank of Australia NetBank Account (account number …82)
$1,01111 W Cash savings held in [AA] Bank (account number …66)
$612 H Household contents in Husband's possession $20,000 13 W Household contents in Wife's possession $1,000 14 H Artwork collection in Husband's possession, including 3 paintings by [a well known artist]
$Not Known15 H Stamp collection in Husband's possession $Not Known 16 H Coin collection in Husband's possession $Not Known 17 Microscopes in Husband's possession $Not Known 18 W Amount payable to Wife (by previous husband located in [Asia]) as a part of their property settlement
$4,62319 W Amount payable to Wife (by the Respondent Husband) pursuant to Orders dated 10.2.2014 $12,136+accruing interest Total $1,208,395
+ Not Known
ADDBACKS
Ownership Description Wife/de facto partner’s value 20 H Sale proceeds from sale of motor vehicle $14,000 21 H Money transferred to his daughter, [Ms D's] bank accounts
$Not known22 H Money redrawn from entitlements held with [W Super]
$127,76523 H Money spent on legal fees $33,000 Total $174,765
+ Not Known
LIABILITIES
Ownership Description Wife/de facto partner’s value 24 W Commonwealth Bank of Australia MasterCard Gold (account number …68)
$3,14025 W [Asia] Merchants Bank MasterCard $1,494 26 H Credit card debt $Nil 27 H Amount payable to Wife (by the Respondent Husband) pursuant to Orders dated 10.2.2014 $12,136
+accruing interest
Total $16,770
+accruing interest
SUPERANNUATION Ownership Name of Fund Type of Interest Wife/de facto partner’s value 28 H [W Super] Accumulation interest $19,226 29 H [V Super] Retirement Saving Account
$351,705Total $370,931 FINANCIAL RESOURCES Ownership Description Wife/de facto partner’s value 30 H USA Social Security Payments $Not Known 31 H Australian super annuity $Not Known 32 H US Superannuation annuity payments $Not Known 33 H UK pension payments $Not Known Total $ Not Known NETT TOTAL ASSETS (including Superannuation) $1,737,321
+ Not Known
The respondent husband submitted a balance sheet in the following terms:
Assets … Current Assessment by … Respondent 160810 [C Street] … 1150000 … … [V Super] … 230000 Note 3 [W Super] … 19162 BT … 1 Savings … 780 [Asia] Apartment … Old Apartment … Furnishings and household goods, US … Furnishings and household goods Australia …
7000Cars … 14328 Horses … Artwork … 270 Addbacks, debts payable …
27000Notes 4, 5 Total … 1448541 DEBTS … Mortgage … Non-payment debts … [Ms D] … Applicant in [Asia] … Various debts … 200000 Note 6 200000 NET … 1,248,541
Settlement 1. Marriage to separation divided between Applicant and Respondent
…2. Marriage to now, divided among Applicant, Respondent and Respondent's daughter
…
19680Not knowns excluded, does not include applicants business and [Asian] assets, addbacks and applicant's legal debts not included … 3 [V Super] values by applicant inflated by $120,000, recent [V Super] statement available as exhibit 4 Applicant treats $120,000 converted from Super into an annuity as an addback (exhibits explaining background are available) 5 Applicant's legal debts not factored into liabilities 6 Respondent estimate of Applicant's total debts
The assets
The only available evidence as to the value of the husband's shareholding in the company P Pty Limited consisted of financial reports for the 2014 and 2015 years. The gross income of the company in 2014 and 2015 respectively was $24,063 and $46,684. In each of those years the company incurred a loss.
The 2015 Balance Sheet read as follows:
[P] PTY LTD
ABN …BALANCE SHEET
AS AT 30 JUNE 2015Note 2015
$2014
$CURRENT ASSETS Cash at bank 987 96 Deposits paid 4 - 221 987 317 FIXED ASSETS Property, plant and equipment 5 15,702 9,570 15,702 9,570 TOTAL ASSETS 16,689 9,887 CURRENT LIABILITIES Loans from shareholders 6 - 24,344 Other creditors - 220 - 24,564 NON-CURRENT LIABILITIES Loans from shareholders 6 23,127 - 23,127 - TOTAL LIABILITIES 23,127 24,564 NET ASSETS (LIABILITIES) (4,438) (14,677) EQUITY Fully paid ordinary shares 2 2 Retained Profits (Accumulated Losses) (6,440) (14,679) TOTAL EQUITY (DEFICIT) (6,438) (14,677)
On the basis of this Balance Sheet, and on a net asset-backing basis, I find that the husband's shareholding in P Pty Limited has a nil value. I will exclude this item of property from the Balance Sheet, for purposes of simplification.
The husband gave uncontradicted evidence that the motor vehicle which is available to him is an asset of P Pty Limited. I accept this evidence and will not include the motor vehicle as an asset of the husband in the Balance Sheet.
There was no admissible evidence in relation to the value of the wife's 4WD motor vehicle. Documents annexed to the husband's affidavit (Annexure 86) consisted of advertised asking prices for vehicles of the same model and year of production as that owned by the wife. These documents do not constitute evidence of the value of the wife's car. Accordingly, I can rely only on the wife's admission against interest in her Financial Statement of 14 July 2016 where she ascribed a value of $5,000 to her car. Otherwise, no value could be attributed to this asset at all.
On behalf of the wife, it was submitted that bank statements supported the values ascribed to the accounts listed in items 5 to 11 in the Balance Sheet. The husband did not take issue at that proposition in his written submissions. Accordingly, I will include these bank accounts as assets with the listed values.
There was no evidence in relation to the value of the parties' respective household contents. There was no basis whatsoever for the wife's assertion that the husband owns household contents with a value of $20,000. There was no evidence as to the value of the household contents of either party. In my view, the fairest course is to exclude the household contents of each of the parties from the Balance Sheet.
In his written submissions dated 8 December 2016, counsel for the wife conceded that no value could be ascribed to items 14 to 17 in the Balance Sheet. These items consisted of the husband's artwork, stamp and coin collections and microscopes. On that basis, I will exclude these items from the list of assets.
The wife asserted that a sum of $4,623, being the balance of a property settlement with her first husband, should not be included as her asset because of alleged difficulties with recovery. The wife has an entitlement to these funds and it is a matter for her whether she elects to pursue payment. I will include this amount as an asset of the wife in the Balance Sheet.
In my view, it is clear that arrears of spouse maintenance of $12,136 should not be included as an asset of the wife in the Balance Sheet. As noted, a sum of $10,000 was paid by the husband to the wife on account of arrears of spouse maintenance on 7 December 2016. Accordingly, the outstanding balance is approximately $2,136. This amount remains payable by the husband to the wife and should be treated neither as her asset nor his liability.
I will include as an asset the lump sum payment made by the husband to the wife pursuant to the orders of 10 February 2016. As noted, I will characterise these funds as a partial property settlement.
In his written submissions, counsel for the wife abandoned the contention that proceeds of sale of motor vehicles should be included in the list of assets. The purported item "money transferred to [the husband's] daughter [Ms D]" was unquantified and, obviously, cannot be regarded as an asset.
The wife contended that a sum of $127,765, being "money withdrawn from entitlements held with [W Super]" should be included as an asset of the husband in the Balance Sheet. The husband gave evidence that these funds were applied in part to a property settlement with the mother of his son Q. He gave uncontradicted evidence that he converted $100,000 from the superannuation fund into an annuity, which generates income of approximately $4,100 per annum. He included a sum of $82 per week, being "Australian Super Annuity" as a component of his income in his Financial Statement of 10 August 2016. In these circumstances, I am not prepared to treat the amount of $127,765 as an asset of the husband.
It seems that the husband spent approximately $33,000 on legal fees but, in his written submissions, counsel for the wife conceded "this is an estimate drawn from the husband's bank statements". On the other hand, the husband sought from the wife a total of approximately $48,000 on account of his costs incurred in these proceedings. In his written submissions (page 37) the husband referred to "$33,000 payment to my lawyer [Mr X] for legal advice while I was represented" as a component of this amount.
The evidence did not reveal whether the husband paid these costs from assets existing at the date of separation or from subsequently earned income. In these circumstances, I am not prepared to include the husband's paid costs as an asset.
Superannuation
There did not seem to be an issue in relation to the balance of the husband's account with W Super, which the wife included at $19,226 in the Balance Sheet. The husband offered no opposition to that figure in his written submissions. As to the V Super retirement benefit, the husband tendered a document (Exhibit 6) which showed a balance of $196,704. In his written submissions the husband conceded (paragraph 47) that the balance has increased since the date of the trial. He asserted that an amount of $216,000 "is accessible in this fund". There was no evidence which supported the wife's assertion that this fund had a value of $351,705 as at the date of trial. I will adopt the figure of $216,000 for the husband's V Super benefit.
Liabilities
In my view the three credit card debts are most likely to be post-separation liabilities, since the parties began to live apart in 2013. I will not include these credit card debts as liabilities in the Balance Sheet. I will not include the arrears of spouse maintenance owed by the husband to the wife as his liability. This obligation arose pursuant to an order of the Court and no responsibility for these arrears should be sheeted home indirectly to the wife.
Financial resources
The wife's Balance Sheet referred to four asserted financial resources available to the husband. There was little evidence in relation to these purported financial resources, which will not be included in the Balance Sheet.
Accordingly, I find that the parties' assets, superannuation, liabilities and financial resources are as follows:
Assets
($)
1
C Street, Town B (H)
1,150,000
2
4WD motor vehicle (W)
5,000
3
Cash in DD Bank account (H)
150
4
Cash in Z Bank account (H)
213
5
Cash in NatWest Helpful bank account (H)
3,810
6
Cash in Commonwealth Bank of Australia account (H)
1,1207
Cash in Commonwealth Bank of Australia account (W)
1,8268
Cash in Commonwealth Bank NetBank account (W)
1,0119
Cash in AA Bank (Town BB) (W)
6
10
Amount payable to wife by previous husband as property settlement (W)
4,62311
Partial Property Distribution (W)
10,000
$1,177,759
Superannuation
12
W Super (H)
19,226
13
V Super (H)
216,000
$235,226
Liabilities
Nil
Financial Resources
Nil
$1,412,985
The letters "H" and "W" in the above table indicate findings that the respective assets and superannuation are owned by the husband and the wife respectively.
Contributions
The husband made significant initial contributions of superannuation and the unencumbered property C Street, Town B. The husband and his former partner purchased the Town B property some 17 years before the parties' marriage. He caused the discharge of the mortgage on the title to the property approximately 15 years before the parties' marriage. The property has an agreed present value of $1,150,000. No renovations or improvements were made to the Town B property during the parties' relationship.
It seems that, at the commencement of cohabitation, the husband had superannuation benefits of $91,000 and $135,000 with V Super and W Super respectively. These figures were extracted from a document headed "[Tsui Padelford] …14 values in asset pool 2010 to current" which was submitted by the husband.
The wife had no significant assets at the date of the parties' marriage. She deposed that she did not "receive any significant gifts, lump sum payments, inheritances or windfalls during our relationship."
The wife occupied the Town B property between May 2011 and approximately November 2013, at no cost to herself. During this period, the wife's daughter K was housed in the Town B property. The husband met all outgoings from income which he received from employment in the United States. He also provided at least $1,000 per month to the wife to cover living expenses.
The wife engaged in paid employment for only a period of days, in September 2013, between May 2011 and November 2013. The wife alleged that she earned some few hundred dollars from language lessons in about 2012. She claimed that she used these funds to purchase food for the children.
The wife contended that she met her living expenses from accrued savings for an unspecified period after she ceased her employment in Country J in 2009. It was common ground that the husband provided funds to the wife while she lived in Country J. The husband tendered a document (Exhibit 6) which appeared to show debit card charges in City CC and a cheque payable to the wife for an amount of $3,000 on 25 August 2010.
The wife deposed "once I had exhausted my cash savings, [Mr Padelford] began to send $700 each month." In the next paragraph of her affidavit the wife deposed that she had approximately $1,000 in savings when she arrived in Australia. If that is the case, these savings must have been accrued from funds provided by the husband.
As noted, orders were made on 10 February 2014 that the husband pay to the wife interim spouse maintenance of $328 per week. He complied with this order until November 2015 and made a lump sum payment of $10,000 in reduction of accrued arrears in December 2016. Pursuant to the orders of 10 February 2014, the husband paid to the wife a sum of $10,000 which I will characterise as a partial property distribution.
The husband directed considerable focus in cross-examination of the wife and submissions to her alleged lack of care of, or actual damage to, the Town B property while she lived there with M and K during the period when he worked in the United States. His daughter Ms D swore an affidavit which purported to corroborate these allegations. Ms D Padelford was not required for cross-examination. I cannot find that the wife caused damage to the property as alleged by the husband.
It is obvious that the husband made substantial direct financial contributions by way of the introduction into the relationship of the unencumbered Town B property, superannuation benefits and income generated from his employment in the United States. I accept that the husband made unquantifiable funds available to the wife for her financial support between 2009 and the date of the marriage.
The wife made a significant contribution as primary carer for the parties' child M, who has special needs. The wife has been heavily involved in M's medical assessment and treatment. It may be that she took steps to exclude the husband from M's health care, as was his contention.
It was conceded on behalf of the wife that the husband "made an impressive initial contribution". As noted, the wife deposed that she earned only "several hundred dollars" during the marriage.
As the husband repeatedly pointed out, the parties actually lived together for a relatively short period during the marriage. It follows that the wife must have been the primary carer for M prior to the separation. Whatever may have been the reason, M spent little time in the care of the husband after the separation and the wife continued to fulfil the role of primary carer.
Pursuant to final parenting orders made by consent on 15 November 2016, the wife will be responsible for most of the care of M for the foreseeable future. In cross-examination the husband said: "I certainly think that she is deserving of praise for what she has done with [M] but I was not permitted to be involved."
It seems to me that the husband's significant initial financial contributions and subsequently earned income are unmatched by any contribution on behalf of the wife. Her major contribution, during the marriage and following the separation, was the care of the parties' special needs child.
For these reasons, I find that the contributions of the parties should be assessed as 90 per cent to the husband and 10 per cent to the wife.
Section 75(2) factors
The husband is aged 66 and suffers from a number of physical health problems and clinical depression. He operates a small business through P Pty Limited, which has yet to make a profit on the available evidence.
The husband said that he hopes to achieve an annual cash flow of approximately $70,000 and net profit of $10,000 per annum from the business which he conducts via P Pty Limited. He said also that he had a contract with a university in the US which would terminate at the end of 2016.
The wife is 42 years of age and suffers from no health issues. Like the husband, the wife holds post-graduate qualifications but she has been out of the paid workforce for some seven to eight years.
Realistically the husband is unlikely to again secure relatively well-paid employment in the academic world, having regard to his age and health problems. Realistically, the wife's opportunity to take on paid employment must be compromised by her responsibility to provide primary care for M. In my view, however, it is reasonable to anticipate that the wife's opportunities to return to the paid workforce will increase as M grows older and achieves a greater level of independence.
It seems to me that, in reality, neither party has a significant capacity at present to generate income from employment. In practical terms, the wife will probably have such an opportunity in the future but the husband has reached in the twilight of his working life.
The husband pays child support, as assessed, in the sum of $33 per month. In October 2015 the husband took steps to secure a payment to the wife of $100 per week for the support of M from a social security agency in the United States.
The wife's ongoing responsibility to care for the parties' special needs child seems to me to be the most significant section 75(2) factor. She will continue to receive the sum of $100 per week from the United States agency but it is unlikely that the husband will be in a position to pay child support at a meaningful level in the future.
On the other hand, the husband is nearing the end of his income-earning life. He will be reliant for his future financial support upon his share of the net pool of assets and superannuation, together with whatever profits may be generated by the activities of P Pty Limited. It is most unlikely that he will again be in a position to generate his previous levels of income.
Section 75(2) factors clearly favour the wife but this must be offset to some extent by the husband's age and state of health and the consequent impact on his income-earning capacity. Having regard to all of the circumstances, I consider that an adjustment of 17.5 per cent in favour of the wife is an appropriate outcome.
Result
I thus find that the net pool of assets and superannuation should be divided as to 72.5 per cent to the husband and 27.5 per cent to the wife. These percentages equate to $1,024,414 and $388,571 respectively.
The husband will retain the following assets and superannuation:
Assets ($) 1 Town B property (H) 1,150,000 2 DD Bank account (H) 150 3 Z bank account (H) 213 4 NatWest bank account (H) 3,810 5 Commonwealth Bank account (H) 1,120 6 W Super (H) 19,226 7 V Super (H) 216,000 $1,390,519 This figure exceeds the husband's entitlement of 72.5 per cent by $366,105.
The wife will retain the following assets:
Assets ($) 1 4WD motor vehicle (W) 5,000 2 Commonwealth Bank account (W) 1,826 3 NetBank account (W) 1,011 4 AA Bank account (W) 6 5 Property settlement with previous husband (W) 4,623 6 Partial Property Distribution 10,000 $22,466 This amount falls short of her entitlement of $388,571 by $366,105.
Accordingly, the husband must pay to the wife a sum of $366,105 in order to retain the Town B property. He is at liberty to utilise his superannuation entitlements to assist in payment to the wife if he wishes to do so.
I will allow the husband a period of three months to make such payment to the wife. I will not make orders for a sale of the Town B property in default of payment in full by the husband to the wife. A number of enforcement options are available to the wife, should she need to take such action.
The husband sought orders which would compel the wife to purchase a residential property. Obviously, it is not for the husband to determine the wife's application or utilisation of the funds which she receives by way of alteration of property interests. There will be no such order.
The husband's application for costs
In his written submissions the husband indicated that he sought an order that the wife pay his "costs" of "about $48,000" which he particularised as follows:
i.$33,000 payment to my lawyer [Mr X] for legal advice while I was represented (cited as addbacks in the applicant's budget statement)
ii.$10,000 for subsequent legal advice (receipts can be provided)
iii.payment of $1,650 for legal aid/ICL costs
iv.$1,038 paid to [E Org] in compliance with court orders of May 2016
v.$2,500 for travel and accommodation costs of McKenzie friend which the applicant seems to think improper but in Scott v Northern Territory 2005 NTCA4 it was made clear that "litigants in person are entitled to costs by way of out-of-pocket expenses". My McKenzie friend ([Mr EE]) was not a paid advisor, but is a friend who provided moral support.
In his written submissions the husband indicated that he "seeks reimbursement of interim payments ordered by Justice Rees on 10 February 2014, who, at item 15, left the characterisation of payment to the trial judge." Notably, the husband did not appeal those orders.
I can see no valid basis for any such orders against the wife. Given that the proceedings reached the point of a final hearing, I am not prepared to assume that there would have been a resolution of issues at an early stage if the wife had engaged in pre-action procedures. The husband seemed to suggest that the wife should pay those amounts on that basis.
The husband also appeared to suggest that the wife should pay these amounts because she raised allegations of family violence. Such allegations ultimately did not figure in the final hearing of the financial issues and the parenting dispute was resolved by consent.
The husband seemed to suggest that he should be reimbursed for payments made to the wife pursuant to the interim orders of 10 February 2014. His remedy was an appeal against those orders, not an attempt to rehash those issues at the final stage of the proceedings.
I certify that the preceding ninety-one (91) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Stevenson delivered on
27 April 2017
Associate:
Date: 27 April 2017
Key Legal Topics
Areas of Law
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Family Law
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Equity & Trusts
Legal Concepts
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Remedies
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Fiduciary Duty
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