Valente & Valente

FAMILY COURT OF AUSTRALIA

VALENTE & VALENTE

[2007] FamCA 51

FAMILY LAW - PROPERTY SETTLEMENT

Family Law Act 1975 (Cth) s75 (2), s79(4)(g)

Gosper & Gosper (1987) FLC 91-818,
Kessey & Kessey (1994) FLC 92-495

Money & Money (1994) FLC 92-485,
Black & Kellner (1992) FLC 92-287
Giunti & Giunti (1986) FLC 91-759,
Weir & Weir (1993) FLC 92-338
Collins & Collins (1990) FLC 92-149,
Brandt & Brandt (1997) FLC 92-758

APPLICANT:

MRS VALENTE

RESPONDENT:

MR VALENTE

FILE NUMBER:

ADF

583

2004

DATE DELIVERED:

9 February 2007

PLACE DELIVERED:

Adelaide

JUDGMENT OF:

Judicial Registrar Forbes

HEARING DATE:

30 November 2006, 1 & 12 December 2006

REPRESENTATION

COUNSEL FOR THE APPLICANT:

Ms Powell QC with Mr King

SOLICITOR FOR THE APPLICANT:

Griffin Hilditch Lawyers

COUNSEL FOR THE RESPONDENT:

Mr Richards

SOLICITOR FOR THE RESPONDENT:

Barbara D Rowe

IT IS NOTED IN CONNECTION WITH THESE ORDERS that the judgment of the Court delivered this day will for all publication and reporting purposes be referred to as Valente & Valente

FAMILY COURT OF AUSTRALIA AT ADELAIDE

FILE NUMBER: ADF 583 of 2004

MRS VALENTE

Applicant

And

MR VALENTE

Respondent

REASONS FOR JUDGMENT

The matter for determination is settlement of property. The wife first filed an application on 25^th March 2004. The wife filed an amended application on 18^th April 2005. In that application the wife sought:
“That in full and final settlement of property and alternation of interest in property and for spousal maintenance:
a)That the husband transfer his interest in the partnership styled [V] trading as A to the wife;
b)That for the period of two years from the date of any final order for settlement of property the husband be restrained from:
(i)holding out that he has any interest in the business styled “[A]” (herein after called “the business”);
(ii)holding out that he is authorised to act on behalf of the business;
(iii)pledging the credit of the business;
(iv)engaging in or carrying on the business of the manufacture and/or sale of fresh pasta, whereas employee, contactor (sic), agent or principal.
c)That the husband transfer to the wife all his estate and interest in the property situated at [P] comprised and described as Certificate of Title Register Book Volume […] Folio […] free from all encumbrances;
d)That the wife do have the properties situated at [S1] and [S2] [S] comprised and described as Certificate of Title Register Book Volume […] Folio […]and Certificate of Title Register Book Volume Number […] Folio […] as her sole property.
e)That the former matrimonial home situated at [G Street] comprised and described as Certificate of Title Register Book Volume […] Folio […] [R] be sold;
f)That the wife transfer her interest in the property situated at [M] comprised and described as Certificate of Title Register Book Volume […] Folio […] to the husband, or, at his election, the property be sold and the husband retain the net proceeds of sale;
g)That the husband retain as his sole property any interest at law or in equity in land, chattels or business situated or conducted at C;
h)That the wife retain her savings, jewellery, all personal effects left in the former matrimonial home at separation and the Magna motor vehicle;
i)That the husband retain the BMW motor vehicle and indemnify the wife with respect to any encumbrance in relation thereto;
j)That the husband and wife each retain one half of the furniture and effects left in the former matrimonial home at separation;
k)That the husband pay to the wife such sum as the court deems just and equitable;
l)That the husband do pay the wife’s costs of and incidental to these proceedings.”
The husband by his Form 1A Response filed the 29^th April 2005 sought orders as follows:
“1.That in full and final settlement of property and alterations of interest in property:
(a)That the assets of the parties be divided in equal shares to the intent that:
(i)The wife do transfer to the husband all her estate and interest in the former matrimonial home situate at [R] being the whole of the land comprised and described in Certificate of Title Volume […] Folio […];
(ii)The wife do transfer to the husband all her estate and interest in the property situate at [P] being the whole of the land comprised and described in Certificate of Title Volume […] Folio […];
(iii)The wife do transfer to the husband the whole of her interest in the partnership styled “[V]” trading as [A].
(b)That the wife do pay the husband’s costs of and incidental to these proceedings;
2. Such further or other order as this Honourable Court deems appropriate.”
It is a long marriage of some 27 years with three children, the youngest being a dependant child of 16 years of age who resides with the wife. As will be seen, it is a marriage where each of the parties made significant contribution both financially and by reason of endeavour or personal exertion. There is an agreed position as to the value of real property held by the parties or each of them totalling $1,739,000 with mortgages totalling $220,000. There is also personal property. These are matters to which I will return.
The parties were married in August 1976. The wife was then one month short of her 18^th birthday. The husband was 28 years of age. At about the time of the marriage the parties purchased in their joint names a house property at T. The parties agree that the husband sold a car and used the proceeds to contribute to the cost of the purchase of the property. Otherwise they seem not to agree as to the purchase price nor the amounts which they otherwise each contributed. The wife says the property cost $32,000. The husband says it cost about $38,000 - $40,000. The wife says that the sum of $24,000 was borrowed on two mortgages. The husband is non specific as to the amount of borrowing but concedes the bulk of the cost of purchase was obtained by way of finance with bank mortgage. The wife says the balance came from moneys provided by her mother by way of gift as to $4,000; from the wife’s savings of $2,000 and from the proceeds of sale of the car which the husband sold. The husband does not acknowledge the contribution from the wife’s mother although he does concede that the wife “may have had several thousand dollars”, to use his expression. He says that he received $3,600 from the sale of his motor vehicle.
At the time of the marriage the husband conducted his own crash repair business. The wife was employed in clerical work with an insurance brokerage business. Following the marriage she took up work part time in the husband’s business as a receptionist/clerk as well as undertaking casual employment at a nursing home for four hours each day, five days per week.
The parties had a large wedding with some 550 guests. The wife says that her mother paid for one half of the cost of the wedding and that the balance of the cost came from cash gifts from guests. The wife says that she received from her mother a lounge suite; from her sister a dining table and chairs and from her grandmother a washing machine. She says the husband’s parents purchased a bedroom suite for them. She says otherwise they had little by way of household effects. She says she and the husband took up accommodation at the T property where they then lived for 14 years.
There are three children of marriage:
M born in April 1979, currently 27 years of age;
L born in October 1982, currently 24 years of age; and
Y born in May 1990, currently 16 years of age.

Contribution

As well as the personal property which the husband brought to the marriage as mentioned, there is a history of ongoing contribution by him in the running and maintaining of family businesses, initially the crash repair business and then in a video rental business, in the development of shop premises at F, and from June 1994, a pasta business known as A.
In 1990 the parties sold T and purchased a house property at R. They paid a deposit of $7,000 and with the proceeds of sale from T, acquired $50,000 by way of borrowings on mortgage to conclude the settlement on the purchase of R. In 1994 when the opportunity arose, the parties borrowed $230,000 against R to purchase the real estate at the place from which the business, A, was conducted at P. The property cost $250,000. Otherwise the husband says that he and his father did all the necessary work to establish the premises from which the business was to be operating. Clearly the husband has worked hard in each of the businesses in which he was involved. Then there was a period of some 8 months in 2003 when he also took on work as a production supervisor for a marble paving business. Income from this work was used to renovate the kitchen at the R home.
The wife also had a clothing boutique business in partnership with another person. This lasted for two years, ceasing in 1978. The wife says that during this time she was also doing bookwork for the husband’s business. It can be seen that the child M was born in April 1979. The wife continued to work. She says the husband played no part in the early rearing of M. It seems, however, that with M and the other two children, the wife had the help of her family and the husband’s family in the care of the children from time to time. The wife then worked at the greengrocery business conducted by her sister and brother-in-law. She gave produce to her mother-in-law in return for care of the child M. She returned to the greengrocery work after the child L was born in 1982. She also worked in the video business on alternate Fridays through to Sundays. Her mother and mother-in-law looked after one child each during the period whilst she was at work. She did the bookwork for the business at home.
Later again the wife worked in a super deli which was a business run by her mother, older brother and two sisters. She returned to work at the video store, working every weekend and on occasions during the week, continuing to do the bookwork for the video business at night. In 1987/1988 the video business was sold. It seems that the parties had paid off all liabilities at this time, both in respect of any business and the home. At this stage the wife says that she spent most of her time looking after the children as well as caring for her mother and her grandmother. Her mother was ill and was cared for in the home of the parties at T three days a week. The husband was not working. Shortly before the birth of the child Y in May 1990, the wife’s mother returned to her own home under full time nursing care. The wife continued to manage her mother’s affairs. It was at this time that the parties decided to seek larger accommodation and T was sold and the R home purchased. The husband then went into a new venture in the video business with the wife’s brother. The business opened in December 1989. The wife did the bookwork. That business was sold in 1992 and the proceeds enabled the parties to pay off the mortgage on the R home.
The next business venture was the pasta business which commenced in June 1994. As mentioned, the parties shortly after commencing the business were able to purchase the real property from which it was conducted. Both parties worked extremely hard in the pasta business. The husband says he worked “around the clock”. He says for many years he worked a 15 to 18 hour day. The wife says her day started at 6.30am getting the two older children ready for school and the younger child ready for childcare. She says that she would invariably finish at 9pm and then attend to domestic work at home as well as doing the bookwork for the business. She says she worked in the business all day Saturday. She said Sunday was her day off. The wife says “we both worked extremely hard”. She says “We had no social life or holidays to speak of”. It can be seen that as well as the $230,000 borrowing on mortgage on their home, there was also a commitment for the costs of setting up of the business of $25,000 being plant and equipment which was leased. The total cost was $50,000, the balance being derived from moneys due by the wife’s brother and moneys held in the children’s bank accounts.

Other contributions

Wife
1978 $4,000 gift from mother – the wife says that money was used to pay off the mortgage on T (see paragraph 4);
1982 $4,000 compensation being proceeds of motor vehicle claim;
1989 $30,000 gift from mother
1989 gift of vacant land at S1 from her mother. This came from a subdivision which cost $8,000. The wife paid that from the $30,000 she had received from her mother as mentioned. The wife then contributed the $20,000 balance of moneys to the video venture undertaken by the husband and her brother Sam. The wife took the view that she had a personal obligation to her brother and she intended that he should benefit from the gesture. The legality of the transaction must have been something else because the wife acknowledges that the money was recovered in 1992 when the business was sold and then only after the husband had issued court proceedings.
1993 – wife inherited from her mother vacant land at S2. Transfer is effected in 1996.
1993 - cash inheritance of $18,000 also received. $9,000 of the $18,000 was placed in an interest bearing deposit. That fund with the accumulation of interest grew to the sum of $15,000 at the date of separation. The other $9,000 was spent on the family.
Husband
In 1994 the husband as one of four siblings received a quarter interest in three properties at C. The property was received by way of gift from the husband’s parents.
In 1996 the parties separated for two months. They further separated for a week in January 1997.
In 2002 the parties purchased shop premises at M for the sum of $145,000. The sum of $160,000 was borrowed using the security of the home at R and the wife’s land at S1. It was an interest only loan and remains.

Property which is to be the subject of orders as to a settlement

There is an issue as to whether the S land should be included. The wife argues that it should not and refers to its origins; as to allotment S1, it representing a gift from her mother received in 1989 and as to allotment S2 an inheritance upon her mother’s death in 1993. The husband questions the basis upon which the wife received allotment S1 and asserts that in effect it represented a wedding present. These are events which occurred some 17 years ago. The period of time itself is a reason to be cautious about accepting evidence of either party about the perceived basis upon which the transfer took place. If I had no other choice, I would accept what the wife says about the matter in preference to what the husband says. The gift occurred at a time when the wife’s mother had been ill. She had been diagnosed with motor neurone disease and was in need of care and supervision. She was staying at the wife’s home for 3 days per week and the husband does not argue with the wife’s assertion that she only received recompense, a payment of $150.00 per week, because of the husband’s insistence that she be paid for her services.
Then it can be seen that the mother also proposed that part of her gift of the $30,000 should be used to pay the costs of sub division; a sum of $8,000 being spent by the wife for that purpose.
I believe these are circumstances which are more likely to explain the desire to make the gift and how it was to be achieved. It may be as the husband says that mention was made at the time of marriage that the mother was contemplating making a gift of the parcel of land which she held on S, but if it was said, then it was something said some 13 years before and where the wife was one of four siblings and where also there was a history of different siblings at different times having been involved in various business ventures with the mother.
The most telling evidence of intention is to be found in the transfer. The property was put in the sole name of the wife. In these circumstances I am satisfied that the parcel of land at S1 can be attributed as a contribution by the wife. The land at S2 came by way of a bequest. I do not understand there to be an argument that that property represents a contribution by the wife. Senior counsel for the wife refers to and relies upon the oft quoted dicta of Fogerty J in Gosper & Gosper (1987) FLC 91-818 at page 76,167 and I rely in particular upon what his Honour said at pages 76,167-76,168:
“Where the evidence enables the Court to determine that it is a gift to one or other or both of the parties, that is an important finding. Normally where title to a property is transferred to one or both of the parties that would be the strongest indicator of the intention of the donor.”
and Kessey & Kessey (1994) FLC 92-495 at page 81,150 as well where the Full Court said:
“In other words, a contribution by a parent of a party to a marriage to the property of the marriage will be taken to be a contribution made by or on behalf of the party who is the child of the parent unless there is evidence which establishes it was not the intention of the parent to benefit only his or her child.”
The next question is whether the land should be the subject of an assessment of contribution. I believe that it should. It was received by the wife some 17 years ago as to allotment 1637 and 13 years ago as to allotment 1639. There is some evidence of it having been used by the parties as security for borrowings undertaken in relation to the land/business at P and it was the income of the parties through A which paid the rates and taxes and other outgoings until the date of dissolution of the partnership in March 2006.
Vacant blocks of land of themselves do not constitute property in respect of which there can be anything other than the financial contribution or value which underpins their acquisition. In a marriage such as this where it is of a length and where the parties have each made significant contribution of effort and endeavour to the home, children and extended family as well to secure the financial basis of the family by work and the running and maintaining of businesses in these circumstances, there will always be a disparity in the level at which each of the parties have contributed to any particular item of property.
The same comment can be made as to the properties at C which constitute a contribution attributable to the husband and received some 12 years ago. In other words, there will invariably be items of property after a long marriage which represent different levels of financial and other contributions by each of the parties. In this matter, many years have elapsed since the property was received. In those years, the parties have continued to make ongoing contribution, little as it happens so far as the vacant land and the properties are concerned, but there will always be an ebb and flow of contributions as they may relate to each of the parties and each individual item of property.
Fogarty J when speaking for the Full Court in Money & Money (1994) FLC 92-485 indicated that it is not necessary to show a greater contribution so as to affect the weight attaching to the initial contribution: that the period which ran after the initial contribution has much to do with balancing one as against the other. His Honour said at page 81,054:
“and that the term ''off-setting contribution'' does not necessarily mean ''greater contribution'' . It simply reflects the circumstance that the respective contributions of the parties over a long period of marriage may ''offset'' the significance which might otherwise be attached to a greater initial contribution by one party. This is, in my view, made clear by the Full Court in White and White (1982) FLC 91-246 where that Court pointed out that the principle in Crawford and Crawford (1979) FLC 90-647 is that the original contribution should not be carried forward as a mathematical proportion; ultimately, when it comes to the trial such a contribution is one of a number of factors to be considered. The longer the marriage the more likely it is that there will be later factors of significance, and in the ultimate the exercise is to weigh the original contribution with all other, later, factors and those later factors, whether equal or not, may in the circumstances of the individual case reduce the significance of the original contribution”.

In the circumstances, I am satisfied that the two vacant blocks of land at S as well as the husband’s interest in the premises at C should be included.

BMW and Magna

The wife argues for the inclusion of a BMW and a Magna motor vehicle in the property pool. Husband’s counsel, Mr Richards, submitted that the two motor vehicles are included in the property of the business and must therefore be excluded because of the wife’s concession. A determination of this question can be undertaken by reference to the wife’s memorandum, the exhibit W14. It reads:
“1.The wife does not seek any adjustment on account of contribution to the date of trial for the distribution of profits/proprietor’s funds from the date of separation to the dissolution of the partnership.
2.The wife also does not seek any adjustment on account of the goodwill in the partnership.
3.The parties’ ability to earn income in the future is a matter to be evaluated by the Court on the whole of the evidence.”
Senior counsel for the wife for the purposes of the addresses accepted husband’s counsel’s contention that both the motor vehicles were caught by the wife’s memorandum. However, senior counsel by a further written submission points out that only the BMW appears in the partnership accounts. The concession is accepted as to that motor vehicle. For my part I am unable to find any mention of the Magna in the inventories attached to the accounts for the years ending 30.6.2004, exhibit W2, and year ending 30.6.2005, exhibit W5. In the 2005 accounts, the schedules to the profit and loss statements reads “Motor Vehicle Expenses (BMW)”. It was a 1995 model motor vehicle and so it would be expected to be an inclusion in the accounts which were tendered, rather than a somewhat unlikely situation of it being introduced into the accounts as at the dissolution of the partnership. In these circumstances, I am inclined to include the Magna in the property pool. The only evidence of value is an internet site, carsales.com.au, which gives an average private sale price range of $2,000 to $4,200. I will split the difference and accept a value of $3,100.

The business had been conducted as a partnership of the husband and wife. The business began in 1993 at P and separation notwithstanding continued until March 2006. That was the operative date for the dissolution, notice of which was given by the wife. For the purposes of the trial, the parties were involved in negotiation as to how they would deal with the value of the business at separation and/or at the date of its dissolution. It was these discussions which lead to the abovementioned memorandum, the exhibit W14. I understand the agreement to be an acknowledgement that the business is to be brought to account as not having a value at either of the dates under consideration beyond the net asset position shown on the balance sheet (i.e. goodwill), nor does the wife seek to include the proprietors’ funds as an item of property of the parties for the purposes of these proceedings. This is the position which counsel adopted with their final submissions, and the only disagreement was as to whether the business overdraft should be included. Husband’s counsel conceded the overdraft had to be excluded as a liability for the same reason that the motor vehicles would be excluded; namely that they were part of the balance sheet.
On the other hand, the parties agree to include the real property and improvements at M and at P as well as the mortgages which relate to them. I make mention of the matter because the balance sheets of the partnership, e.g. the 30^th June 2006 Statement of Fixed Assets, includes the land and buildings at P and M including property improvements at each of $420,382 with liabilities being loans – Westpac Bank as follows:
P land and buildings  $69,644     and
      M land and buildings  $159,534
Total  $229,178
These are funds which comprise part of the net assets and hence the proprietors’ accounts. It would be a doubling up of property to include these items both separately as the parties have agreed to deal with them and also as part of the proprietors’ funds. To the extent that the respective items of real property are brought into the property pool, and this was an agreed position as between the parties, the wife does not make the concession as to contribution, as evidenced by the memorandum. It seems then that the parties in their approach to the matter agree that for some purposes at least, that is, the P and M properties are not to be considered as part of the agreement, W14.
Then the wife also refers to the drawings which have been undertaken against the business post separation. She points to drawings of $13,641.20 in the period 7^th January 2004 to 30^th June 2004 being joint drawings and says that the husband cannot claim the benefit of contributions post separation to the R home and other real property when it has been the business which has paid for them. To this extent, I understand the wife to be saying that she also has contributed because it was the business of which she was a partner which paid the outgoings. The wife readily acknowledges that W14 precludes her from alleging contribution to the items of property in the partnership post separation until dissolution, but it can be seen that the submission seeks that the husband be denied the credit for the whole of the contribution.
For my part, I believe that income tax assessments notwithstanding, the wife has relinquished her claim to an interest in the proprietors’ funds of the partnership at least for the period from separation to the dissolution. Having said that, it may be a distinction without a difference because of the position the parties otherwise adopted as to the P and M properties.

Jewellery

This is a vexed subject. The wife says that at separation she took with her certain items, namely:-
(a)gold wedding ring
(b)gold engagement ring
(c)small diamond dress ring
(d)pair gold hooped earrings
(e)Seiko watch
(f)pearl earrings with matching pendant
(g)two gold chain bracelets
(h)gold chain with crucifix and horseshoe charm.
She also says that there was a quantity of jewellery which she left in the home. These were items of jewellery which were held in a safe at R. The wife says she did not have access to it, neither during the marriage nor at separation. The husband agrees; he says the wife did not have access to the safe and that he had the only key. These items she says comprised:-
(a)diamond pendant with gold chain
(b)gold ring with opal stone
(c)sapphire and diamond gold ring
(d)solitaire diamond white gold ring
(e)diamond cluster white gold ring
(f)diamond cluster yellow gold ring
(g)opal and diamond ring
(h)sapphire and diamond eternity ring
(i)gold friendship ring with diamonds and sapphires
(j)solid gold bracelet
(k)gold bracelet set with precious stones
(l)pearl and diamond teardrop earrings
(m)long 18ct gold chain
(n)her mother’s 18ct bracelet
(o)3 or 4 gold chains
(p)a solid gold “M” brooch
(q)one 18ct gold bangle
(r)various gold hooped earrings
(s)black opal pendant
The wife seeks the return of these items to her.
The husband does not concede that jewellery has been left in the home although he did say at one point that he had not accessed the safe for some 2 years and he was not sure what was in it. What the husband in his affidavit evidence says is this:-
“In the course of the relationship both my wife and I acquired jewellery. There were four significant pieces;
(a)A $40,000.00 diamond ring being a 1.64 carat diamond ring. The original ring was lost. It was replaced by the insurance company and recently valued by a jeweller for $40,000.00. It was purchased early in the marriage and was worn consistently by my wife. I am aware that my wife claims that she left it in the former matrimonial home. I say that I have not retained the ring and that it is in the wife’s possession. She wore the ring on a daily basis.
(b)An engagement ring consisting of one large and four small diamonds purchased for about $20,000.00. My wife always wore this ring and she removed this ring from the former matrimonial home at the time of separation.
(c)Pearl earrings and pearl pendants purchases for about $3,000.00 removed by my wife at the time of separation.
(d)One gold chain purchased in Italy valued at about $2,500.00 also removed by my wife at the time of separation.”
Under cross-examination in respect of the 1.64 carat diamond ring the husband confirmed his affidavit evidence to the effect that it was a ring which only left the wife’s finger when it was to be cleaned or to take it to the jeweller. I was unimpressed by the husband’s evidence on the question of jewellery. It is clear he is yet to resolve the pain and bitterness felt as a result of the separation. I believe his evidence remains motivated by these feelings of anger towards the wife, not just by her leaving and her alleged relationship with Mr G, but as well because he holds her liable for his inability to see his son Y. He displayed bitterness. I do not doubt that people who are bitter are capable of telling the truth. For the husband however, that was not so. Such was his emotion that he was uncaring as to what assessment would be made of his evidence.
In another context, the wife gave evidence about her perception of matters. Italian, that is, as to the culture in which she was the member of a family where separation only occurred because of the death of a spouse and remarriage was not undertaken. Effectively the wife was saying that in her family, and to this extent I understood her to be including her marriage to the husband, marriage was “until death do us part”. She concedes she violated that perception and that commitment when she separated from the husband. It was clear from the husband’s evidence as well as his manner that there remains deep unresolved emotional issues, as to the separation and the wife’s perceived responsibility for the break-up of the marriage.
How is the jewellery to be considered? The wife provides a valuation of Mr N dated November 2006:
Insurance                Forced Sale      Divorce
  Replacement  Settlement
  Value
Diamond ring 0.78 carats
small diamond missing
other small diamond shattered        $8,400               $1,800               $4,000
Diamond cluster ring .25 carats        $3,000                   $500               $1,200
Pearl & diamond pendant  $975                   $150                  $400
Pearl earrings  $950                   $135                  $375
Neck chain with pendants                  $2,400                   $500               $1,100
The husband produced a valuation of the 1.64 carat diamond ring, the item in sub-paragraph 34(a) abovementioned. The valuation was carried out for insurance purposes and is dated the 2^nd February, 2002. The husband tendered two other valuations both carried out for insurance purposes:-
Pierced earrings and a pendant: total $1,840. That valuation is dated August 1996.
The other valuation:
Diamond ring 4 x .01 carat &
     1 x .75 carat   $5,580
Diamond ring 1.64 carat                  $14,300
  $19,880
This valuation is dated the 9^th March 1988.
The husband fails to produce a current valuation of jewellery in his possession, whether acquired for his own use or that of the wife’s which was left in the safe. As senior counsel for the wife submitted, it is quite unfair to exclude the wife’s jewellery as per her valuation because she has made the effort to produce the evidence. The husband, who has failed to produce any satisfactory evidence, benefits because there is no jewellery which he acknowledges can be attributed to him much less any evidence of value attaching to it. Neither the husband nor the wife seeks to include the wife’s jewellery in the property pool although from paragraph 1(h) of the wife’s application, it can be seen that she seeks possession of her items of jewellery which she left in the home at separation.
Senior counsel argues that I should determine who holds the 1.64 carat diamond ring. As mentioned, I am satisfied that it is in the husband’s possession. What is its value? Senior counsel submitted I could be mindful of the appraisal of Mr N as to the perceived relationship between values for divorce settlement purposes and values for insurance purposes. She argued that I could adopt the husband’s evidence as to the insurance value for the 1.64 carat diamond ring, namely $40,000, and apply the methodology used by Mr N even though Mr N had never valued the item. She says the value for insurance purposes is non controversial and it can be used as the starting point so as to arrive at a market place value for the item.
Mr Richards of counsel for the husband argues that to approach a valuation of the item as sought by the wife would be contrary to legal principle. He argues that to proceed as the wife would wish would have me embarking upon an exercise which becomes a valuation undertaken by me. I accept that argument to the extent that I am being asked to presuppose that the writing down of values of the wife’s jewellery as per the abovementioned table, can be applied across the board as to all items of jewellery.
On examination of the percentages by which market value is written down from insurance value, there is no common discount which applies. Had there been, then consideration could have been given to the question of whether in the circumstances I was prepared to adopt that approach so as to give a considered market value to the particular diamond ring. When I say “in the circumstances” I am referring to the husband’s failure to produce evidence of market value of that ring. He could have done that, I would have thought, with or without the ring. His culpability in this instance is aggravated because of my view that I believe that he is in possession of it. The discount factor adopted by Mr N in paragraph 37 varies between 39.47% for the pearl earrings up to 47.61% for the .78 carat diamond ring. It stands to reason, really, that the composition and layout of an item of jewellery will have something to do with the rate at which any given item would be discounted. Then again, it is the only evidence which is to hand.
I do not believe that the husband should escape from the consequences of his non disclosure of the ring simply by pointing to the inadequacy of the wife’s evidence as to its value.
In Black & Kellner (1992) FLC 92-287 the then Chief Justice quoted with approval the earlier decision of the Full Court in Giunti & Giunti (1986) FLC 91-759 when it said:
“It is obviously desirable as a general principle that the court should first of all identify the pool of assets available and evaluate it. If each party complies with his or her obligation to make a full and substantive disclosure of their financial affairs: see In the Marriage of Briese (1985) 10 Fam LR 642; [1986] FLC 91-713, affirmed by the Full Court in Oriolo v Oriolo (1985) 10 Fam LR 665; [1985] FLC 91-653, there is no problem, although there may be disputes as to valuation. "However if, as here, one party fails to fulfil that obligation, is it open to that party then to rely on the absence of satisfactory evidence to prevent the making of an order against him or her which otherwise justice and equity would require? It would be simple, if that were the case, to evade the jurisdiction of this court, not by outright refusal which would attract sanctions but by obfuscation and evasion.”
In Weir & Weir (1993) FLC 92-338 at page 79,594 the Full Court said as to a finding of non-disclosure:
“We appreciate that this is something of a broad brush approach, but, as we have said, where there is clear evidence of non-disclosure as there was here, the Court should not be unduly cautious about making findings in favour of the other party.”
In these circumstances I believe I should make some endeavour to put a market value to the ring. Adopting the discount factor which is the highest and as it happens, relates to a diamond ring with some imperfections, a discount of 47.61% to the 1.64 carat ring with an insurance value of $40,000; upon that basis we would attribute market value to the ring of $19,044. I understand the wife’s case to be that where there are a number of items of jewellery, where she is in possession of some items which as per paragraph 37 have been produced for valuation and that there are other items still unaccounted for, that in these circumstances, bring the diamond ring into the pool. I do not understand the wife to otherwise be seeking orders as to the jewellery. Mention was made of jewellery owned by the husband and of some items being worn by him during his evidence. Again I understand the wife’s position to be to simply exclude the jewellery of the husband for the purposes of the exercise.

Cash at separation

The wife acknowledges a balance of $15,000 in a Commonwealth Bank account. The husband seeks that it be included in the property pool. The wife opposes that course of action. Her evidence on the matter was that originally the account was opened with a deposit of $9,000 being a bequest received in 1996 from her mother’s estate. With interest the account grew until it comprised the $15,000 at separation. Since then, the moneys in the account have been used to subsidise the living costs of herself and Y. The wife describes in paragraph 94 of her affidavit evidence the purposes for which the money was spent viz:
i)      purchase of a car  $3,000
ii)     soccer club membership for Y  $550
iii)     interstate soccer trips Y (2)  $3,200
iv)     clothing and personal effects – (existing
items left in the home)  $3,500
v)      rent  $2,500
vi)     incidentals for wife and Y.
I am satisfied that I should exclude the savings. The basis for doing so has more to do with the purposes for which the money was spent post separation, than the fact that the account was created from the bequest. The money has been spent. The wife discloses in her financial statement that she has no savings. The expenditure should be attributed to matters of maintenance for the wife and Y.

Term Deposit Account - Y

The husband argues for the inclusion of this account. It had a balance at 28^th February 2006 of $16,816.05. The wife says that she had control of the account, it having been built up over the years with payments of child endowment or its equivalent. All the children had accounts. There is little evidence on the subject although the wife makes mention of “the children’s bank accounts” being drawn against to help fund the establishment of the pasta business. The husband also in his affidavit evidence alleges that the wife at separation held bank accounts with or for the children. It is a matter which was not otherwise taken up by him during the trial.
Under cross-examination the wife said that she had used the account to purchase the following items:
i)      a car for Y at a cost of  $2,000
ii)     a suit for Y at a cost of  $700
iii)     school formal costs  $1,500
iv)     Queensland trip  $2,200
v)      TAFE course  $1,200
vi)     TAFE course  $1,000
The exhibit H3 shows that there was $16,816.05 in the account at 28^th February 2006. The expenditure therefore must have been incurred after that date. The exhibit W15 shows there was a balance of $7,117 held in the account as at the 31^st October 2006 but importantly to my mind, it also shows that the account is held in Y’s name. The implications which arise from this situation are not known. The wife’s evidence is that she has incurred expenditure from funds held in the account. If the account was then as it is now being an account in the name of the child, then her use of the funds was achieved with Y’s co-operation. To include the account in the property pool would be to presuppose that the wife has an ability to call upon the balance of the moneys in the account. Senior counsel for the wife on occasions would refer to the account as “the wife’s trust account” and I must say that it was only upon sighting the exhibits for the purposes of these reasons that I became aware that the account was in the sole name of the child.

The wife in her evidence referred to the account as a trust account and she described the accounts held by the other children as “trust accounts”. I believe in these circumstances that it is permissible to include the account in the property pool upon the basis that the wife has had the use of the moneys held in it.
In those circumstances I would identify the property of the parties as follows:-

R (joint) agreed value  $535,000
P (joint) agreed value  $580,000
M (joint) agreed value  $285,000
S (wife) agreed value  $305,000
C (husband) agreed value  $34,000
Magna motor vehicle  $3,100
Diamond ring  $19,044
Commonwealth Term Deposit (a/c Y)                  $7,117
$1,768,261

Liabilities

R school fees
The fees total $6,098.64. The exhibit W11 seems to show a balance owing of $130.00 at separation. The account has then grown to its current debit balance in the period of separation. It constitutes a liability of the parties. The account shows that as at May 2006 it had grown to $10,271 and then it seems two adjustments were made: $2,965.00 and $2,335.20 both described as “H/Masters Concession”, effectively crediting the account with these sums. Otherwise, there is no reason to understand that the parties do not have the financial capacity to pay the accounts as they fall due.
In addition, with the child being in the care of the wife for the most part since separation, the costs could be readily understood as being incidental to her contribution as a home maker and parent. As well and in the generality of the matter, they could be brought to account as part of the child support obligations which the parties “might be liable to provide …” per Section 79(4)(g) at any given point in time for the child Y. I note that the wife succeeded in having the Child Support Assessment for the child increased from an annual amount of $5,838 for the period 1^st June 2006 to 29^th October 2006 to an annual sum of $16,440 for the period 26^th July 2006 to 31^st December 2007. The Senior Case Officer in an administrative determination made on 2^nd August 2006 said “This is sufficient to meet both [the husband’s] contribution to [Y’s] support, expenses and education expenses.” The husband’s annual liability of $3,616 for the period 30^th July 2005 to 31^st May 2006 was not changed nor his annual liability of $5,838 for the period 1^st June 2006 to 26^th July 2006.
It can be seen then that the inclusion of education expense as a factor in the adjustment of child support commenced as and from 26^th July 2006. As at that date the sum of $5,499.89 was owing on the school account. It has grown thereafter and the balance at 5^th October 2006 was $6,098.64. The husband gives notice that he seeks to revisit the new administrative assessment. He concedes he failed to act within the time permitted to file a notice of objection and whilst his counsel at trial intimated that he held an Amended Form 1A Application which sought to vary the assessment, it was not filed nor otherwise proceeded with nor in the reality of the matter could it have been without the consent of the wife. As matters stand, I am satisfied that I should include the school fees as a liability as at the 26^th July 2006.

Wife’s Income Tax Liability

I calculate the amount owing at $13,949.24 calculated:
per assessment 30.6.2005 $6,688.75
per assessment 30.6.2006 $7,260.49
The wife argues for the inclusion of her tax liability upon the basis that it relates to income attributed to her from A. It will be remembered that the partnership was dissolved in March 2006, the parties having separated in January 2004.
Mr Richards of counsel for the husband in his closing address says:
“There's no argument that the wife's tax liability arising from partnership income in the 05 and part 06 years needs to be brought to account, as your Honour will be aware, and there is agreement between the parties that whatever tax is payable in relation to that income will be declared and paid equally. So the husband will have an offsetting amount of whatever the finally agreed or determined tax amount is, and your Honour should disregard 8.2, subject to generally having regard that each of the parties, on account of 05 and 06 partnership trading, will have a tax figure to pay of the order of magnitude indicated by 8.2.”
Senior counsel for the wife in her written reply does not disagree with this statement although the claim for the school fees remained part of her submission. Counsel for the husband in his written response to the wife’s submission on this point says:
“8.2Upon the agreement/completion of the 2005 and 2006 partnership accounts, each of the parties will have an equal liability for payment of income tax – it is inappropriate to adjust only the wife’s liability for income tax.”
Where reference is made to the paragraph 8.2, that is a reference to the wife’s written submissions and the amount shown there is $13,951.65. I believe I should include the wife’s income tax assessment. It is a liability which she must face. Where counsel says “…and there is agreement between the parties that whatever tax is payable in relation to that income will be declared and paid equally”, I did believe at first that the husband was offering to indemnify the wife against at least half of her tax assessment beyond what was his own assessment but on reflection I do not think this is so. I think husband’s counsel was in fact only offering the proposition that each party would be liable for their own tax assessment. The husband is not offering to indemnify the wife against the liability. The husband’s position is that the wife should pay her tax liability. Husband’s counsel is not arguing that the liability is caught by the exhibit W14, nor do I believe that it is. The assessment is referrable to income and hence a post separation contribution. I would permit it. I might say that for these same reasons, if the husband’s assessment was to hand, it would also be included.

Centrelink liability

The wife sought to include a debt to Centrelink of $4,934.94. That appears at 8.3 of the wife’s written submissions. Husband’s counsel said as to that claim:
“Then in relation to 8.3 my friend indicated that that would be a matter not for direct adjustment but which your Honour again would regard as a liability of the wife's that she will need to pay in the future from her own resources, and it's a matter affecting 75(2) adjustment as to her position.”
Senior counsel for the wife did not demur as to that statement. It may be that it was a concession given personally as between counsel. For my part I was not able to find reference to it in my notes.

T Soccer Club

The husband refers to his indebtedness of $22,710.00 at separation in his affidavit evidence. The matter was not otherwise taken up by him. I understood that the concession was made that the liability should not be brought to account for the purposes of the proceedings.
In these circumstances I would identify the liabilities of the parties as follows:
Mortgage M (agreed)  $160,000
Mortgage R (agreed)  $60,200
R school fees  $5,499
Wife’s income tax liability                 $13,949
  $239,648
Property of the parties $1,768,261
Less liabilities as above $239,648 $1,528,613

Final thoughts as to contribution

A 27 year marriage is a relatively long marriage. In this marriage, both parties made significant contribution by their respective endeavours throughout its subsistence. They had a history of acquiring, developing and then selling a business. Some of these ventures were more successful than others. The video business at S was successful and was sold for a profit in 1988. The I business was moderately successful. That was sold in 1992 with the parties receiving a sale price of $150,000. That helped pay off the mortgage on the R home, it having been purchased in 1990 for $265,000 with a $50,000 mortgage. They also benefited from the increased value attaching to the P and M properties.
There are post separation contributions by each of the parties. The husband by his continuing the business although in that respect the wife also continued her input into the business until March 2006. In this respect the wife, without objection of the husband, points to her continuing to do the bookwork in the business from separation until the dissolution of the partnership.
The wife has also had the care of the child Y since January 2004. He was then 13 years of age.
The length of the marriage, the efforts of the parties, including the raising of three children, are matters which point to an equality of contribution by the parties. The wife seeks an adjustment on account of the S land. She received it in 1989 and 1993. There is a long period then of other contributions which post date the acquisition although these contributions did not in any significant way relate themselves to the property. It remained just vacant land. It was used as collateral security against borrowings in one instance. The payment of rates and taxes came from joint funds. Nevertheless in terms of proportionality it represents property of the value of $305,000 out of a net property pool of $1,500,000 (rounding down) or about 20% of the total net pool. I believe it would be excessive to give a credit of say 50% or $150,000 in round figures on account of the contribution of the land but I do believe the wife should receive an adjustment: in broad terms, of say, 6% of the total property pool. All other things being equal, that would give the wife a contribution of 53% and the husband 47%.
In real terms, with a net property pool of $1,528,613, 53% thereof represents a contribution based property entitlement of the wife of $810,164 and a 47% share to the husband of $718,448.

Section 75(2) factors

The wife is 48 years of age. She enjoys good health. The husband is 58 years of age. He enjoys good health.

Property - Wife

Contribution based property entitlement         $810,164
Rest Superannuation Trust  $2,000
2001 Hyundai motor vehicle purchased
December 2005 at a cost of $7,400  $7,400

Property – Husband

Contribution based property entitlement         $718,448
Westpac savings  $1,000
Household contents  $15,000
A
The husband attributes a value to the business of $150,000 in his financial statement filed the 14^th June 2006. The question was, what was the property of the partnership of which this estimate comprised, because the husband had included the business overdraft as a liability not to mention the mortgage balance on each of the P and M properties. As noted, a situation which became very confused once W14 is brought to account. The wife’s seeking to rely upon the husband’s estimate of value was resolved by her amending her written submission to say:
“The wife acknowledges that having regard to the memorandum executed during the course of the trial (W14) that the goodwill in the business reflected in this estimate should not be brought to account.”

Once that concession is accepted, and noting that some partnership assets are separately included as mentioned, viz P and M, then the task of extrapolating what remains becomes rather difficult. The most recent balance sheet is at 30^th June 2005 and the values of P and M are book values. The values included in this exercise are market values. The net asset position per the 30^th June 2005 is $156,138.
M and P have a combined present day market value of $865,000. The present day mortgage liability adopted and agreed by the parties is as to M of $160,000. The partnership accounts at 30^th June 2005 show “loans bank $93,099”. Even if it were possible to reconcile the mortgage indebtedness, the market values of the real estate once removed, do not permit a determination of the present day value of the balance of partnership property. The exercise could be undertaken as at 30^th June 2005. With land and buildings of $266,041 and bank loans of $93,099, that would take out $172,942 from the accounts where the net assets are $156,138. That is a debit situation. The W14 concession was not to hand when the husband compiled his financial statement. There are risks then of duplicating his valuation of $150,000, with the other evidence of values of business property. There are risks also of encroaching into the property, the subject of W14, although the wife only ever understood her concession to relate as to the issue of contribution. On balance I think I ought not to include the husband’s evidence of value.

Liabilities - Wife

Centrelink Commonwealth Family Tax
Benefit overpaid $4,667.06

Liabilities - Husband

Business overdraft  $20,000
Westpac credit card  $300
Citibank  $1,700
T Soccer Club  $22,710
Sundry business debts  $15,000

Income - Wife

The wife was assessed as having a taxable income of $63,955 for the year ending 30^th June 2006. This was made up of:-
L  $14,000
H  $3,705
Government allowances and benefits             $2,058
Partnership – A  $44,201
Interest  $58             $64,022
Less deductions
Cost of managing tax affairs  $67   $63,955
The wife makes no claim in respect of income earnt from the partnership. That is her position as to the 2005 as well as the 2006 financial year. As to the 2006 tax year, the wife effected a notice of dissolution of the partnership operating as and from March 2006. Her share of partnership profits was calculated as of that date and was the subject of the tax assessment for the whole of the financial year.
L Pty Ltd: this employment ceased in March 2006.
H: the wife is a receptionist and it represents a commitment of one evening per week.
Since March the wife has worked for S currently working two hours per week as a bookkeeper. The wife has worked for an allied business, E, ten hours per week as a receptionist. The wife says that since March she has been restricted in looking for full time work because of the need to attend to the commitments of the child Y. The wife’s position in this matter is not consistent with her previous history of work during the marriage. The child Y will be commencing in year 12 at R school in 2007. I would expect that the wife would have a capacity and an availability to undertake work commencing sometime in 2007.
The wife’s work history has seen her working in the family business, either for her siblings or with the husband. That background may provide some difficulty for the wife in her securing full time employment. This is apparent post separation where her work at L Pty Ltd was in a business in which her friend, Mr G, had a major interest. I expect that the wife can obtain further part time work in the short term. I am not so sure that she will secure full time work as quickly. She presents as a confident and resourceful person. I do not doubt that these things are more likely to happen once she puts her mind to it.

Income - Husband

In his financial statement filed 14^th June 2006 the husband disclosed his income as follows:
M Rent  $260 per week
Tenant of P  $215 per week
A husband drawings  $80 per week
  $555 per week
There is a question as to the level at which the husband can make drawings from the partnership. The husband now has a capacity to earn income as the sole proprietor of the business, A. The husband says since the March 2006 dissolution of the partnership, its earnings have fallen away. The husband indicates that some clients have been lost. He works 9am to 8pm Monday to Friday and Saturday 9am to 7pm. There are some 7 or 8 staff including his mother and his son, L, who work in the business. The husband provides records of the income of the business for the four months ending 30^th June 2006. That income includes rental income from M as well as P. The net income for the four months is $24,163. Projected over twelve months that would be a figure of $72,489.
The profit for the three months ending 30^th September 2006 has been recorded at $23,259. Again that figure includes rent received from M and P. That figure projected as to a full twelve months would represent a sum of $93,036.
The wife furnishes particulars of the income of the business as to:-
30^th June 2005 $130,230
30^th June 2006 $88,403
The difference in the respective figures can be explained, I believe, by the fact that the husband’s figure of $72,489 is based upon a projection over the full year of income earnt in the last four months of the financial year viz March 2006 to June 2006. The wife’s figures are compiled from the actual income of the business over the 12 months. There is not such a large difference between the two figures if the disruption brought about by the dissolution is to be considered.
Drawings were undertaken against the partnership as follows:-
Year ending 30^th June 2005 $101,613
1^st July 2005 to March 2006 $84,094
In each instance, the drawings were less than the net income. In theory the partnership previously or the business now only has had a capacity to fund drawings in excess of the net income by recourse to property or borrowings. Drawings in excess of net income or net profit would erode the capital of the business. There are tax implications although they have not been considered in this instance because it seems to be a perception rather than the history of the matter that the drawings would attract a taxation implication.
There is also the question of the capacity of the business to return to earlier levels of income. The exhibits W2 and W3, the financial statements of the business for the years 2003 and 2004 show:

Net Profit  Drawings
Year ending 30^th June 2003  $92,616  $81,887
Year ending 30^th June 2004  $101,796  $89,745
There is no evidence as to earlier periods. The 2004 figures include the separation at January 2004, but there seems to have been minimal disruption in the actual operation of the business, post separation. With current profit figures post dissolution of:
Net Profit
30^th June 2006      projected and assessing net profit and
net income are one and the same                 $72,489
30^th June 2007      projected and assessing net profit and
net income are one and the same                 $93,036
If these figures are at all reliable, then they suggest that the husband is readily capable of restoring the business to past levels of income. He has of course lost the services of the wife and there would be a cost factor in having her services performed for market remuneration. He will also have lost the tax savings from the equal division of the business income, but otherwise he can reasonably expect, I would have thought, to aspire to an income level of $100,000 per annum or thereabouts. I do not overlook the evidence concerning the need to recognise the efforts of the husband’s mother in her work in the business, but equally I do not doubt that there is a capacity to add to the current levels of profitability notwithstanding these demands.
d) Commitments of each of the parties that are necessary to enable the party to support … a child
The only dependant child is the child Y. He was 16 years of age in May 2006. He, as mentioned, is to commence year 12 at R school in 2007. He is to repeat several year 11 subjects and to undertake just two year 12 subjects. He is able to complete year 12 at TAFE in 2008. The wife says it is not impossible that he could achieve the number of required points at the conclusion of year 12 in 2007 but I understood her to be saying that that was unlikely. Part of his year 12 will include a skilled trade study which he can undertake as a TAFE course away from the school. She concedes that if he is to be accepted into the Police Force, he needs to have obtained a Year 12 Certificate. It seems from what the wife is saying that for Y that will represent his completing year 12 subjects in 2008 if he is to hold to his current plans.
m) If either party is cohabiting with another person – the financial circumstances relating to the cohabitation
It is clear that the wife is not cohabiting with Mr G. She concedes that they have a friendship and that Mr G indicates feelings of fondness and affection towards her. She says they spend a good deal of time together but it is not a relationship that includes intimacy. The wife says that she is presently not ready for a relationship but also concedes that is not to say that she will not develop a relationship in the future with Mr G. She says there is no prospect of her residing with Mr G at least in the immediate term. The wife says that her son Y would not be accepting of the relationship. She also says that her family background, that is, matters of religion and culture which I made mention of earlier is a factor. For my part I am satisfied that it is unlikely that the wife will start to cohabit with Mr G until the child Y has left school.
The husband concedes that he shares accommodation with Ms K two or three nights per week. He says he first met Ms K in March 2004. He says that she has shared accommodation with him at his premises at R and he has shared accommodation with her at G. He says that there is no sexual relationship with Ms K. By way of explanation he said that it was because of Ms K’s religious beliefs. I must say that I found that I had difficulty accepting the husband’s explanation but then I also had difficulty understanding the wife’s explanation that her relationship with Mr G was without intimacy. It is quite another matter, however, to therefore infer or find that there is cohabitation: either as it may relate to the husband or to the wife.
In these circumstances it is unnecessary to go on and consider the financial circumstances relating to the perceived cohabitation of either of them.

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
A liability for the husband to pay Child Support for the child Y commenced on 30^th April 2004. A number of assessments have issued. It seems that the husband had a liability to pay:
30^th April 2004 to 29^th July 2005                   $467.67 pm           $116.91 pw
30^th July 2005 to 31^st May 2006   $301.33 pm           $75.33 pw
1^st June 2006 to 2^nd July 2006   $486.50 pm           $121.62 pw
3^rd July 2006 to 25^th July 2006   $486 pm                 $121.50 pw
26^th July 2006 to 31^st July 2006  $1,368.58 pm        $342.14 pw
1^st August 2006 to 7^th August 2006               $486 pm                 $121.50 pw
8^th August 2006 to 29^th October 2006          $1,368.58 pm        $342.14 pw
30^th October 2006 to 31^st December 2007 $1,360.75 pm        $340.18 pw
The most recent assessment is based upon the husband having the maximum level of child support income, referred to as the CAP, in the amount of $104,702. That assessment came from a determination of a Senior Case Officer at the Child Support Agency. It can be seen from the assessment of the Senior Case Officer that it was considered that the assessment should include a consideration of the need for the husband to make a contribution towards the child’s school fees. It was accepted that the wife had made all payments of the child’s school fees for 2005 and 2006, save for a payment made by the business in March 2006.
The question of the husband’s arrears of child support was also considered by the Senior Case Officer who said this:
“[The wife] would have me back date this decision for a considerable period. However, I am mindful that [the husband] already has a significant arrears liability. If I were to back date the decision, as request (sic), he will be raised a further and considerable arrears liability. This may well impact on [the husband’s] capacity to contribute towards [Y’s] support and be beyond his capacity to meet”.
When the Senior Case Officer made that comment, he noted that the arrears were $4,475.45. The assessment was made as of 2^nd August 2006. The Child Support Agency by letter of 14^th November 2006 advised that the husband was in arrears of child support in the sum of $9,630.80 as of 14^th November 2006.
On the question of school fees the Senior Case Officer also records:
“[The father] indicated that he would not be making contribution to [Y’s] school fees unless and until he is able to spend some time with him.”
There is a restraining order which prevents the husband from seeing the child Y. The circumstances which led to the making of a Restraining Order are not to hand although it appears it arose as a result of events which occurred when the child was living with the husband for a matter of a few weeks shortly after separation in January 2004. There is therefore a significant period which has elapsed where the husband has not seen the child. In cross-examination of the husband on the question of his failure to pay child support and school fees, the husband made it plain that he did not acknowledge these obligations because he was unable to see Y. There is no evidence to suggest that there will be any change as to this matter. The wife will need to exercise her remedies to secure payment of the moneys owing to her by way of child support and she may have the ultimate liability to pay the school fees.

Final thoughts as to Section 75(2)

The husband is in good health and of an age which will permit him to have many years of work. He has an income presently of $80,000 per annum or thereabouts. The effects of the property distribution are likely to have some impact upon that income because it includes rental income from M and P; or if he is to keep M, because it is conceded he should retain P, then he will need to resort to considerable borrowings. For the purposes of the settlement, that should not be at the expense of the wife, not that is if he can sell M: nor the P rental property for that matter.
The wife is in good health and also of an age where she can reasonably expect many years of employment. As mentioned, the wife has yet to find her feet in this regard. If she chooses to apply her capabilities I believe she can obtain employment. It is not clear what her level of income might be. She has a work history as a receptionist or as a book keeper. I believe that Y’s demands need not limit her capacity to engage in full time work although even at 16 years of age, I acknowledge there would remain the need to juggle parental responsibilities as well as work commitments. Ultimately the wife should be capable of earning an income at the level at which she was earning when she held the job at L Pty Ltd. With the other work at H that represented an income of $500.00 per week or $26,000 per annum.
As well as the responsibility to provide for Y, the wife also has the cost of providing for him. The husband, as mentioned, has taken a determined attitude not to acknowledge his obligations to pay child support nor school fees. There is nothing to suggest there will be a change in attitude on his part. In these circumstances, the wife may obtain relief by pursuing enforcement action to recover the child support arrears. There are other features to the wife’s case and control of the child. At page 78,043-8m the Full Court in Collins & Collins (1990) FLC 92-149 said there is also the need to acknowledge:-
(i)“When the parents separate the question of the responsibility for the nurture of those children until they reach adulthood is obviously of great importance, not only to the parties and their children, but to society generally.”
(ii)that care and control included not just the financial implications “but with the moral and social responsibilities which go with that”.
(iii)that “The child support order would have gone a considerable distance towards meeting the living expenses of the child, but would not have covered the capital costs involved in the provision of a home and the like which necessarily flows from the wife being the sole custodian of this young child.”
A separately constituted Full Court has subsequently disagreed with the principle that allowance should be made for the non economic factors which arise in respect of a party’s care of a child or children. In Brandt & Brandt (1997) FLC 92-758 at page 84,345
“In Collins (1990) FLC 92-149 the Full Court (corum Ellis, Fogarty, and Gun JJ) accepted that para. 75(2)(c) was concerned not only with the financial implications of the care of children but also with the social and moral responsibilities which go with them. A differently constituted Full Court (cor Lindenmayer, Finn, and Joske JJ) in Robb (1995) FLC 92-555 noted that such a view might not be consistent with the decisions of Ferguson (1978) FLC 90-500 and Soblusky (1976) FLC 90-124 which seem to limit s75(2) considerations to matters economic.”
The Full Court went on to say:
“If, when evaluating factors under s.75(2), it is appropriate to give consideration to such non-economic matters, then presumably it is important to weigh into the process the pleasure, company and sense of purpose that children bring both now and in the future. The difficulty in evaluating such matters demonstrates why approaching the matter in the manner his Honour did is not an appropriate course to be adopted. It is proper to take into account the economic ramifications of having responsibility for the children and the quasi-economic contributions involved in raising children which include washing, ironing, cooking, transporting and the like. It is appropriate to bear in mind salary and income opportunities foregone because of responsibilities to children. It is appropriate to recognise that such responsibilities involve sacrificing leisure and recreation time. It is however very difficult to give economic value to either the emotional trauma involved in raising children or the rewards and compensation that come, often very late in life, when role-playing is reversed between parent and child.”
I approach the matter upon the basis referred to in Brandt & Brandt (supra). As mentioned, there are a number of economic considerations which attach to her care of the child, offset somewhat by his age. He may remain with the wife for many years beyond his 18^th birthday but that is not to presuppose that he will do so.
In summary, the respective positions of the parties can be summarised as follows:
Wife  Husband
Contribution based property entitlement       $810,164  $718,448
         Business A  Nil  Not known
         Liabilities:          Com Fam Tax Benefit             $4,667            Tax (not known)
         Income  Not known                  Est $93,036
         Health  Good  Good
Earning capacity  Approx $26,000pa     Approx $100,000pa
         Dependants  Child aged 16 years
These particulars highlight the need to make an adjustment in the wife’s favour. She has lost her capacity to derive income as a partner in the partnership although that situation is mitigated somewhat by the distribution of property. She also has a capacity to obtain employment but not at a level as previously enjoyed and there may be some initial disruption before it eventuates. She has the child Y to provide for in circumstances where she will be compelled to take proceedings for enforcement of child support if she wants contribution from the husband.
The wife argues for a final adjustment of 65:35 in her favour of all property, save for S and C. Taking out these properties reduces the asset pool by $339,000, which is 22% of the net asset pool (see paragraph 64) of $1,528,613. The net effect of that approach would represent the wife receiving 70.5% of the property pool which I have brought to account. The husband argues for an equal division of property.
I am satisfied that there should be a further 6% adjustment in favour of the wife on account of Section 75(2) factors. That will result in an overall distribution of 56% to the wife and 44% to the husband. In monetary terms it represents $856,023 to the wife and $672,589 to the husband.
Is a settlement in these terms a just and equitable settlement? It can be seen that it represents the wife receiving $183,434 more than the husband. In the circumstances, I am satisfied that this additional sum is at a level which recognises the greater contribution of the wife to the property of the parties as well as an allowance in her favour because of the matters in Section 75(2).
The parties wish to be heard as to how a division of property is to be undertaken based upon the percentage apportionment reflecting as it does the values attributed to the respective properties.

I certify that the preceding one hundred (100) paragraphs are a true copy of the reasons for judgment of Judicial Registrar Forbes.

Associate:

Date: 9 February 2007

[2007] FamCA 51

9 February 2007

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