Upton and Upton
[2018] FCCA 128
•6 February 2018
FEDERAL CIRCUIT COURT OF AUSTRALIA
| UPTON & UPTON | [2018] FCCA 128 |
| Catchwords: FAMILY LAW – Property – final orders – wife seeking 60% of entire pool – husband seeking 80% of entire pool – weight to be attached to husband making significantly greater initial contributions – weight to be attached to husband making greater post separation contributions – weight to be attached to prospective inheritance – adjustment of property just and equitable. |
| Legislation: Family Law Act 1975 (Cth), Pt VIII |
| Cases cited: Stanford v Stanford [2012] HCA 52 Fields & Smith [2015] FamCAFC 57 |
| Applicant: | MS UPTON |
| Respondent: | MR UPTON |
| File Number: | NCC 880 of 2015 |
| Judgment of: | Judge Middleton |
| Hearing date: | 31 October 2017 |
| Date of Last Submission: | 31 October 2017 |
| Delivered at: | Newcastle |
| Delivered on: | 6 February 2018 |
REPRESENTATION
| Counsel for the Applicant: | Mr Duane |
| Solicitors for the Applicant: | Searson Shannon & Co |
| Counsel for the Respondent: | Mr Hodgson |
| Solicitors for the Respondent: | John Joseph Solicitor |
ORDERS
The property of the parties is adjusted to affect an overall distribution to the husband as to 69.5% and to the wife 30.5% of the total net pool;
The parties are to confer and settle orders that bring into effect the distribution as set out in order (1) hereto;
The parties are to file a set of agreed orders consistent with the decision in order (1) within 28 days of today's date.
IT IS NOTED that publication of this judgment under the pseudonym Upton & Upton is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT NEWCASTLE |
NCC 880 of 2015
| MS UPTON |
Applicant
And
| MR UPTON |
Respondent
REASONS FOR JUDGMENT
Background
This matter concerns an application for property adjustment orders.
The Applicant Wife was born on (omitted) 1956 and was 61years old at the time of trial.
The Respondent Husband was born on (omitted) 1951 and was 66 years old at the time of trial.
The parties commenced cohabitation on (omitted) 1994. They married on (omitted) 2006 and separated on or about 19 September 2008.
The husband says the parties separated in 2009 although both parties conceded through submissions that nothing turned on this point. Accordingly there is a relevant relationship of cohabitation for approximately 14 years.
There is a period of some nine years post-separation up to the date of trial.
It is conceded that the husband at the commencement of cohabitation owned six properties including a business which at that time was operating as a (business omitted).
Throughout the relationship and post separation the parties bought and sold certain properties and they both received monies from the sale of properties.
Since separation the husband has continued to work in the business operated by the company known as (business omitted). The husband has continued to maintain and meet the liabilities relating to the properties through his continued work in the business, through his personal income, and through ensuring that the company met its liabilities through the income derived through the husband's endeavours in that company.
Issues
The issues for determination were as follows:
a)The weight to be attached to the husband's initial contribution;
b)The weight to be attached to the husband's post-separation contribution;
c)Whether there was any waste committed by the wife;
d)What weight should be attached to the alleged inheritance to be received by the husband.
The orders sought
At the close of submissions the wife sought an adjustment of the parties’ interest in property such that she received 60% of the entire pool.
At the close of submissions the husband sought an adjustment of the parties’ interest in property such that he received 80% of the entire pool.
The material
The wife relied upon the following documents:
a)Amended Application filed 24 October 2017;
b)Financial statement filed 24 October 2017; and
c)Affidavit of the wife filed 24 October 2017.
The husband relied upon the following documents:
a)Affidavit of the husband filed 25 October 2017; and
b)Financial Statement filed 25 October 2017.
The law
As these are proceedings concerning the adjustment of property part VIII of the Family Law Act 1975 (Cth) applies.
Since Stanford[1] the proper approach the Court should adopt in determining property proceedings is as follows:
a)identify, “according to ordinary common law and equitable principles, the existing legal and equitable interests of the parties in the property"; ;[2]
b)consider whether it is just and equitable to make an order adjusting those interests;[3]
c)consider and make determinations in relation to section 79(4) of the Act[4];
d)consider whether there should be any further adjustments after making determinations relevant to the matters contained within section 75(2) of the Act;[5]and
e)consider whether the orders that are to be made are in the circumstances just and equitable overall.
[1] Stanford v Stanford [2012] HCA 52
[2] Ibid at [37]
[3] Family Law Act 1975 (Cth), s 79(2).
[4] Family Law Act 1975 (Cth)
[5] Ibid.
The evidence
The wife
The wife in her affidavit material states that at the time of cohabitation in 1994 she owned a Holden (omitted) which she subsequently gave to her son, some household goods and furniture. She deposes that she had no debt.
The wife acknowledges that the husband owned the following properties:
a)Property H, New South Wales, a house;
b)Property I, New South Wales, vacant land;
c)Property J, New South Wales an old storage shed;
d)Property K, New South Wales comprising a colour bond shed, a (omitted) including office equipment, racks and shelving and some stock;
e)Property L, New South Wales which had a (omitted) including equipment on the land; and
f)Property M, New South Wales which had an older dwelling as the improvement.
The wife concedes that at the time of cohabitation the parties resided in the residence at the (omitted) property.
The wife deposes that the parties operated a joint bank account. It is her evidence that the husband's wage was deposited into the joint account and that the parties used those funds for living expenses.
Her evidence continues that her wage was deposited into a savings account in her sole name and that those savings were used by the parties to purchase investment properties during the relationship.
It is her evidence, and it is not in dispute, that a number of properties were purchased during the course of the relationship as follows:
a)Investment property at Property B (as tenants in common in equal shares with Mr B (the husband's adult son) and each of the parties having a one third interest);
b)Vacant land at Property A, (purchased in the sole name of the wife);
c)Investment property at Property C, (joint tenants);
d)Vacant land at Property D, (purchased in the Respondent's sole name);
e)The commercial property at Property E, (purchased in the name of (business omitted));
f)Vacant land at Property F (as joint tenants);
g)Investment property at Property G (as joint tenants).
The wife deposes that in 1995 the husband borrowed $150,000 from (omitted) Bank secured by way of mortgage over the (omitted) properties so as to refinance the existing loans to the (omitted) Bank and the balance was thereafter used to repay outstanding debts of the business.
The wife deposes that by 2005 the Respondent and she had repaid the (omitted) loan referred to above. This is not in contest.
The wife deposes that in (omitted) 2009 the property at Property F was sold for $135,000 and the net proceeds were divided as follows:
a)The husband $66,000;
b)The wife $33,000; and
c)The son Mr B $33,000.
The wife deposes that the property at Property A, was sold in 2014 for $45,000 and that she retained the net proceeds of $42,269.71 for her own use.
The wife deposes that the property at Property C was sold in (omitted) 2009 and the proceeds were divided as follows;
a)the husband $58,000; and
b)the wife $58,000.
The wife says from her proceeds she purchased a new Subaru (omitted), still in her possession, and had a balance of approximately $35,000 which she spent on living expenses.
It is the wife's evidence that the properties were purchased through the use of funds saved in her sole account, from the wages she received from her work in the businesses operated by the parties and further that several loans were obtained to purchase the properties and that both she and the husband gave personal guarantees in order to establish the loans.
It is the wife's evidence that in 2007 the parties borrowed $50,000, at the suggestion of the husband, so that they could establish a share portfolio. It is her evidence, and again this is not in contest, that the amount owing pursuant to that loan remains at $50,000 at the time of trial.
The wife deposes that she commenced working in the business operated by (business omitted) shortly after cohabitation. It is her evidence that she made significant contributions to the business by assisting the husband with an outstanding taxation issue, again the taxation issue is not in contest, and through her general administration prowess.
It is the wife's evidence that in (omitted) 1995 the husband arranged for the wife to become a director and secretary of (business omitted) (the business) and that she receive a 50% shareholding in the company. The wife concedes that no funds were exchanged for that interest.
In 2001 the wife says the parties established a second (omitted) business at Property E also operated by (business omitted).
At this time the wife says that she continued to work in the (omitted business) at (omitted) while the husband was setting up the second (omitted) business in (omitted).
It is the wife’s evidence that she made contributions to the establishment of a second business through various endeavours including arranging trades and doing the paperwork for the setup of the business.
The wife says that from 2006 to 2009 inclusive she was responsible for the operating of the business in the (omitted) property whilst the husband was responsible for operating the business out of Property E. Her evidence is that she looked after the administrative tasks associated with both businesses.
The wife deposes that over the years the (omitted) business evolved into a business known as (omitted business) which initially (business omitted). It is the evidence that (business omitted) continued operating that business.
It is not in contest that in late 2005 early 2006 the (omitted) business conducted at (omitted) ceased operation.
The wife deposes that she was the majority contributor towards the homemaker contributions throughout the relationship.
She says that the husband's adult son Mr B lived with the parties for approximately 4 years and that she prepared meals, did the washing ironing and cleaning during that time.
The wife deposes that Mr B also worked in the (omitted) business until it ceased in 2005/2006 and that he contributed board of approximately $20 per week whilst living with the parties.
The wife says that she babysat for Mr B and his wife after their child was born in 2002 and that she continued to do this until 2008.
In relation to the properties at Property B and Property C, the wife deposes that it was her task to clean the homes before tenants moved in, interview the applicants and decide who would lease the properties in question and also attend to advertisements in local papers and arranging all of the bond requirements required when tenants vacated.
The wife gives evidence that at the end of the relationship the relationship between the parties deteriorated and they were arguing frequently. It is her evidence that the husband started to push her during arguments causing her to fall over.
It is the wife's evidence that she moved out of the matrimonial home and rented a granny flat in (omitted) for approximately $100 per week whilst the husband returned to the former matrimonial home post separation.
The wife says that post separation she was told she was suffering from stress by her doctor and he put her on “some” medication and referred her to a psychologist. She says she saw the psychologist on five occasions and she believed that those sessions assisted her.
The wife says she stopped working in the businesses in September 2009 and moved to (omitted) to live with her parents. At that time she deposes that she had $65,000 in a savings account, that amount coming from the sale of Property B and Property C.
The wife deposes that the (business omitted) operated in (omitted) closed down shortly after separation and that the company continued to operate the (omitted) business known as (business omitted) at Property E until trial. Her evidence is she remains a 50% shareholder and director of (business omitted).
The wife deposes that she currently works and has done so since 2010 and that during 2017, at the time of trial she had earnt approximately $23,094. The wife says she currently lives with her parents in a flat below the main residence but that she does not pay rent or board.
The wife deposes that the husband will receive an inheritance as a result of his mother passing away in mid-2017.
Whilst being cross-examined the wife conceded that the husband had significantly greater assets at the time of cohabitation.
The wife conceded that the husband received a greater income because he worked longer hours in the business but noted that she did the household chores.
The wife accepted that the business at the time of cohabitation and continuing is a labour-intensive business.
The wife was cross-examined as to an arrangement where a person by the name of "Mr G" was in debt to the company. The thrust of the cross examination was that the wife allowed Mr G to continue to remain in debt because he was providing information to her about alleged affairs the husband was having.
After those questions were asked and answered I was satisfied that the wife was not allowing Mr G to continue to be in debt because he was providing information.
The wife conceded that since separation she had paid no money off the mortgage directly over the Property G property and that the husband was meeting the shortfall. The wife also conceded that she paid no monies towards rates and water in relation to this property post-separation and that it was the husband that did so.
In relation to Property I, post separation the wife conceded that there were no arrears in relation to the rates and made a further concession that any shortfall that occurred after the rent was taken into account was paid for by the husband.
The wife conceded that dividends were never paid to the husband or wife from the company (business omitted).
The wife conceded that post separation she had not made any contributions towards the interest payable on the $50,000 loan established to trade in shares and that it was the husband that was meeting those interest payments.
In relation to (business omitted) the wife conceded that there were two loans outstanding at time of separation, one in the sum of $39,000 and the other in the sum of $13,000. She acknowledged that those loans required payments of relevantly $1200 per month and $400 per month.
The wife conceded that it was the husband post separation who was deriving income from the business and that as a result the business was able to meet the liabilities for the loan.
The wife conceded that she had made no contributions to the Upton's self-managed superfund post separation.
The wife’s evidence was that as she was a 50% shareholder of (business omitted), she was contributing to the expenses previously outlined.
The wife was cross-examined about monies received post separation and she acknowledged that she received $133,269.71 from the sale of properties post separation. Her evidence is that she used those monies on living expenses and purchased a Subaru (omitted) which she still has in her possession.
Having regard to the length of time post separation, that is nine years, I am satisfied that the expenditure represents a reasonable expenditure in all the circumstances.
Overall I was satisfied that the wife was an honest historian who did not try to oversell her contributions to the properties and the relationship nor did she try to undersell the contributions to the property and relationship of the husband.
The husband
The husband deposed to the ownership of the properties previously referred to in these reasons at the commencement of cohabitation.
The husband deposed that he purchased the (omitted) business in 1976 together with the properties on which the (omitted business) was situated in (omitted). It was his evidence that (business omitted) had been incorporated in 1983 and that he was the only director and shareholder of the company until such time as he arranged for the wife to become a director, secretary and 50% shareholder.
It was the husband's evidence that the wife did not make any financial contribution of any assets at the commencement of the cohabitation.
The husband deposed that he used his own funds to pay for the property at Property B and that when the property was sold $99,000 was deposited in a joint bank account and that the sum of $99,000 was divided equally between he and the wife.
It was the husband's evidence that the properties purchased in (omitted) were purchased out of funds in the joint account and/or by establishing loans rather than out of funds held in the wife's personal savings account.
It was the husband's evidence that the liabilities relevant to the various properties were met during the course of relationship out of the joint account. The husband's evidence was not in contest with the wife's in relation to the establishment of the wife's shareholding and directorship of (business omitted) nor in relation to the purchase of the further businesses in (omitted).
The husband deposed to the fact that the wife carried out administrative and secretarial duties in relation to the businesses and that she continued to receive a wage until the parties separated, noting that the husband at all times said the parties continued in a relationship until 2009. Accordingly there was no dispute as to the time in which the wife's wage ceased.
In relation to the shares the husband agrees that the parties borrowed $50,000 to establish a share portfolio and it was his evidence at the time of separation the shares were worth approximately $31,372. This was not disputed.
In relation to the self-managed superannuation fund the husband deposed that the fund was established in approximately 2001, that the members of the fund are the wife, his son and himself.
His evidence is that during cohabitation the business paid contributions on behalf of the wife and himself into the fund.
The fund itself makes provision for the amounts each member is entitled to.
The husband gave evidence that he believed the wife had wasted approximately $30,000 by allowing a person by the name of Mr G to continue to remain in debt.
It was the husband's evidence that the wife had told him she had allowed Mr G to do that because he was assisting her in providing information about affairs that the husband might have been having.
As previously outlined in these reasons I do not accept that the wife allowed Mr G to remain in debt and accordingly, I am not satisfied that the wife is responsible for any waste.
In relation to the monies received from sale of properties post separation the husband deposes that he received $168,270.
His evidence is that he invested $50,000 into a fixed term deposit which he still has and that he loaned the balance of the money together with other monies to the business (omitted business), a business operated by (business omitted) to prop up the business. It is his evidence that without that money the business would not have remained viable.
In relation to post separation contributions to the various properties it is the husband's evidence, consistent with the wife's concessions, that he has continued to maintain the liabilities, rates and other services.
It is the husband's evidence that post separation he has been responsible entirely for the physical maintenance and upkeep of the properties and the business.
In relation to the business it is the husband's evidence that he continues to work 70 to 80 hours per week and that he draws a gross wage of $920 per week. This was not in contest.
In relation to the shares the husband deposes that since February 2016 he, through his own endeavours, has recommenced trading. He says that through his endeavours he has increased the share portfolio from a value of $31,000 to a sum of just over $50,000. It is not in contest that the share value at the time of trial was $50,964.
In relation to superannuation it is the husband's evidence that he is the only member who has continued to make contributions to the self-managed super fund at the rate of 9.5% per annum and that he also contributed a further sum of $30,987 in 2011 this money coming from two matured insurance policies that he had inherited from his father.
It is his evidence that as result of his contributions to the fund the fund's value has increased overall and accordingly the wife's entitlement pursuant to the fund has also increased.
In relation to non-financial contributions it was the husband's evidence that the wife “made slightly greater, though not overwhelming, contributions as homemaker”. His evidence was that the household duties were essentially shared although the wife did the majority of the inside household duties and he did the majority of the outside household duties. Overall the husband considered that the wife would have made slightly greater non-financial contributions to the assets and family.
With regards to section 75(2) factors the husband notes that he is currently 66 years of age, that he has sight impairment in one eye and that he has had 11 major surgeries on his eyes since 2008.
The husband deposes that he has only worked in his business since 1976 and that he has little prospects of obtaining any further employment other than continuing in his business.
The husband “suspected" prior to separation, from 2007 onwards the Applicant was diverting funds into an (omitted) bank account she had. The husband further deposes that the existence of that account was never confirmed. In those circumstances I cannot be satisfied that the wife has diverted funds.
In relation to an inheritance the husband says:
“My mother passed away early in 2017 I understand the only asset she owned was a house in (omitted). I have a sister and I believe we are the joint beneficiary of the estate although I do not know whether my mother made a will and have not been informed that one exists. No steps to obtain probate or letters of administration in relation to my mother's estate have been taken."
Whilst being cross-examined the husband conceded that the properties that he owned had a mortgage or loan secured against them at the time of cohabitation.
The husband conceded that the business grew from the date of cohabitation and that both parties worked hard in relation to the business.
The husband agreed that the business expanded and that the business through the parties’ joint endeavours provided a good income which allowed the parties to pay out loans quickly. He conceded that the two of them were a successful team and that he was not critical of the wife for not continuing in the business after she left.
The husband conceded that the parties did not waste any money during the relationship.
In relation to Mr G's debt the husband under cross examination said he had no idea that Mr G had a debt, that he questioned the wife about it on several occasions and that she told him he had paid it and that the wife at that time was handling all of the accounting and banking.
Assessment of evidence having regard to the law
Interest in property
Exhibit 1 in these proceedings is a joint balance sheet where in all of the property, liabilities and superannuation is listed with agreed values.
Accordingly the assets and liabilities at the time of trial are as follows:
ASSETS
| No. | Ownership | Description | Agreed value |
| 1. | Husband | Properties H, I & J | $150,000 |
| 2. | Husband | Property K | $350,000 |
| 3. | Husband | Properties L & M | $200,000 |
| 4. | Husband | Property D | $80,000 |
| 5. | Joint | Property F | $70,000 |
| 6. | Joint | Property G | $482,500 |
| 7. | Wife | Subaru (omitted) | $10,000 |
| 8. | Husband | (omitted) Bank accounts Property G (omitted) (omitted) Super Term Deposit (omitted) | $61,480 |
| 9. | Husband | Husband’s interest in joint accounts (cash manager share account (omitted)) | $3,126.50 |
| 10. | Wife | Wife’s interest in joint accounts (cash manager share account (omitted)) | $3,126.50 |
| 11. | Wife | (omitted) Bank accounts | $35,756 |
| 12. | H/W | Shares ((omitted) Bank share trading) | $50, 964 |
| 13. | Husband | Husband’s 50% shareholding in (business omitted) (inclusive of Property E) | $279,544 |
| 14. | Wife | Wife’s 50% shareholding in (business omitted) | $279,544 |
| 15. | Husband | Household contents | $5000 |
| 16. | Wife | Household contents | $5000 |
| Total | $2,066,041 |
LIABILITIES
| 17. | Joint | Property G mortgage | $256,714 |
| 18. | Joint | Loan (shares) | $50,000 |
| 19. | Husband | (omitted) Credit Card | $5,888 |
| Total | $312,602 |
SUPERANNUATION
| 20. | Husband | Upton Superannuation Fund | $234,498 |
| 21. | Wife | Upton Superannuation Fund | $100,611 |
| 22. | Wife | (omitted) Fund | $2,300 |
| Total | $337,409 |
| TOTAL NET POOL | $2,090,848 |
Both parties agreed that I should determine the matter having regard to the global approach.
Is it just and equitable to adjust the property interests?
The evidence establishes that at the commencement of the relationship the husband owned certain real properties and a company that conducted a business.
Throughout the relationship the evidence establishes that the parties bought several properties and through their joint endeavours grew the business operated by the company.
Since separation the husband has been entirely responsible for maintaining the properties and the business and it is through his income and management of the company that the liabilities of the parties are being met.
The evidence establishes that as a result of the separation the parties no longer enjoy the benefits of their jointly owned and/or individually owned properties in the same way that they enjoyed those properties throughout the relationship.
At paragraph 42 in Stanford[6] their Honours said:
“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.”
[6] Stanford v Stanford [2012] HCA 52
The evidence in this case sits on all fours with the observations made by their Honours as referred to above and accordingly I am satisfied it is just and equitable to adjust the property interests of the parties.
Section 79(4) contributions
Initial contribution
It is not in contest that the husband brought into the relationship significantly more than the wife. The wife conceded as much during cross examination.
At the time of trial, and having reference to the table of assets and liabilities contained within these reasons items 1, 2, 3, 13 and 14 represent property that the husband brought into the relationship. The value of that property as at the time of trial represented 60% of the total net pool.
In Pierce v Pierce[7] the Full Court said it was not so much a matter of erosion of the contribution but a question as to what weight was to be attached in all of the circumstances to the initial contribution.
[7] (1999) FLC 92-844
In SJS & NS[8] the Full Court took into account the income producing nature of the husband's initial contribution when considering the weight to be attached to it.
[8] [2005] FamCA 66
The evidence establishes that (business omitted) grew as a result of the parties’ joint endeavour. However the foundation for that growth existed at the time of cohabitation.
The evidence further establishes that the three real properties in (omitted) are currently worth $700,000 and that the parties jointly contributed to their maintenance throughout the relationship. Again however the foundation for the growth in the value of those assets existed at the time of cohabitation.
It is not in contest that the wife made no contribution to the acquisition of those relevant pre-existing properties and although she made contributions to the properties throughout the relationship significant weight must in my view be attached to that initial contribution.
Contribution throughout the relationship
Both parties assert and/or concede that through their joint endeavour they were a successful team in growing the business as operated by (business omitted) and in purchasing various properties throughout the relationship.
An assessment of the evidence of the husband and wife satisfies me that throughout the relationship, some 14 years they contributed equally towards the property of the parties.
As I said earlier I am not satisfied that either party wasted any property or that either party has hidden assets or mismanaged their affairs such that there is a reduction in the property.
Post separation contributions
In relation to the Property G property the evidence establishes that the husband continues to meet the shortfall of $400 per week towards the Property G mortgage.
The wife conceded that she contributed no amounts directly since separation however argues that as a shareholder of (business omitted) she is contributing.
She agrees however that the parties never received dividends and that they only draw a wage and that since separation it is the husband's efforts that continues to see the business earning income and he continuing to draw a wage.
The husband was not cross-examined as to his evidence that he has loaned significant moneys to the company in order to keep it afloat and in those circumstances I must accept his evidence.
In relation to (omitted) the wife conceded that to the extent that there is any shortfall after rent the husband has paid all expenses relating to the properties.
The wife conceded that she made no contribution to the interest payments required in relation to the $50,000 loan established to develop a share portfolio and furthermore conceded that the husband has met those payments.
The husband said that at the time of separation the share portfolio was worth $31,000 and that at the time of trial, (and this is conceded), the value of the shares was $50,964.
The husband was not cross-examined as to the truth or otherwise as to his alleged share trading bringing about the increase in that value and in those circumstances I must accept his evidence, that is that he has brought about an increase in the share portfolio through his own trading.
In relation to (business omitted) the wife concedes that the only person drawing a wage from the business is the husband, that he is continuing to work in the business and that he is continuing to manage the affairs of the business such that the liabilities consisting of a $1200 and a $400 per month payment are being met by the husband.
In relation to the self-managed superannuation fund the wife concedes that she made no contribution to the fund since separation and that the husband has made contributions through employer contributions and does not dispute that the husband deposited $30,987 (by way of an inheritance) into the superfund.
In those circumstances I am satisfied that the superannuation fund has increased as a whole post separation due to the husband's contributions and that the wife has not made any contribution post separation to the superannuation.
In relation to post separation contributions I am satisfied that the husband made direct financial contribution to the assets and that he conserved the loan account for the shares through his payments and that he increased the share value due to his trading. I am furthermore satisfied that the husband and only the husband has contributed directly to the superannuation post separation.
I am satisfied that the wife is entitled to some acknowledgement of her indirect financial contribution post separation since, through the parties joint endeavours, the business grew which allowed the husband's income to increase and also provided sufficient financial resources to continue to make payments through the company towards the company's liabilities.
However balancing, weighing and considering those contributions I am satisfied the husband has made greater contributions than the wife post separation.
In Fields & Smith[9] the Full Court said at [75]:
‘…there is no requirement to attribute different percentages to different periods in the relationship. Indeed the Full Court has cautioned against it: see Dickons & Dickons [2012] FamCAFC 154, Lovine & Connor and Anor (2012) FLC 93-515 and Bolger & Headon [2014] FamCAFC 27 where the Full Court said at [28], “[d]oing so … is not consistent with a holistic assessment of the parties’ contributions which is what s 79(4) requires.”
[9][2015] FamCAFC 57
What is required is a qualitative assessment of all of those matters referred to above. Considering those matters and the findings I have made holistically I am satisfied that the husband has made significantly greater contributions towards the property than the wife. I assess those contributions at 69.5% .
Section 75(2) factors
The wife gives evidence that she suffered some stress, treated by way of five sessions with a psychologist and some medication post separation. Her evidence is not that she still suffers from that stress or that the stress impacts upon her ability to work.
Indeed the evidence establishes that the wife continues to work as a (occupation omitted) at the (employer omitted) in (omitted) and that since 2010 her income has increased overall over that time.[10]
[10] see paragraph 90 of the wife’s Affidavit filed 24 October 2017.
The husband's evidence establishes that he has had eye problems since 2008. He continues to draw a wage of $920 per week from the business, consistent with what he was drawing at the time of separation. He continues to work in the business on his evidence 70 to 80 hours per week.
The evidence establishes overall that the husband earns approximately twice as much as the wife noting that she says for the 2017 year she made $23,094 and that the husband by extrapolation of the weekly gross amount he receives earns approximately $47,840.
Neither party has the care or control of any child under the age of 18. Neither party has any commitment to any other person. Neither party gives any evidence as to their eligibility for a pension or allowance under any law of the Commonwealth, State or Territory of another country.
The evidence does not establish that either party are currently living in circumstances that is unreasonable having regards to the circumstances throughout their relationship.
Neither party complains that the length of the relationship has impacted upon their ability to earn income.
The wife alleges that the husband has a financial resource available to him by virtue of an inheritance.
A bequest that has been received is property under the Family Law Act[11].
[11] Bonnici & Bonnici [1992] FLC 92-272
In White & Tulloch & White[12] the Full Court rejected the proposition that a prospective inheritance is a financial resource. The Court said there is no absolute rule, the relevance of an inheritance must depend on the nature of the claims being put forward and the facts in the particular case. The likelihood of a benefit to the party cannot be so speculative that it is irrelevant to a section 79 determination.
[12] (1995) FLC 92-640
There is no evidence of the nature of the benefit. There is evidence that the husband's mother has died but the husband says he is unsure if there is a Will.
He says he has a sister and ‘I believe we are joint beneficiaries of the Estate although I do not know whether my mother made a Will and have not been informed that one exists’[13]
[13] Paragraph 63 of the husband’s Affidavit filed 25 October 2017.
The wife gives evidence that ‘In August 2017 the Respondent sent me a text message to let me know that is (sic) mother passed away. I am unsure as to the value of his mother's estate. The Respondent has a brother and sister" [14].
[14] Paragraph 99 of the wife’s Affidavit filed 24 October 2017.
Assessing that evidence I am satisfied that the likelihood of any benefit and indeed the nature of that benefit is highly speculative and as a result I am satisfied it is irrelevant to this application.
Considering all of that evidence I am satisfied that there should not be any adjustment to either the husband or wife pursuant to section 75(2). In my view any disparity in income is offset by the husband's continuing health issues.
Is the order just and equitable?
It follows from the findings that I have made that I intend making an order adjusting the property so that the husband receives a total of 69.5% of the total property pool.
The net result of such an order would see the husband receiving approximately $815,430.72 worth of property more than the wife.
Having regard to the significant initial contributions and the significant post separation contributions such an adjustment in my view is just and equitable.
The wife currently has in her possession and control property, as set out in the assets and liabilities contained within these reasons, totalling $156,793.50. Accordingly the wife requires an adjustment of property so that she receives further assets totalling $480,915.14.
Other than just a bold statement as to the percentage entitlements of the husband there were no orders proposed for my consideration.
The wife in her Case Outline filed 27 October 2017 proposed a series of orders that would see the transferring of the real property and business entity to the husband and the retention of the wife of her superannuation entitlements in the self-managed superannuation fund and a payment to her of $830,780.
Clearly from the decision I have made those orders would not be made.
In those circumstances I am of the view that the party should confer in order to draft a set of orders consistent with the determination I have made and submit those orders to Chambers within 28 days of today's date.
I certify that the preceding one hundred and fifty-six (156) paragraphs are a true copy of the reasons for judgment of Judge Middleton
Date: 6 February 2018
Key Legal Topics
Areas of Law
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Family Law
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Property Law
Legal Concepts
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Remedies
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Costs
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