Varnham and Moses
[2020] FamCA 83
•14 February 2020
FAMILY COURT OF AUSTRALIA
| VARNHAM & MOSES | [2020] FamCA 83 |
| FAMILY LAW – PROPERTY – Where there is a large disparity in competing applications for adjustment of interests in matrimonial property – Where the parties agree that the wife retain the former matrimonial home, however disagree on which party should take responsibility for the mortgage – Where both parties seek cash adjustments in their favour – Where the wife’s initial contribution is greater than that of the husband – where the husband provided the first family home – Where both parties contributed equally during the relationship with the husband’s greater financial contribution being supported indirectly by the wife – Where, after separation, the wife has struggled financially and the husband received a large redundancy and has maintained a high standard of living – Where the husband has capacity to maintain employment providing a superior level of income – Where the wife has been out of the paid workforce for five years and a clear disparity in income earning potential results – Where both parties solely own real property and will retain such – Where the husband’s superannuation is almost eighteen times that of the wife – Where it would be just and equitable to make an adjustment – Order made to reflect a ratio of 70/30 in favour of the wife. |
| Family Law Act 1975 (Cth) ss 75, 79. |
| Bevan & Bevan [2013] FLC 93-545 Stanford & Stanford (2012) 247 CLR 108 |
| APPLICANT: | Mr Varnham |
| RESPONDENT: | Ms Moses |
| FILE NUMBER: | NCC | 1058 | of | 2017 |
| DATE DELIVERED: | 14 February 2020 |
| PLACE DELIVERED: | Newcastle |
| PLACE HEARD: | Newcastle |
| JUDGMENT OF: | Cleary J |
| HEARING DATE: | 16 – 18; 26 July 2019 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Kelly |
| SOLICITOR FOR THE APPLICANT: | Fowler Predny Legal Pty Ltd |
| COUNSEL FOR THE RESPONDENT: | Mr Rugendyke |
| SOLICITOR FOR THE RESPONDENT: | Consort Family Law |
Orders
That within 60 days of the date of these orders the husband shall pay to the wife the sum of $301,406.
That simultaneously the husband and the wife shall do all acts and things and sign all documents necessary to transfer to the wife all of the husband’s right, title and interest in the property at B Street, Suburb C New Zealand (“the New Zealand property”) and its offset accounts.
That simultaneously with the transfer referred to in Order 2 the wife shall do all acts and things to discharge the mortgage secured on the New Zealand property and the wife shall indemnify the husband for all claims in respect of the mortgage until the discharge is effected.
That the husband be the sole beneficial owner of the properties registered in his name in Australia and the wife be the sole beneficial owner of the properties registered in her name in Australia, to the effect that:
(a)The husband retain his properties situate at, and known as:
(i)1 D Street, Suburb E;
(ii)2 D Street, Suburb E;
(iii)1 F Street, Suburb G; and
(iv)2 F Street, Suburb G.
(b)The wife retain her investment properties situate at, and known as:
(i)J Street Suburb H; and
(ii)K Street, Suburb L.
(c)The husband and the wife be solely liable for repayment of any loans/mortgages secured over the aforesaid Australian properties and shall indemnify the other in respect thereto.
The Amended Initiating Application of the husband filed 7 December 2018 and Amended Response of the wife filed 22 January 2019 are both otherwise dismissed.
Note: The form of the order is subject to the entry of the order in the Court’s records.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Varnham & Moses has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
Note: This copy of the Court’s Reasons for Judgment Moses be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).
| FAMILY COURT OF AUSTRALIA AT NEWCASTLE |
FILE NUMBER: NCC 1058 of 2017
| Mr Varnham |
Applicant
And
| Ms Moses |
Respondent
REASONS FOR JUDGMENT
Introduction
These are competing applications for adjustment of interests in matrimonial property.
The parties met in mid-2006. They began living together in November/December 2006 in the home of the husband at Suburb R.
To do so, the wife moved from Sydney, with her then 12 year old daughter from a prior marriage, to live with the husband and his then 14 year old daughter.
The parties were married on … 2007.
The parties disagree over the date of breakdown of marriage.
The husband asserts that the parties separated on 30 May 2016, continuing to live together in the family home in New Zealand but leading separate lives for six months.
The wife asserts that the parties’ relationship ended on 29 September 2016 when the husband first told her that he wanted a separation.
A four month difference is a small one, however it was during this period that the husband resigned his employment.
The difference between the parties on this issue has no significant effect on the outcome.
The parties agree that physical separation was effected by the husband leaving New Zealand and returning to live in Australia on 2 December 2016.
The parties’ divorce was finalised on … 2018.
The parties were together for a total of approximately 10 or 11 years.
There are no children of the relationship, however each party has two, now adult, children from prior marriages.
The Parties
The Applicant Husband – Mr Varnham
The husband was born in Country S. He is a finance professional and has until very recently been employed as a senior corporate executive. At the date of trial he was aged almost 61 years.
He presently lives in a rented property in Suburb T, a suburb on the north shore of Sydney.
The husband had been unemployed for four to five weeks at the date of trial. He held the intention to actively seek and obtain employment with a view to retiring two to three years thereafter.
The Respondent Wife – Ms Moses
The wife was born in Country U. She is qualified in applied science and prior to marriage was a project manager. At the date of trial she was 58 years.
The wife lives in the former matrimonial home in New Zealand. The wife has no plans to return to live in Australia.
The wife is not in paid employment and has retired.
The Applications
The Husband
The proposal of the husband for adjustment of interests in property, by conclusion of submissions, was:
a)That the wife retain the New Zealand property and take responsibility for discharging the mortgage secured on it;
b)That the wife pay to the husband the sum of $150,000;
c)That (with the exception of certain named items) each party otherwise retain all assets, real and personal, and interests in superannuation currently held in the name of each and be responsible for all liabilities associated with those assets;
d)The analysis of the husband was a division of net assets in a ratio of 45 percent to the husband and 55 percent to with wife;[1]
e)The husband opposed the application of the wife for ongoing spouse maintenance.
[1] Exhibit 25
The Wife
The wife proposed that there be a global division of net assets of 80 percent to her and 20 percent to the husband.
The ultimate position of the wife was that she retain the New Zealand property and that the husband discharge the mortgage secured on that property that the husband rollover $300,000 into her superannuation fund and pay to her a cash sum of $400,000.
The wife had sought spouse maintenance, ongoing or as a lump sum. The wife did not press that aspect of the application although she submitted for an adjustment on account of future needs.
The Issues
Was there full and frank financial disclosure by each party?
The parties agree that the wife retain the New Zealand property. Which of the two parties should be responsible for the discharge of the mortgage secured on the property?
The parties each seek a cash adjustment from the other consistent with the proposed ratio of division. What cash adjustment, if any, should be made to effect a just and equitable adjustment of property interests?
The Trial
The evidence was concluded in the three days allocated for the trial commencing 16 July 2019. The matter was adjourned for submissions to 26 July 2019 and concluded mid-afternoon on that day.
Part of the reason for the trial being prolonged is that both parties produced exhibited documents within days of the first day of trial; in the case of the husband seven quarto volumes of double sided pages; for the wife three quarto volumes. The volumes initially lacked an index. Page numbers on the top of each page were inconsistent with the foot of each page.
About 10 or 12 of those documents were relied on during the trial and in submissions.
It was a wasteful exercise in every sense.
Both counsel were indignant about being provided with these documents at short notice. So was the Court.
Worst of all the documents were not simply documentary evidence of relevant evidence given in an affidavit. An attempt was made, primarily by counsel for the husband, to explain or amplify the evidence by reference to documents especially bank statements.
Accordingly, the evidence was inadequate and unsatisfactory in some respects.
Neither party applied for adjournment. That is not to say it would have been granted.
The decision was reserved.
History of Relevant events
Financial position of each party at cohabitation (November 2006)
The Husband
In July 1996 the husband emigrated from Country S to Australia with his former wife Ms Varnham and their two young children of the marriage.
I infer that the husband brought funds with him to Australia.
Although it is not entirely clear, the husband and his former wife probably lived in a jointly owned property at M Street, Suburb N (“M Street”) as their family home, until that marriage ended in 2005.
Over a period of about 18 months in 2000/2001 the husband bought seven investment properties, set out below, substantially financed with loans from various banks and leased out:
·On 10 July 2000 – 2 D Street, Suburb E (“2 D Street”) for $182,000;
·On 4 October 2000 – 1 D Street, Suburb E (“1 D Street”) for $170,000;
·On 16 October 2000 – 1 F Street, Suburb G (“1 F Street”) for $135,000 (possibly in the name of the husband’s former wife or their joint names);
·On 9 January 2001 – O Street, Suburb N (“O Street”) for $305,000;
·On 8 August 2001 – 1 and 2 P Street, Suburb E (“1 P Street” and “2 P Street”) for $162,064 for each property, totalling $324,128;
·On 18 October 2001 – Q Street, Suburb R (“Q Street”) for $245,000.
During that period, in July 2001, the husband borrowed $50,000 from his parents. The purpose for the loan was not identified but was accepted as a debt.
In 2005 the husband separated from his former wife.
In July 2006 the parties to these proceedings met.
On 14 August 2006 the husband purchased a property at S Street, Suburb R (“S Street”) for $528,000. He borrowed almost the entire purchase price and had two bank mortgages. This property became the new residence of the husband and soon after, the family home for the parties and two of their respective children for a period of a few months.
On 26 August 2006 the husband entered into a property settlement with his former wife. M Street, unencumbered, was transferred into her sole name. The husband retained the investment properties and the associated debt.
As part of the settlement the husband was able to borrow up to $110,000 against M Street, on condition that he made all relevant repayments and indemnified his former wife against the debts. That evidence was corroborated by the husband’s former wife.[2]
[2] Affidavit of Ms Varnham filed 5/06/2019, pars 9-14
This provision enabled the husband to use M Street as a collateral facility to finance the purchase of S Street and is reflected in one of the mortgages.
The Wife
The wife too had purchased/acquired investment properties, leased, as set out below:
· In 1996 –K Street, Suburb L (“Suburb L”) for $258,000;
· In 1999 after a settlement with her first husband – J Street, Suburb H (“Suburb H”) for $222,000.
In 2004, the wife was divorced from her second husband and purchased a motor vehicle 1 for $65,000.
In July 2006 when the parties met the wife was living in comfortable leased accommodation in the eastern suburbs of Sydney.
Commencement of cohabitation
On 29 July 2006 the parties began their courtship.
The husband, at the commencement of the relationship, was employed as the General Manager for Company AA earning $180,000 per annum.
The wife, at the commencement of the relationship, was employed by Company BB. The wife also had a business in Sydney and a company, CC Pty Ltd.
Her annual combined income was approximately $150,000.
In November 2006 the parties began living together in S Street, the husband’s new property at Suburb R.
On 21 January 2007 the parties were married.
The husband asserts that he discussed with the wife prior to their marriage the potential for relocation to New Zealand to enable him to take up a new position with his employer.
The wife disagrees. She asserts that the husband informed her in the month after they were married that he had been offered a job in New Zealand.
I accept the evidence of the wife that this move overseas, whenever it was that she was told about it, was significant for her in its impact. Her daughter had to change schools. Her adult son remained in Australia. The wife had to promptly close down her two businesses.
Further, that although she was happy for her husband and wished to support him she was anxious about her own career prospects.
In March 2007 the husband moved to live in New Zealand. His daughter Ms Z moved back to live with her own mother.
On 11 March 2007 the wife states that while the husband was in New Zealand alone he informed her that he had found a property suitable to be the matrimonial home at Suburb C, New Zealand.
The wife agreed and approved the property when she saw it.
Purchase of New Zealand property
The relevant fact is that the New Zealand property was purchased by the parties as joint tenants for NZ$975,000 (approximately AUD$938,000).
The purchase was considerably more expensive than any property purchased by either party previously.
Although the husband asked her to do so the wife did not contribute funds to the purchase.
The husband sold four of the investment properties he owned in Australia for a total sale price of $1,374,500.[3] There was debt secured on those properties such that after costs of sale there was minimal net proceeds of sale. More than half of the debt related to S Street, so recently purchased, and totally encumbered. The sales enhanced borrowing capacity. The balance of purchase price was raised by a loan secured on the New Zealand property. In fact it was a loan facility of up to $865,000 not a mortgage with fixed payments. A condition was to reduce the loan balance to $820,000 within 6 months.[4]
[3] Affidavit of Mr Varnham filed 5/06/2019, par 91
[4] Affidavit of Mr Varnham filed 5/06/2019, Exhibit E
The property became the permanent family home for the parties and sporadically their respective children. For instance the wife’s daughter Ms W moved to New Zealand with the parties.
In early July 2007 the wife moved to live with the husband in New Zealand. Upon arriving in New Zealand the wife attended to unpacking and setting up the home.
In November 2007 the wife commenced employment in City QQ. The wife accepted the job which paid about $90,000 per annum, a lower salary then her combined income in Australia.
In October 2008 the department restructured, resulting in her having to start looking for another job.
In January 2009 the wife commenced working at another organisation in City QQ. The wife took another pay cut for this job earning about $65,000 per annum.
In 2013 the wife informed the husband that she was being bullied at work. He assisted her to find a solicitor who filed a grievance complaint against the employer. An agreement was reached that the wife would be on ‘garden leave’ until 15 January 2014, meaning that she would be paid during this time but would not attend work. The wife asserts that her employer had not been sympathetic to her taking time off to travel with the husband. She sought medical assistance in relation to high stress levels and panic attacks.
The cost of the loan payments on the New Zealand property became a contentious issue. The husband again asked the wife to consider selling one of her investment properties. She again declined on the same basis, that her properties were a better long term investment. Although the husband conceded that that assessment proved to be correct, he asks the Court to take into account the sacrifice of his long term investments to the immediate necessity of managing debt.
On 25 July 2013 the husband sold a fifth property, O Street, for $455,000. After discharge of the mortgage of $360,698 and costs of sale, the net proceeds were $83,202. Those funds were used to reduce mortgage debt.
On 15 January 2014 the wife ceased employment with the organisation. Her evidence was that the husband wanted her to cease work and concentrate on supporting him in his job.
The husband disagrees. He asserts that he put some pressure on the wife to find another job.
The agreed fact is that the wife commenced her own small business under the name ‘DD Business’ which she had registered in 2007 when the parties moved to New Zealand.
The business was an international consulting agency. The husband alleges that until the parties separated in May 2016, he met all the operating expenses for the business from the day the business was commenced until October 2016. The wife denies that the husband made any investments in the business however the wife had no other source of funds. The business does not appear to have made a profit.
At least from January 2014 the husband was responsible for the mortgage, financial outgoings on the home property and domestic expenses.
Separation
On 30 May 2016 the husband states that the parties separated however continued to reside under the one roof.[5]
[5] Affidavit of Mr Varnham filed 05/06/2019, par 16
The wife asserts they separated in September 2016.[6] The wife drew the Court’s attention to the affidavit of the husband in support of divorce.[7]
[6] Affidavit of Ms Moses filed 31/05/19, par 12
[7] Affidavit of Ms Moses filed 31/05/2019, par 20
The contents of that affidavit is consistent with the marriage having finally broken down in September 2016.
The husband may well have decided in May 2016 that he wished to end the marriage but it was from September 2016 that the parties “lived completely separate lives.”
Between August to September 2016 the husband negotiated his redundancy package with his employer Company AA.
In August 2016 the wife travelled to Europe on a ticket booked and paid for by the husband prior to separation. The husband too was travelling to Europe. They flew back to New Zealand on separate flights.
In October 2016 the husband ceased working with Company AA and took a redundancy package of $891,082.30 (three years of earnings at a final rate of salary). The net payment was NZ$575,003 (AUD$529,003).
On 4 October 2016 the parties paid out the credit cards and split the joint bank account balance equally between them, thereafter closing the account. The husband states that after repayment of the credit card debts, the parties received NZ$13,568.14 each.
Spouse maintenance begins
In November 2016 the husband commenced paying the wife $4,000 a month towards her cost of living expenses.
On 1 December 2016 the husband agreed to pay the wife one half of his annual and deferred bonus that he was about to receive and the deferred portion for three years before that. The husband states the bonus was NZ$28,149.36 and the parties each received $14,074.68.
From separation to date of trial the husband has paid home insurance premiums over the New Zealand property.
From 2 December 2016 to 30 July 2019 the husband made mortgage repayments over the New Zealand property at a cost of $3,600 per month.
Husband’s return to Australia
On 2 December 2016 the husband returned home to Australia from New Zealand and commenced living at one of his investment properties, 1 F Street.
Access to 1 F Street is by boat. The husband sold his old boat for $7,600 and bought a more reliable boat for $45,000 for use to travel from his home to the marina where his car was parked. He could then drive to Sydney. The husband asserts he has spent $50,000 renovating 1 F Street, and that he used part of his redundancy payment to pay for the repairs.
On 12 December 2015 the husband alleges that New Zealand company search information indicated that the wife incorporated the company EE Pty Ltd in New Zealand on this date, and that she is the director, controlling shareholder and sole current shareholder. The husband raised lack of disclosure. There was no evidence of assets arising.
In 2017 the wife ceased her consulting business ‘DD Business’ and in her own terms, retired.
In March 2017 the husband spent $20,000 on a trip to Africa for himself and his children. They visited members of the paternal family.
Commencement of proceedings in the Family Court of Australia
On 10 April 2017 the husband filed an Initiating Application.
He proposed sale of the New Zealand property, a superannuation split in favour of the wife and other orders. The husband later stepped back from the proposal for the New Zealand property to be sold.
On 9 May 2017 the husband was in New Zealand staying at the home. A controversy developed over his use of the parties’ cars. On the next visit to New Zealand he removed the motor vehicle 2 and motor vehicle 4 and parked them at the FF Removalists. He sold the motor vehicle 4 for $31,000 and shipped the motor vehicle to Australia.[8]
[8] Affidavit of Mr Varnham filed 5/06/2019, pars 369-378
In June 2017 the husband ceased paying NZ$675.00 per month towards the finance payments for the wife’s motor vehicle. The husband states he had been paying this since November 2016, and the total amount he states he paid was $5,400.
On 24 July 2017 the parties attended a Conciliation Conference and were unable to reach an agreement.
Employment for Husband
In October 2017 the husband was offered a position with GG Pty Ltd as Chief Executive Officer of GG Company.
In November 2017 the husband began employment with GG Pty Ltd. The husband was being paid $245,760 net per annum. He purchased a new car for $64,000. The husband remained in that employment for approximately 18 months until he resigned. He rented various properties in Sydney to stay in during the working week during that period. He lived in his permanent residence on weekends.
In December 2017 the husband ceased paying the electricity, bills, rates, water, telephone, internet, garbage, home insurance, Sky TV subscription, mooring and jetty fees and other maintenance costs of the New Zealand property. The husband ceased paying the wife $4,000 per month.
In late 2017 the husband states he had a conversation with the wife over the telephone. A dispute broke out over certain paintings, that was still inflaming the property dispute at trial. Items with strong sentimental value but low commercial value cannot reasonably take up Court time.
On … 2018 the parties were divorced.
On 14 March 2018 the husband filed an Application in a Case and supporting affidavit. The husband was seeking valuation of the painting by artist no. 1, the motor vehicle 2, the boat and the outboard motor. The husband was also seeking a restraint on the wife disposing and removing the husband’s assets from the New Zealand property.
On 19 March 2018 orders were made by Justice Austin in relation to a number of valuations and procedural orders.
The husband alleges that at Court on this date the wife’s solicitor orally informed the court that the wife had sold the four original paintings of the husband from Country S.[9]
[9] Affidavit of Mr Varnham filed 5/06/2019, par 326; Affidavit of Mr Varnham filed 5/06/2019, Exhibit EE
Orders were made by Justice Austin on 11 May 2015 restraining the wife from selling, disposing or removing from the parties former matrimonial home any furniture and chattels which the husband asserted exclusive or partial proprietary interest over. This included the two artworks by artist no. 2, the painting by artist no. 1 and the painting by artist no. 3. The wife was ordered to pay the husband’s costs.
In June 2018 the husband states that he and the wife had a conversation and reached agreement about his goods in New Zealand being shipped to Australia.
On 5 July 2018 the husband alleges that FF Removalists took photographs of items to be removed and the painting by artist no. 1 was in the photograph.[10]
[10] Affidavit of Mr Varnham filed 5/06/2019, par 331
The husband alleged that the wife did not allow the removalists to remove all the items and that she took/added things. The husband states that he was informed by the removalists that they could not locate all of the four specified paintings, except for the one painting by artist no. 1 that was in the hallway where it was left to be packed. The husband states that when the removalists returned to collect items to transport, the painting by artist no. 1 was no longer there.[11]
[11] Affidavit of Mr Varnham filed 5/06/2019, pars 347-349
In July 2018 the husband received his items shipped from New Zealand to Australia by FF Removalists. His iMac computer was not amongst them. The husband stated he required this computer in order to complete his tax returns.[12]
[12] Affidavit of Mr Varnham filed 5/06/2019, par 226
On 20 July 2018 orders were made noting that the parties were ready to accept a trial date and referring the matter back to the docket registrar.
On 30 July 2018 the husband ceased making mortgage repayments on the New Zealand Property.
The husband wished to change the loan from principal and interest to interest only. The wife did not agree. The husband then informed the wife that he would not be paying for the mortgage anymore.
Whether or not he had told the wife of his intention to do so in October 2018 the wife discovered that the husband had ceased paying the mortgage over the New Zealand property when she was notified by the bank that the mortgage was three months in arrears, of about $14,000. The wife states she also discovered that the council rates and not been paid for a year and a further debt of $5,500 accumulated, which was deducted from the mortgage.[13]
[13] Affidavit of Ms Moses filed 31/05/2019, par 130
The wife struggled to maintain and meet the outgoings on the property.
Relationship for the Husband
The husband was in a long distance relationship with Ms V whom he met in England. In August 2018 Ms V moved to Australia from England with her children aged 13 and Y aged eight to live with the husband at the home he was renting in Sydney at the time. The husband states he gave his new partner the motor vehicle 3 as a gift.[14]
[14] Affidavit of Mr Varnham filed 5/06/2019, pars 461, 464
Purchase of a property at 2 F Street
On … September 2018 the husband purchased the property at 2 F Street, Suburb G (“2 F Street”) for $290,000.
He did not forthwith advise the wife of the purchase.
Ultimately, the husband filed in December 2018 the Amended Application on which he relies in these proceedings, adding the details of that property.
In his oral evidence the husband described the property as in very poor condition, in need of significant repairs, “barely habitable”.[15] The benefit identified by the husband is that the property is next door to an existing property of his, being 1 F Street, and affords him space and privacy.
[15] Affidavit of Mr Varnham filed 05/06/2019, pars 400, 401
The submission by the wife to the Court was that the husband had borrowed to buy the property by extending the loan facility, had not spoken to her about the purchase or the borrowing arrangements.
On 9 November 2018 trial directions were made in this Court.
In December 2018 the husband ended his personal relationship with his partner, Ms V.
On 14 March 2019 the husband resigned from his employment with GG Company.
Accordingly in July 2019 when this trial commenced the husband was unemployed and without income, by his own choice.
The Evidence
The documents relied on in respect of the application were as follows:
The Applicant Husband – Mr Varnham[16]
[16] Leave was refused for the husband to rely on Affidavit of Mr JJ filed 31/05/2019 and Affidavit of Mr KK filed 5/07/2019
(a)Further Amended Initiating Application filed 7/12/2018;
(b)Affidavit of husband filed 5/06/2019;
(c)Affidavit of husband filed 11/07/2019;
(d)Financial Statement filed 4/07/2019;
(e)Affidavit of Ms Varnham filed 5/06/2019;
(f)Affidavit of Ms Z Varnham filed 13/06/2019;
(g)Affidavit of Mr HH filed 20/06/2019;
The Respondent Wife – Ms Moses
(h)Amended Response filed 22/01/2019;
(i)Affidavit of wife filed 31/05/2019;
(j)Financial Statement filed 03/07/2019;
(k)Affidavit of Mr LL filed 31/05/2019.
Approach to alteration of interests in property
In considering applications for alteration of property interests and transfer of property the Court must:
(i)Identify the existing legal and equitable interests of the parties in property;[17]
(ii)Consider whether it would be just and equitable in the particular circumstances to make an alteration;
(iii)
If an alteration should be made, to consider the matters contained in
ss 79(4) and 75(2) of the Act in coming to an adjustment; and
(iv)Analyse and consider whether the adjustment under consideration would be just and equitable.
[17]Stanford & Stanford (2012) 247 CLR 108; Bevan & Bevan [2013] FLC 93-545
1. Identify the assets and liabilities of the parties
The parties’ assets are set out in the balance sheet which became an exhibit.[18]
[18] Exhibit 26
| Description | Wife’s value | Husband’s value | ||
| ASSETS | ||||
| 1 | J | B Street, Suburb C NZ | $ 1,501,000 | $ 1,516,800 |
| 2 | H | 1 D Street, Suburb E | $ 475,000 | $ 475,000 |
| 3 | H | 2 D Street, Suburb E | $ 480,000 | $ 480,000 |
| 4 | H | 1 F Street, Suburb G | $ 312,000 | $ 300,000 |
| 5 | H | 2 F Street, Suburb G | $ 290,000 | $ 290,000 |
| 6 | W | K Street, Suburb L | $ 860,000 | $ 860,000 |
| 7 | W | J Street, Suburb H | $ 450,000 | $ 450,000 |
| 8 | H | Commonwealth Bank account ending in …43 | $ 2,108 | $ 2,108 |
| 9 | H | Commonwealth Bank account ending in …66 | $ 2,984 | $ 2,984 |
| 10 | H | Commonwealth Bank account ending in …08 | $ 16 | $ 16 |
| 11 | H | Westpac Bank account ending in …25 | $ (801) | $ (801)- |
| 12 | H | MM Bank NZ account ending in …100 | $ 71 | $ 71 |
| 13 | W | Westpac Australia account ending in …92 | $ 3,850 | $ 3,850 |
| 14 | W | Westpac NZ Bank account for EE Pty Ltd ending in …200 | $ 120 | $ 127 |
| 15 | W | Westpac NZ account for DD Business ending in …500 | $ 200 | $ 200 |
| 16 | W | Westpac NZ account ending in …400 | $ 2,250 | $ 2,250 |
| 17 | W | Westpac NZ account for DD Business ending in …43 | $ 248 | $ 248 |
| 18 | W | Westpac NZ account ending in …63 | $ 849 | $ 849 |
| 19 | W | NAB offset account ending ..22 | $ 228 | $ 228 |
| 20 | H | Boat & outboard bought in 2017 | $ 41,055 | $ 41,055 |
| 21 | H | motor vehicle 2 reg no … | $ 45,000 | $ 45,000 |
| 22 | H | Motor vehicle 3 reg no … | $ 18,000 | $ 18,000 |
| 23 | W | motor vehicle 4 reg no … – NZ$28,000 | $ 26,880 | $ 26,880 |
| 24 | W | Furniture and effects at Suburb C Property | $ 10,000 | $ 10,000 |
| 25 | H | Furniture and effects save for Suburb G chattels in 26 | $ 144,275 | $ 10,000 |
| 26 | H | Furniture and effects at Suburb G Property | $ 5,725 | $ 5,725 |
| Total | $ 4,381,300 | $ 4,540,590 |
| LIABILITIES | ||||
| 27 | J | Mortgage to Westpac secured over B Street, Suburb C (total of four home loans) - NZ$787,169 | $ 747,810 | $ 755,684 |
| 28 | H | CBA home loan ending in …07 | $ 163,767 | $ 163,767 |
| 29 | H | CBA home loan ending in …03 | $ 595,423 | $ 595,423 |
| 30 | H | CBA home loan ending in …52 | $ 296,489 | $ 296,489 |
| 31 | H | Personal loan owed to RR Varnham | $ 5,813 | $ 5,813 |
| 32 | H | American Express ending …03 | $ 847 | $ 847 |
| 33 | H | MM Bank Visa ending in …38 | $ 453 | $ 453 |
| H | CBA MasterCard ending in …57 as at 23/07/19 | $ 7,429 | ||
| 34 | W | AMEX card ending in …01 | $ 3,041 | $ 3,041 |
| 35 | W | Westpac MasterCard ending in …95 | $ 19,346 | $ 19,346 |
| 36 | W | NAB home loan ending in …95 | $ 344,429 | $ 344,429 |
| 37 | W | NAB home loan ending in …46 | $ 112,896 | $ 112,896 |
| Total | $ 2,290,314 | $ 2,305,617 |
| SUPERANNUATION | |||||
| Member | Name of Fund | Type of Interest | Wife’s value | Husband’s value | |
| 38 | W | Super Fund 1 | Accumulation | NIL | Not Known |
| 39 | W | Super Fund 2 | Accumulation | $ 31,000 | Not Known |
| 40 | H | Super Fund 3 | Accumulation | $ 289,295 | $ 299,369 |
| 41 | H | Super Fund 4 | Accumulation | $ 243,017 | $ 243,017 |
| Total | $ 563,312 | $ 542,386 |
| FINANCIAL RESOURCES | ||||
| 42 | - | - | $ 0 | $ 0 |
| Total | $ 0 | $ 0 |
| ADD BACKS | ||||
| 43 | W | Wife legal fees paid for from mortgage acc. …46 | $ 0 | $ 61,000 |
| 44 | H | Husband legal fees paid for from CBA home loan acc. …03 | $ 95,214 | $ 0 |
| 45 | H | Husband legal fees paid for from CBA home loan acc. …07 | $ 7,000 | $ 0 |
| 46 | H | Husband legal fees paid from redundancy payout in accounts CBA …66 and …43 | $ 83,968 | $ 0 |
| Total | $ 0 | $ 0 | ||
Notes
In relation to any disputed items and all disputed values for items a party should state, using the item number as a heading:
Why an item should not be on the balance sheet.
Whether expert evidence is required to resolve a dispute as to value and what steps have been taken to agree upon and appoint a single expert.
Whether documents in the possession of the other party need to be provided before the value of an item can be agreed.
Any other comment a party wishes to make in relation to the disputed item.
| Item No | |
| 1, 11, 12, 14, 15, 16, 17, 18, 28 & 37 | Husband: The value of New Zealand assets has been converted from NZD to AUD using conversion rate of 1 NZD = 0.96 AUD. Exchange Rate at 23/7/19 is 1 NZD = 0.9625 AUD. Wife: The value of New Zealand assets has been converted from NZD to AUD using conversion rate of 1 NZD = 0.95 AUD. |
| 1 | As per joint valuation NZ$1,580,000 |
| 2-3, 5-7 | As per joint valuation |
| 4 | Wife: In May 2018 H obtained an updated valuation of this property. The $312,000 value as per application to CBA (Vol.3/p813 Wife’s Exhibits). Husband: As per joint valuation conducted in 2017. Husband did not appoint any other valuer. The valuation in the loan application for the purchase of the property at 2 F Street was arrived at by CBA on a “desk valuation" by themselves and no valuation occurred at the premises. |
| 20-23 | As per joint valuation and agreement. |
| 25 | Wife: The value of the husband’s chattels reflected in FF Removalists documents and H’s CBA loan application (Vol.3/p813 Wife’s Exhibits). |
| 24, 25 & 26 | Husband: It is the husband's case that the wife is estopped from asserting a value other than $10,000 for these items. Pursuant to an agreement finalised on 27 June 2018 the valuation process (Ordered on 19/03/18) was halted. The Court was advised of this agreement in a document sent to the Court and headed 'Consent orders’. Those orders were never made. However, the Court was advised by the parties' solicitor on 20/07/18 of the agreement. The wife took no steps to restart the valuation process. The wife then suddenly asserts a different value on 15 July 2019 just prior to hearing and seeks to rely on insurance values noting: · The wife’s contents of the City QQ property are currently valued at $367,200 in her insurance policy paid for by herself; · The wife asserted in an application for vehicle finance and her “balance sheet" within that application in December 2006 that she had $150,000 in "jewellery, furs, electronics etc.” and has not deposed to disposing of any such items since then; and · CBA listed the insured value of the husband’s home contents at $150,000 in September 2018. FF Removalists value the items moved by them on a lump sum basis - being USD $22750 per cubic meter “times the weight or volume of the shipment”. This totaled $186,809. |
| 38-39 | Husband: The wife has never disclosed any documents relating to these superannuation interests. |
| 43 | Husband: The balance of this mortgage account as at 30/04/18 was $55,935. The balance of this mortgage account as at 30/04/19 was $61,926. It is noted that the wife’s solicitor's trust account indicates that $35,000 was paid into the trust account from this account in the period 02/07/19 to 13/07/19. No statements for the period 30/04/19 to 14 June 2019 have been provided or disclosed at any time, in spite of requests to do so. Another $26,000 was paid into the wife's solicitors trust account from this account, thus totaling $61,000. |
| 44-46 | Husband: Legal Fees On 23 July 2019 the husband placed $35,000 into the trust account of Fowler Predny for legal costs. $15,000 from CBA …43 $3,000 from CBA …66 $10,000 from CBA …03 $7,000 from CBA …07. |
| 51 | Husband: The wife has paid legal fees of $61,000 from this mortgage account, as set out at note 41 above, the wife has not properly disclosed this account nor the source of funds for her legal fees. |
| 46 | Wife: § 13.12.2016 - $26,000 debited from CBA Home Loan Account …03 for ‘NN Lawyers’ to CBA acc. …58 and same day $25,214 debited to pay H’s NZ solicitors NN Lawyers (Vol.2/p.869 H’s Exhibits). § 3.3.2017 - $12,000 debited from acc. xx8503 for ‘Fowler Predny’ to CBA acc. …58 and same day $10,000 debited from …58 to H’s Fowler Predny solicitors (Vol.2/p.871 H’s Exhibits). § 6.6.2019 - $50,000 debited from acc. …03 to CBA acc….66 and same day $50,000 debited to pay Fowler Predny (p1 Annexures to Balance Sheet). § 23.07.2019 - $10,000 debited from acc. …03 to CBA …66 and same day paid from …66 to Fowler Predny (H conceded). Total redraws from Home Loan account …03: $95,214 |
| 47 | Wife: 23.7.2019 - $7,000 debited from CBA Home Loan acc. …07 to CBA acc. xx9066 and same day debited to pay Fowler Predny (H conceded). |
| 48 | Wife: 13.06.2017 - $478,700 redundancy payment credited to H’s CBA acc. …66. 14.06.2017 - $180,000 of that amount credited to CBA acc. …43. Thereafter: a. 18.07.2017 - $20,000 debited from …43 to pay Fowler Predny (Vol.2/p.958 H’s Exhibits); b. 21.2.2018 - $28,968 debited from …43 to pay Fowler Predny (Vol.2/p.944 H’s Exhibits); c. 9.7.2018 - $27,000 debited from CBA acc. …43 to CBA acc. …66 (Vol. 2/p946 H’s Exhibits) and same day $20,000 debited from …66 to pay Fowler Predny (Vol.2/p974 H’s Exhibits). 10.7.2018 Fowler Predny received $20,000 in their trust account (p.6 Annexures to balance sheet); d. 23.7.2019 - $15,000 debited from CBA acc. …43 CBA to CBA acc. …66 and same day debited from …66 to pay Fowler Predny (H conceded). Total: $ 83,968. |
End of Exhibit 26
Analysis of Balance Sheet
Item 1
This represents an irritating refusal by the parties to agree on a conversion rate from NZ currency to AUD. The difference will be split. Value $1,508,900.
Item 4
The parties had a joint valuation in 2017. The wife relies on an application for finance in May 2018 by the husband. He relied on a value $312,744 .Whether or not the bank nominated the value as the husband asserts.[19] Value $312,000.
[19] Affidavit of Ms Moses filed 31/05/2019, Exhibit Volume 3, 813
Item 7
Nominal difference. Applicant’s value $127.
Item 25
Wife relies on values in documents of removalist ($186,809). FF Removalists and the CBA loan application from May 2018. Contents $150,000.
The husband does not so much challenge the value rather objects to the wife not being bound by a document titled “Consent Orders” with a nominal figure for each of $10,000 although orders were not made. The wife is clearly not bound or estopped from relying on other figures.
However valuation was not undertaken and insurance figures can represent cost of replacement or as valued. The removalist value is per cubic metre, so is in fact a cost of removal not a value. Item 25 is omitted.
Item 38
Omitted.
Item 39
No contrary figure. Confirmed.
Item 40
Husband’s figure accepted as admission against interest $299,369.
Item 27
No note. Average of two figures $751,747.
Revised Balance Sheet
The revised Balance Sheet is therefore as follows:
| Description | ||||
| ASSETS | ||||
| 1 | J | B Street, Suburb C NZ | $ 1,508,900 | |
| 2 | H | 1 D Street, Suburb E | $ 475,000 | |
| 3 | H | 2 D Street, Suburb E | $ 480,000 | |
| 4 | H | 1 F Street, Suburb G | $ 312,000 | |
| 5 | H | 2 F Street, Suburb G | $ 290,000 | |
| 6 | W | K Street, Suburb L | $ 860,000 | |
| 7 | W | J Street, Suburb H | $ 450,000 | |
| 8 | H | Commonwealth Bank account ending in …43 | $ 2,108 | |
| 9 | H | Commonwealth Bank account ending in …66 | $ 2,984 | |
| 10 | H | Commonwealth Bank account ending in …08 | $ 16 | |
| 11 | H | Westpac Bank account ending in …25 | $ (801) | |
| 12 | H | MM Bank NZ account ending in …100 | $ 71 | |
| 13 | W | Westpac Australia account ending in …92 | $ 3,850 | |
| 14 | W | Westpac NZ Bank account for EE Pty Ltd ending in …200 | $ 127 | |
| 15 | W | Westpac NZ account for DD Business ending in …500 | $ 200 | |
| 16 | W | Westpac NZ account ending in …400 | $ 2,250 | |
| 17 | W | Westpac NZ account for DD Business ending in …43 | $ 248 | |
| 18 | W | Westpac NZ account ending in …163 | $ 849 | |
| 19 | W | NAB offset account ending …22 | $ 228 | |
| 20 | H | boat & outboard motor bought in 2017 | $ 41,055 | |
| 21 | H | motor vehicle 2 reg no … | $ 45,000 | |
| 22 | H | motor vehicle 3 reg no … | $ 18,000 | |
| 23 | W | motor vehicle 4 reg no … – NZ$28,000 | $ 26,880 | |
| 24 | W | Furniture and effects at Suburb C Property | $ 10,000 | |
| 26 | H | Furniture and effects at Suburb G Property | $ 5,725 | |
| Total Assets in Items 1-26 | $ 4,534,690 |
| SUPERANNUATION | ||||
| 39 | W | Super Fund 2 | $ 31,000 | $ 31,000 |
| 40 | H | Super Fund 3 | $ 299,369 | $ 299,369 |
| 41 | H | Super Fund 4 | $ 243,017 | $ 243,017 |
| Total Superannuation | $ 573,386 |
| Total Gross Assets | $ 5,108,076 |
| LIABILITIES | ||||
| 27 | J | Mortgage to Westpac secured over B Street, Suburb C (total of four home loans) - NZ$787,169 | $ 751,747 | $ 751,747 |
| 28 | H | CBA home loan ending in …07 | $ 163,767 | $ 163,767 |
| 29 | H | CBA home loan ending in …03 | $ 595,423 | $ 595,423 |
| 30 | H | CBA home loan ending in …52 | $ 296,489 | $ 296,489 |
| 31 | H | Personal loan owed to RR Varnham | $ 5,813 | $ 5,813 |
| 32 | H | American Express ending …003 | $ 847 | $ 847 |
| 33 | H | MM Bank Visa ending in …38 | $ 453 | $ 453 |
| 33A | H | CBA MasterCard ending …57 as at 23/07/19 | $ 7,429 | $ 7,429 |
| 34 | W | AMEX card ending in …001 | $ 3,041 | $ 3,041 |
| 35 | W | Westpac MasterCard ending in …95 | $ 19,346 | $ 19,346 |
| 36 | W | NAB home loan ending in …95 | $ 344,429 | $ 344,429 |
| 37 | W | NAB home loan ending in …46 | $ 112,896 | $ 112,896 |
| Total liabilities | $ 2,301,680 |
| NET ASSET POOL | $ 2,806,396 |
2. Would it be just and equitable to make an adjustment to interests in property?
Each of the parties asks the Court to make an adjustment of interests. The relationship endured for approximately ten years. There is jointly owned real property in New Zealand in addition to solely owned real property and superannuation in Australia. The parties are divorced and wish to sever all financial connection with each other.
It is appropriate for the Court to consider the competing applications of the parties and make orders effecting an adjustment.
3. Consideration of ss 79(4) and 75(2) of the Act in order to come to a just and equitable adjustment
Contributions under section 79(4)
Initial Contributions
When the parties began living together they each had assets and liabilities as set out below. The figures are largely drawn from the relevant material of the wife with respect to both parties due to concessions by the husband and corrections.[20]
[20] Affidavit of Ms Moses filed 31/05/2019, par 41
There was a mathematical error in the addition by the wife of the values of the husband’s assets.[21] A difference of $500,000. Submissions made on the disparity in assets are affected by that error.
[21] Affidavit of Ms Moses filed 31/05/2019, pars 41
With regard to his assets the husband withdrew objection to the values attributed to his assets by the wife during submissions.
With regard to liabilities the husband had included in his trial affidavit incorrect figures for his liabilities at the commencement of cohabitation.[22] He filed a further affidavit shortly before trial to correct the position.[23]
[22] Affidavit of Mr Varnham filed 5/06/2019, par 44
[23] Affidavit of Mr Varnham filed 11/07/2019
The wife:
Assets
·K Street, Suburb L 460,000
·J Street, Suburb H 290,000
·Motor vehicle 1 36,000
·Jewellery, house contents and personal effects 150,000
·business machines and other equipment 120,000
·Superannuation 100,000
TOTAL 1,156,000
Liabilities
·Home loan secured on both properties 470,000
·Business loan 70,000
·Car loan 28,000
TOTAL 568,000
TOTAL NET WORTH 588,000
The wife had income from employment ($131,000 plus bonuses and benefits); business income of $33,800 per annum and rental income from investment properties of $32,760 per annum.
The Husband:
Assets
·1 P Street, Suburb E 233,750
·2 P Street, Suburb E 233,750
·1 D Street, Suburb E 250,000
·2 D Street, Suburb E 250,000
·Q Street, Suburb R 352,000
·O Street, Suburb N 421,000
·S Street, Suburb R 545,000
·1 F Street, Suburb G 250,000
·Boat 5,000
·Furniture and personal effects 5,000
·motor vehicle 5 25,000
·Artwork 1,000
·Super Fund 5 100,000
TOTAL 2,671,500
Liabilities
·OO Bank …13 422,400
·OO Bank …60 99,390
·Westpac Bank 360,000
·St George Bank 607,827
·CBA …05 220,000
·CBA …09 109,000
·CBA …18 27,000
·CBA …08 69,000
·CBA …105 135,000
·CBA …06 38,000
·CBA …07 50,000
·CBA …505 54,866
·CBA …600 99,000
·Motor vehicle 5 lease 35,000
·Loan to parents 35,000
TOTAL 2,361,483
TOTAL NET WORTH 310,017
The husband had income from employment. His estimate was $180,000 per annum plus a motor vehicle with FBT benefits.
His investment properties were negatively geared consistent with tax benefits from that arrangement.
The position of the wife both as to net assets and net income was stronger in net dollar terms than that of the husband.
The net asset pool on dollar figures was held in a ratio of 65/35 favouring the wife.
However this is an artificial analysis, unless consideration is given to how the assets were used at that time.
From the outset the parties lived in a property, S Street, owned by the husband which was the family home for six months before the move to New Zealand. He had purchased that property in August 2006 in order to create a family home for the parties and children.
This enabled the wife to leave her two investment properties in place, earning rental income and increasing in value while debt reduced.
On the figures the wife made a greater contribution. She had net assets of greater value.
The additional debt incurred by the husband in order to buy the S Street home delivered a benefit.
I consider that the initial contribution made by the parties favours the wife.[24] However, the use of assets, especially the provision of a home, must be recognised.
[24]Pierce v Pierce (1998) 24 FamLR 377
Overall there should be a disparity of 55/45 favouring the wife.
Contributions during the relationship
There are no children of the parties’ marriage. However each of the parties had two children from prior marriages.
When the parties began living together in November 2006/January 2007 each one had a child under 18 years living with him/her. The husband’s daughter Ms Z was 14, the wife’s daughter Ms W was 12 years. Both children lived with the parties in the S Street property initially. When the parties moved to New Zealand in May 2007 Ms Z remained living in Australia with her mother, but Ms W moved to New Zealand and was a member of the household for about three years. Ms W then returned to Australia to live with her father. Later Ms Z lived with the parties for a year whilst she studied.
Both parties were working and contributing to the household during those years. The three years of Ms W’s residence represents a real but comparatively modest contribution by the husband to the welfare of the family. Likewise, but to a lesser extent by the wife to the welfare of the family for the twelve months when Ms Z was with them.
The husband paid private school fees for his two children and occasional expenses. The husband’s older child turned 18 the year before the parties married but there would have been three or four years of secondary school fees for his younger child during the marriage. This represents an indirect financial contribution by the wife.
The wife paid some expenses for her adult son and her daughter growing up.
Both parties give evidence of monies spent by each of them to accommodate and assist their young adult children to travel to New Zealand and visit and also for cars in Australia. The husband refers to having leased an apartment for Ms W and her boyfriend for six months however the monies were transferred out of the parties joint account, to which both parties contributed, to the husband’s account for payment to the lessor.
There were gifts for children during the marriage.
There was very little evidence about the domestic work of the household. The husband asserted that he and the wife “shared the chores equally.”[25] His recollection was that they “both did the washing and cooking and also ate out a lot”.
[25] Affidavit of Mr Varnham filed 5/06/2019, par 28
The wife asserted that in New Zealand the husband devoted his time to work and that she did more of the work at home especially when she was not employed.
It was uncontroversial that the parties employed a fortnightly cleaner and a gardener. The wife was not challenged on her evidence that after she ceased work the cleaner was discharged. I infer that the wife thereafter did more of the cleaning.
I also accept that the wife did the shopping and most of the cooking and that “the husband loved my cooking” and that the husband did his own ironing and assisted with the vacuuming due to the wife’s back pain.
The wife also travelled with the husband and attended work functions most weekends. The company for whom the husband worked, sponsored sporting and other events in New Zealand and around the world. There is no dispute that the husband was required to attend nor is it disputed that the wife went with him.
The husband gave disparaging evidence about the value of the wife’s attendance at least in the last years of the marriage but I attribute the cause of those remarks to post separation hostility. The husband’s letter to the New Zealand Department of Immigration in support of the wife’s application for New Zealand citizenship sets out in detail the extent of not only travel by the wife but her honorary role in the work of the company “we both built up contacts which are of benefit to Company AA and to New Zealand as a whole…”.[26]
[26] Affidavit of Ms Moses filed 31/05/2019, par 106
I conclude that during the marriage, the parties were both working to capacity. The husband made a greater financial contribution overall. The wife did not resume paid work after January 2014 but made an indirect financial contribution through her interest and active support of the husband’s position. The husband worked full time with an executive salary throughout the marriage.
The husband sold five investment properties in Australia in order to reduce and manage the mortgage debt on the New Zealand property.
Overall the ratio of contribution by separation, given how the respective assets of the parties were used during the marriage, should be adjusted to equality between the parties.
There were further contributions post separation. The husband received a solid redundancy payment in 2017 of more than $500,000 which he mostly spent in a discretionary personal way, for example on overseas travel, gifts and clothes.
The husband paid for an overseas holiday for himself, a companion and his two adult children. This was part of extensive discretionary spending by the husband after he received his redundancy payment in 2017.
He rented a property on the North Shore of Sydney. The husband paid spouse maintenance to the wife but effectively from joint funds.
The husband bought a new boat ($45,000), bought 2 F Street ($290,000) and renovated 1 F Street ($50,000). Those assets are in the Balance Sheet.
He paid about $150,000 towards mortgage, house insurance and outgoings. Those payments were for the joint benefit of the parties in preserving an asset.
He paid $50,000 to the wife in the first year for her expenses. He spent at least $100,000 on himself for a holiday, travel, a new car and a car for a new partner. He paid $83,968 for his legal costs.
He used the mortgage to pay more of his legal costs ($102,214). The wife paid $61,000 for legal costs for herself.
The wife has had the benefit of living in the New Zealand property.
However the husband returned to a high paying position and rented comfortable accommodation for himself at several addresses on the North Shore of Sydney.
The balance of redundancy and income of the husband is substantially unaccounted for. The wife has been increasingly unsupported and meeting the mortgage and other expenses from draw downs on her superannuation.
By the date of trial the contributions of the husband should be weighed against the balance of redundancies not accounted for, other than some items in the Balance Sheet and income available to the husband. The ratio should move in favour of the wife 60/40.
Relevant factors under section 75(2) for adjustment of interests
The relevant matters to be taken into account are as follows:
The age and state of health of each of the parties
At the date of trial the husband was 61 years and the wife was 58 years. There is no evidence of ill health or disability for either party.
The income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment
Each of the parties hold in their respective names real property in Australia, in addition to the New Zealand property which became the family home.
The Husband
The husband ceased work, by his own choice, as the general manager of Company AA New Zealand on 12 June 2016. This was, on his evidence, days after the parties had separated but remained living in the family home. The husband had six months paid leave. In December 2016 the husband returned to live in Australia.
The husband received a substantial redundancy package (AUD$529,000) equivalent to three years employment, paid to him in June 2017.
In October 2017 the husband accepted a position as CEO of GG Company. His monthly net salary was $20,480 ($245,760 per annum).
In March 2019 the husband, by his own choice, resigned that position. He had been employed with the company for approximately 18 months.
His expressed intention is to find an equivalent position and resume work at least for a few years before retirement. This is consistent with his decision to spend his redundancy payment on overseas travel, personalty and financial support of his adult children from a prior marriage. Evidently he did not consider it necessary to garner those funds to provide for his future.
The evidence supports a finding that the husband has the capacity to maintain employment providing a superior level of income.
The Wife
The wife had been employed and was running small businesses in Australia when she met the husband. She had investment properties and a reasonable level of security.
The wife moved to New Zealand due to the husband having accepted a position in that country. She did so willingly but knowing there would be an impact on her career and earning potential. The wife found employment in New Zealand in City QQ. In March 2014 she resigned from the employer after workplace bullying.
Thereafter she established a business consultancy and otherwise continued to support the husband’s career by travelling with him and attending dinners, sporting events and conventions.
The wife has been out of the paid work force for five years plus. She has capacity to work but regards herself as having retired. She considers that her age and absence from the IT industry makes employment unlikely. The wife had worked as a senior business analyst and marketing campaign manager for a health fund prior to marriage. It is possible, but unlikely, that the wife will obtain some employment or generate income from self-employment. Her income earning capacity has diminished over the course of the relationship and has been significantly less than that of the husband since the move to New Zealand. That disparity would continue.
Subject to s 75(2)(3), the eligibility of either party for a pension, allowance or benefit under: (i) any law of the Commonwealth, of a State or Territory or of another country; or (ii) any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia; and the rate of any such pension, allowance or benefit being paid to either party
The husband has superannuation of about $550,000 and will likely contribute further before retirement. He had estimated superannuation of $100,000 when the parties began living together. The balance was accumulated during the marriage.
The wife has minimal superannuation arising from her employment in New Zealand. Her fund has been diminished in order to meet debt.
Where the parties have separated or divorced, a standard of living that in all the circumstances is reasonable
The parties enjoyed a very comfortable lifestyle during the marriage commensurate with high level income.
The wife has struggled financially since separation and particularly since the husband ceased paying spouse maintenance in December 2017. She has drawn on her superannuation benefits to meet expenses, more so since the husband ceased making mortgage payments in respect of the New Zealand property in August 2018.
The parties agree that the wife should retain the New Zealand property. Doing so enables the wife to maintain a reasonable standard of living as the husband has.
The duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration
The marriage endured for between 10 and 11 years. The marriage did have an effect on the earning capacity of the wife. She gave up her employment and self-employment in Australia to facilitate the parties living in New Zealand where the husband had taken a promotion within his organisation.
Whether she was enthusiastic about the move, or simply dutiful, the wife as a consequence earned less income in work which was less congenial to her.
She has made a life in New Zealand and wishes to remain there.
If either party is cohabiting with another person - the financial circumstances relating to the cohabitation
Strenuous efforts in cross examination were made to persuade the Court to find that the wife has a new domestic relationship and is living with Mr LL, a self-employed New Zealander.
Both the wife and Mr LL gave evidence of a friendship and of a working relationship. Both denied an intimate relationship.
The wife has regularly travelled with Mr LL who is an unhappy passenger in planes but travels for business. The wife has organised travel for him to Thailand, Hong Kong and Australia. They have travelled together. They discuss business ideas and appeared mutually respectful of each other.
There was no evidence to support a finding by the Court of cohabitation.
Any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account
The presentation of this case reflected that the vexed question of the division of personalty has the power to dominate proceedings disproportionately.
The husband was very unhappy about departure from a figure in an early Balance Sheet of $10,000 each in respect of household contents. Counsel argued that the wife was estopped from departing from that figure despite evidence of what had occurred then and since.
There was also natural disappointment that paintings the husband had brought from Country S were said to have been sold. Their value to him is a separate issue from commercial value as the Court is confident he would understand in an objective way.
CONCLUSION
Taking those matters into account an adjustment in favour of the wife is appropriate in circumstances where her earning capacity and access to superannuation is much less, by a factor of 10 percent.
There is justification for an adjustment in favour of the wife to bring the ratio to 70/30 in her favour due to the earning capacity of the husband and his use of funds and income post separation. His income and professional standing was enhanced by the move to New Zealand and it is apparent that he is still very much employable at executive levels. It has been by his choice that he has ceased employment on both occasions, at the end of the marriage and just prior to trial.
The net pool of remaining assets at date of trial is $2,806,389.
·To the wife $1,964,472
·To the husband $841,917
Wife Retains
Assets Item No.
1
B Street, Suburb C NZ
1,508,900
6
K Street, Suburb L
860,000
7
1 J Street, Suburb H
450,000
13-19
Various bank accounts
7,752
23
Motor vehicle 4, reg no: …
26,880
24
Furniture and effects
10,000
39
Super Fund 2
31,000
Total
2,894,532
Liabilities Item No.
27
Mortgage of NZ property
751,754
34
Amex credit card
3,041
35
Westpac MC
19,346
36
Home loan …95
344,429
37
Home loan …46
112,896
Total
1,231,466
NET ASSETS
1,663,066
Cash payment from the husband
301,406
TOTAL NET ASSETS
1,964,472
Husband retains
Assets Item No.
2
1 D Street, Suburb E
475,000
3
2 D Street, Suburb E
480,000
4
1 F Street, Suburb G
312,000
5
2 F Street, Suburb G
290,000
8-12
Various bank accounts
4378
20
Baysport 545 boat
41,055
21
Motor vehicle 2, reg no: …
45,000
22
Motor vehicle 3, reg no: …
18,000
26
Furniture and effects at Suburb G
5,725
40
Super Fund 3
299,369
41
Super Fund 4
243,017
Total
2,213,544
Less liabilities Item No.
28
Home loan 8407
163,767
29
Home loan 8503
595,423
30
Home loan 9852
296,489
31
Personal loan to RR Varnham
5,813
32
American Express …03
847
33
MM Bank Visa …38
453
33A
MasterCard …57
7,429
Total
1,070,221
NET ASSETS
1,143,323
Less payment to wife
301,406
TOTAL NET ASSETS
841,917
4. Analysis of whether the adjustment contemplated is just and equitable
A rollover of superannuation of $300,000 was sought by the wife in the context of her application for the discharge by the husband of the mortgage on the New Zealand property and also a cash payment to her of $400,000.
The wife has not been successful with that application.
The cash payment ordered is likely to be applied to reducing the mortgage debt on the property. The wife will likely draw on one or both of her investment properties now or in future in order to eliminate remaining debt and maintain her present standard of living in the family home. The husband will have substantial superannuation and will likely borrow to make the payment to the wife.
I am satisfied that the adjustment provides a just and equitable outcome for the parties.
Orders are made accordingly.
I certify that the preceding two hundred and twenty-four (224) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cleary delivered on 14 February 2020.
Associate:
Date: 14 February 2020
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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Intention
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Reliance
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Fiduciary Duty