Walls and Walls
[2011] FMCAfam 882
•6 September 2011
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| WALLS & WALLS | [2011] FMCAfam 882 |
| FAMILY LAW – Alteration of property interests – non-disclosure. |
| Family Law Act 1975, ss.75(2), 79 (4)(d)-(g) |
| Black & Kellner (1992) FLC 92-287 Giunti & Giunti (1986) FLC 91-759 Hickey & Hickey & Attorney-General of the Commonwealth of Australia (Intervener) (2003) FLC 93-143 Mezzacappa & Mezzacappa (1987) 11 Fam LR 957; (1987) FLC 91-853 Weir (1993) FLC 92-338 |
| Applicant: | MS WALLS |
| Respondent: | MR WALLS |
| File Number: | SYC 4842 of 2010 |
| Judgment of: | Altobelli FM |
| Hearing dates: | 10 May 2011 & 29 July 2011 |
| Date of Last Submission: | 29 July 2011 |
| Delivered at: | Sydney |
| Delivered on: | 6 September 2011 |
REPRESENTATION
| Counsel for the Applicant: | Mr Packer |
| Solicitors for the Applicant: | Shead Lawyers |
| Respondent: | Self-represented litigant |
ORDERS
THE COURT ORDERS:
That Husband and Wife shall jointly co-operate to take all necessary steps and execute all necessary documents to effect the sale of the property situate and known as Property B, [B] Queensland (the Queensland property), being the whole of the land contained in Lot [omitted], and by way of consequential arrangement that shall be made for the purposes of effecting a sale:
(a)That the Wife have the carriage of the sale of Queensland property;
(b)Give such instructions to Shead Lawyers or their Queensland solicitors agents, for the preparation of an appropriate contract of sale and other documents as are necessary for the sale of the Queensland property;
(c)Upon completion of the sale of the Queensland property, the proceeds be applied as follows:
(i) in payment of the amount required to discharge the mortgage registered to Commonwealth Bank of Australia Limited over the Queensland property;
(ii) in payment of agent’s commission and expenses if any due on the sale;
(iii) in payment of legal costs of the sale;
(iv) the payment of the balance of proceeds to the Wife.
That the Court allocates, as required by Section 90MT(4) of the Family Law Act 1975, a base amount of $23,169.00 to the Applicant Ms Walls out of the Respondent Mr Walls’ interest in the [C] Super Retirement Fund [C] Umbrella Financial Plan (Contract No [omitted]) Superannuation Fund.
That, in accordance with Section 90MT(1)(a) of the Family Law Act 1975:
(a) the Applicant Ms Walls is entitled to be paid, using the base amount allocated in the immediately preceding order, the amount calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001; and
(b) the entitlement of Mr Walls in the [C] Super Retirement Fund [C] Umbrella Financial Plan (Contract No [omitted]) Superannuation Fund (or the entitlement of such other person who becomes entitled to receive a payment out of Mr Walls’ superannuation interest) is correspondingly reduced by force of this Order.
That the trustee of the [C] Super Retirement Fund [C] Umbrella Financial Plan (Contract No [omitted]) Superannuation Fund ("the trustee") shall do all such acts and things and sign all such documents as may be necessary to:
(a) calculate, in accordance with the requirements of the Family Law Act 1975 the entitlement awarded to the Ms Walls in the immediately preceding clause of this Order; and
(b) pay the entitlement whenever the trustee makes a splittable payment from Mr Walls’ interest in the [C] Super Retirement Fund [C] Umbrella Financial Plan (Contract No [omitted]) Superannuation Fund.
That this order has effect from the operative time and the operative time is 4th business day after the day on which the within Orders were made.
That, after service of the payment split notice in accordance with the Superannuation Industry (Supervision) Regulations 1994 ("the SIS Regulations"), Mr Walls shall do all such things and sign all such documents as may be necessary, including but not limited to exercising the Ms Walls’ request in accordance with the SIS Regulations, for the rollover or transfer of the non-member spouse interest to a complying superannuation fund of the Ms Walls choosing in accordance with the SIS Regulations.
The wife be solely entitled to Holden Astra sedan registered number [omitted].
That the wife be solely entitled to all benefits and funds in any superannuation fund in her name.
That the wife be solely entitled to all funds in any bank account in her name.
That in the event that either party refuses or neglects to execute a deed and/or instrument in compliance with the provisions of this order, the Registrar or Deputy Registrar of the Family Court of Australia at Sydney is hereby appointed pursuant to section 106A of the Family Law Act 1975 to execute all deeds and/or instruments in the name of the wife and do all acts and things to give validity and operation to the deeds and/or instruments.
IT IS NOTED that publication of this judgment under the pseudonym Walls & Walls is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
SYC 4842 of 2010
| MS WALLS |
Applicant
And
| MR WALLS |
Respondent
REASONS FOR JUDGMENT
Introduction and background
The wife claims in this case that the husband has, somewhat like Harry Potter’s cloak of invisibility, covered up the true extent of his income, assets and resources. This case is primarily about non-disclosure and, if it has occurred, what impact that has on the alteration of property interests between the parties.
The applicant wife is 35 years old and the respondent husband 45. They commenced cohabitation in August 1996 when she was 19 and he 29. They have three children of the marriage who are currently eight, seven and four, who live with the wife and spend substantial and significant time with the husband. Whilst the parties commenced cohabitation in August 1996, they separated in May 2000, resumed cohabitation in January 2001, married in August 2005 and separated on a final basis from February 2010, initially under the same roof but with physical separation from July 2010.
It is the wife’s case that the husband was secretive about his financial and business affairs throughout their relationship. She claims she has little knowledge of his financial affairs. There is an issue about what assets they each had at the date of cohabitation. There is an issue about what is the true level of the husband’s income, assets and financial resources as at the date of the hearing.
The known assets available for distribution between the parties are relatively modest, but the wife asserts that there are other assets in respect of which the husband has not made disclosure.
During the relationship, the husband was a professional [omitted] who then retired and commenced to operate a business through which he provided his own services for various [omitted] related activities. It is also uncontentious that the wife worked throughout the relationship apart from periods of maternity leave. It is also relatively uncontentious that she was the primary caregiver for the children as well as took responsibility for most of the homemaking duties. The wife asserts that the husband has substantial business interests in New Zealand which are available to him, at the very least, as a financial resource. The husband, who represented himself at the final hearing, actually says very little about his financial affairs both here in Australia and in New Zealand.
It will be necessary to undertake a quite detailed examination of the husband’s financial affairs, to the extent that this is known to the court.
Evidence in this case was adduced on behalf of both parties. Both were cross-examined. The husband represented himself but demonstrated to me that he was an intelligent and articulate man who was quite capable of cross-examining his former wife in relation to relevant matters. The wife was represented by her counsel, Dr Packer. In addition to the affidavits of the respective parties, there was a considerable volume of subpoenaed documents tendered in evidence, some of which I will refer to below.
On behalf of the wife, Dr Packer’s submission was that the wife should receive the majority of the known matrimonial assets. Indeed, on her proposal, the husband would receive no cash and would retain a very small amount of superannuation. The wife’s case, of course, is that the known asset pool does not reflect the reality of the assets and resources available to the husband, and hence she should receive a significantly greater share of the known assets, to reflect the contribution she has made, her section 75(2) entitlements, and the uncertainty created by what she says was the husband’s failure to disclose. The husband articulated his proposal to the court in terms of receiving $50,000 cash out of the sale proceeds of a property in Queensland, and with each party retaining their respective superannuation entitlements.
The pool of assets, resources and liabilities
On behalf of the wife the following list of assets and liabilities was presented to the court as the known asset pool:
| ASSETS | VALUE ($) E |
| Property B | 270,000 |
| [omitted] shares | 2,975 |
| 2002 Holden Astra | 11,000 |
| Bank accounts (Ms Walls) | 700 |
| [F] Super (Ms Walls) | 44,540 |
| Property M (7/10) | 560,000 |
| BMW station wagon | 22,000 |
| Bank accounts | 1,200 |
| Walls Family Trust (Christchurch New Zealand house & business) (Mr Walls) | Not Known |
| [C] Superannuation (Mr Walls) | 57,000 |
| Total Assets: | $969,415.00 |
| LIABILITIES | VALUE ($) E |
| Commonwealth Bank mortgage - Property B | 146,000 |
| Toyota finance - 2002 Holden Astra | 11,000 |
| Credit Cards - Ms Walls | 6,900 |
| Homeside mortgage - Property M | 699,000 |
| Mr P personal loan to Mr Walls | 50,000 |
| BMW finance - BMW station wagon | 22,000 |
| Credit cards – Mr Walls | 14,200 |
| Liability to Applicant’s brother Mr M Property B | E 117,500 |
| Estimated CGT liability Property B | E 30,000 |
| Total Liabilities: | $1,096,600.00 |
Doing the best I can to understand the husband’s position as regards the pool of assets, he did not articulate any disagreement except in relation to these matters. Firstly, he asserted (implicitly, if not explicitly) that his interest in the Walls family trust was nil because he was a mere discretionary beneficiary of the same. His case also was that the wife, in fact, did not have a liability to her brother, Mr M, which liability would need to be paid on the sale of the said property. These are matters in respect of which I will need to make findings.
Despite the alleged issues of non-disclosure, the alteration of property interest between the parties can be simplified in a number of ways. For example, there is no dispute that the husband should retain his interest in the property at Property M in [M], together with the liabilities attributable to it which includes not just the Homeside mortgage but the Mr P personal loan. Indeed, in relation to the [M] property, no other alternative was possible given that Mr P is a part owner of the property and had not been joined to the proceedings. It was also uncontentious that the husband would retain his BMW station wagon. Indeed, for all practical purposes, the only assets available for distribution between the husband and the wife was the equity in the property at Property B, [B] in Queensland, together with the husband’s superannuation entitlement.
In any event, and subject to my observations above, the pool of assets that is known to the court, and conceded by the husband, is as set out in the schedule above.
Applicable Law
The preferred approach to the determination of an application under s.79 of the Family Law Act is set out in a passage found in the Full Court’s decision in Hickey & Hickey & Attorney-General of the Commonwealth of Australia (Intervener) (2003) FLC 93-143 at 39.
The Full Court states that there are four inter-related steps:
a)Identify and value the property, liabilities and financial resources of the parties; and
b)Identify and assess the contributions of the parties and express them as a percentage of the net value of the property; and
c)Identify and assess the other facts relevant under s.79(4)(d)-(g) including s.75(2) and determine the adjustment (if any) to be made to the contribution entitlements at step two; and
d)Consider the effect of the above and resolve what order is just and equitable in all the circumstances.
A significant issue in this matter was the alleged non-disclosure of the husband. Attempting to deal with non-disclosure often puts the other spouse to considerable difficulty with regards to investigating their financial affairs. The Full Court in Weir (1993) FLC 92-338 at 79,593–4 made the following statement regarding the duty to disclose and the Court’s powers where non-disclosure has been found:
This Court has pointed out in a line of cases leading up to the recent decision of the Full Court in Black & Kellner (1992) FLC 92-287, that it is the duty of a party involved in property proceedings in this jurisdiction to make a full disclosure of their financial affairs. See also Giunti & Giunti (1986) FLC 91-759, and Mezzacappa & Mezzacappa (1987) 11 Fam LR 957; (1987) FLC 91-853. It is clear enough from his Honour's findings in the present case that the husband had not done so and had in fact pocketed the proceeds of a substantial number of cash sales. It is obvious that in most cases of this nature it is difficult enough for the other party to establish that fact let alone establish the quantum of what has been taken.
It seems to us that once it has been established that there has been a deliberate non-disclosure, which follows from his Honour's findings in this case, then the Court should not be unduly cautious about making findings in favour of the innocent party. To do otherwise might be thought to provide a charter for fraud in proceedings of this nature…
We appreciate that this is something of a broad brush approach, but, as we have said, where there is clear evidence of non-disclosure as there was here, the Court should not be unduly cautious about making findings in favour of the other party. It has been said by one commentator (O'Ryan and Broadfoot, 5th National Family Law Conference Handbook, p 249) the failure to disclose undermines the whole process of adjudication of proceedings for a settlement of property in that the court is unable to identify the property of the parties, to properly assess contribution, or to properly assess s 75(2) factors.
Non-disclosure issues
Whether or not the husband has failed to disclose the true extent of his assets, liabilities and resources to the court depends on the evidence about his financial circumstances, including whether the husband, in fact, has assets or resources available to him in New Zealand.
In the husband’s financial statement sworn 13 September 2010, prepared by the husband’s former solicitors, he discloses at item 56 that he has a financial resource in that he is one of five discretionary beneficiaries of the Walls Family Trust in New Zealand. He sets out no value of this interest. In the husband’s affidavit sworn 13 September 2010, again prepared by his solicitors, at paragraph 17 he confirms this and explains that his four children are the other discretionary beneficiaries of the trust. He says nothing of substance about the assets of the trust in his affidavit. He sets out no evidence about his involvement in the control or management of the trust, or of the distributions and/or other benefits he has received from the same.
At paragraph 11 of the husband’s said affidavit he deposes that when cohabitation commenced with the wife in 1997, all he had received from the property settlement with his previous wife was his car and superannuation. The wife’s case, of course, is that he has failed to disclose the true nature and extent of his New Zealand business and personal interests.
As it turns out, in fact, the best evidence available to the court about these issues is in the Family Court of Australia file PAF4187/2001. This file relates to the property proceedings between the husband and his former wife. The consent orders dated 28 August 2006 provided for the husband and his first wife to enter into the following settlement. The consent orders indicate that the parties would sell the former matrimonial home with the wife receiving the balance of the sale proceeds. In addition, the husband would pay to his former wife $20,000 by a stated date. Relevantly, order 7 provided as follows:
That the husband is hereby declared, as between he and the wife, the sole owner of the companies and business interests and in trusts herein referred to and that the wife shall forthwith then do all acts and things and execute all deeds and documents required to transfer to the husband her interest in same:
(a) [H] Limited
(b) [T] Limited
(c) [V] Limited
(d) [C] Limited
(e) [L] Limited
(f) The Walls Family Trust and/or the [W] Trust
(g) The [K] Trustees] Limited
(h) The [G] Partnership
(i) [W] Limited
(j) [D] Limited
Even relying on this one document alone, a reasonable inference to draw is that the husband attributed some value to the assets referred to in order 7.
In the husband’s financial statement sworn 24 August 2006, the only value attributable to these items is described in item 56 as $148,000 for the Walls Family Trust. There are no liabilities disclosed for the trust, but the husband does disclose various personal borrowings totalling $185,000 at item 53 of his financial statement. This included personal borrowings from his parents ($31,000), from [H] Limited ($114,000), and Mr C ($40,000) for mortgage repayments and living expenses.
In a document entitled “Respondent husband’s summary of argument”, the assets, resources and liabilities referred to above are confirmed. There is no evidence, however, to link the liabilities to the trust and, indeed, there is no explanation of these liabilities. The summary of argument document does contain a useful chronology, however, which provides, potentially, a far deeper understanding of the husband’s financial circumstances as at 2006 than any evidence that the husband himself provides. [H] Limited was incorporated in July 1993 with the husband’s mother as director, and with the husband lending the company NZ$90,000 for the purpose of the purchase of the [L] business. In March 1994, the Walls Family Trust (previously the [W] Trust) was set up. The husband is appointor and the trustee is [K] Trustees] Limited. The husband is a director of that company but otherwise has no interest. In 1996, the hotel at [L] was sold and the loan of approximately NZ$90,000 was repaid to the husband. In 1997, there is a note that [LC] business runs [TRB] business which opens.
In February 1998, [T] was incorporated with the husband appointed as a director and holding 10 of the issued shares jointly with Mrs and
Mr W, his parents. In 1999, the husband commenced an investment in Queensland with shares in [V] Limited and [C] Limited at Port Douglas. [C] Limited was actually incorporated in May 1999. The husband was a director, together with two others, each of whom held 100 of the 300 issued shares of the company. The company was subsequently struck off the register of companies in January 2003. In February 2001, [L] Limited was incorporated and the husband appointed a director. His mother was the other director and, apparently, through the Walls Family Trust, the husband held 501 shares.
What is patently obvious from the documents that the husband himself provided to the court in his previous property settlement proceeding is that there is a wealth of relevant information not disclosed in the present proceedings. I am satisfied that the husband either personally knew, or should have been able to find out, about all of the matters referred to above. His assertion at paragraph 12 of his affidavit that when he and his first wife completed his property settlement in 2006, all he was left was his car and superannuation, is patently incorrect.
The husband gives no evidence about any of the entities referred to above apart from the Walls Family Trust. In these circumstances, I consider myself able to draw the inference against the husband that he still retains some or all of these assets and resources. That inference is strengthened by evidence about income received from overseas, to which I will shortly refer. It was his obligation to disclose the existence of these things to the court. Even if he had merely asserted to the court that these entities and his business interests no longer existed, it would be more evidence than that which he did provide to the court. In these circumstances, the failure to disclose entitles me to draw an inference against him.
Having said this, it must be noted that on the wife’s case there is no assertion that she made any contribution to any assets and/or resources that the husband has either in Australia or in New Zealand, that he has not disclosed to the court. Obviously, the wife is unable to attribute any value to this.
It is also the wife’s case that the husband has not disclosed his current income. In the husband’s financial statement sworn 13 September 2010, the only financial statement of the husband available to the court, he deposes to having a total average weekly income of $770 per week which on an annual basis becomes $40,040 per annum. The financial statement the husband swore on 24 August 2006, in the proceedings with this former wife, discloses a total average weekly income of $605 per week. If this was annualised, and noting that it would fall in the 2007 tax year, his income would be $31,460. In each case, this is deposed to be income before tax. In his 2007 tax return the husband discloses taxable income of $35,543 or $683 per week. In 2008, his taxable income is $32,317 or $621 per week. In 2009, it was $33,598 or $646 per week and in 2010, $34,372 or $661 per week. I observe that for a person who was self-employed in a business, his taxable income from year to year seems to be relatively consistent. On 18 June 2007, the husband signed a low documentation loan declaration with a bank in which he represented to the bank that his net profit before tax was $84,000 per annum and that he received other income of $5200 per annum. This is plainly inconsistent with his 2007 tax return, and the difference is not explained by reference to, for example, gross fee income. This is because the 2007 tax return reveals a gross fee income of $45,533, just over half of what he represented to the bank. The inference sought to be drawn in the wife’s case, resisted of course by the husband, is that the representation he made to the bank in order to obtain finance is, in fact, a more accurate indication of the husband’s income, not just then but since then.
The situation is rendered more complex by a further loan application made by the husband on 8 January 2010 in which he represents to the bank a gross salary of $4529 per calendar month, or $54,348 per annum, or $1045 per week. This figure cannot be reconciled to his 2010 tax return either on a gross or net basis.
The husband was extensively cross-examined by Dr Packer in relation to transactions in and out of accounts that, I accept, were controlled by the husband. Many of the relevant transactions are characterised as overseas transfers of funds into the husband’s account. Thus, for example, on 19 March 2009, $100,000 was received by way of an overseas transfer. There were many other transfers, particularly in the period 2007-2010 when the husband was receiving regular monthly payments of approximately $6000. In cross-examination the husband asserted that these payments represented his earnings, all of which were disclosed in his tax returns. I find the husband’s explanation unconvincing. He did not adequately explain the source or purpose of these payments, characterised as they were as being overseas remittances into his account. His explanation about this being income that he disclosed is simply not borne out by reference to his own tax returns. There are several large transactions, both inward and outward, in respect of which there is no plausible explanation by the husband. It is the absence of any, or any plausible explanation by the husband, that creates the greatest difficulty for the husband. The husband sought to explain some of these transactions as being a “subsidy” paid by his parents on his behalf, and other payments as being loans from his parents, but detail is curiously absent both from his oral and written evidence.
On behalf of the wife, Dr Packer submits that the evidence indicates that the husband has throughout the marriage received large amounts, apparently undeclared in the husband’s tax returns, with no disclosure or reference or explanation in the evidence filed on behalf of the husband. Dr Packer’s submission is borne out by the evidence before me. I am satisfied that, more likely than not, the husband has either, or possibly both, assets and resources available to him either in Australia or New Zealand that he has not disclosed in these proceedings. Moreover, he is receiving, or is entitled to receive, income and/or other benefits that he has not disclosed to date. It was, at all relevant times, an obligation imposed on the husband to make proper disclosure to the wife and to the court.
Assessment of contribution
The husband and the wife cohabited from 1996 to February 2010, with one period of separation from May 2000 until January 2001. Even allowing for that period of separation, this is a long marriage that produced three children. Based on the evidence of both the husband and the wife, I conclude that the contribution they made at the date of separation, financial and non-financial, direct and indirect, and including as homemaker and parent was equal. I come to this conclusion irrespective of whatever the husband and the wife may, or may not have done about dividing their finances during the marriage. I find that until the marriage finally broke down there was, for all practical purposes, a partnership of marriage in which they worked together for the common good of their family, albeit in different roles. Whilst I have made findings about the husband’s non-disclosure of income, assets and resources, it is highly likely that at least some of the income that he derived but did not disclose was utilised for the benefit of the family. Even a cursory examination of the National Australia Bank statements tendered in evidence will confirm this. I am not satisfied, however, that the husband has provided evidence which shows that all of this income was applied for family purposes. That is not a matter of contribution, however, it is a matter that I will take into account under section 75(2). It is also clear to me, as I foreshadowed above, that the wife made no contribution to whatever assets and resources the husband may have in New Zealand.
Accordingly, I assess contribution as being equal.
Section 75(2) consideration
I am satisfied that both of the parties are in good health and that whilst there is an age difference between them of about 10 years, such does not give rise to any adjustment under section 75(2).
The wife’s income includes Centrelink benefits and is modest, particularly having regard to the fact that she is primarily responsible for the care of three children, and with no support paid by the husband. Even if I were to make the orders sought by the wife, she would have, at most, a modest sum with which to re-establish herself. In this regard, I accept her assertion that her brother has some interest in the [B] property, thus potentially reducing the amount that she will receive on its sale. The nature of her brother’s interest in this property is far from clear and I am not convinced that its repayment is certain to take place on its sale. I also accept that, in all likelihood, there will be a capital gains tax liability that will accrue on the sale of the property. Whilst I cannot ascertain the quantum of this, in all likelihood this is a liability that will impact on her, more than the husband. At least there is no assertion that she has been filing incorrect tax returns. By contrast, the husband’s financial circumstances are largely unknown, mainly because of his failure to make proper disclosure to the wife and to the court. In all likelihood, there is a disparity between the resources available to him and the resources available to her. In addition to this, the mere fact of non-disclosure entitles the wife to have this taken into consideration under section 75(2).
The wife clearly has the care of the three children of the marriage, though the husband has substantial and significant time with them, pursuant to a consent order made on 10 May 2011.
The mother’s commitments include rental as well as bearing most of the costs associated with caring for the children. The husband’s commitments include the mortgage over the [M] property and loan payments on his BMW motor vehicle. Given the husband’s obfuscation about his financial affairs, it is difficult to really know what the true level of his commitments are. The husband does have some responsibility towards his son from an earlier marriage, [X]. [X] will turn 18 in November.
Neither party is entitled to a pension or allowance, and the standard of living that they enjoyed during the course of their relationship is not pertinent on these facts.
I am satisfied from the evidence that the wife has contributed to the husband’s earning capacity. I am also satisfied that whatever order I make under section 79, whilst as just and equitable as the circumstances permit, it will only result in a modest sum for the wife.
As I indicated above, the husband is not paying child support and, indeed, given the findings that I have made against him, it is likely that he never will.
In all the circumstances of this case, a substantial adjustment under section 75(2) of the Family Law Act is warranted. Taking into account all of the factors that I have referred to above, and in particular the husband’s non-disclosure, I assess the wife’s section 75(2) consideration at 35 per cent.
A just and equitable order
The wife seeks orders that the parties do all things necessary to sell the [B] property with her receiving all of the sale proceeds, but on the understanding that she will then repay her brother an amount representing his equitable interest in the property.
The wife also seeks an order that the husband pay to her the sum of $70,000. This order is problematic in circumstances where there is no evidence that the assets of the husband, whether disclosed or undisclosed, include a sum sufficient to meet this liability. Indeed, there must be concerns about the order she seeks given that, if the husband does have property and assets, it is likely to be in New Zealand rather than in Australia. Indeed, given the particularity with which the wife’s case was prepared, I would be surprised indeed if the wife were not able to find some property owned or controlled by the husband in Australia. I am not prepared to make an order which is futile, both in substance and in form.
The wife seeks a super split in her favour as to $50,000 in the husband’s superannuation fund which has a balance of $57,000. Whilst this order does not provide for the wife’s short term needs, it certainly assists in contributing to a retirement fund for herself in the future. Of course, she already has her own modest superannuation entitlement.
The reality of this case is that a just and equitable order needs to be determined by reference to a very small pool of assets. Realistically the pool of assets consists of the equity in the [B] property, and the parties’ respective superannuation entitlements. I recognise that there are other assets including minor shareholdings and some savings, but I propose to leave them where they are. The wife’s motor vehicle, and the husband’s motor vehicle, both seem to be encumbered and have no equity in them. The property at [M] in respect of which the husband has a mortgage indeed seems to have a negative equity and, in the circumstances of this case, I will not bring it onto the balance sheet. The husband asserts he owes a loan or has a debt to Mr P but I have my doubts about that. The husband has credit card debts which I am not prepared to take into account as there is no evidence that they existed at the time of separation. As I indicated above, I have taken into account the possible capital gains tax liability in respect of [B] as a section 75(2) consideration.
Accordingly, and realistically for division purposes, the pool of assets consists of:
[B] property $270,000
Less mortgage $146,000
Wife’s superannuation $44,540
Husband’s superannuation $57,000
Total $225,540
The wife’s 85 per cent share of this amounts to $191,709. The value of the property and resources available to the wife is $168,540, meaning that the shortfall of $23,169 should come by way of super split out of the husband’s superannuation fund.
The net result is that the wife receives all of the available cash assets and the vast majority of the superannuation. The husband retains a modest superannuation entitlement together with any other assets and resources available to him but not disclosed to the court. I consider this to be as just and equitable as the circumstances of the case permit. I do not know the value of the husband’s assets. There is no evidence before me to satisfy me that there is even a reasonable prospect of the husband satisfying an order that he pay a cash amount to the wife. The most that the court can do in these circumstances is the award the wife a very generous section 75(2) adjustment to take into account the uncertainties. I am satisfied that, under the circumstances, this is as just and equitable as is possible. The other orders proposed by the husband are appropriate.
Orders
THE COURT ORDERS:
That Husband and Wife shall jointly co-operate to take all necessary steps and execute all necessary documents to effect the sale of the property situate and known as Property B, [B] Queensland (the Queensland property), being the whole of the land contained in Lot [omitted], and by way of consequential arrangement that shall be made for the purposes of effecting a sale:
(a)That the Wife have the carriage of the sale of Queensland property;
(b)Give such instructions to Shead Lawyers or their Queensland solicitors agents, for the preparation of an appropriate contract of sale and other documents as are necessary for the sale of the Queensland property;
(c)Upon completion of the sale of the Queensland property, the proceeds be applied as follows:
(i) in payment of the amount required to discharge the mortgage registered to Commonwealth Bank of Australia Limited over the Queensland property;
(ii) in payment of agent’s commission and expenses if any due on the sale;
(iii) in payment of legal costs of the sale;
(iv) the payment of the balance of proceeds to the Wife.
That the Court allocates, as required by Section 90MT(4) of the Family Law Act 1975, a base amount of $23,169.00 to the Applicant Ms Walls out of the Respondent Mr Walls’ interest in the [C] Super Retirement Fund [C] Umbrella Financial Plan (Contract No [omitted]) Superannuation Fund.
That, in accordance with Section 90MT(1)(a) of the Family Law Act 1975:
(a) the Applicant Ms Walls is entitled to be paid, using the base amount allocated in the immediately preceding order, the amount calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001; and
(b) the entitlement of Mr Walls in the [C] Super Retirement Fund [C] Umbrella Financial Plan (Contract No [omitted]) Superannuation Fund (or the entitlement of such other person who becomes entitled to receive a payment out of Mr Walls’ superannuation interest) is correspondingly reduced by force of this Order.
That the trustee of the [C] Super Retirement Fund [C] Umbrella Financial Plan (Contract No [omitted]) Superannuation Fund ("the trustee") shall do all such acts and things and sign all such documents as may be necessary to:
(a) calculate, in accordance with the requirements of the Family Law Act 1975 the entitlement awarded to the Ms Walls in the immediately preceding clause of this Order; and
(b) pay the entitlement whenever the trustee makes a splittable payment from Mr Walls’ interest in the [C] Super Retirement Fund [C] Umbrella Financial Plan (Contract No [omitted]) Superannuation Fund.
That this order has effect from the operative time and the operative time is 4th business day after the day on which the within Orders were made.
That, after service of the payment split notice in accordance with the Superannuation Industry (Supervision) Regulations 1994 ("the SIS Regulations"), Mr Walls shall do all such things and sign all such documents as may be necessary, including but not limited to exercising the Ms Walls’ request in accordance with the SIS Regulations, for the rollover or transfer of the non-member spouse interest to a complying superannuation fund of the Ms Walls choosing in accordance with the SIS Regulations.
The wife be solely entitled to Holden Astra sedan registered number [omitted].
That the wife be solely entitled to all benefits and funds in any superannuation fund in her name.
That the wife be solely entitled to all funds in any bank account in her name.
That in the event that either party refuses or neglects to execute a deed and/or instrument in compliance with the provisions of this order, the Registrar or Deputy Registrar of the Family Court of Australia at Sydney is hereby appointed pursuant to section 106A of the Family Law Act 1975 to execute all deeds and/or instruments in the name of the wife and do all acts and things to give validity and operation to the deeds and/or instruments.
I certify that the preceding forty-six (46) paragraphs are a true copy of the reasons for judgment of Altobelli FM
Date: 8th September 2011
0
0
1