Tudor and Tudor
[2007] FamCA 1462
•17 December 2007
FAMILY COURT OF AUSTRALIA
| TUDOR & TUDOR | [2007] FamCA 1462 |
| FAMILY LAW - PROPERTY SETTLEMENT – Contribution – Other matters |
| Family Law Act 1975 (Cth) |
In the Marriage of Hickey (2003) 30 Fam LR 355;
In In the Marriage of Omacini (2005) 33 Fam LR 134;
Mallett v Mallett (1984) 9 Fam LR 449;
In the Marriage of Ferraro (1992) 16 Fam LR 1;
In the Marriage of Shewring (1987) l2 Fam LR 139;
In the Marriage of Lenehan (1987) 11 Fam LR 615;
In the Marriage of Norbis (1986) 10 Fam LR 819; FLC 91-712;
In the Marriage of Zyk (1995) 19 Fam LR 797;
In the Marriage of Coghlan (2004) 33 Fam LR 414;
| APPLICANT: | Ms Tudor |
| RESPONDENT: | Mr Tudor |
| FILE NUMBER: | SYC | 4419 | Of | 2007 |
| DATE DELIVERED: | 17 December 2007 |
| PLACE DELIVERED: | Sydney |
| JUDGMENT OF: | JR Loughnan |
PLACE HEARD: Sydney
| HEARING DATE: | 13 & 14 December 2007 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Ms T Messner |
SOLICITOR FOR THE APPLICANT: | Doolan Wagner & Callaghan |
| SOLICITOR FOR THE RESPONDENT : | Adrian Twigg & Co |
Orders
That within 2 months of the date of these orders the husband shall pay to the wife or as she may direct the sum of $330,550.50.
Forthwith upon that payment the wife do all necessary acts and sign all necessary documents to transfer to the husband her right, title and interest in the former matrimonial home at …, F, being the whole of the land contained in Folio Identifier … ("the home").
Forthwith upon that transfer the husband discharge the mortgages registered over the home to Australian and New Zealand Banking Group Limited, being mortgage registered numbers AA4… and AA9… and indemnify and keep indemnified the wife in respect of such mortgage in respect of all rates and outgoings arising out of and in respect of the home.
Should the amount referred to in Order 1 herein not be paid within 2 months then interest shall accrue at the rate prescribed by the Family Law Rules.
In the event that the husband does not comply with order 1 and order 3 within 2 months of the date of these orders then the following shall occur:-
5.1That the parties forthwith do all acts and things and sign all documents necessary so as to effect the sale of the property known as F in the State of New South Wales, being the whole of the land described as Folio Identifier … (“the [F] property”) for the best price reasonably attainable in the following manner:-
5.1.1The husband and wife shall agree upon a licensed real estate agent and auctioneer (“the agent”) to conduct the sale of the F property within 14 days of the date of these Orders.
5.1.2In default of agreement as to the agent, within 21 days of the date of these Orders, the husband and wife shall do all things and sign all necessary documents to request the President of the Real Estate Institute of New South Wales to nominate a licensed real estate and auctioneer to conduct the sale of the F property and the husband and wife must accept such nomination.
5.1.3The husband and wife shall, within seven days of appointing the agent, agree upon the method of sale and price for sale, but, in default of agreement, then the husband and wife shall do all things and shall sign all necessary documents to list the F property with the agent for sale by auction.
5.1.4The reserve price for the auction sale of the F property shall be as agreed between the husband and wife within seven days of the date that the property is auctioned or, in default of such agreement, the husband and wife shall do all things and sign all necessary documents to request the President of the Real Estate Institute of New South Wales to nominate a reserve price for the auction of the F property.
5.1.5The husband and wife shall do all things and shall sign all necessary documents to cause the agent to auction the F property within 16 weeks of the date of these Orders.
5.1.6The husband and wife shall do all things and shall sign all necessary documents to instruct the agent to accept the said reserve price in the event that a bid is made in this sum or a greater sum at the auction.
5.1.7In the event the F property is not sold on the first occasion that it is auctioned, then the husband and wife shall do all things and shall sign all necessary documents to cause the agent to auction it again every six weeks until it shall be sold upon the same terms and conditions as stated herein.
5.1.8In the event the bidding at the auctions do not reach the reserve price, the husband or wife, or such of them as attends the relevant auctions, may negotiate with the highest bidders or any other interested person and effect a sale of the F property at a price which is not more than 5 per cent below the reserve price, or at such other price as the parties agree in writing.
5.1.9The husband and wife shall each co-operate in every way with the agent, including:-
5.1.9.1Making the key available to the agent.
5.1.9.2Allowing the inspection of the F property at all reasonable times as requested by the agent.
5.1.9.3By not saying or doing anything that is likely to hinder or prevent the sale being effected.
5.1.9.4By ensuring that the F property, including the grounds, is in a neat and clean condition at the time of inspection by the agent or prospective purchasers.
5.1.9.5Signing all documents requested by the agent in relation to the listing for sale of the F property, except a contract or agreement of sale which has not been authorised by the solicitor for the Husband and Wife acting in relation to the conveyance.
5.1.10The husband and wife shall agree upon and instruct a solicitor to conduct the sale of the F property and, in the absence of agreement reached within 14 days of the date of these Orders, the husband and wife shall do all such things and sign all necessary documents to request the President of the Law Society of New South Wales to appoint a solicitor to act in relation to the sale.
5.1.11The husband and wife shall do all things and sign all necessary documents and provide all necessary authorities to cause the proceeds of the sale of the F property to be distributed in the following manner and priority:-
5.1.11.1All costs and expenses of sale, including legal costs and disbursements, agent’s commission, valuer’s fees and auction expenses.
5.1.11.2Discharge of the mortgage.
5.1.11.3The balance then remaining shall be divided as follows:-
5.1.11.3.1To the wife the amount referred to in Order 1 and 4 herein.
5.1.11.3.2The balance to the husband.
That, within 28 days of the date of these Orders:-
6.1The wife shall do all acts and sign all documents as provided to her by the husband so as to transfer to him all shares and interest she has in the company T Group Pty Ltd (ABN …) (“the company”) and to dissolve the Mr and Ms Tudor Partnership, and the husband shall forthwith indemnify the wife from all liability of whatsoever nature of, and associated with, the said company and partnership.
6.2The wife shall transfer to the husband all of her right, title and interest in the property known as …, R (“the [R] property”).
6.3The parties shall discharge the mortgage over the R property at the husband’s expense or the husband shall re-finance all borrowings into his sole name.
The wife shall retain all her interest in the business known as “[TSP Services]”and shall forthwith indemnify the husband in relation to any liability of whatsoever nature associated with the said business.
The husband’s superannuation interest with SuperWrap Superannuation Scheme (Member No …) (“the Relevant Fund”) shall be split to create a superannuation interest for the Wife and, in this regard, the following provisions shall apply:-
8.1The base amount allocated to the wife out of the interest held by the husband in the relevant fund is the sum of $49,557.50.
8.2That, in accordance with paragraph 90MT(1)(a) of the Family Law Act 1975, whenever a splittable payment becomes payable from the member husband’s interest in the Relevant Fund, the Trustee must pay to the non-member wife or her administrators, executors, beneficiaries, heirs or assigns the base amount being the entitlement calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001 and the member husband has a corresponding reduction in entitlement in the Relevant Fund.
8.3That Order 6.2 has effect from the operative time for these Orders.
8.4That the operative time for these Orders is 28 days after service of the Final Orders on the Trustee.
8.5That the Trustee of the Relevant Fund shall in accordance with the obligations set out under the Family Law Act 1975 and Family Law (Superannuation) Regulations 2001 do all acts and things and sign all such documents as may be necessary to record the entitlement of and make payment to the wife in accordance with this Order.
Except as otherwise provided herein, the wife shall retain, to the exclusion of the husband, all of her right, title and interest in the following:-
9.1All furniture, jewellery and other chattels currently in her possession, custody or control.
9.2Any motor vehicle registered in her name.
9.3Any funds standing to her credit in any Bank, Credit Union or Building Society account.
9.4Any shares in any public or private company.
9.5Any superannuation fund in which she has an entitlement.
9.6All and any leave or long service, or any other employment benefits or entitlements.
Except as otherwise provided herein, the husband shall retain, to the exclusion of the wife, all of his right, title and interest in the following:-
10.1All furniture, jewellery and other chattels currently in his possession, custody or control.
10.2Any motor vehicle and boat or yacht registered in his name.
10.3Any funds standing to his credit in any Bank, Credit Union or Building Society account.
10.4Any shares in any public or private company.
10.5Any superannuation fund in which he has an entitlement.
10.6All and any leave or long service, or any other employment benefits or entitlements.
In the event that either party refuses or neglects to comply with the provisions of these orders, the Registrar of the Family Court of Australia at Sydney is hereby appointed pursuant to Section 106A of the Family Law Act 1975 to execute all deeds and documents in the name of the defaulting party and do all acts and-things necessary to give validity and operation to the said orders.
Liberty is granted to both parties to restore the proceedings to the list before Judicial Registrar Loughnan in relation to the form or implementation of these orders or otherwise on giving 48 hours notice to the Court and to the other party.
IT IS NOTED that publication of this judgment under the pseudonym Tudor & Tudor is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)
| FAMILY COURT OF AUSTRALIA AT SYDNEY |
FILE NUMBER: SYC 4419 of 2007
| MS TUDOR |
Applicant
And
| MR TUDOR |
Respondent
REASONS FOR JUDGMENT
After a marriage involving cohabitation of more than 11 years the parties cannot agree on a settlement of their property.
Applications
The wife seeks orders in terms of a minute of orders attached to her case outline documents, as amended in final submissions, as follows:
1.That within 30 days of the date of such Order the Respondent shall pay to the Applicant or as she may direct the sum of $450,000.
2.Should the amount referred to in Order 1 herein not be paid within 30 days then interest shall accrue at the rate prescribed by the Family Law Rules.
3.In the event that the amount referred to in Order 1 is not paid within 30 days then the following shall occur:-
3.1That the parties forthwith do all acts and things and sign all documents necessary so as to effect the sale of the property known as [The F Property] in the State of New South Wales, being the whole of the land described as Folio Identifier […] (“the [F] property”) for the best price reasonably attainable in the following manner:-
3.1.1The Husband and Wife shall agree upon a licensed real estate agent and auctioneer (“the agent”) to conduct the sale of the [F] property within 14 days of the date of these Orders.
3.1.2In default of agreement as to the agent, within 21 days of the date of these Orders, the Husband and Wife shall do all things and sign all necessary documents to request the President of the Real Estate Institute of New South Wales to nominate a licensed real estate and auctioneer to conduct the sale of the [F] property and the Husband and Wife must accept such nomination.
3.1.3The Husband and Wife shall, within seven days of appointing the agent, agree upon the method of sale and price for sale, but, in default of agreement, then the Husband and Wife shall do all things and shall sign all necessary documents to list the [F] property with the agent for sale by auction.
3.1.4The reserve price for the auction sale of the [F] property shall be as agreed between the Husband and Wife within seven days of the date that the property is auctioned or, in default of such agreement, the Husband and Wife shall do all things and sign all necessary documents to request the President of the Real Estate Institute of New South Wales to nominate a reserve price for the auction of the [F] property.
3.1.5The Husband and Wife shall do all things and shall sign all necessary documents to cause the agent to auction the [F] property within 16 weeks of the date of these Orders.
3.1.6The Husband and Wife shall do all things and shall sign all necessary documents to instruct the agent the accept the said reserve price in the event that a bid is made in this sum or a greater sum at the auction.
3.1.7In the event the [F] property is not sold on the first occasion that it is auctioned, then the Husband and Wife shall do all things and shall sign all necessary documents to cause the agent to auction it again every six weeks until it shall be sold upon the same terms and conditions as stated herein.
3.1.8In the event the bidding at the auctions do not reach the reserve price, the Husband or Wife, or such of them as attends the relevant auctions, may negotiate with the highest bidders or any other interested person and effect a sale of the [F] property at a price which is not more than 5 per cent below the reserve price, or at such other price as the parties agree in writing.
3.1.9The Husband and Wife shall each co-operate in every way with the agent, including:-
3.1.9.1Making the key available to the agent.
3.1.9.2Allowing the inspection of the [F] property at all reasonable times as requested by the agent.
3.1.9.3By not saying or doing anything that is likely to hinder or prevent the sale being effected.
3.1.9.4By ensuring that the [F] property, including the grounds, is in a neat and clean condition at the time of inspection by the agent or prospective purchasers.
3.1.9.5Signing all documents requested by the agent in relation to the listing for sale of the [F] property, except a contract or agreement of sale which has not been authorised by the solicitor for the Husband and Wife acting in relation to the conveyance.
3.1.10The Husband and Wife shall agree upon and instruct a solicitor to conduct the sale of the [F] property and, in the absence of agreement reached within 14 days of the date of these Orders, the Husband and Wife shall do all such things and sign all necessary documents to request the President of the Law Society of New South Wales to appoint a solicitor to act in relation to the sale.
3.1.11The Husband and Wife shall do all things and sign all necessary documents and provide all necessary authorities to cause the proceeds of the sale of the [F] property to be distributed in the following manner and priority:-
3.1.11.1All costs and expenses of sale, including legal costs and disbursements, agent’s commission, valuer’s fees and auction expenses.
3.1.11.2Discharge of the mortgage.
3.1.11.3The balance then remaining shall be divided as follows:-
3.1.11.3.1.To the wife the amount referred to in Order 1 and 2 herein.
3.1.11.3.2 The balance to the husband.
4.That, within 28 days of the date of these Orders:-
4.1The Wife shall do all acts and sign all documents as provided to her by the Husband so as to transfer to him all shares and interest she has in the company [T] Group Pty Ltd (ABN […]) (“the company”) and to dissolve [Mr and Ms Tudor] Partnership, and the Husband shall forthwith indemnify the Wife from all liability of whatsoever nature of, and associated with, the said company and partnership.
4.2The Wife shall transfer to the Husband all of her right, title and interest in the property known as [the R property] (“the [R] property”).
4.3The parties shall discharge the mortgage over the [R] property at the Husband’s expense or the Husband shall re-finance all borrowings into his sole name.
5.That the Wife shall retain all her interest in the business known as “[TSP] Services” and shall forthwith indemnify the Husband in relation to any liability of whatsoever nature associated with the said business.
6.The Husband’s superannuation interest with SuperWrap Superannuation Scheme (Member No […]) (“the Relevant Fund”) shall be split to create a superannuation interest for the Wife and, in this regard, the following provisions shall apply:-
6.1The base amount allocated to the Wife out of the interest held by the Husband in the relevant fund is the sum of $45,500.
6.2That, in accordance with paragraph 90MT(1)(a) of the Family Law Act 1975, whenever a splittable payment becomes payable from the member Husband’s interest in the Relevant Fund, the Trustee must pay to the non-member Wife or her administrators, executors, beneficiaries, heirs or assigns the base amount being the entitlement calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001 and the member Husband has a corresponding reduction in entitlement in the Relevant Fund.
6.3That Order 6.2 has effect from the operative time for these Orders.
6.4That the operative time for these Orders is 28 days after service of the Final Orders on the Trustee.
6.5That the Trustee of the Relevant Fund shall in accordance with the obligations set out under the Family Law Act 1975 and Family Law (Superannuation) Regulations 2001 do all acts and things and sign all such documents as may be necessary to record the entitlement of and make payment to the Wife in accordance with this Order.
7.That, within 28 days of the date of these Orders, both parties shall do all acts and sign all documents necessary so as to effect the transfer of one-half of any shares they own to be transferred to the other party.
8.That except as otherwise provided herein, the wife shall retain, to the exclusion of the husband, all of her right, title and interest in the following:-
8.1All furniture, jewellery and other chattels currently in her possession, custody or control.
8.2Any motor vehicle registered in her name.
8.3Any funds standing to her credit in any Bank, Credit Union or Building Society account.
8.4Any shares in any public or private company.
8.5Any superannuation fund in which she has an entitlement.
8.6All and any leave or long service, or any other employment benefits or entitlements.
9.That, except as otherwise provided herein, the husband shall retain, to the exclusion of the wife, all of his right, title and interest in the following:-
9.1All furniture, jewellery and other chattels currently in his possession, custody or control.
9.2Any motor vehicle and boat or yacht registered in his name.
9.3Any funds standing to his credit in any Bank, Credit Union or Building Society account.
9.4Any shares in any public or private company.
9.5Any superannuation fund in which he has an entitlement.
9.6All and any leave or long service, or any other employment benefits or entitlements.
10.That the Respondent shall pay the Applicant’s costs of and incidental to these proceedings.
By the minute or orders included in the Case Outline filed on his behalf, the husband seeks:
1.That within two months from the date of these orders the husband pay to the wife the sum of $250,000.
2.At the same time the wife do all necessary acts and sign all necessary documents to transfer her right, title and interest in the former matrimonial home at [F], being the whole of the land contained in Folio Identifier […] ("the home").
3.At the same time the husband discharge the mortgages registered over the home to Australian and New Zealand Banking Group Limited, being mortgage registered numbers AA4[…] and AA9[…] and indemnify and keep indemnified the wife in respect of such mortgage in respect of all rates and outgoings arising out of and in respect of the home.
4.At the same time the wife transfer to the husband her right title and interest in the business premises know as [the R property], being the whole of the land contained in Folio Identifier […] ("the business premises").
5.At the same time the husband discharge the mortgage registered over the business premises to Australian and New Zealand Banking Group Limited, being mortgage registered number AA9[…] and indemnify and keep indemnified the wife in respect of such mortgage and of all rates and outgoings arising out of and in respect of the business premises.
6.At the same time the wife shall transfer to the husband her right, title and interest in the husband's business, being [T] Group Pty Limited and the husband shall transfer any shares in respect of the said company to the husband or his nominee and resign any office she holds in respect of the company and the husband shall thereafter indemnify and keep indemnified the wife in respect of all liabilities arising out of or in respect of the company.
7.At the same time the wife shall transfer to the husband any interest she has in respect of the parties' partnership known as [Mr and Ms Tudor] and the said partnership shall be resolved and the husband shall indemnify the wife in respect of any liability arising out of and in respect of the partnership.
8.At the same time the husband shall transfer to the wife any interest he has in respect the wife's business known as TSP Services. The wife shall indemnify and keep indemnified the husband in respect of any liability arising out of and in respect of the said business.
9.The husband shall sign do all acts and sign all documents necessary to transfer to the wife any interest he has in the Toyota Secom motor vehicle in her possession.
10.That paragraph 10 to 13 (inclusive) of these Orders is binding on the Trustee of SuperWrap ("the Fund").
11.That the base amount allocated to the wife in these proceedings out of the interest of the husband in these proceedings in the Fund is thirty two thousand five hundred dollars ($32,500 ) ("the base amount").
12.That pursuant to s 90MT(l)(a) of the Family Law Act 1975 ("the Act") whenever a splittable payment becomes payable in respect of the interest of the said husband in the Fund the wife shall be entitled to be paid an amount calculated in accordance with Pt 6 of the Family Law (Superannuation) Regulations 2001 ("the Regulations") using the base amount and there be a corresponding reduction in the entitlement of the person to whom the splittable payment would have been made but for these Orders.
13.That Order 11 has effect from the operative time.
14.The operative time for the purposes of Order 11 of these Orders is five (5) business days after the date of service of these Orders upon the Trustee of the Fund.
15.The husband shall within fourteen (14) days of becoming entitled to receive a superannuation benefit from the Fund, provide to the Fund all such forms as shall be necessary to enable it to determine the nature and quantum of the superannuation entitlement and any other related information it may reasonably require.
16.That there be liberty to apply to each party and the Trustee in relation to the implementation of the Orders affecting the superannuation interest.
17.That until such time as the superannuation split to the wife pursuant to these Orders can be rolled over onto a separate account to the wife:
17.1 The husband shall provide to the wife no less than twenty-eight (28) days notice before such time as she elects to retire from and/or take voluntary retirement and/or for any reason accept or become entitled to access in whole or in part her entitlement in the Fund.
17.2 The husband shall direct and authorise the Trustee of the Fund to communicate with the wife and/or any person authorised by her in writing:
17.2.1 To answer any reasonable inquiries as may be made by her or on her behalf from time to time in relation to his entitlement in the Fund, and
17.2.2 To provide to the wife and/or her authorised representative a copy of any notice of any application or request by the husband which seeks release of entitlements in the Fund in so far as that release may affect the wife's entitlement in the Fund pursuant to these Orders.
18.The husband by himself, his servants and/or agents be and hereby are restrained from doing any act or thing which would prevent the wife, her heirs, executors, administrators or nominees from receiving the benefits in the Fund to which she is entitled pursuant to these Orders.
19.In the event that the superannuation split to the wife pursuant to these Orders can be rolled over into a separate account to the wife each of the parties hereto shall each do all such acts and things and execute all such documents as may be necessary to facilitate and to implement that rollover.
20.Subject to these Orders, the wife, as against the husband, be solely entitled to the following assets in her possession, and the husband shall transfer any interest he has in such assets to the wife and relinquish any claim in respect of such assets namely:
i) Furniture and furnishings in her possession;
ii) Motor vehicles in her possession;
iii)Bank accounts and accounts in financial institutions in her possession;
iv) Superannuation entitlements in her name;
v) Shares and investments in her name; and
vi)All other assets of whatsoever nature and in the husband's name, possession and control.
21. Subject to these Orders, the husband, as against the wife, be solely entitled to the following assets in his possession, and the wife shall transfer any interest she has in such assets to the husband and relinquish any claim in respect of such assets namely:
i) Furniture and furnishings in his possession;
ii) Motor vehicles in his possession;
iii)Bank accounts and accounts in financial institutions in his possession;
iv) Superannuation entitlements in his name;
v) Shares and investments in his name;
vi) His interest in a racing yacht; and
vii)All other assets of whatsoever nature and in the husband's name, possession and control.
22. That subject to the above Orders, each party indemnify and keep indemnified the other party in respect of any liability in the first party's name or encumbering any asset which the first party is retaining pursuant to these Orders, including that the husband indemnify the wife in respect of any claim against the wife by the husband's mother.
23. That in the event that either party refuses or neglects to comply with the provisions of these orders, the Registrar of the Family Court of Australia at Sydney is hereby appointed pursuant to Section 106A of the Family Law Act 1975 to execute all deeds and documents in the name of the defaulting party and do all acts and-things necessary to give validity and operation to the said orders.
The Evidence
The parties relied on the following documents:
Wife
Affidavit of the wife sworn and filed 4 December 2007
Affidavit of the wife sworn 7 December 2007
Financial Statement sworn and filed by the wife on 4 December 2007
Husband
Affidavit of the husband sworn and filed 3 December 2007
Affidavit of Mrs P Tudor sworn 2 December 2007 and filed 3 December 2007
Financial Statement sworn and filed by the husband on 3 December 2007
Expert Report
Report of Mr M valuing T Group Pty Ltd
Issues for determination
The issues for determination are:
· The impact of the contribution of the F property by the husband’s mother;
· The extent of the difference in the earning capacities of the parties.
Short History
The wife and husband are 45 and 51 years of age respectively. They commenced cohabitation in about May 1995, were married in May 1996 and separated under one roof in November 2006.
Children
The parties have one child:
E born in November 2001 and who was 6 years of age as at the date of the hearing.
Background facts
In March 1980 the husband and his uncle sold a property at O for $115,000 or $117,000 and purchased a property at G for $81,500. The surplus from O was paid as to about $2,000 to each of the husband and his uncle and the rest to the husband’s mother to recompense her for the cost of renovations to O funded by her. The husband says both properties were subject to life estate in favour of his mother.
From 1984-1993 the wife worked Community Health, then in England and back to Community Health in Australia.
The husband had a property settlement with his first wife whereby he received 30% of the net proceeds of sale of a property at S. He applied that (about $30K) to purchase the yacht.
On 4 November 1992 the husband’s mother (Mrs P Tudor) bought the F property.
In 1993 the wife established TSP Services in Y. In addition she worked in other jobs to supplement her income. They included work as at a hospital and in nursing homes.
On 15 July 1993 the husband registered a business, T Group Pty Ltd.
On 16 July 1993 the husband was appointed a Director of T Group Pty Ltd.
The parties met in 1994.
In 1994 the F property was renovated for approximately $100,000. The husband’s mother paid for the renovations from an extension on the mortgage.
On 3 May 1994 the husband’s mother was appointed as a Director of Secretary of T Group Pty Ltd.
The parties commenced cohabitation in May 1995. They resided in the F property and paid rent to the husband’s mother. She applied an equivalent sum to the mortgage repayments.
At the time, the husband owned:
1.Unencumbered Half share of the G property, subject to life interest in favour of his mother;
2. T Group Pty Limited
3. House full of Furniture
4. Savings $3,000
5. 30’ Yacht
6. Toyota Camry Stationwagon
7. Superannuation
The wife owned:
1. Mazda 323
2. Small amount of furniture
3.“TSP Services” which wife estimates to have been worth $1,500.
4.Some superannuation. The wife estimates it was $9,000.
The husband had no liabilities of substance. The wife owed $500 by way of credit card debt. The husband was earning $50,000 pa. The wife had a modest income.
In 1995 the husband sold the yacht for $29,000.
In 1996 the wife opened a second business in B. By 1997 the wife was working full-time in both locations.
The parties were married in May 1996. The wife’s father paid $5,000 for the reception.
The parties bought a Toyota Seca motor vehicle for $21,000.
On 16 January 1997 the wife was appointed as a Director of T Group Pty Ltd.
In 1997/1998 the wife began depositing her earning from her businesses into the T Group (up to $56,000 gross p/a).
In 1998 the wife moved her business from B to L.
In 1999 the husband’s business moved from the home to rented premises
In about 1998 or December 1999 the husband purchased a half share of a boat for $36,000 or $30,000. The purchase price came in part from the proceeds of sale of the yacht. The husband also bought a small motor boat for $3,000.
As at 30 June 2000 the husband’s superannuation entitlement stood at $37,410; and the wife’s at $7,362.
In September 2001 the property at G in which the Husband has a half share, subject to the life interest of his mother, was sold pursuant to a Deed of Family Arrangement executed by the husband, the wife, the husband’s mother, Mr DP, and Ms RP. The sale proceeds were distributed between the husband’s mother and the sole beneficiary and trustee of Mr JP’s (the husband’s uncle) estate, Ms RP. Pursuant to this Deed of Family Arrangement the husband received $2,800 upon the sale of the G property, which he paid to his mother. The husband says the deed was entered into on 19 October 2001.
The child E was born in November 2001.
In November 2001 the wife ceased full time work in order to look after the child E.
In January 2002 the G property was sold.
In April 2002 the wife resumed working part-time. She worked half a day per week at a School. The husband stayed at home to look after the child E on those days with the help of his mother.
In December 2002/January 2003 the wife was diagnosed with hypothyroidism (developed as a result of pregnancy). The treatment requires her to take 75mg of Thyroxin daily for the rest of her life.
On 30 December 2003 the husband’s mother transferred the F property into the names of the Husband and the Wife subject to a mortgage of $58,972. The parties obtained a mortgage facility of $250,000 to fund this acquisition. The only consideration was the parties were to pay transfer expenses (Duty $33,740+valuer $350), take over mortgage ($58,971), and pay any CGT ($17,928). The property was valued at the time for Stamp Duty at $850,000. It is asserted on behalf of the husband that the value of the gift was $797,982. It is also asserted by the husband that CGT of $27,000 or $17,928 is still owing to the husband’s mother.
In August 2004 the parties purchased a commercial unit at R. They subsequently rented the premises to T Group Pty Ltd. The purchase price of $360,000 or $340,000 came from $365,000 borrowed from the ANZ Bank and security was also given over the F home.
In 2005 the wife began working 2 days per week at a School. The child E was at preschool or cared for by the wife’s parents when she was working.
In 2006 the wife began working 3 days a week at a School. The child E was at preschool or cared for by the wife’s parents when she was working.
From 17 July 2006 – 9 October 2006 the wife received a sum of $909.23 and a sum of $200 on a fortnightly basis from T Group.
On 24 July 2006 the husband’s mother ceased to be a Director and the Secretary of T Group Pty Ltd.
On 16 October 2006 the wife received a bonus of $500 from T Group.
From 23 October 2006 – 4 December 2006 the wife received a sum $938 and a sum of $200 on a fortnightly basis from T Group.
In November 2006 the parties separated under the one roof.
In November 2006 the husband’s mother bought a VW Passat motor vehicle for $48,000. The husband drives the vehicle. The car was purchased using a trade in of the husband’s Saab ($9,500) and the balance came from the husband’s mother.
On 1 November 2006 the wife received a bonus of $300 from T Group.
From 18 December 2006 – 2 January 2007 the wife received a sum of $938 on a fortnightly basis from T Group.
In January 2007 and shortly after separation the wife attended upon Dr N (psychiatrist) for symptoms of anxiety.
From 11 January 2007 the wife received a Family Benefit Payment on a weekly basis.
On 15 January 2007 the wife began renting the property at W.
On 15 January 2007 the wife alleges that the parties agreed that the husband was to begin paying the wife the sum of $800 per week by way of Child Support/Spousal Maintenance.
On 16 January 2007 the husband paid the wife $652 by way of Child Support/Spousal Maintenance.
On 23 January 2007 the husband paid the wife $253 by way of Child Support/Spousal Maintenance.
On 30 January 2007 the husband agreed to pay the wife the sum of $800 on a per week account by way of Child Support/Spousal Maintenance from the time she vacates the F property and for the period pending the payment to the Wife of her share of the property settlement or the duration of 6 months from this date (whichever comes first). The husband also agreed to pay the rental bonds for the Wife’s rented property and for basic white goods as requested. The wife’s parents agreed to pay a shortfall of up to $200 per week extra to the wife.
On 31 January 2007 the husband paid the wife an amount of $800 by way of child support/spousal maintenance.
From January/February 2007 to date, the child E has attended school. He is collected from school by the wife’s parents on Mondays and Tuesdays from whom the husband then collects him, by the wife on Thursdays and Fridays, and goes to after-care on Wednesdays.
In February 2007 the parties agreed that the husband will pay the wife a sum of $770 by way of child support/spousal maintenance on a per week basis from the date that the wife vacates the F property and for the period pending the payment to the wife of her share of the property settlement or the duration of 6 months from this date (whichever comes first).
On 9 February 2007 the wife moved out of the F property into a rented unit at V.
From 9 February 2007 to date the child E has lived with both parties on a shared basis – with the husband on Mondays and Tuesdays, with the wife on Thursdays and Fridays, and alternating fortnightly between the husband and the wife on Wednesdays. Weekends days are shared.
The husband says that he agreed to pay the wife $800 per week for six months, later reduced to $770 per week.
The parties divided the contents of the former matrimonial home equally
On 18 September 2007 orders were made by consent whereby a few days later the wife received $20,000. The money was borrowed on the security of the home. The husband argues it should be treated as a partial property settlement.
On 19 June 2007 the wife commenced employment at the W property as a sole trader under the name TSP Services.
On 9 August 2007 the husband alleges that the parties’ agreement regarding the payment of spousal maintenance is to end.
On 20 August 2007 the wife’s mother lends the wife a sum of $700 for rent on her unit to be paid back in full.
Credit and Submissions
The evidence of the witnesses
The witnesses called for cross-examination were the parties, the husband’s mother and the valuer, Mr M.
The wife was a very good witness. She was thoughtful and made concessions in favour of the husband without hesitation. For example she conceded that the agreement for payments to her of about $800 per week was for only 6 months; she conceded that the husband cared for the child E when she took an extra days’ work each week. There are some matters that she recalls differently than the husband but she was a good witness.
Although the husband does not have a compete recollection of figures and dates, he made proper concessions about the relevant history.
The husband’s mother was briefly cross-examined. She is not a good witness. She agreed with virtually every proposition put to her. Some of them were inconsistent with unambiguous evidence given in her affidavit sworn less than 2 weeks ago. She is 82 years of age and says she has some short term memory loss. I was left with some doubt about the accuracy of her recall.
In her affidavit she said:
“I recently gave [the husband] money to buy a car in my name.”
In cross-examination, the question – “You helped [the husband] buy a car?” elicited the response “I think so”.
In her affidavit “I have not been paid back the $5,000, for his legal fees, nor moneys I have lent for [the husband]’s business. I do expect to be repaid these amounts.”
In cross-examination she agreed with the proposition that she did not expect to be repaid the money she had lent to the business. I do not suggest that the husband’s mother attempted to give false evidence, she is simply unreliable
Mr M was cross-examined in relation to his report. In particular he was asked about two matters, the remuneration rate fixed for the husband in calculating the good will of the business and the multiplier that was used for the assessment of the value of good will. He was not shaken in his testimony and there was no conflicting expert evidence.
The approach in proceedings under section 79
The case law reveals that there is a permissible approach to the determination of an application brought pursuant to the provisions of s 79. That approach involves four inter-related steps. First, I am to make findings as to the identity and value of the property, liabilities and financial resources of the parties at the date of the hearing. Second, I should identify and assess the contributions of the parties within the meaning of s 79(4)(a), (b) and (c) and determine the contribution based entitlements of the parties expressed as a percentage of the net value of the property of the parties. Third, I should identify and assess the relevant matters referred to in s 79(4)(d), (e), (f) and (g), (the other factors) including, because of s 79(4)(e), the matters referred to in s 75(2) so far as they are relevant and determine the adjustment (if any) that should be made to the contribution based entitlements of the parties established at step two. Fourth, I should consider the effect of those findings and determination and resolve what order is just and equitable in all the circumstances of the case. [1]
[1] This summary of the effect of the authorities is paraphrased from the comments of the Full Court in In the Marriage of Hickey (2003) 30 Fam LR 355 at 370
There is no mention of steps in section 79 but it is convenient to approach the exercise of discretion in a structured way. As I say, the Full Court has supported such an approach.
The property of the parties at the date of the hearing
The Court is required to make a finding as to the property of the parties at the date of the hearing. The list of assets and liabilities are largely agreed. As to the disputed matters:
T Group Pty Limited
The first thing to be said is that Mr M is the only expert on this issue. The only possible outcomes of challenging his report are that it be rejected, that Mr M would concede on some issue and change his evidence or that in some way the Court would be able to identify a value different to that contained in the report. In my view, although pressed on me on behalf of the husband, the latter approach is fraught with difficulty.
The business develops software and hardware. It has 5 employees (full-time and part-time) and 3 contractors. Mr M assesses the business to have a value of $149,215 based on the net assets of the company, including a value of $65,000 for goodwill.
The goodwill figure was arrived at by reference to the adjusted profits over 2006 and 2007 at $56,982. With an allowance for tax at 30% that figure revealed the future maintainable earning amount of $39,887. A multiple of 5 was then used by Mr M to value the business at $199,435. Taking $134,201 off that figure for the net tangible assets gave Mr M $65,000 for goodwill. The goodwill was plugged into the calculation of the assessment of the net assets of the parties and the result is $149,215.
It is submitted for the wife that the value should be taken to be $199,215 because the value ascribed to the business my Mr M relies on the business owing the husband’s mother $50,000 and she said in cross-examination that she did not expect to be repaid. I have referred above to my misgivings in relation to the evidence of the husband’s mother. Her oral evidence directly contradicted her affidavit evidence. In my view it does not matter. It is an agreed fact that moneys were advanced by the husband’s mother to the husband, for the business. (The husband gave that evidence and was not challenged on it; and the fact of the advances was the premise of questions put to the husband’s mother in cross-examination). If the advances are not repayable the business is worth more but the contributions to it made on behalf of the husband are increased. If the advances are repayable then the value stands. I accept that there is a business debt of $50,000 owed to the husband’s mother.
Mr Twigg challenged Mr M in relation to two main topics – firstly the assessment of the proper income for the proprietor of the business. He was asked if he conducted any assessment of the proper level of remuneration for someone of the husband’s experience and qualifications or by reference to industry standards. Mr M said that he just accepted the income that the husband had himself accepted. He noted that he was not briefed with details of the husband’s experience and in any event had not conducted any more general assessment. The second area was the multiplier applied to the future maintainable earnings figure. He was challenged as to the import of the seven factors listed at the top of page four of his report in arriving at a multiplier of 5. In effect, the husband questions whether there should be any goodwill component in the valuation of his company at all.
In my view Mr M answered the questions adequately. In the main his observations were based on objective matters – a generally buoyant economy; the current bond and bank rates; the self evident fact that this was the type of business that did not call for a massive initial set up cost and general observations of computer software and hardware development companies. He did bring to bear a specific and reasoned observation in relation to the profitability of the business that put into context reported losses in this business over previous years. He conceded that it was not the case that each indicia had a numerical value that could be reduced to a specific multiplier. In this regard Mr M revealed the process of his valuation to be more of an art than a science. He said that a suitable multiplier for a public company or a large enterprise may be more like 20 to 30. He rejected Mr Twigg’s suggestion that a multiplier of 2 or 21/2 could be appropriate. In the main Mr M’s approach appears to be within the range of acceptable valuation approaches. As to the concern about the multiplier (also called the Price Earnings Ratio) which is used to identify the value of the business from the future maintainable after tax profits, Wayne Lonergan [2] says:
“Determining the appropriate PER to be applied to the earnings of the business being valued is one of the most difficult areas in a valuation, particularly when using the comparable company method. There is no textbook answer to this problem and no magic formula. The guideline is ‘what rate of return would a prudent investor seek upon his investment in this particular company or business?’”
[2] Author of The Valuation of Businesses, Shares and other Equity 4th edition published by Allen & Unwin
Here the comparable company method was not used. At the end of the day I accept Mr M’s opinion.
Trade in value of Husband’s car
The husband’s mother bought him a VW Passat motor vehicle in November 2006. The husband received a trade-in of the order of $9,500 on his Saab motor vehicle. For the husband it is argued that the trade-in should be ignored because of the generosity of the husband’s mother to the parties. For the wife it is argued that it should be included in the list of assets. The original vehicle was a matrimonial asset. In effect the husband gave it away. On the basis of the approach in Townsend I will include it as an asset.
Partial property settlement
$20,000 was drawn on the F property mortgage and paid to the wife pursuant to orders made on 18 September 2007. The husband seeks that it be read back into the list of assets. The wife concedes that all but about $4,000 will be included in the list. $9,972 comes in because the wife has that in her savings, being moneys remaining from the $20,000 advance. Similarly $6,000 comes back in as legal costs. It will join the $5,500 in legal costs also paid by the wife from other sources. The issue is as to the remaining $4,000 or so.
Generally the Court is obliged to identify and value assets and liabilities at the date of the hearing. Care is needed in departing from that approach. That is not to say that assets and liabilities are always identified as at that date. There are circumstances, which the Court has found in other cases, have justified the inclusion of property that no longer exists, in the pool of property for settlement. In In the Marriage of Omacini (2005) 33 Fam LR 134 the Full Court noted:
[30] To date, three clear categories of cases have emerged where the court has determined that it is appropriate to notionally add back to the pool of assets, that is, assets that no longer exist. They are:
(a) Where the parties have expended money on legal fees. In In the Marriage of DJM and JLM (1998) 23 Fam LR 396; (1998) FLC 92-816; [1998] FamCA 97 the Full Court said at [11.6]:
[11.6] For reasons set out in Farnell, s 117 provides that each party to proceedings under the Family Law Act shall bear their own costs unless the Court otherwise orders. Failing to add back monies expended by parties on costs frequently has the effect of defeating the policy of s 117 by permitting the pool of available assets for distribution between the parties to be diminished by any monies that either of the parties have managed to spend on their costs up to the date of trial. We are of the view that the normal approach ought be to add costs already paid back into the pool. Whilst there may be cases where that approach is inappropriate, the reasons why it is not taken ought normally be spelt out.
(b) Where there has been a premature distribution of matrimonial assets. In In the Marriage of Townsend (1994) 18 Fam LR 505; (1995) FLC 92-569 Nicholson CJ as he then was with whom Fogarty and Jordan JJ agreed, said at Fam LR 509; FLC 81,654:
In my view, what occurred in this case, as I said during the course of argument was, in fact, a premature distribution of a proportion of the matrimonial assets. What the husband did was to distribute to himself an asset in which the wife had a legitimate interest. In such circumstances I consider that it would be unjust in the extreme to simply treat such conduct by the husband as a matter to which regard should be had under section 75(2). It seems to me that the husband has had the benefit of that money. Had he retained, for example, the taxi licence instead of selling it, that would have been brought into account as an item of property which would have been dealt with in the same way as the remaining items of property in this case. Accordingly, I am of the view that the correct way in which to deal with the husband’s receipt of those moneys is to bring them into the pool of assets on a notional basis and make a distribution accordingly.
In the circumstances outlined by Baker J in In the Marriage of Kowaliw (1981) 7 Fam LN N13; (1981) FLC 91-092 at FLC 76,644:
As a statement of general principle, I am firmly of the view that financial losses incurred by parties or either of them in the course of a marriage whether such losses result from a joint or several liability, should be shared by them (although not necessarily equally) except in the following circumstances:
(a) where one of the parties has embarked upon a course of conduct designed to reduce or minimise the effective value or worth of matrimonial assets, or
(b) where one of the parties has acted recklessly, negligently or wantonly with matrimonial assets, the overall effect of which has reduced or minimised their value.
Conduct of the kind referred to in para (a) and (b) above having economic consequences is clearly in my view relevant under s 75(2)(o) to applications for settlement of property instituted under the provisions of s 79.
As to the remaining $4,000 the wife says she lived on that sum. The husband says there is no evidence about the fate of that sum. The wife has a weekly deficit of $269. At that rate $4,000 would be consumed in less than 15 weeks. The husband’s maintenance payments ceased in August. In my view it is probable that the $4,000 was consumed in the wife’s living expenses. On that basis I will not read it back into the list of assets.
The assets are:
Assets Value The F property (joint) $931,000 The R property (joint) $385,000 Bank – ANZ (H) $1,546 AMP Shares (H) $3,685 T Group Pty Limited (H) $149,215 Household Contents – Husband $3,000 Yacht and motor boat (share) (H) $27,000 Trade-in value of husband’s car $9,500 Legal fees paid by the husband $18,855 Bank account - Wife $9,972 TSP Services (W) $3,000 IAG Shares (314) (W) $1,431 Toyota Seca (W) $3,500 Household Contents – Wife $5,000 Legal fees paid by the wife (W) $11,500 Total $1,563,204.00
Superannuation Super Wrap (H) $194,023 Solar Super Wrap (W) $83,058 First State Super (W) $11,850 Total $288,931.00
Liabilities:
The liabilities are largely agreed. As to the disputed matters:
Debt Mrs P Tudor for CGT
The parties have not paid the CGT incurred by the husband’s mother as a result of the transfer to them of the F property. I have referred above to the problems of the husband’s mother’s evidence. She was not cross-examined in relation to the CGT. Her sworn testimony is that it is still payable. The payment was either a contribution or a loan and in a sense it does not matter much. Here I am satisfied that the advance was a loan.
The liabilities are:
Liabilities Amount Mortgage (Home) $182,960 Mortgage (other) $315,600 NAB Visa (W) $3,512 Debt Mrs P Tudor for CGT $17,214 Company Loan Account (joint) $6,228 Other debt Mrs P Tudor (H legal fees) $5,000 $530,514.00
Net assets
The net non-superannuation assets have a value of $1,032,690 ($1,563,204 - $530,514).
Financial Resources
The husband has been the beneficiary of ongoing and uncritical generosity from his mother. That is likely to continue. In terms of taking that fact into account however, the problem is there is no evidence about his mother’s capacity to provide future support. Therefore the fact of that resource has no weight. The wife’s mother inherited £300,000 from her aunt’s estate. The wife’s brother was given some of that money to help him buy a home. The wife does not expect to benefit from her parents’ assets until their death.
Contributions
The obligations placed on the Court by s 79 call for an assessment of the respective contributions of the parties. The manner of assessing contributions has been the subject of previous decisions. The contributions of a parent and homemaker are to be assessed, not in any merely token way, but in terms of their true worth to the building up of the assets[3]. There are said to be risks in taking an overly technical approach to the assessment of the respective contributions of the parties in that the Court can become involved in questions of the quality of contributions which go far beyond the real world expectations of parties[4].
[3] Mallett v Mallett (1984) 9 Fam LR 449; In the Marriage of Ferraro (1992) 16 Fam LR 1
[4] In the Marriage of Shewring (1987) l2 Fam LR 139
As to whether the Court should apply the considerations in section 79(4) to the assets globally or asset by asset, the authorities have it the latter approach is preferred, in appropriate circumstances either approach is permissible and sometimes the asset by asset approach is best. See In the Marriage of Lenehan (1987) 11 Fam LR 615; In the Marriage of Norbis (1986) 10 Fam LR 819; FLC 91-712; In the Marriage of Zyk (1995) 19 Fam LR 797.
A separate pool for superannuation
In the Marriage of Coghlan (2004) 33 Fam LR 414 the Full Court allowed that superannuation may be included in the list of property drawn up as “the first step” in the determination of proceedings under s 79, whether or not a splitting order is sought in those proceedings. The Full Court suggests that that:
“… approach could be adopted where the parties agree that it should be adopted, or where the court is satisfied that the superannuation interest is indeed property within the meaning of the definition of property contained in s 4(1), or if the interest is not within that definition, but is of relatively small value in the context of the value of the other assets in the case, or there are features about the interest which leads the court to conclude that this would be an appropriate approach.”
Here there are significant superannuation interests and the wife’s case is argued on the basis of there being two pools of assets, superannuation and non-superannuation assets. In accordance with the counsel of the Full Court, on that basis, I too will adopt the preferred approach and apply the section 79(4) considerations to a combined pool of superannuation and non-superannuation assets.
Contributions to Superannuation
Section 79(4)(a) Contributions
Financial contributions, both direct and indirect were made by each of the parties. The wife owned some superannuation at the commencement of cohabitation. The wife estimates it was $9,000. It is unlikely that the wife’s superannuation was $9,000. It stood at about $7,000 in 2001.
100.The husband also had superannuation. His interest is likely to have been greater than that of the wife.
101.The husband’s income was greater than that of the wife and thereby greater superannuation contributions were made by him.
Section 79(4)(b) contributions
102.There is no evidence of non-financial contributions to superannuation.
Section 79(4)(c) contributions
103.It is agreed that the parties shared homemaker tasks before E was born and that thereafter, the wife’s contributions exceeded those of the husband.
Conclusion
104.The husband came into the marriage with a greater superannuation interest. He made the greater contribution during the marriage and after separation. By undertaking that greater parenting and homemaker role the wife enabled the husband to contribute to his superannuation. This was a marriage of 11 years. The parties undertook traditional roles during the marriage. It is agreed that there general contributions during cohabitation were equal. That leaves the question of any imbalance of contributions before and after cohabitation. In my view the husband made the greater contribution to superannuation. That should be reflected in a finding that his contributions were 55% compared to 45% by the wife.
Contributions to Non-Superannuation
Section 79(4)(a) Contributions
105.Financial contributions, both direct and indirect were made by each of the parties. At the commencement of cohabitation, the husband owned:
· Unencumbered Half share of the G property, subject to life interest in favour of his mother;
· T Group Pty Limited
· House full of Furniture
· Savings $3,000
· 30’ Yacht
· Toyota Camry Stationwagon
106.It transpired that the husband’s interest in the G property had no value and therefore was not a valuable contribution. The yacht was sold for $29,000. That sum was used for various purposes, including as security for the business overdraft, but was ultimately applied to the purchase of the current boat.
107.The wife owned:
· Mazda 323
· Small amount of furniture
· “[TSP ] Services” which wife estimates to have been worth $1,500.
· Some superannuation. The wife estimates it was $9,000.
108.The wife thinks her Mazda was worth about $3,000. She thinks it was sold for $2,400. The husband thinks it was $1,400. It is unlikely that the wife’s superannuation was $9,000. It stood at about $7,000 in 2001.
109.In May 1995 the wife was running her business out of one set of rooms at Y. She was working in that business for 42 weeks a year and for 2 days a week. She did other jobs one day a week. She was earning far less than she had been earning some years before. In 1996 she started working out of two sets of rooms. The parties amalgamated their businesses and through an income splitting arrangement, the wife was paid more than she had been earning from her business. She was initially paid $50,000 per annum but this was later reduced in accountant’s advice. The wife ceased paid work on the birth of E in 2001. When he was 5 months she returned to paid work one day a week. E started pre-school at 3 years and the wife increased her paid work to 2 days a week. The husband contends that she had no more clients or income for that increase.
110.The husband has worked in his information technology business throughout the marriage. His income significantly exceeded that of the wife.
111.The husband’s mother transferred the F property to the parties in December 2003. The impact of this contribution is the main dispute in the case. The argument on behalf of the wife is that by their payments of rent, the parties reduced the mortgage from $165,000 to $59,000. Therefore the submission is that the value of the gift was far less than is contended for by the husband. The husband’s case is that the gift was made in December 2003 when it was worth about $750,000.
112.The F property was bought by the husband’s mother for $248,000 with a mortgage of $165,000. She renovated the property in about 1994. Upon their marriage the parties moved in and under a Residential Tenancy Agreement paid rent of about $1,300 per month. It then had a value of $850,000 and was subject to a mortgage of about $59,000. The parties paid the Stamp Duty, legal fees and agreed to pay the CGT imposed on the husband’s mother ($17,928). The net value of the gift or contribution to them was of the order of $750,000.
113.I accept that there may be some basis for the wife’s argument. The husband’s mother conceded in cross-examination that the F property was in effect bought for the husband. The earlier dealings with the G property which resulted in the husband receiving no benefit at all for his one half legal interest in that property raises the issue of an understanding between the husband and his mother that might have left him with a resultant interest in the F property. However, there in insufficient reason to go behind the objective facts. The existence of such an understanding was not put to the husband or his mother. The events in relation to the F property purchase and transfer took place long before the breakdown of the parties’ marriage. There was a formal transfer in December 2003 and stamp duty was paid on a value identified in a formal valuation. Prior to the transfer there was a formal agreement to pay rent. There is no suggestion that the payment was not by way of rent. The fact that the rent was in practice applied by the husband’s mother to her mortgage payments does not make the payments themselves, mortgage instalments. There is no suggestion that the rent was in excess of a commercial rent. The net value of the gift or contribution to the parties was of the order of $750,000. It is agreed that the contribution was one made on behalf of the husband.
114.The husband provided significant financial support to the wife’s household after separation. As I understand the evidence the payments up until 28 September 2007 were as follows:
Date Purpose Amount 16 January 2007 Child Support/Spousal Maintenance $652 23 January 2007 Child Support/Spousal Maintenance $253 31 January 2007 Child Support/Spousal Maintenance $800 23 January 2007 Child Support/Spousal Maintenance $253 12 February 2007 Child Support/Spousal Maintenance $1,540 21 February 2007 Rent support $740 26 February 2007 Child Support/Child Maintenance $800 12 March 2007 Child Support/Child Maintenance $1,540 27 March 2007 Child Support/Child Maintenance $1,540 11 April 2007 Child Support/Child Maintenance $1,540 23 April 2007 Child Support/Child Maintenance $1,540 8 May 2007 Child Support/Child Maintenance $1,540 25 May 2007 Child Support/Child Maintenance $1,200 5 June 2007 Child Support/Child Maintenance $1,100 18 June 2007 Child Support/Child Maintenance $1,200 21 June 2007 Child Support/Child Maintenance $440 5 July 2007 Child Support/Child Maintenance $1,650 18 July 2007 Child Support/Child Maintenance $1,540 2 August 2007 Child Support/Child Maintenance $1,300 16 August 2007 Assessed Child Support $660 13 September 2007 Assessed Child Support $640 28 September 2007 Assessed Child Support $640 $23,108.00
115.The husband also contributed to the sum of about $4,000, being the only part of the $20,000 paid as a result of the orders of 18 September 2007 that will not be brought to account as an asset of the wife in these proceedings. The husband had the benefit of the occupation of the F property since separation and the wife was required to rent.
Section 79(4)(b) contributions
116.There is scant evidence of non-financial contributions.
Section 79(4)(c) contributions
117.It is agreed that the parties shared homemaker tasks before E was born and that thereafter, the wife’s contributions exceeded those of the husband. The husband cleaned the kitchen and vacuumed. The husband always did his own washing and ironing. He was responsible for arranging for maintenance on the outside of the house (tiling and gas leaks) and he personally did any electrical work in the house. The wife did the rest of the washing and ironing, cleaned the bathroom and arranged for any other work or maintenance inside the home. She was more involved in medical matters and has been more involved in his occupational therapy and efforts to improve his reading and writing.
Conclusion
118.It is agreed that apart from the F property, the contributions during the period of cohabitation were equal. The husband argues that as a result of an imbalance of initial contributions and the injection of the F property about 3 years before separation, the contributions overall favour him in the proportions 85% - 90% compared to 10% - 15% by the wife. For the wife it is submitted that the difference in initial contributions is not significant and that the impact of the F property should result in a finding that the husband’s contributions overall were 70% compared to 30% by the wife.
119.The husband brought more assets into the marriage than the wife. That was 12 years ago and although not eroded, I am obliged to assess that imbalance in the context of valuable contributions made by both parties during the marriage. The F property was the equivalent of a contribution by the husband of $750,000, three years before separation. Otherwise the parties contributed equally, albeit in different proportions as to financial and parent and homemaker contributions.
120.This is not a mathematical exercise. The argument made on behalf of the husband would leave a difference between the parties of between $720,000 and $800,000. In effect that is a mathematical adjustment for the entire value of the 2003 injection of funds and in my view that is outside a proper range. On the other hand the wife’s argument means about $400,000 difference and although perhaps within a legitimate range of discretion seems an inadequate recognition of the importance of the initial imbalance of assets and the F transfer. I will put the contributions to the non-financial assets at 75% by and on behalf of the wife and 25% by and on behalf of the husband. It leaves a differential between the parties on contributions of over $500,000.
The other matters in Section 79
121.Once contributions have been assessed, the other factors in section 79(4) need to be considered.
122.Dealing with the matters identified in the legislation:
Section 79(4) (d)
123.Pursuant to s 79(4)(d) I am required to take into account the effect of any proposed orders on the earning capacities of the parties. Nothing comes to attention under this provision.
Section 79(4)(e) - Section 75(2) Factors
124.The relevant matters in Section 75(2) would seem to be paragraphs (a), (b), (c), (k) and (na).
(a) the age and state of health of each of the parties;
125.First, as to the age and state of health of each of the parties. The wife is 45 years of age and the husband is 51. The wife has weekly treatment for anxiety and for damage to her back. There is no evidence about the health of the husband.
(b) the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment;
126.The wife’s income is $969 per week made up as follows:
Source Amount TSP Services $346 Dividend $1 Family Tax Benefits A & B $40 The husband for child support and rental support $582 $969.00 127.She charges $55 per half hour and $250 for each assessment. She has costs, of course. For example she pays $70 to have each assessment typed. The husband also pays $30 per week in health insurance and $14 per week for the wife’s mobile telephone. Apart from the child E, the wife lives alone.
128.The wife’s fixed expenses are as follows:
Expense Amount Income tax $60.00 Rent - ANZ Bank $370.00 Rent for office premises $90.00 Home Contents and Car insurance – GIO $20.00 Motor vehicle registration – Toyota … $23.00 Visa card payments NAB $25.00 Living expenses $650.00 Food $200.00 Household supplies $90.00 Gas $5.00 Electricity $15.00 Telephone $20.00 Petrol $40.00 Motor vehicle maintenance $30.00 Fares and parking $5.00 Clothing & shoes $10.00 Children’s activities $20.00 Medical dental optical $80.00 Entertainment and hobbies $15.00 Holidays $10.00 Educational expenses $5.00 Chemist pharmaceuticals $10.00 Gifts $10.00 Hairdressing toiletries $10.00 Occupational therapy $75.00 Sub-total $650.00 Total $1238.00
129.The wife apportions her living expenses as to $449 for herself and $201 for the child E.
130.As to the wife’s earning capacity, she intends to maintain part time employment 3 days a week while E is young. She is unable to support herself from her own business. Although she works three days a week, in her current job she cannot work throughout the year. For example she now faces 8 weeks without employment over the upcoming school holidays. She has been seeking alternate employment in another private business or the public service. In cross-examination the wife said that she had tried to obtain other jobs. The learned solicitor for the husband put several job advertisements to the wife and she demonstrated that she was aware of nearly all of them. She does not apply for jobs that involve more than one hour’s travel each way; nor those that will not guarantee her year round work (such as small private businesses like her own); nor those that call for her to work in areas in which she does not feel sufficiently experienced – she mentioned working with autistic children and persons suffering cerebral palsy. She takes any new referral made to her but has not advertised for more private work as she wants to get a new job that gives her the opportunity of employment all year round. The wife has personal medical appointments that take up half a day a week (psychologist and physiotherapist). Although there may be a debate about the degree, it is common ground that the wife is not fully exercising her earning capacity. She referred to making a lifestyle decision about that issue. The submission for the husband is that the wife has an earning capacity significantly greater than she currently exercises. It is submitted that the income she earned in 1989 of $670 per week would equate to $85,000 per annum in 2007 and that significantly reduces the difference in the earning capacity of the parties.
131.The husband earns $2,308 per week made up of:
Source Amount Salary as Director of T Group Pty Limited $2,154 Car allowance $134 Income from Mr & Ms Tudor Partnership $20 $2,308.00
132. Apart from the child E he lives alone. His expenditure is as follows:
Expense Amount Income tax $668.00 Rent - ANZ Bank $310.00 Rates and telephone $46.00 Home Contents and Car insurance – AMP $20.00 Motor vehicle insurance – GIO $22.00 Boat insurance – AMP $12.00 Motor vehicle registration – VW Passat … $20.00 Loan repayments – TSG (company loan account) $400.00 Child support payments $210.00 Living expenses $694.00 Food $150.00 Household supplies $20.00 House repairs $5.00 Gas $13.00 Electricity $29.00 Telephone $13.00 Petrol $50.00 Motor vehicle maintenance $20.00 Fares and parking $10.00 Clothing & shoes $15.00 Children’s activities $13.00 Child minding $30.00 Medical dental optical $51.00 Entertainment and hobbies $40.00 Holidays $15.00 Educational expenses $50.00 Chemist pharmaceuticals $33.00 Cleaning $30.00 Dry cleaning $5.00 Books and magazines $6.00 Gifts $20.00 Hairdressing toiletries $50.00 Occupational therapy $75.00 sub-total $743.00 Total $2402.00
133.In his Financial Statement the husband totals his living expenses at $743 and yet only includes $694 in the calculation of overall expenses. It may be that there is some overlap between the fixed expenses and living expenses claimed. The husband apportions his living expenses as to $404 for himself and $330 for E. Again those sums do not reconcile with either of the two totals of living expenses. The husband conceded in cross-examination that he does not spend $75 per week on E’s occupational therapy. In fact he has spent that on two occasions only. Also in cross-examination the husband conceded that his sailing costs him about $200 per week in mooring fees and maintenance etc. There is no mention of those costs in his Financial Statement. Reference to his assets, liabilities and resources is set out earlier in these reasons.
134.As to the husband’s earning capacity, as I understand the cross-examination of the valuer, the husband believes that his earning capacity is not refected in the income he receives from the business. If that were true it may be that he is not fully exercising his earning capacity.
135.The husband has a greater earning capacity than the wife.
(c) whether either party has the care or control of a child of the marriage who has not attained the age of 18 years;
136.The parties equally have the care of E who is 6 years old. In 2007 he was in Kindergarten. E suffers from allergies and is treated for eczema and inflamed nasal passages. He has flat feet and grommets in his ears, following a history of ear infections. The parties have arranged occupational therapy to address visual perception difficulties that have held back his reading and, in particular, his writing.
(d) commitments of each of the parties that are necessary to enable the party to support:
himself or herself; and
a child or another person that the party has a duty to maintain;
(e) the responsibilities of either party to support any other person;
137.I have set out the evidence in relation to the parties’ expenses.
(f) subject to subsection (3), the eligibility of either party for a pension, allowance or benefit under:
any law of the Commonwealth, of a State or Territory or of another country; or
any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia,
and the rate of any such pension, allowance or benefit being paid to either party;
138.The parties each have an interest in superannuation. The wife is in receipt of Family Tax Benefits.
(g) where the parties have separated or the marriage has been dissolved, a standard of living that in all the circumstances is reasonable;
139.There is some evidence in relation to the standard of living of the parties during the marriage. They had some overseas travel, lived in a nice house and the husband sails.
(h) the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income;
140.There is no evidence that either of the parties intends to undertake further study.
(ha) the effect of any proposed order on the ability of a creditor of a party to recover the creditor’s debt, so far as that effect is relevant;
141.This is not a relevant issue.
(j) the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party;
(k) the duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration;
142.The wife gave up paid employment for periods and has worked part-time for other periods. When she was in paid employment she did not command a level of remuneration comparable to that earned by the husband. No doubt the wife has missed out on the benefits of an unbroken history of paid employment. They can include the opportunity for promotion or progression, long service and other leave entitlements and the establishment of employer funded superannuation entitlements. The marriage adversely affected her earning capacity.
(l) the need to protect a party who wishes to continue that party's role as a parent;
143.The wife has paid employment three days a week. Part of the reason for that is that she wants to be available for E. When E lives with the husband he has the assistance of the wife’s parents who collect E twice a week. The wife does not take up such offers, despite there being options to allow her to put more time into paid employment.
(m) if either party is cohabiting with another person — the financial circumstances relating to the cohabitation;
144.Apart from E, each of the parties lives alone.
(n) the terms of any order made or proposed to be made under section 79 in relation to the property of the parties;
(na) any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage; and
145.There is a child support assessment and the husband meets his liability.
(o) any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account;
146.Nothing comes to mind under this provision.
(p) the terms of any financial agreement that is binding on the parties.
147.There was no binding agreement made between the parties.
Section 79(4)(f)
148.The only relevant orders made under the Family Law Act affecting the parties were the orders of 18 September 2007 whereby the husband was to pay the wife $20,000, to permit access to a property by the wife’s valuer and appointing Mr M to value the company and partnership. The Court noted that the husband and wife would argue that the character of the $20,000 was to be interim property settlement and interim spousal maintenance, respectively.
Section 79(4)(g)
149.The child support position is already referred to in these reasons.
Conclusion
150.It is agreed that there should be an adjustment in favour of the wife. The wife seeks an adjustment of 15% and it is submitted for her that the range is 10% - 20%. The husband seeks that the adjustment be 5%. It is conceded that the adjustment could be as much as 10% provided the allowance for her contributions is no more that 15%.
151.The relevant matters arising from the remaining elements of s 79, which include the s 75(2) factors referred to above are:
Ø The parties are at a similar time of life but the wife has some health problems;
Ø The husband’s income, property and income earning capacity are all greater than that of the wife, in the case of property, that difference is very significant;
Ø The wife’s earning capacity was adversely affected by the marriage.
152.Care is needed in making this adjustment. The difference in the allocation of superannuation based on contribution alone should only be relevant to the adjustment on the superannuation pool. It is not within the scope of the other matters in section 79(4) to simply even up the parties’ financial circumstances. There need to be a recognition of the dollar effect of an adjustment, not just of a percentage figure.
153.In relation to the non-superannuation pool a significant adjustment is warranted. Although I can understand the basis on which the wife pressed for a greater adjustment, in my view it should be 10%. That represents about $103,000 and the adjustment will cause a difference between the parties of twice that sum. The outcome will be a division of non-superannuation assets in the proportions 65% to the husband and 35% to the wife.
154.In respect of the superannuation assets the adjustment should be 5%. 5% is about $15,000 of superannuation interest and the adjustment makes a difference between the parties of nearly $30,000. The main reason for that lesser adjustment being the fact that the contribution based outcome was less disparate. Nevertheless the husband will more easily add to his superannuation entitlement than the wife, and is more likely to be able to make proper provision for a self-funded retirement than she will. The outcome will be an equal division of superannuation. That cannot be literally achieved but I will make a splitting order with similar effect.
Just and Equitable
155.The final step is to review the proposed outcome and see if it would be just and equitable within the context of section 79.
Conclusion
156.The net non-superannuation assets have a value of $1,032,690 ($1,563,204 - $530,514). If the wife receives 35% she would have $361,441.50.
157.The wife has or has had the benefit of:
Assets Value Bank account - Wife $9,972 Business (W) $3,000 IAG Shares (314) (W) $1,431 Toyota Seca (W) $3,500 Household Contents – Wife $5,000 Legal fees paid by the wife (W) $11,500 NAB Visa (W) -$3,512 Total $30,891.00
158.In order to bring her to 35% she would therefore receive $330,550.50. If the husband retains 65% of the net non-superannuation assets he would have $671,248.50.
159.With a payment to the wife of $330,550.50, the husband will have or have had the benefit of:
Assets Value The F property (joint) $931,000 The R property (joint) $385,000 Bank – ANZ (H) $1,546 AMP Shares (H) $3,685 T Group Pty Limited (H) $149,215 Household Contents – Husband $3,000 Yacht and motor boat (share) (H) $27,000 Trade-in value of husband’s car $9,500 Legal fees paid by the husband $18,855 Mortgage (Home) -$182,960 Mortgage (other) -$315,600 Debt Mrs P Tudor for CGT -$17,214 Company Loan Account (joint) -$6,228 Other debt Mrs P Tudor (H legal fees) -$5,000 Payment to wife -$330,550.50 Total $671,248.50
160.It is agreed that the husband will have the opportunity of buying the wife out. Given the time of year the husband seeks that he have three months to do that, rather than the two months he originally sought. There must be a balance here. If I extend the time then that is another month of the wife not having access to her funds. The parties are free to come to some accommodation about it but in my view 2 months is sufficient time.
161.The superannuation assets as are follows:
Superannuation Super Wrap (H) $194,023 Solar Super Wrap (W) $83,058 First State Super (W) $11,850 Total $288,931.00
162.In order to achieve an equal allocation of their superannuation interests they should each have about $144,465.50. The wife has superannuation interests of $94,908. I will order a split of the husband’s interest relying a base amount of $49,557.50.
163.As to the terms of the order, the trustee of the husband’s superannuation fund was provided with the form of orders sought by the wife. There was no formal response but the solicitor for the wife was told that the fund did not have a family law specialist who could respond and therefore it would only respond to the terms of the orders as finally made. For that reason, although the trustee has strictly had due process, the operative date proposed by the wife has been amended to 28 days after service on the trustee.
Conclusion under Section 79
164.In my view the outcome identified meets the requirement for a just and equitable settlement of property as section 79 is applied to the circumstances of the parties in this case.
I certify that the preceding one hundred and sixty four (164) paragraphs are a true copy of the reasons for judgment of Judicial Registrar Ian Loughnan.
Associate
Date: 17 December 2007
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