Vergara & Vergara
[2023] FedCFamC2F 57
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Vergara & Vergara [2023] FedCFamC2F 57
File number(s): NCC 2058 of 2020 Judgment of: JUDGE CARTY Date of judgment: 27 January 2023 Catchwords: FAMILY LAW – PROPERTY – identification and quantification of assets and liabilities – alleged liability to family member – rights of unsecured creditors in property claims – consideration of proposed add backs – assessment of contributions-consideration of relevant matters in s.75(2) – consideration of what orders are just and equitable Legislation: Family Law Act 1975, ss75, 79, Pt VIII
Federal Circuit and Family Court of Australia Rules (Family law Rules) 2021, rr 8.19, 8.20
Cases cited: Af Petersens and Af Petersens (1981) FLC 91-095
Collins (1990) FLC 91-144
Clauson (1995) FLC 92-595
Dickons & Dickons [2012] FamCAFC 154; (2012) 50 FamLR 244
Kowaliw (1981) FC 91-092
AJO and GRO (2005) FLC 93-218
Prince and Prince (1984) FLC 91-324
Stanford & Stanford [2012] HCA 52
Division: Division 2 Family Law Number of paragraphs: 265 Date of last submission/s: 17 June 2022 Date of hearing: 17 June 2022 Place: Newcastle Solicitor for the Applicant: Self-Represented Solicitor for the Respondent: CDG Law ORDERS
NCC 2058 of 2020 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MR VERGARA
Applicant
AND: MS VERGARA
Respondent
order made by:
JUDGE CARTY
DATE OF ORDER:
27 JANUARY 2023
THE COURT ORDERS THAT:
1.Within twenty-eight (28) days of the date of these orders the applicant husband will vacate the property situated at and known as B Street, Suburb C in the State of New South Wales being Lot … Section 1 Deposited Plan … (“the property”) and in doing so he will remove all his personal possessions, furniture and belongings and leave the property in a clean and tidy state.
2.Within forty-two (42) days of the date of these orders the respondent wife will take all steps required and execute all documents necessary to refinance the mortgage to Bank D over the property, thereby removing any liability of the applicant husband in connection with the mortgage, and from the date of refinancing the respondent wife shall indemnify and keep indemnified the applicant husband for all rates, taxes, insurances and outgoings affecting the property as they fall due.
3.Within forty-two days (42) of the date of these orders the respondent wife will pay to the applicant husband the sum of $74,486.00 (seventy four thousand, four hundred and eighty six thousand dollars) (“the payment”).
4.Simultaneously with the payment the applicant husband will do all acts and things and sign all documents required to transfer to the respondent wife all of his right title and interest in the property.
5.Except as otherwise provided in these orders the applicant husband be declared to have the sole right title and interest in:
(a)USA Life Insurance Account #...16
(b)USA Bank E Account #...06
(c)USA Bank E Account #...54
(d)Motor Vehicle 1
(e)Motor Vehicle 2
(f)NAB Bank Account #...11
(g)NAB Bank Account #...03
(h)Anwtique Collection held in USA Safe
(i)USA Super Fund F #...23
6.Except as otherwise provided in these orders the respondent wife is declared to have sole right title and interest in:
(a)Motor Vehicle 3
(b)National Australia Bank account #...92
(c)Bank G account #...67
(d)Unregistered caravan
7.As between the parties and unless otherwise specified in these orders and except for the purpose of enforcing the payment of any money due under these or any subsequent orders:
(a)Each party be solely entitled to the exclusion of the other to all property (including choses-in-action) in the possession of such party as at this date;
(b)Each party hereby foregoes any claim they may have to any superannuation benefits belonging to or earned by the other;
(c)All insurance policies to become the sole property of the beneficiary named therein;
(d)Each party be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these orders.
8.In the event that either party refuses or neglects to sign a document or documents required pursuant to these orders, the Registrar or Deputy Registrar of the Newcastle Registry of the Family Court of Australia is hereby appointed pursuant to Section 106A of the Family Law Act1975 to sign each document or documents instead of the defaulting party.
9.Any application for costs is to be filed and served within 28 days of the date of these orders.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym Vergara & Vergara has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE CARTY
INTRODUCTION
Following the breakdown of their marriage of sixteen years, the applicant husband and the respondent wife are unable to agree on the appropriate division of their property.
The key issues in dispute are the values of certain chattels; whether or not it is appropriate to notionally “addback” to the pool of assets some monies which have already been spent; whether funds advanced by the husband’s mother in March 2006 will be treated as a joint liability of the parties, and deducted from the property available for division between them; and the impact of relevant matters which are required to be considered under s 79(4)(e) of Family Law Act 1975 (Cth) (“the Act”).
BACKGROUND
In this background, statements of fact are to be construed as findings unless otherwise stated.
The applicant husband was born in the United States of America (“the USA”) in 1968. He is currently 53 years old. He is a citizen of the USA, and a permanent resident of Australia. He currently lives in the jointly owned former matrimonial home at B Street, Suburb C, New South Wales (“B Street, Suburb C”). He is employed full time in sales and discloses average weekly earnings of $961.
The respondent wife was born in Australia in 1973. She is currently 49 years old. She lives with the two children of the marriage, who are currently 17 years old and 15 years old, in rental accommodation at Town H, New South Wales. She is employed part time as a carer and discloses weekly earnings of $1,000, along with additional income of $207 per week made up of Centrelink benefits, transport allowance and child support.
The parties met in the USA. They did not live together prior to their marriage in 2003. They finally separated in February 2019 and remained living under the one roof until 7 September 2019, when the wife moved out of B Street, Suburb C with the children. The parties were divorced on 26 May 2020.
The two children of the marriage are X born in 2005, and Y born in 2007. The children remain in the primary care of the mother.
Upon their marriage the parties commenced to live together in City J. At that time the husband owned a Motor Vehicle 4. He says that he had “modest” savings[1] which allowed the parties to make a down payment on a new car, rent an apartment, buy the wife’s engagement and wedding ring, and have a honeymoon in Country K.
[1] Husband’s affidavit paragraph 18
The husband says that “unbeknownst” to him the wife had savings of $27,000 which she gave to her parents to deposit into their bank account. The wife says that in about 1998, with the assistance of her parents and prior to her moving to the USA, she opened a bank account called the “L account”. She says that she held about AU$20,000 in the account at the commencement of the marriage. From time to time during the marriage, monies were transferred from the L account into the parties’ joint USA accounts and used for family expenses, including payment of a time share, holidays, and airfares. The wife’s father Mr M had authority to transfer money from the L account, as instructed.
In 2006 the husband moved from City J to City N to take up employment, and in 2006 the wife and X followed him to City N, where the family remained until 2011.
In 2006 the husband purchased, in his sole name, a real property at O Street, Suburb P, City N (“the City N property”). The husband’s evidence is that “we” paid $250,000 for the City N property, using $85,000 of $100,000 advanced by his mother Ms Q (“Ms Q”) in 2006.[2] The wife’s evidence, which I accept for reasons articulated later, is that the husband purchased the City N property in his sole name.
[2] Husband’s affidavit paragraph 23
On 7 March 2006 it appears that the parties signed two separate promissory notes in favour of Ms Q, the first note in respect of an interest free advance of $50,000, and the second note in respect of a separate advance of $50,000 at 4% interest per annum. Whether the parties will be held jointly liable for any debt to Ms Q is one of the key issues in these proceedings explored later in these reasons.
In the latter part of 2009 the husband lost his employment. Between 2009 and 2011 he obtained short periods of employment, and he ran an online business. In 2011 the family moved to City R, where they remained living for almost 5 years, before moving to Australia to live in 2015.
The husband’s affidavit reveals that the City N property was lost in a “short sale” after he was made redundant during the 2008 financial crisis.[3] The wife’s evidence establishes that on 5 August 2011 the husband requested, due to hardship, that the City N property be “short sold” by the mortgagee Bank S.[4] Following the sale a debt in the sum of US$107,171.66 due to Bank S was cancelled. Company T claimed a lien against the City N property for unpaid fees in the sum of $1,673.54[5].
[3] Husband’s affidavit paragraph 27
[4] Wife’s affidavit Annexure “A”
[5] Wife’s affidavit Annexure “A”
The husband conceded during cross examination that neither he nor the wife received any money from the sale of the City N property. Nor was the City N property used as collateral for the purchase of any other property during the marriage.
Neither party has repaid any money to Ms Q, upon the sale of the City N property or since, and Ms Q made no formal demand for repayment until 25 March 2019, after the parties separated, and twelve years after the funds were advanced.
In 2015 the parties sold their assets in the USA, which consisted of two cars and a campervan, and the family moved to Australia to live. The parties arrived in Australia with about $30,000, which they deposited into a joint bank account. The wife’s parents provided to the parties a Motor Vehicle 1, and some items of furniture. The family lived with the wife’s parents for about three months, before moving into a granny flat at the wife’s brother’s property. They lived rent free there, until leasing a house in the City U NSW area.
Upon arrival in Australia, the wife obtained employment as a carer at Employer V and she continues in that employment to date. About two months after the family arrived in Australia, the husband commenced employment.
In late 2016 the parties purchased B Street, Suburb C in their joint names. The husband says the purchase price was $330,000, which is inconsistent with the evidence of the single expert Valuer, whose investigations indicate that the subject property was sold for $340,000 on 15 November 2016[6]. Nothing turns on that inconsistency.
[6] Affidavit of Ms W filed 26 May 2022, paragraph 56
The husband says that the parties contributed $35,000 to the purchase price and borrowed a further $295,000 from Bank D. Currently the parties owe $268,000 to the Bank D in respect of the home loan for B Street, Suburb C.
In early 2018, according to the husband, the wife informed him that she wanted a divorce, and reiterated her request in June 2018. The husband says that in 2018 his mother called to tell him that she would need funds to travel back to the USA for surgery, and he says that he told the wife that they needed to start repaying Ms Q. The wife denies any knowledge of that alleged conversation, and further denies that she is indebted to Ms Q.
In 2018 the wife discovered that the husband had opened a bank account in his sole name and that he was moving money from the parties’ joint National Australia Bank account into his sole account. The husband agreed under cross examination that there were difficulties in the marriage about this time and that he deposited his bonuses and commissions into his sole account and intended to save up to travel to the USA.
He told the wife that the account was set up for tithing. The wife says that, prior to September 2018, she was not aware that the husband was paying tithes of any significant value to any church. By the time the wife discovered that the husband was operating an account in his sole name, the account had a balance of $24,000.
In late October 2018 the parties split the monies held by the husband in his sole account and the husband transferred $12,825.61 to the wife’s account at that time.[7]
[7] Exhibit B page 1
In early 2019 the wife discovered that the husband had blocked her access to the joint Bank E accounts held in the USA[8].
[8] During his cross examination of the wife the husband asked her “Why did I lock you out” which I infer is confirmation that he did so, and in any event he conceded during his cross examination by the solicitor for the wife that while he had access to, and did use, the Bank E funds post separation, the wife did not.
On 12 February 2019 the wife informed the husband that the relationship was over and thereafter the parties lived separately and apart under the one roof until September 2019 when the wife left with the children.
On 25 March 2019 Ms Q purportedly wrote a letter requesting repayment of the monies advanced in March 2006. The wife deposes that she only became aware for the first time of the letter on 22 July 2019.[9] The letter is not in evidence before the court.
[9] Wife’s affidavit paragraphs 95 and 96
On 26 March 2019 the wife made a unilateral decision to transfer $72,000 from the parties’ joint National Australia Bank account into an account in her sole name.
On 28 March 2019 the wife arranged for US$17,032 held in the L account to be transferred to her parents Mr M and Ms Z. She did not obtain the husband’s approval for that transaction. When she was cross examined by the husband, the wife said that she arranged the transfer in order to reimburse her parents for monies that they had spent on the family, including money to meet expenses, a family cruise holiday, and for the Motor Vehicle 1 they had provided.
On 15 June 2020 the husband filed an Initiating Application in which he sought final parenting orders and one final property order that he be granted leave to file an Amended Application for Property Orders after both parties had provided full financial disclosure.
On 31 July 2020 the wife filed a Response in which she sought a final property order that the court make such orders as are necessary in order to facilitate a just and equitable distribution of the matrimonial property.
On 5 August 2020 orders were made by consent for the parties to provide each other with full and frank financial disclosure, including in relation to any assets or financial resources held in the USA within the last three years, and each party agreed to file an amended application and response respectively. Pending further order the husband was ordered to pay all outgoings associated with B Street, Suburb C, including the mortgage repayments, land rates and insurance.
On 23 November 2020 the husband filed an Amended Initiating Application in which he sought an order that, pending further order, he have sole use and occupation of B Street, Suburb C, and that the wife be restrained by injunction from entering the property unless he was present and gave his consent. The husband also sought an order that the parties do all things to transfer to him the mortgages over the property, and that he be solely responsible for repaying loans from his mother arising under the promissory notes, and that he retain his interest in all other property he owned and the wife retain her interest in her property.
On 1 December 2020 the wife filed an Amended Response in which she sought final property orders that B Street, Suburb C be transferred to her and that the husband pay her $58,100 within 30 days. Pending the transfer she sought that the husband have sole right to occupy the property and that neither party encumber the property without the written consent of the other. The wife sought an order that, from the date of transfer, she would indemnify the husband against all liability in respect of the mortgage registered over the property and that otherwise each party keep the property they held as at the date of the orders.
On 22 February 2021 the parties attended a conciliation conference and were unable to reach agreement .The Registrar ordered that, by no later than 22 March 2021, each party provide the other with a proposed Minute of Order that represents a genuine offer to settle their case.
On 26 October 2021 the wife filed an Application in a Proceeding seeking an interim order that she have sole use of B Street, Suburb C. The wife’s application was filed after the husband became unemployed and had requested that the mortgagee Bank D grant him a moratorium in respect of the mortgage repayments for a period of three months, due to hardship.
On 16 December 2021 Her Honour Judge Kearney ordered that the husband have sole and exclusive use and occupation of B Street, Suburb C and that be responsible for payment of all the outgoings. The Court noted that the husband undertook not to enter into any arrangement for a reduction of the regularised mortgage payments relating to the mortgage without having first obtained the written consent of the wife, or an order of the court, and further noted that the former matrimonial home had not been recently valued, and that the husband submitted it was worth $360,000.00.
On 22 December 2021 during family dispute resolution, to each party’s credit, they reached agreement about the parenting arrangements for their children, and orders were made by consent. The final parenting orders provide that the parents have equal shared parental responsibility for the children, that the children live with the mother, and spend substantial and significant time with the father. It was noted that both parents contribute to the cost of children’s education, including equally sharing school fees.
On 16 May 2022 the husband filed an Amended Initiating Application seeking final property orders, in summary, that the wife transfer to him her share of B Street, Suburb C, and that she be indemnified in relation to the mortgage, and that otherwise each party be declared the owner of all assets, property and accounts currently in their possession and control. The husband also sought an order that the wife pay him $94,367.00 for payment to Ms Q, and that the wife return his two mountain bike tyres, all the paint for the home, both interior and exterior, and three ladders.
On 17 May 2022 the wife filed an Amended Response in which she sought orders, in summary, for the husband to vacate B Street, Suburb C and remove all his personal possessions, furniture and belongings and leave the property in a clean and tidy state; that the husband transfer to her all his right, title and interest in the property, and that the wife take steps necessary to refinance the mortgage and be declared to have sole right and title in her property, and the husband have sole right and title in his property, and that the husband pay the wife’s costs of the property proceedings.
THE HEARING
The hearing proceeded on 17 June 2022 over the course of one day.
The husband appeared in person and was not legally represented. He conducted his case with courtesy. He was particularly troubled by the wife’s use of the joint funds which she transferred post-separation,[10] and by her arranging for funds in the L account to be paid to her parents. The husband did not contend for the L funds to be “added back”, however he expressed his concern that the wife’s parents have been repaid, while his mother has not.
[10] Husband’s affidavit paragraph 40 and 47
The wife was competently represented by Mr Gray Solicitor.
Each party was cross examined. The husband’s mother Ms Q was not available for cross examination, and I will refer to her evidence later in these reasons.
Documents relied on
In support of his case the applicant husband relied on the following documents:
(a)Outline of Case – Exhibit A.
(b)Amended Application for final orders filed 28 May 2022.
(c)His Affidavit filed 12 May 2022.
(d)His Financial Statement filed 12 May 2022.
(e)Affidavit of Ms Q sworn 10 May 2022.
In support of her case the respondent wife relied on the following documents:
(a)Outline of Case – Exhibit D.
(b)Amended Response filed 17 May 2022.
(c)Her Affidavit filed 24 May 2022.
(d)Her Financial Statement filed 13 May 2022.
(e)Affidavit of Single Expert registered real property Valuer Ms W filed 26 May 2022.
Each party tendered into evidence documents which were received and marked as Exhibits, which will be referred to, when necessary, in these reasons.
The husband’s proposal
The husband’s proposal at trial was consistent with the orders he seeks in his Amended Initiating Application filed on 16 May 2022.
The wife’s proposal
The wife’s proposal at trial was consistent with the orders she seeks in her Amended Response filed on 17 May 2022.
Evidence of the Husband
Prior to the commencement of the husband’s evidence the wife’s solicitor objected to portions of the husband’s affidavit, with the result that parts of his evidence in paragraph 23 and 39 were excised, and the whole of paragraphs 56 and 57, and Annexure A, were struck out.
During cross examination about his initial contributions the husband was unable to recall the exact amount of his “modest” savings. He produced no documentary evidence to confirm what amount he had in his savings account when the parties married. While the parties may have spent $18,000 on a new car, as the husband in his oral evidence asserted, he deposed in his affidavit that they had made a “down payment” for the car from his savings, and provided no evidence as to the amount paid.
On the state of the husband’s evidence I am unable to find precisely what amount he held in savings at the date of the marriage. I accept, and will take into account, that he had “modest savings”.
I consider that the husband’s evidence that “we” bought the City N property[11], is misleading. Documentary evidence, which the wife attaches to her affidavit, demonstrates that the husband was the sole proprietor and mortgagor of the City N property. He omitted from his affidavit evidence as to what became of the proceeds of the short sale of the City N property; he omitted evidence that the bank cancelled a debt of US$107,171.66 affecting the City N property; and he omitted evidence that the Company T claimed a lien for unpaid fees in the sum of $1,673.54.
[11] Husband’s affidavit paragraph
The husband’s oral evidence was inconsistent with evidence he provided in his financial statement, for example in relation to the Bank E accounts, addressed later.
The husband deposes that he played a significant role in the children’s lives from their birth, as well as working and contributing to the financial support of the family. I accept that the husband took an active interest in the children, and that he assisted the wife with their care when he was at home.
I accept that the husband was engaged in paid employment throughout most of marriage and that he contributed his income for the benefit of the family.
I consider that generally the husband was an honest witness, however I found him to be a less reliable historian than the wife. He presented as a congenial man doing his best to portray events in a manner which, he perceived, would best enhance his case, and he omitted significant details from his affidavit.
Evidence of Ms Q
Ms Q swore her affidavit in Country AB on 10 May 2022. At the commencement of the hearing the husband made an oral application for leave for Ms Q to give her oral evidence by electronic means including Zoom or telephone. The Court was not in a position to facilitate Ms Q giving oral evidence via the Zoom platform, and the husband said that Ms Q was unable to access the Microsoft Teams platform.
The husband provided no notice of his application to the court or the other party, and it was opposed by the wife.
Ms Q’s first language is Country AB. The husband said that her English is “pretty good”, “not perfect” and that she would need the questioner to “speak slower”.
On 19 May 2022, in accordance with Rule 8.20 Federal Circuit and Family Court of Australia Rules (Family law Rules) 2021 (“the Rules”), the wife’s solicitor gave notice to the husband that Ms Q was required for cross examination[12]. On 14 June 2022 the wife’s solicitor wrote to the husband reminding him of the requirement for him to make Ms Q available for cross examination at the hearing[13].
[12] Exhibit E
[13] Exhibit F
The wife’s solicitor submitted that the evidence of Ms Q is controversial and that the wife ought to be afforded the opportunity to properly test the evidence under cross examination in a court room, where the witness’s demeanour can be observed and properly assessed.
I took into account that the husband was on notice of the requirement to make Ms Q available for cross examination at the hearing, and the late notice of his application to permit her to give evidence by electronic means. Ms Q was not able to facilitate her participation in the proceedings via Microsoft Teams, and her oral evidence could therefore only be given by telephone from Country AB, in circumstances where it was likely there would be a language barrier, without the benefit of an interpreter. Taking into account these factors, and the controversial nature of parts of the evidence, and the potential prejudice to the wife of being deprived of the opportunity to properly test the evidence, and having regard the proper and efficient use of court resources, I dismissed the husband’s application for leave.
By consent, and pursuant to Part 8.19 of the Rules, the husband was permitted to rely on the following paragraphs and Annexures in Ms Q’s affidavit, without her being required for cross examination:
(a)Paragraphs 1 and 2, part paragraph 3, and part paragraph 6;
(b)Annexures A1 and A2.
In summary, the evidence of Ms Q is that:
(a)She is the husband’s mother;
(b)In 2006 the husband and wife were moving from City J to City N and wished to purchase a home at O Street, Suburb P, City N. Ms Q wanted to help them and says that she loaned the parties US$100,000. She made them fill out “repayment” notes. In summary, the terms of the first note dated March 7, 2006 for $50,000 were that the parties promised to pay Ms Q “for value received”, interest free, due “when requested”. The terms of the second note dated March 7, 2006 for $50,000 were that the parties promised to pay Ms Q “for value received” with interest at the rate of an illegible % amount per annum due “upon sale of above property”. The only reference to property is “O Street, Suburb P, AC County, City N”. Ms Q says, and the court accepts, that the interest rate was 4% per annum.[14] The promissory notes are Annexures A1 and A2 to Ms Q’s affidavit;
(c)Ms Q says that in 2018 she “asked Mr Vergara to start making the payments on the $100,000 US in accordance with our agreement”;
(d)Ms Q provided the parties “…a written request for the funds, offering to wave (sic) the interest fees”. Ms Q does not specify the date upon which she made the written request, and her written request is not in evidence before the court.
[14] Affidavit of Ms Q paragraph 2
Evidence of the Wife
Prior to the commencement of the wife’s evidence the husband took objection to parts of her affidavit, with the result that a portion of paragraph 17, and the whole of paragraphs 18 through to 21, and paragraph 23, were struck out.
The wife says that, when the parties met, she had approximately $20,000 in a bank account, made up of the proceeds of sale of a car sold prior to moving to the USA, and money her parents placed in the account from time to time, including $5,000 which she received when her grandmother passed away. The husband thinks that the wife had $27,000 in the account around the time of the marriage[15].
[15] Husband’s affidavit paragraph 19
The wife worked as a carer earning approximately US$300 per week, and she continued in her employment for a further year following X’s birth, as her employers allowed her to bring X to work.
The wife says that the husband was unemployed when they married, and that he remained unemployed until around late 2003, when he began a job as a salesperson. The wife says that his job was solely based on commission and that he did not earn an income if he did not sell.
The wife agrees that that the husband moved to City N in early 2006 to take up a job with a non-profit organisation called Company AD. The wife and X moved to City N in early 2006. The wife stopped working at that time and continued to care for X full-time, and was the primary homemaker.
After Y was born, in 2007, the wife continued in her role as a full-time stay at home parent. Her unchallenged evidence is that the parties had several conversations during which they agreed that she would stay at home and care for the children[16]. In 2010 the wife home-schooled X for his Kindergarten year.
[16] Wife’s affidavit paragraph
The husband did not challenge the wife’s evidence that she was the primary carer for each of the children from the time they were born. The wife provides evidence of the various tasks she did in order to meet the children’s needs.[17] She says that the husband occasionally attended the children’s sporting events, and usually attended their presentation days, and that he rarely attended parent-teacher nights and other events at the school.
[17] Paragraph 8 of the Wife’s Affidavit.
In 2011 the parties moved from City N to City R because the husband wanted to plant a church in City R. The church did not eventuate, and the husband obtained a job as a salesman, earning a minimal income, and may have been receiving some commission. The wife says that at various times her parents provided some financial support to the family to help meet expenses.
When the children were both enrolled at AE School in City R, the wife commenced volunteer work as a carer at a school undertaking about 30 hours per week, in exchange for free schooling tuition for both children.
The Wife deposes, and I accept, that she did not have a superannuation plan in the USA.
In 2015, when the family moved from the USA to Australia, the wife obtained employment at Employer V in City U. She says that the husband was unemployed for the first four months, before gaining employment with the Employer AO.
With respect to the monies allegedly owed to Ms Q, the wife says that the husband purchased the City N property in his sole name in March 2006.
She says that she was exhausted from packing and moving across the country with X, and that the husband told her almost nothing about what was happening with his purchase of City N property.
She says that it was her understanding;
“…that [Ms Q] was contributing $100,000 to the purchase of the [City N] property, and that [Mr Vergana] and [Ms Q] entered into an agreement whereby when the property was sold [Ms Q] would be reimbursed the $100,000 deposit together with one-half of any profit”[18].
[18] Wife’s affidavit paragraph
The wife says that the husband and his mother speak primarily in Language AB when they converse with each other, and as the wife does not speak Language AB, she was not privy to the content of their conversations.
The wife says that she is aware that the husband’s mother has a real estate portfolio, and a history of investing in property in order to make money. She is aware that at least historically the husband and his mother held joint bank accounts.
The wife says that during 2010 the husband ceased to make mortgage repayments on the City N property, and that in August 2011 he instructed the Bank S to conduct a short sale on the unit. She recalls the husband telling her “I don’t want to be bankrupt on my credit score. A short sale is the only option.”
The wife says that the husband stopped paying the homeowners association fees. She says that she was not involved in the decision to stop paying those fees.
The wife says that City N property was sold for US$86,000, and the Bank S took over the outstanding debt of US$107,171.66. The wife contends that there is no debt due to Ms Q as there was no profit made on the sale of the City N property.
The wife annexes to her affidavit[19] the husband’s request for a short sale and the evidence of cancellation of the debt by Bank S.
[19] Wife’s affidavit Annexure A
The wife’s unchallenged evidence is that she has never had a conversation with Ms Q during which Ms Q has demanded repayment of any of the monies contributed to the purchase of the City N property.
The wife’s unchallenged evidence, corroborated by relevant documents, is that when she and the husband applied for a mortgage through Bank D to purchase the B Street, Suburb C property, they did not disclose in their loan application that there was money due to Ms Q.[20]
[20] Wife’s affidavit and Annexure B
On 17 January 2021, when he applied for pre-approval for a mortgage, the husband did not disclose to the Bank D on his loan application that he owed money to Ms Q.[21]
[21] Wife’s affidavit and Annexure C
The wife says that between September 2019, when she left B Street, Suburb C and took the children with her, and December 2019, the husband did not spend time with the children, notwithstanding that she tried to arrange for the children to spend time with him. She complains that on numerous occasions since December 2021 the husband has disregarded the orders for him to spend time with the children, and on numerous occasions he has been late. She said that most recently he was late on 1 May 2022 and 15 May 2022.
The wife accepted the proposition, put to her by the husband during his cross examination of her, that he sent recently her an email to let her know that he was not picking up the children, and told her that he was attending a work function. The wife rejected his suggestion that he provided her with plenty of notice that he would not be having the children, and she said that he had advised her of his intention with little time to spare, and that she had to cancel an appointment on that day as a result.
I consider that the wife was an honest and forthright witness, and a reliable historian. Her affidavit evidence was largely confirmed during her cross examination by the husband.
LEGAL PRINCIPLES
The property proceedings are to be determined in accordance with Part VIII of the Family Law Act 1975 (Cth) (“the Act”).
Section 79(1) of the Act empowers the court to make such orders as it considers appropriate altering the interests of the parties to a marriage in the property of both or either of them.
Section 79(2) of the Act provides that the court shall not make an order under the section unless it is satisfied that it would be just and equitable to do so.
In Stanford & Stanford[22] the High Court said that when an application for property settlement is made the court must first identify the legal interests of the parties in the property and then consider whether it is just and equitable to make an order altering those legal interests. The question of whether it is just and equitable to make an order cannot be dealt with simply by considering whether a party has made contributions as set out in s 79(4) of the Act. The High Court stated:[23]
In many cases where an application is made for a property settlement order, the just and equitable requirement is readily satisfied by observing that, as the result of a choice made by one or both of the parties, the husband and wife are no longer living in a marital relationship. It will be just and equitable to make a property settlement order in such a case because there is not and will not thereafter be the common use of property by the husband and wife. No less importantly, the express and implicit assumptions that underpinned the existing property arrangements have been brought to an end by the voluntary severance of the mutuality of the marital relationship. That is, any express or implicit assumption that the parties may have made to the effect that existing arrangements of marital property interests were sufficient or appropriate during the continuance of their marital relationship is brought to an end with the ending of the marital relationship. And the assumption that any adjustment to those interests could be effected consensually as needed or desired is also brought to an end. Hence it will be just and equitable that the court make a property settlement order. What order, if any, should then be made is determined by applying s 79(4).
[22] Stanford & Stanford [2012] HCA 52
[23] Ibid paragraph 42
In determining the question of what order, if any, is just and equitable to make altering the interests of the parties in the property, the court is required to undertake the following tasks:
(a)Identify the assets, liabilities and financial resources of the parties to the marriage;
(b)Identify and assess the relevant contributions of each of the parties within the meaning of s 79(4)(a), (b) and (c);
(c)Consider the matters in s 79(4)(d), (e), (f) and (g), including the matters in s 75(2) so far as they are relevant, and determine whether any adjustment ought to be made to the contribution based entitlement of the parties assessed earlier; and
(d)Consider the effect of the above findings and decide whether it is just and equitable to make the order.
ASSETS, LIABILITIES AND SUPERANNUATION INTERESTS
Subject to their respective contentions about the disputed items, the joint balance sheet upon which each party ultimately relied was contained within the wife’s Outline of Case Document[24]. Both parties had input into the creation of the joint balance sheet reproduced below:
[24] Exhibit D, Part D pages 3-5 inclusive
Ownership
Description
Applicant’s Value ($)
Respondent’s Value ($)
ASSETS
1
J
B Street, Suburb C – joint valuation
$600,000
$600,000
2
W
Bank G Acct #...56
$32,000
$23,000
3
W
Motor Vehicle 3
$23,000
$23,000
4
J
Camper Van (wife’s possession)
$8,000
$1,000
5
H
NAB Acct #...03 & #...11
$8,989
$8,989
6
W
Antique Collection (Husband’s possession)
$0
$5,000
7
H
Bank E Acct #...06 & #...54
$4,681
$4,681
8
H
Motor Vehicle 2
$3,000
$15,000
9
H
Motor Vehicle 1
$1,000
$5,000
10
W
NAB Acct #...70
$160
$160
11
H
Surrender value on AC Life Insurance
$10,421
$19,421
12
W
Diamond wedding rings
$15,000
$500
13
J
Household items taken without consent
$20,000
SUB TOTAL
$726,251
$714,751
ADDBACKS
14
H
Tithe to AD Church
$0
$12,465
15
H
Tithe to AE Church
$0
$17,238
16
H
Tithe to AF Organisation
$0
$3,380
17
H
Tithes to Husband’s friends – AG, AH, AJ and Company AK
$6,840
18
H
Hardship loan repayments not made by husband
$0
$4,050
19
H
Loan rebates received from husband to personal account
$0
$1,620
20
J
Joint accounts drained by wife
$109,771
21
J
Cash withdrawals from wife accounts
$143,635
22
J
Mortgage, Rates, Water, Insurance, from September 2019 to May 2022
$54,870
TOTAL
$308,276
$45,593
LIABILITIES
23
J
Home mortgage
$268,000
$268,000
24
NK
Loan from Ms Q
$188,734
NIL
TOTAL
$456,734
$268,000
SUPERANNUATION
Member
Name of Fund
Type of Interest
Applicants Value
Respondents Value
25
H
Super Fund 1
Retirement saving account
$56,622
$56,622
26
W
Super Fund 2
Accumulation
$30,863
$30,863
27
H
Super Fund F USA account
$107,913
$107,913
28
W
USA Retirement account
$30,000
NIL
TOTAL
$225,398
$195,398
Disputed items on Balance Sheet
As can be seen from the document reproduced above, the parties were in dispute about a number items on the joint balance sheet. The court will address each disputed item in turn.
Assets
Item 4: The camper van (or caravan) in the wife’s possession
The husband conceded during his final submissions that the camper van, which was not valued for the purposes of these property proceedings, is probably worth about $1,000.[25]
[25] Pursuant to Exhibit “G”
Accordingly the camper van will be included in the revised balance sheet at the agreed value of $1,000.
Item 6: The antique collection
Neither party provided evidence about the antique collection in their trial affidavit. The husband’s evidence in cross examination was vague. He said that the collection consists of seventeen items owned in partnership with a deceased person, who died leaving a widow. The collection is stored in a safe in the USA and, for reasons which are unclear, the safe cannot be opened currently. The collection has not been valued. The husband contends that it has no value.
In the absence of any admissible evidence about the value of the collection, the court cannot attribute a value it. During final submissions, the wife’s solicitor’s sensibly conceded that the wife no longer pressed for inclusion of the antique collection in the revised balance sheet, and therefore it is omitted.
Item 7: The Bank E accounts in the husband’s sole name
In his financial statement filed on 12 May 2022 the husband deposes that:
“[Bank E] account in my name not added due to being locked out of the accounts by the applicant in 2019 unknown amount” (sic).
In Part D of his case outline filed on 15 June 2022 the husband contended that his financial resources include:
(a)Bank E Main $ 3,714
(b)Bank E Savings $ 2,899
During the trial the parties agreed that the combined value of the husband’s Bank E accounts is AU$6,693.
The husband conceded during cross examination that in March 2019 the Bank E accounts had a value of US$12,716, and that since separation he has used some of the funds in the Bank E accounts, and that the wife has not had access to those funds, post separation. The husband’s case outline and his oral evidence was inconsistent with evidence he provided to the court in his financial statement.
During final submissions each party submitted that the value of the Bank E accounts is agreed to be AU$6,693. Accordingly the funds will be included in the revised balance sheet at that agreed value.
Item 8: Motor Vehicle 2 in husband’s name
During final submissions each party agreed that the Motor Vehicle 2 has a value of $7,700, which is at the low end of the private price guide in the RedBook document which was tendered into evidence on behalf of the wife.[26]
[26] Exhibit H
Accordingly the Motor Vehicle 2 will be included in the revised balance sheet at the current agreed value of AU$7,700.
Item 9: 2007 Motor Vehicle 1 in husband’s name
During final submissions each party agreed that the Motor Vehicle 1 has a value of $4,100, which is at the low end of the private price guide in the RedBook document tendered into evidence on behalf of the wife.[27]
[27] Exhibit I
Accordingly the Motor Vehicle 1 will be included in the revised balance sheet at the current agreed value of AU$4,100.
Item 11: Value of AC Life Insurance policies held in the husband’s name
The husband provided no evidence in his trial affidavit about this asset. The only information he provides in his written evidence is in his financial statement where he attributes a value to that asset of $0.
At the outset of the trial the husband contended that the surrender value of the policies is $10,421, whereas the wife contended that the surrender value is $19,421. During cross examination the husband agreed that the policies have a surrender value of AU$15,800, and that only he can withdraw the funds.
The husband submitted that the children are the beneficiaries of the policies, and that the cash value may be applied to pay the premiums, if not paid from another source. He provided no evidence in support of those submissions.
Taking into account the husband’s concession that he is the only person who can withdraw the funds, I attribute ownership of the funds to the husband.
108. The AC Life Insurance policies will be included in the revised balance sheet at the agreed value of AU$15,800.
Item 12: wife’s rings
The husband originally contended for inclusion of the wife’s rings at a value of AU$15,000. The rings were not valued for the purposes of these proceedings.
The unchallenged evidence of the wife is that she sold her engagement ring for AU$500 online, and threw her wedding band into the ocean on the day the divorce was finalised[28]. The wife says that the wedding band “had little monetary value at the time of purchase”.
[28] Wife’s affidavit paragraph 78
During final submissions the husband said that he accepted the wife’s evidence that she sold her engagement ring online for the sum of AU$500.
Although the ring has been sold, the parties agree that the value of it will be included in the revised balance sheet as an asset of the wife.
The wife’s ring will be included in the revised balance sheet at the agreed value of AU$500.
Item 13: household items
The husband originally contended for inclusion of household items which he alleges the wife removed from B Street, Suburb C without his consent. In the absence of any expert evidence, the husband estimated that the items have a current value of $20,000. He agreed during cross examination that his estimate is based on what it might cost him to replace the items.
The wife disputes that she took household items from the home worth $20,000. She contends that the household items ought not to be included in the balance sheet. Her unchallenged evidence is that:
“The majority of mine and [Mr Vergana]’s furniture and other household items remained at the home at [B Street, Suburb C] after the children and I moved out. On 7 September 2019 I took clothes for the children and I and some personal effects. I returned after this date and I recovered from the house some furniture lent ot [Mr Vergana] ad I by my sister, and items mostly for the children. I needed to purchase items for myself and children by way of furniture, large electrical items, computes, kitchen appliances, linen and other personal items”[29].
[29] Wife’s affidavit paragraph 73
The husband conceded during final submissions that the household items may be ignored, and that he does not press for inclusion of item 13.
Accordingly item 13 can be deleted from the revised balance sheet.
Proposed Addbacks
The parties dispute extended to whether or not each of the proposed “addbacks”, or notional items of property, will be taken into account on the balance sheet:
(a)Items 14 – 17: $39,923 estimated to have been tithed by the husband to various churches, charities and associates since separation;
(b)Item 18: $4,050 Hardship loan repayments not made by husband;
(c)Item 19: $1,620 Loan rebates received to husband’s personal account;
(a)Item 20: $109,771 alleged to have been withdrawn by the wife from the joint bank account post separation;
(b)Item 21: $143,635 alleged to have been withdrawn in cash from the wife’s accounts since separation;
(c)Item 22: $54,870 which the husband contends is the amount he has paid for mortgage, rates, insurance from September 2019 to May 2022.
In determining the issue of “addbacks” the court has regard to the decision of the Full Court of the Family Court of Australia in AJO & GRO[30] and in particular the three clear categories of cases where it has been determined that it is appropriate to notionally add back into the pool assets which no longer exist.
[30] (2005) FLC 93-218 at 79,617; 79,618
Each disputed “addback” items is addressed below in turn.
Items 14 – 17: Tithing by the husband
The husband’s conceded that, during the period from September 2019 until May 2022, he has tithed a sum of money, estimated to amount to $39,923.
The wife urges the court to find that the husband’s tithing, post separation, falls within a category of expenditure which would justify the court “adding back” to the pool the amount tithed and distributing it to the husband. During final submissions the wife’s solicitor did not specify what category the husband’s expenditure falls into, in terms of the settled case law on addbacks. He submitted that if the husband had not tithed in the period September 2021 through to November 2021 then he could have applied the tithed monies to pay the mortgage, instead of seeking a moratorium. I infer from the wife’s evidence that she relies upon one of the circumstances outlined in AJO & GRO[31], in particular the conduct referred to by Baker J in Kowaliw[32]:
…where one of the parties has acted recklessly, negligently or wantonly with matrimonial assets, the overall effect of which has reduced or minimised their value
[31]Op cit at paragraph 30 (a)
[32](1981) FLC 91-092
The husband’s evidence is that the parties agreed during the marriage that they would pay 10% of their wages to the church by way tithing[33]. He says that, in furtherance of their agreement, the parties tithed while living in City J, City N and City R.[34] He annexes documents to his affidavit which establish that tithes were paid by the parties regularly throughout 2014, and during the first half of 2015.[35]
[33] Husband’s affidavit paragraph 17
[34] Husband’s affidavit paragraph 28
[35] Husband’s affidavit Annexures B1 and B2
The wife says that, prior to September 2018 when she discovered that the husband had been transferring joint funds into a tithing account since mid-2018, as far as she was aware the husband had not been paying tithes “of any significant value” to any church[36].
[36] Wife’s affidavit paragraphs 59-60
I find that the wife was aware that the husband was paying tithes, just “not of any significant value”
It is common ground that the family moved to City R in 2011 because the husband wanted to establish a church there. The children attended AE School in City R, and have attended AL School since moving to Australia in 2015.
The husband has tithed, since separation, predominantly from his post separation income, apart from the funds he accumulated in his tithing account in 2018, half of which were transferred to the wife in late October 2018. I accept the husband’s unchallenged evidence that he is a Christian, that he continues to practise his faith, and that his practice includes supporting the church through tithing.
I have carefully reviewed the husband’s bank account statements which are in evidence, including for the period from 16 September 2021 through to 31 December 2021.[37] It is clear that the final payment into the husband’s bank account from his employer at the time of his redundancy was $13,220.77 received on 16 September 2021. On 17 September 2021 the husband tithed $2,000. It appears that there was no further tithe paid from his bank account until 14 December 2021 in the sum of $100, after the husband resumed paid employment in early December 2021. The husband resumed making the monthly mortgage payment on 31 December 2021. The husband’s tithing practices are consistent with his evidence that he pays ten per cent of his income to the church. I find that the tithes were paid from the husband’s income.
[37] Exhibit
Although the categories of addbacks discussed in AJO & GRO are not exhaustive, in my view the wife has failed to demonstrate why it is appropriate to addback any amount on account of the husband’s tithing. Taking into account the husbands’ Christian faith and practices, and that the tithes sought to be added back were paid from his post separation income, I am not persuaded that he has acted recklessly, negligently or wantonly with matrimonial assets.
I decline to addback the sums referred to in items 14 through 17 inclusive and accordingly those items are omitted from the revised balance sheet.
Item 18: Hardship loan repayments not made by husband $4,050
The wife contends that the loan repayments not made by the husband, for the months of September 2021 through to November 2021 inclusive, ought to be added back to the pool and distributed to the husband. As noted previously, the wife submits that tithes paid when the husband did not pay the mortgage could have been applied to pay the mortgage instead. The husband opposes the proposed addback. When the wife’s solicitor asked the husband why he paid the tithes, instead of the mortgage, the husband said “I don’t co-mingle God’s money”.
The husband was made redundant from his employment in September 2021 and he did not engage in further paid employment until early December 2021. He applied to the Bank D for a three month moratorium on the loan repayments for B Street, Suburb C. The Bank D granted his request and he did not make the monthly loan repayments, in the sum of $1,328, during the months of September 2021, October 2021 and November 2021. Upon regaining his employment in December 2021 he re-commenced making the loan repayments.
Having regard to the categories in AJO & GRO, and the husband’s circumstances at the relevant time, I am not persuaded to addback any amount on account of the husband not having made the loan repayments for a period of three months in 2021 due to hardship.
Accordingly item 18 is omitted from the revised balance sheet.
Item 19: $1,620 Loan rebates received to husband’s personal account
There was no evidence at all in respect of this item. Absent evidence, the court will not add back the amount.
Item 19 will be omitted from the revised balance sheet.
Item 20: $109,771 alleged to have been withdrawn by the wife from joint bank account post separation, and
Item 21: $143,635 alleged to have been withdrawn in cash from the wife’s accounts since separation
These items will be addressed together as they are related.
The evidence is clear that the wife has not had access to funds amounting to $253,406, in either a joint account or in her own personal account, at any relevant time. The husband’s contentions as to these addbacks logically include double counting, and he conceded as much during his final submissions, when he informed the court that item 21 can be omitted.
The wife opposes adding back any amount spent by her post-separation. Her solicitor submitted that the amount she actually spent is not extraordinary in the context of her reasonable living expenses. Further, not all of the funds withdrawn by the wife from the joint back account have been exhausted. She still has $32,000 in her bank account which is included in the joint balance sheet[38]. In October 2021 the wife paid $26,700 for the 2021 Motor Vehicle 3, and that asset is reflected in the joint balance sheet at the current value of $23,000.[39]
[38] Item 2
[39] Item 3
The wife’s unchallenged evidence is that in February 2019 the husband stopped having his wages paid into their joint account. On 26 March 2019 the wife transferred $72,000 from the joint account into an account in her sole name, leaving a balance in the joint account of $350. The husband subsequently transferred that balance to an account in his sole name. The joint account was then overdrawn and the wife paid the overdrawn amount and closed the account.
The wife says she transferred the funds from the joint account because she was genuinely concerned that the husband may remove the funds into a foreign bank account.
Between March 2019 and September 2019, while the parties were living separately and apart under the one roof, the wife used joint funds transferred to her account to make the loan repayments over B Street, Suburb C, to buy food, to pay school fees for the children, to pay sporting fees for the children, to pay for school camps for the children, to purchase school uniforms, pay car expenses, and meet other day-to-day expenses. Prior to her moving out of B Street, Suburb C, the wife estimates that the family’s monthly household expenses were between $3,000 and $6,000, in addition to the home loan repayments of approximately $1,300 per month.
I accept the wife’s evidence that, on average, the monthly expenses for the family were in the range of $4,300 to $7,300. Therefore, during the period from late March 2019 until early September 2019, about five and one half months, the wife spent likely between $23,650 and $40,000 from joint funds transferred on living expenses for the family, in circumstances where she and the husband were living separately under the one roof.
After the wife and the children moved out of B Street, Suburb C, on 7 September 2019, the wife applied some of the joint funds to pay her moving expenses, including setting up a three bedroom granny flat, which she rents from her sister Ms AM and her husband, and to assist her to pay for general living expenses, including expenses in relation to the children. The wife says that the majority of the parties’ furniture and other household items remained at B Street, Suburb C after she moved out. She took only the children’s clothes and personal effects. She later recovered some furniture which had been lent to the parties by her sister, and some of the children’s items.
The wife says that she needed to purchase items for herself and the children, including furniture, large electrical items, computers, kitchen appliances, linen and other personal effects. As noted previously, the wife purchased the Motor Vehicle 3 in October 2021 for $26,700.
In January 2022 the wife sold a Motor Vehicle 4 for $5000, and the money was put towards a new phone, the Motor Vehicle 3, and the expenses for the children and the wife in the school holidays[40].
[40] Wife’s affidavit paragraph 76
Having regard to the above evidence, the court is not satisfied that the wife has prematurely distributed to herself matrimonial assets, or that she deliberately embarked on a course of action designed to reduce or minimise the value of the joint funds, or that she has acted recklessly, negligently or wantonly with the funds. I consider that the wife’s use of the joint funds does not fall within a category of expenditure which would justify it being added back into the pool and distributed to the wife.
I will take into account, when I assess the contributions of the parties, the husband’s contribution to the joint funds used post separation by the wife, and weigh that contribution alongside other relevant contributions, including the wife’s greater post separation contribution to the welfare of the family made in her capacity as the parent responsible predominantly for the day to day care of the children.
Items 20 and 21 will be omitted from the revised balance sheet.
Item 22: $54,870 which the husband contends he has paid for home mortgage, rates, insurance from September 2019 to May 2022
The husband has enjoyed sole use and occupation of B Street, Suburb C, to the exclusion of the wife, since September 2019, when she moved out with the children and commence to rent accommodation which currently costs her $325 per week.
On 5 August 2020 Her Honour Judge Costigan ordered, by consent and pending further order, that the husband pay all fees associated with the property at B Street, Suburb C including the mortgage repayments, land rates and insurance.
On 16 December 2021 Her Honour Judge Kearney ordered that the husband have sole and exclusive use and occupation of B Street, Suburb C, and that he be responsible for payment of all the outgoings.
During final submissions the husband appropriately conceded that he no longer presses for any amount to be included as an addback to reflect the amount paid by him in respect of mortgage, rates and insurance during the relevant period.
Accordingly Item 22 will be omitted from the revised balance sheet.
Disputed alleged liability to husband’s mother Ms Q
Item 24: Proposed inclusion of liability for loan from Ms Q
The husband originally asserted that the parties owed Ms Q $188,734[41]. The evidence of the husband and Ms Q does not reveal how that sum was calculated.
[41] Exhibit D, Part D page 4
The wife is 49 years of age. There is no evidence as to her state of health
Section 75(2)(b) the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment
The husband works five days each week for Company AN as a customer service officer. He discloses that he earns on average $50,000 per annum. He agreed with the wife’s solicitor during cross examination that he has experience across a range of industries, and that over the years he has had many different jobs.
He conceded that in October 2021 he obtained an Australian Business Number as a sole trader. He told the court “I was going to try and start my own business”. He denied that he was waiting until the property proceedings were over to start a business. He said that he has a technology background as a sales person and that he was planning to assist smaller technology companies who don’t have their own sales person, but that he found it impossible to get quick turnover and that many smaller businesses are “flaky”.
I take into account that the husband has adapted himself to a range of different income producing activities and that his employment prospects have not been impacted at any time during the marriage by the need for him to provide full time care for the children and undertake home duties, as I have accepted that the parties mutually agreed that those duties would be undertaken by the wife.
The husband is currently gainfully employed and I find that he has the capacity to remain employed in the foreseeable future.
The husband currently owns a one half share in B Street, Suburb C with the wife. B Street, Suburb C is subject to a loan, which the husband is currently required to repay weekly in the sum of $337. Otherwise the husband owns:
Bank E account
$ 6,693
Motor Vehicle 2
$ 7,700
Motor Vehicle 1
$ 4,100
AC Life Insurance
$ 15,800
Super Fund 1
$ 56,622
Super Fund F USA Retirement account
$107,913
The husband does not disclose an income generated from his assets.
The wife works as a carer. She discloses an average income of $54,000 per annum from her employment.
The wife currently owns a one half share in B Street, Suburb C with the husband, which is subject to a loan. Otherwise the wife owns:
Bank G
$32,000
Motor Vehicle 3
$ 23,000
Camper Van
$ 1,000
NAB account
$ 160
Wedding ring
$ 500
Super Fund 2
$30,863
The wife does not disclose an income generated from her assets.
Section 75(2)(c) whether either party has the care and control of a child of the marriage who has not attained the age of 18 years
The two children live with the wife, X will turn 18 in 2023, and was in Year 11 in 2022 and, according to the wife, he intends to go to University.
Y will turn 16 years of age shortly.
I take into account that the husband has, at times, prioritised his own needs over those of the children by failing to adhere to the arrangements set out in the final parenting orders, and that the wife has been impacted by his choices in this regard.
Section 75(2)(d) commitments of each of the parties that are necessary to enable the party to support:
himself or herself
The husband discloses weekly expenditure of $621.
The wife discloses weekly expenditure of $1,154, which includes some expenditure for the children.
Section 75(2)(e) the responsibilities of either party to support any other person
Other than the children, neither party discloses that they have the responsibility to support any person except themselves.
Section 75(2)(f) subject to subsection (3), the eligibility of either party for a pension, allowance or benefit under:
any law of the Commonwealth, of a State or Territory or of another country; or
any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia;
and the rate of any such pension, allowance or benefit being paid to either party
There is no evidence as to the eligibility of either party for a pension, allowance or benefit, however in the wife’s financial statement she discloses that she is in receipt of Family Tax Benefit A and B in the sum of E$160 per week and a NSW Transport allowance in the sum of E$20 per week.
Section 75(2)(k) the duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration
I consider that the duration of the marriage had no impact on the earning capacity of the husband.
I take into account that the wife was out of the work force between early 2006 and 2011, and consider that this likely impacted her future employment opportunities. She has been engaged in her current employment for the past 7 years.
I consider that overall the wife’s capacity to earn an income is more limited than the husband’s capacity due to the more limited opportunities she had to engage in paid employment during the marriage, compared to the husband, and the impact of those more limited opportunities she had to gain education, training and experience during that period.
Section 75(2) (l) the need to protect a party who wishes to continue that party's role as a parent.
I consider that the wife’s current employment as a carer assists her to combine her day to day parenting responsibilities with the need to provide financially for herself and the children. Her current employment is protective of her role as a parent. If she undertook alternative employment which may not permit flexibility to supervise the children before and after school, and during school holiday periods, then her role as a parent would likely be significantly impacted.
Section 75(2) (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;
The wife applied for child support assessment while the parties were living separately and apart under the one roof, and I am satisfied that the husband has paid child support since that time.
On top of the $120.00 per month that the husband is assessed to pay to the wife for the support of the children, he is also required to contribute one half of their annual private school fees, which amount to $813 per month.
The husband accepted the proposition put to him by the solicitor for the wife that the $120 per month he pays to the wife for the support of the children is not much money to assist her in providing for their needs on a day to day basis, which the wife sets out in her financial statement, and in her affidavit. [57]
Section 75(2)(n) the terms of any order made or proposed to be made under s 79 in relation to:
[57] At paragraph 105
(i) the property of the parties
The property orders which the court proposes to make result in the husband having the benefit of a cash payment from the wife, and he will retain his current cash reserves, including those in the USA, which he can use to re-house himself. He will retain his motor cars and his Life Insurance, his Super Fund F USA account and his Australian superannuation funds intact. Instead of paying the mortgage repayments, and unless he is able pay a deposit on a real property and obtain finance to purchase a home, the husband will likely have to pay rent for the foreseeable future.
The wife will retain the real property, and she will have to refinance the existing loan and borrow a further $74, to pay the husband. Instead of paying rent the wife will have to make the mortgage repayments and pay the rates and other outgoings.
She will retain her car and her savings, the unregistered caravan, and her modest superannuation.
Section 75(2) (o) any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account;
I have disregarded the asserted indebtedness of the parties to Ms Q for the purposes of identifying and valuing their liabilities when ascertaining the property to be divided. I cannot entirely discount the prospect that there may be some future accounting for it, and I take account of that prospect.
In Af Pertersens[58] Nygh J observed that:
“It is fairly common in this Court to meet a situation where a parent has made loan to a child which is in all respects legally enforceable, but which is not in fact enforced and would not really be expected to be enforced. It is no doubt an “obligation” but if the obligation is not likely to have to be met, it should not be taken into account”
[58] At 76,669
Ms Q has clearly been prepared to wait for her money. Had the marriage endured then perhaps she may have been prepared to wait indefinitely, but the marriage broke down and she has apparently subsequently decided to request repayment.
The evidence in this case is that the husband has not treated the obligation to his mother as an immediately pressing need. There is no record of any repayment of the debt or interest. There was no security offered to the mother. The husband and wife have sold chattels, bought B Street, Suburb C, made applications for bank loans omitting any reference to the debt to Ms Q and, accumulated joint savings prior to separation without paying her any amount.
I consider that it is likely that Ms Q will l continue to be patient and forbearing with the husband in relation to the repayment of any amount of the debt due to her, and that the husband will continue to prioritise his other financial commitments over and above meeting any obligation he has to repay his mother.
The vagaries surrounding the liability, against the history of no request or demand being made until 25 March 2019, and in circumstances were the liability may be statute barred, or has been waived, render it of little weight.
Conclusion as to section 75(2)
The factors which principally favour the wife are that she has a relatively modest income earning capacity, with little opportunity to increase such capacity in the immediate future. She has the responsibility to provide primary care for the older child between now and at least until he finishes school. She has the primary care of the younger child for at least the next two years until she attains 18 years of age, or finishes school. The husband currently pays child support in the sum of about $27 per week, and there is no evidence as to whether he intends to continue to pay the wife any amount to assist her to support X after he attains 18 years, apart from paying one half of his school fees.
I consider that there are no factors which principally favour the husband over the wife. He is only four years older than the wife. He does not have the primary care for the children and, unlike the wife, his income earning capacity has not been affected by the duration of the marriage.
Having regard to the matters referred to above and taking into account the relatively modest pool of assets, the court concludes that there should be an adjustment of five per centum (5%) in favour of the wife for matters under s 75(2).
In dollar terms this will result in the wife receiving an additional sum of $31,367, over and above her equal entitlement pursuant to the contribution assessment, which I consider is appropriate and just and equitable taking into account the relevant matters.
Overall division of property
The above determinations will see the wife receive fifty five per centum (55%) of the net asset pool, and the husband will receive forty five per centum (45%) of the net asset pool, which I consider overall is an appropriate, just and equitable outcome.
During his evidence in cross examination the husband was clear to say that he has the capacity to refinance the existing mortgage in respect of B Street, Suburb C, but if he has to pay the wife any amount of money by way of cash adjustment then he cannot afford to retain B Street, Suburb C, even if the court adopts his proposal that there be an equal division of the net assets. His evidence was clear that he cannot raise the funds required to refinance the existing mortgage and pay the wife.
The wife proposed that she keep B Street, Suburb C and refinance the loan. Unlike the husband, the wife submitted that she wants to keep B Street, Suburb C even in the event that the court determines that a cash payment to the husband is required in order to do justice between the parties.
CONCLUSION
I have found that the gross pool of property and superannuation is valued at $895,340. After deduction of the mortgage of $268,000 the net value of the pool amounts to $627,340.
In order to achieve an outcome whereby the wife is entitled to property with a value equivalent to 55% of the net pool she will need to receive property with a total value of $345,037.This can be achieved by her holding or having the benefit of the following property:
B Street, Suburb C
$600,000
Bank G
$ 32,000
Motor Vehicle 3
$ 23,000
Camper Van
$ 1,000
NAB account
$ 160
Wedding ring
$ 500
Super Fund 2
$ 30,863
$687,523
LESS
Home mortgage
$268,000
Cash payment to husband
$ 74,486
Net value of property retained by wife
$345,037
In order to achieve a result whereby the husband will receive his entitlement to assets with a value equivalent to 45% of the net pool he will need to receive property with a total value of $ 282,303
This can be achieved by the husband holding or having the benefit of the following property:
Cash payment from wife
$ 74,486
NAB account
$ 8,989
Bank E account
$ 6,693
Motor Vehicle 2
$ 7,700
Motor Vehicle 1
$ 4,100
AC Life Insurance
$ 15,800
Super Fund 1
$ 56,622
Super Fund F USA Retirement account
$107,913
Net value of property retained by husband
$282,303
The court considers that the orders set out at the forefront of these reasons are the orders which are just and equitable in the circumstances of this case.
COSTS
The wife sought an order for costs against the husband in these proceedings.
It is not appropriate in my view to deal with costs until after delivery of judgment and once the parties have had an opportunity to consider these reasons. The orders will make provision for any application regarding costs to be filed within 28 days of the date of these orders.
I certify that the preceding two hundred and sixty-five (265) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Carty. Associate:
Dated: 27 January 2023
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