Westlake and Trask (No 2)

[2013] FamCA 928

FAMILY COURT OF AUSTRALIA

WESTLAKE & TRASK (NO. 2) [2013] FamCA 928

FAMILY LAW – PROPERTY – Application by the wife for property settlement orders pursuant to s 79 of the Family Law Act 1975 (Cth) – Whether just and equitable to alter property interests and rights – Stanford v Stanford [2012] HCA 52 considered – Consideration of factors under s 79 and s 75(2) of the Family Law Act 1975 (Cth) – Where the outcome of the assessment of financial and non-financial contributions up to the time of separation and post-separation result in those contributions being assessed as equal – Where an adjustment, pursuant to s 75(2), of 10 per cent in the wife’s favour is appropriate.
FAMILY LAW – SPOUSAL MAINTENANCE – Where the wife sought orders for spousal maintenance – Where the evidence does presently establish that, once the orders are complied with, the wife will be able to adequately support herself – Where the wife’s application for spousal maintenance is dismissed.
FAMILY LAW – CHILD SUPPORT – Where the wife sought child support departure orders either by way of lump sum payment or by periodic payment – Where the orders sought by the wife with respect to child support departure were not pressed and are dismissed.

Family Law Act 1975 (Cth) ss 75(2), 79, 81
Child Support (Assessment) Act 1989 (Cth) ss 117, 123(b)

Bevan & Bevan (1995) FLC 92-600

Kowaliw & Kowaliw (1981) FLC 91-092

Mitchell & Mitchell (1995) FLC 92-601

NHC & RCH (2004) FLC 93-204
Stanford v Stanford [2012] HCA 52

APPLICANT: Ms Westlake

RESPONDENT: Mr Trask

FILE NUMBER: SYC 1788 of 2010

DATE DELIVERED: 29 November 2013

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Aldridge J

HEARING DATE: 29-30 April 2013 & 1 May 2013

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Bob Lethbridge SC

SOLICITOR FOR THE APPLICANT: Doolan Wagner & Callaghan Family Lawyers

COUNSEL FOR THE RESPONDENT: Mr Brad Richards

SOLICITOR FOR THE RESPONDENT: Turner Freeman Lawyers

Orders

1.That both parties forthwith do all things and pay equally all monies necessary to sell the properties situated at and known as:

(i)F property in the State of Victoria being the whole of the land more particularly described in folio identifier … (“the F property”), and

(ii)LL property, United Kingdom (“the LL property”),

On the following terms and conditions:

(a)the properties be listed for sale by public auction with a real estate agent agreed between the parties and if there is no agreement within seven (7) days the real estate agent to sell the F property shall be as appointed by the Australian Property Institute – Victorian Division, and the real estate agent to sell the London property shall be as appointed by the United Kingdom equivalent of the Australian Property Institute;

(b)      the auctioneers shall be appointed by the real estate agents;

(c)the auctions shall take place within three (3) months of the dates of listing;

(d)the reserve prices shall, unless agreed on by the parties, be as proposed by the auctioneers; and

(e)the parties shall each pay and be responsible for payment of one half of the auction expenses payable before the properties are auctioned.

2.That upon completion of the sale of each of the F and the L properties, the proceeds of sale be applied as follows:

(a)to pay all costs, commissions and expenses of each sale and to pay any council and water rates outstanding in respect of each property;

(b)to discharge the mortgage or any balance thereof and any other encumbrance effecting each of the properties;

(c)pay any capital gains tax payable by reason of the sale of the properties;

(d)to pay the balance owing to Westpac on the joint Visa card in the name of the parties;

(e)the sum outstanding to S School; and

(f)the balance to be divided with the wife to receive 87.5 per cent and the husband to receive 12.5 per cent.

3.That simultaneously with compliance with Order 2 (a) to (f) of these orders the husband do all such acts and things and sign all such documents as may be required to transfer to the wife, at the expense of the wife, all of his right, title and interest in the property situated at and known as M property in the State of New South Wales being the whole of the land more particularly described in folio identifier … (“the M property”).

4.That the wife is to take all reasonable steps to refinance the property so as to remove the husband as a borrower, to do so within 90 days of the distribution of funds in accordance with Order 2(f) and, in any event, to indemnify the husband in respect of any indebtedness or liability he may have with respect to the mortgage on that property.

5.That the wife is to indemnify the husband in respect of any indebtedness he may have to the wife’s parents for the loan of $108 460 from the wife’s parents.

6.That the husband shall retain all of his right, title and interest in his A motor vehicle and J motor vehicle to the exclusion of the wife.

7.That the wife shall retain all of her right, title and interest in her U motor vehicle, to the exclusion of the husband.

8.That the wife shall retain all of her right, title and interest in the following to the exclusion of the husband:

(a)      Funds held in any bank accounts in her sole name;

(b)      Her jewellery;

(c)      The furnishings and effects currently in her possession; and

(d)Any debts or personal loans or debts in her name, including but not limited to the loan from her parents.

9.That the husband retain all of his right, title and interest in the following to the exclusion of the wife:

(a)      Funds held in any bank accounts in his sole name;

(b)      His watches and jewellery;

(c)      The furnishings and effects currently in his possession;

(d)      His shares portfolio;

(e)The property situated and known as BB property in the State of New South Wales (“the BB property”); and

(f)Any debts or personal loans in his sole name, including but not limited to his Westpac credit card and personal loan from Ms H, and mortgage to Westpac in respect of the E property.

10.That other than as is specifically provided for in these Orders the parties are solely entitled to the exclusion of the other to all other property and chattels of whatsoever nature and kind in the possession or control of each of the parties as at the date of the making of these Orders including but not limited to their respective entitlements to superannuation.

11.That in default of the parties or either of them doing all acts and things and executing all such documents as are necessary to give effect to these Orders, a Registrar of the court be appointed pursuant to s 106A to execute all such documents in the name of the party in default and to do all such acts and things necessary to give validity and operation to the said orders.

12.That upon the payment to the wife pursuant to order 2(f) above, the orders dated 10 December 2010 shall be and are hereby discharged.

13.That the wife’s application for a child support departure and for spousal maintenance be and is hereby dismissed.

14.That all applications and cross applications be and are hereby dismissed.

15.That all issues be removed from the Active Pending Cases List.

16.That all material produced on subpoena shall be returned to the persons or institutions from which they emanated and all exhibits are returned to the person or persons who tendered the same not before fifty-six (56) days from the date of these Orders.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Westlake & Trask has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYC1788/2010

Ms Westlake

Applicant

And

Mr Trask

Respondent

REASONS FOR JUDGMENT

Introduction

1.In these proceedings Ms Westlake (“the wife”) seeks an order against Mr Trask (“the husband”) for property settlement under s 79 of the Family Law Act1975 (Cth) (“the Act”). The wife also seeks an order pursuant to s 123(b) of the Child Support (Assessment) Act1989 (Cth) that the husband pay $780 000 by way of lump sum child support. Alternatively, she seeks an order pursuant to s 117 of the Child Support (Assessment) Act1989 (Cth) that there be a departure order so that the husband be ordered to pay child support at a rate of $15 000 per child per year in addition to payment of school fees and related costs, health insurance and medical and similar expenses. She also seeks orders for spousal maintenance.

2.The wife was born in 1973 and is 39 years old.  The husband was born in 1967 and is 46 years old.  There are four children of their relationship, X born in 1997 and 16 years of age; O born in 1999 and 14 years of age; Z born in 2001 and 12 years of age and J born in 2003 and 10 years of age.

Background

3.On 23 February 1996 the husband purchased, in his own name, a property at Y, Victoria (“the Y property”) for a purchase price of $233 000. He provided $30 000 towards the purchase and borrowed the balance.  Shortly after, the parties commenced cohabitation in that property.  At that time the husband was employed by the National Australia Bank and the wife was a student at University.  Apart from the husband’s interest in the property neither party had any asset of significance.

4.In early 1996 the parties began to cohabit.

5.In January 1997 the parties moved to Sydney and the husband obtained employment with the W Bank.

6.Throughout the first half of that year the wife commuted from Sydney to Melbourne in order to complete her degree which she completed in June 1997. 

7.The parties married in 1998. 

8.On 5 May 1998 the parties moved from Sydney to the United States.  The husband continued to be employed by W Bank. 

9.On 15 June 1998 the parties purchased G property, New South Wales (“the G property”) for a purchase price of $525 000.  The property was rented out. 

10.In September 1999 the parties returned from the United States and lived in Melbourne. 

11.In the early part of 2000 the wife worked three days a week for CP Consultancy for a period of four to five months.

12.In November 2000 the husband received a promotion within W Bank which required him to move from Melbourne to Sydney.  This the parties did.

13.On 6 January 2001 the parties, as joint tenants, purchased the V property for a purchase price of $835 000. 

14.On 2 February 2001 the Y property was sold for $362 000 and the net proceeds are used in the acquisition of the V property.

15.On 12 February 2001 the parties sold the G property for $581 000 and the proceeds of the sale were applied to the acquisition of the V property.

16.Between July and December 2001 the V property was renovated at a cost of approximately $200 000.  On the completion of the renovations the parties moved into that property.

17.In April 2002 the Husband obtained a promotion within W Bank and the parties moved to the United Kingdom to enable them to take up that opportunity.  The V property was rented out. 

18.In 2003 the parties purchased the L property for £713 000.  Although there was a dispute between the parties as to the precise means by which the property was purchased it was acquired substantially by bonuses received from the husband in the cause of his employment.  There were significant renovations undertaken to the L property costing between £80 000 and £100 000. 

19.In approximately May 2004 the husband resigned from W Bank and commenced working with T Bank.  In May 2005 the Husband resigned from T Bank and took up a position with the R Bank

20.On 9 January 2007 the parties, as joint tenants, purchased F property for a purchase price of $1 035 000.

21.On 5 October 2007 the parties, as joint tenants, purchased M property for a purchase price of $2 860 000.  This property is referred to as both the MM property and the M property in the material of the parties, for the purposes of this judgment it will be referred to as “the M property”.  That property was purchased with the intention of rebuilding the house.  It remained vacant until it was occupied by the wife and the children in February 2010. 

22.On 4 January 2008 the parties sold the V property for $1 950 000 and the proceeds of sale were utilised to reduce the mortgage over the M property. 

23.In November 2008 the parties returned to Sydney and the husband continued his employment with R Bank in Sydney. 

24.On 20 February 2009 the parties separated.  At that time the parties were living in rental accommodation provided as part of the husband’s employment package. 

25.On 21 January 2010 the husband resigned from R Bank and accepted an offer of employment with Company E. 

26.In February 2010 the wife left the rental accommodation and moved into the M property with the children.

27.In April 2010 the husband took up his employment with Company E.

28.On 18 May 2010 the parties were divorced. 

29.In June 2010 the husband received the net amount of $904 000 from Company E.

30.In July 2010 the husband purchased an A motor vehicle for $300 000 and in August a J motor vehicle for $40 000.

31.      In November 2010 the husband purchased a property at BB (“the BB          property”) for $2 550 000 which was funded by a deposit of $255 000 from his      savings, a mortgage of $1 700 000 and $700 000 borrowed from a friend.

32.On 21 February 2011 the husband was paid a performance bonus in the net amount of $679 000. 

33.In June 2011 the husband was paid $904 000 which was a further payment of the sign on fee from Company E. The wife said that he received $45 000 in February 2012 and $51 688 in March 2012 described as “cash settled award”.

34.At the end of 2011 the husband was paid a discretionary bonus of $250 000.  

35.In June 2012 the husband was made redundant by Company E and accepted a redundancy payment in the sum of $113 742. 

The Property Liabilities & Financial Resources of the Parties

Applicable Principles

36.According to guidelines established through a series of leading decisions, the court is required to determine the following matters:

·the assets, liabilities and financial resources of the parties to the marriage

·having regard to the breakdown of the marriage, if any, is it just and equitable to consider whether the alteration of the parties interests in their property is just and equitable

·all relevant contributions of each of the parties, within the meaning of paragraphs (a) to (c) of s 79(4) must be identified and weighed against each other

·the matters in paragraphs (d) to (g) of s 79(4), particularly paragraph (e) which takes up, by reference, the provisions of s 75(2) must be considered and a determination made as to what, if any, alteration should be made to the entitlements of the parties earlier assessed on account of contribution

·an order under s 79 must not be made unless the court is satisfied that, in all the circumstances, it is just and equitable to make the order.

Property of the Parties

37.There was no significant dispute with the values to be attributed to the parties’ assets and liabilities.  There were, however, some disputed items.

Husband’s Legal Costs

38.There was a dispute as to whether or not the husband’s legal costs should be added-back to the parties list of assets and liabilities in accordance with the well-established principles set out in NHC & RCH (2004) FLC 93-204.

39.The husband’s legal costs paid by him are $209 237.  He submitted that the wife had not established that he had used matrimonial assets or funds to pay those costs. He also submitted that he had borrowed $75 000 for legal fees which should either be subtracted from them or, alternatively, a liability for $75 000 included. 

40.The husband said:

I have used some of the proceeds of the sale of my Westpac shares to pay for some of my outstanding legal fees.  I intend to realise some cash portion on my [D Bank] holdings in the amount of about $65,000.  However, due to limited time, I borrowed $75,000 from my mother so I could meet my anticipated legal fees as requested by my solicitors. [As per original]

41.In his Financial Statement filed on 29 April 2013 there is no reference to a debt owed to his mother.  There was no other evidence given on this issue. It was not put to him that he had not borrowed this amount.

42.From this meagre evidence I find that the husband did borrow $75 000 from his mother which remains unpaid but the balance of the husband’s legal fees were paid from funds sourced from the parties’ matrimonial assets particularly shares owned and sold by the husband.  He gave no evidence as to any other source of those funds.

43.If it be said that that the source of the funds for the legal fees were the lump sum payments, for the reasons set out below, the wife has established the making of a significant contribution to them.

44.Accordingly, it is appropriate to include as an add-back the amount of the husband’s costs less $75 000 which is the sum of $134 237. 

Husband’s UK Tax Liability

45.The husband worked in the United Kingdom for a number of years. 

46.The husband returned to London in July 2013.  He visited the investment property where he found a large amount of uncollected mail.  Included amongst that mail was correspondence from Her Majesty’s Revenue and Customs.  The husband had been assessed to pay tax of £150 000 based on deemed earnings in the United Kingdom after he had returned to live and work in Australia. 

47.It seems the deemed assessment was made because the husband had not lodged his last tax return that should have been lodged in the United Kingdom.

48.The husband further became aware that he had been declared bankrupt in the United Kingdom in April 2013 for failing to pay this tax liability. 

49.On the husband’s Application, on 23 September 2013, an order was made annulling his bankruptcy.  In order to facilitate the annulment the husband was required to pay £30 948.45 to Her Majesty’s Revenue and Customs. 

50.It appears that there will be no further liability arising from the husband to Her Majesty’s Revenue and Customs. 

51.The wife asserts that this sum should be added-back as it constitutes waste by the husband in that he recklessly failed to deal promptly with his taxation affairs in the United Kingdom.

52.Whilst it is easy to say that the husband should have been more assiduous in his attention to these matters his inattention to this issue is not conduct that is wonton, reckless or negligent as described in Kowaliw & Kowaliw (1981) FLC 91-092.

53.Rather, the liability arose from the oversight of failing to lodge a return on leaving the United Kingdom which does not justify the husband having to bear the whole of this liability.  Consequently, this amount will not be added-back.

Uninvested Restricted Share Units From Company E

54.Pursuant to his employment with Company E the husband became entitled to various restricted share units.  Not all those units have vested in him and the remainder will vest in 2015. 

55.The value of the restricted share units, yet to be vested, has been valued at $187 397, net of tax. 

56.The issue between the parties is whether that sum should be included as an asset or as a financial resource. 

57.The shares have not yet vested and whilst, on the evidence, there is no reason to suggest they will not vest they have not yet done so.  The preferable course therefore is to treat them as a financial resource.

The L property

58.When the hearing of this matter commenced in May 2013 the parties had agreed the value of the L property to be $ 2 000 000.  When the hearing resumed in October 2013 the husband sought to have the value of that property increased to $2 275 393.  The wife opposed this.

59.The basis for this was a letter from the single expert who valued the property to the effect that, although he had not specifically reconsidered the value of this property, prices in that area of London had generally risen.  This is too imprecise a basis to ascribe an increased value to the L property. At the least, the valuer would need to consider any rise in value by the particular property in issue.

60.I also bear in mind that this was an agreed value.

Add-backs

61.The wife sought to have added-back to the property pool a number of large sums received by the husband during the course of his employment.   

Date	Description	Amount
June 2010	Sign on fee	$904 000
21 February 2011	Performance payment	$679 000
June 2011	Balance of sign on fee	$904 000
February 2012	Incentive payment	$45 000
March 2012	Incentive payment	$51 688
Total Payments:  $2 583 688

62.The wife did not suggest that any of these funds had been spirited away or were held in undisclosed accounts or assets.  Rather, she asserted that these sums should be treated as notional assets in the husband’s hands because he failed to give any or any adequate explanation for the dissipation of those sums.  These sums were received by the husband during the course of his employment after the separation of the parties and were associated with his employment with Company E.

63.      In addition, the husband sold Westpac shares and received $9 000 and       subsequently sold other shares and received $135 000.  As has been seen, at     least a substantial part of those proceeds were used to pay the husband’s legal costs.

64.      The husband, after separation, purchased  the A motor Vehicle ($300 000), the J    motor vehicle($40 000), the BB property (part being used to fund the deposit       ($255 000), the stamp duty ($126 000) and part to repay a loan in the sum of         $700 000 plus interest from a friend being also used in the acquisition of the        BB property (repaid by two payments one on 29 April 2011 for $359 368 and           one on 20 June 2011 for $362 505), a total of $721 873, watches and two   horses ($45 000) and household contents ($40 000).  These total $1 527 873.        These assets remain with the husband.

65.At the time of the hearing the husband had the following sums in various bank or shareholding accounts.  These were:

WBC …94$ 39 806

WBC …33$    1 480

D Bank Portfolio  $718 960

Interactive Trading  $  41 666

BBY Account  $  49 985

Total$851 897

66.The sums spent by the husband since separation acquiring assets and the sums in the above accounts total $2 379 770. Whilst the husband also received income as well as the lump sum payments the submission that the disposition of the lump sum payments remains unexplained cannot be accepted. Whilst the husband did not give direct evidence of what he did with them, the irresistible inference, given his only source of funds was the payments and his income, is that they and his income were the source of the assets that were acquired. As they and the bank accounts remain with him, albeit some at a diminished value, there is no factual basis for an add-back. It is not therefore necessary to consider whether adding-back would be the appropriate course or whether it would be preferable to deal with the issue under s 75(2).

Superannuation

67.The wife has very limited superannuation entitlements ($2 515).  The husband’s entitlements are significant ($678 246) of which all but $32 311 arose during the period of the relationship.  That sum is attributable to the time the husband spent working at Company E, and for the reasons given earlier, is a product of his employment which it was, in turn, subject of significant contributions by the wife. 

68.It was not suggested by either party that, save for the sum of $32 311, the contributions to the parties’ superannuation entitlements were different to the contributions to the parties’ other assets.  Because of these two matters it is appropriate to include the superannuation in the general list of assets and liabilities, contrary to the submission of the husband.  The fact that those sums are not presently available to the husband is not of significance because they are assets being taken into account at their present value.  When ultimately realised they will have a significantly higher value.

69.There was a dispute as to the value of the J motor vehicle.  There was neither evidence nor submissions on this issue save for the value given to it in the husband’s Financial Statement.  I adopt that value. 

70.Taking these matters into account I find the property of the parties at the date of hearing to be:

BALANCE SHEET
Assets	Joint	Wife	Husband
F Property, VIC	$825,000
M Property, NSW	$2,850,000
L Property, UK	$2,000,000
Household contents (M and F)	$10,000
BB Property, NSW	$2,700,000
Westpac Account Number …94	$39,806
Westpac Account Number …00  and …33	$1,480
A motor vehicle	$193,000
J motor vehicle	$25,000
Household contents of Husband	$40,000
Watches and 2 horses	$45,000
Husband’s D Bank Portfolio Account	$718,690
Wife’s Bank Accounts	$1,469
U motor vehicle	$50,000
Wife’s Legal Costs Paid/In Trust	$152,699
Husband’s Legal Costs Paid	$134,237
Husband’s Interactive Trading Account	$41,666
Husband’s BBY Account	$49,985
Assets
Total  $5,685,000          $204,168     $3,988,864
TOTAL ASSETS  $9,878,032

Liabilities	Joint	Wife	Husband
Mortgage (F Property)	$471,892
Mortgage (M Property)	$702,796
Westpac Visa	$14,226
Mortgage – BB Property	$1,722,117
S School Fees	$19,871
Income Tax Liability of Husband	$374,843
Personal Loan – Wife’s parents	$108,460
Wife’s Credit Cards	$12,138
Independent Children’s Lawyers Fees	$2,135
Independent Children’s Lawyers Fees	$2,135
Husband’s Westpac and Visa Cards	$13,738
Liabilities
Total	$1,208,785	$ 122,733	$2,112,833
TOTAL LIABILITIES	$3,444,351
Superannuation	Joint	Wife	Husband
BR Superannuation Plan 1	$3,681
UK Standard Life SIPP	$382,638
R Bank DB Scheme	$201,616
D Bank Company E BR Superannuation	$32,311
W Bank Super	$58,000
Host Plus Superannuation	$2,515
Total superannuation	$  2,515	$678,246
Total Assets	$10,558,793
Less Total Liabilities	$3,444,351
Net Assets	$7,114,442

Financial Resources	Joint	Wife	Husband
Unvested RSU’s from Company E – net of Tax	$187,397
Total Financial Resources	$187,397

Sub-section 79(2) of the Act

71.I must first determine whether it is just and equitable that there be an alteration in the property rights of the parties. This must be done by consideration of the relationship, its breakdown, if any, the property held by the parties and the basis on which it was held and used by them. The determination is not to be conflated with the consideration of matters arising under s 79(4). [1]

[1] Stanford v Stanford [2012] HCA 52

72.In the present case I am satisfied that it is just and equitable to make orders altering the interests of the parties to the marriage to the property held by them.  They are no longer living in a marital relationship.  The basis on which the ownership of their property and the use of it, by reason of them being in a married relationship and living together, has ended and it is appropriate that their property interests are altered so as to meet their new needs and circumstances.  The parties join in seeking such an order.

Section 79(4) Factors

Contribution at time of separation

73.The parties agreed that, up until separation, and save for one matter, each of them had made an equal financial and non-financial contribution to the assets of the parties and the welfare of the family.

74.The one matter is the initial financial contribution by the husband.

75.The husband purchased the Y property on 23 February 1996 for $233 000. He paid the deposit of $30 000 from his savings and borrowed the balance.  At the time of cohabitation he thus had equity in the property of approximately that amount.  He submitted that this initial contribution justified a finding that there was a greater financial contribution by him of about one per cent.

76.Whilst there is some force in that submission, given the total value of the property now held, the fact that it has substantially been acquired as a result of the high income of the husband and not by utilising the equity in this property and the substantial time that has passed since its acquisition even a one per cent weighting in favour of the husband is to overvalue the contribution.

77.I find that the financial and non-financial of the parties up to the time of separation was equal.

Post separation contribution

78.The husband submits that he made a substantially higher financial contribution, post separation, because of his very high income, sign-on fees and incentive payments from Company E.

79.There is no doubt that after separation the husband’s income, which had been very high, increased markedly.  For the year ended 30 June 2010 the husband’s taxable income was $2 076 984.  For the year ended 30 June 2011 it was $3 444 209.  For the year ended 30 June 2012, the year in which the husband was retrenched, his taxable income was $1 042 426.

80.The sign-on fees and incentive payments have been referred to earlier and total $2 577 000.  They all relate to his employment at Company E.

81.The parties separated in February 2009.  In January 2010 the husband obtained his position at Company E and commenced work there in April 2010.  He was retrenched in June 2012.  He has not worked since. 

82.During this time the wife remained, as she had been throughout the relationship, the primary care giver to the four children.  Since 2010 the children spend time with their father every second weekend and significant time in the holidays.

83.Throughout the marriage the parties conducted their relationship on the basis that the husband would pursue his career and the wife would be the homemaker and primary carer to the children.  Despite his assertion that, at least, the first move overseas was a joint decision so as to enjoy a different culture the husband frequently took new positions to advance his career and to increase the family’s income.  These new positions often required the family to relocate, both within Australia and internationally. The wife therefore frequently moved residences and countries with small children to enable the husband to take up these new employment opportunities. 

84.Whilst this was no longer the position after separation the husband’s new position at Company E was gained because of the experience, knowledge and opportunities he had obtained in his earlier employment.  The ability of the husband to achieve the higher income arose from the various previous positions he had held.  In doing so he was entirely supported by the wife.  The wife’s non-financial contribution and contribution to the welfare of the children permitted his promotions which, in turn, lead to the Company E position.  The husband would not have obtained that position but for his earlier positions and experience.

85.I find that the wife made a direct non-financial contribution to the husband’s ability to be employed in his position at Company E and thus to the benefits received by him from it.

86.Throughout the course of the marriage the parties had conducted themselves on the basis that the husband would be the primary bread winner and the wife the primary care giver for the children.  Those roles continued after separation.  I find that the financial contributions, the assets of the parties and the welfare of the family after separation to be equal. 

The age and state of health of each of the parties

87.The parties are relatively young and in good health.  This factor requires no adjustment.

The income, property and financial resources of the parties and their capacity for employment

88.The husband has, as has been demonstrated by the positions he has held and that the income he has generated from those positions, the capacity to generate a very high income.  He has not been employed since June 2012.  The husband says that his prospects of re-employment in the near future in an investment banking position are poor. 

89.Mr C a partner of an executive placement firm in the financial markets approached by the husband said:

There are currently no positions available through my firm to which we can introduce [the husband], regardless of his salary expectation.  I am unaware of any managerial and/or trading positions which are currently available to him.  I do not know if there are any other particular roles which [the husband] could pursue.

90.The husband said he had contacted one other recruitment agency.  In July 2012 that agent introduced him to the managing director of Global Markets at ANZ with whom the husband had a discussion about a trading role in Sydney.  He did not receive an offer of employment. 

91.In May 2013 the husband applied directly for positions at FIGG Securities and Morgan Stanley.  He was interviewed for both positions but was not successful. 

92.The husband has taken no other steps to obtain employment other than to telephone, or have coffee with, the two agents mentioned.

93.In September 2013 the husband commenced trading under his personal name in order to generate an income.  At the time of the resumption of the hearing he had lost approximately $3 500.  He intends to continue that activity until he obtains a position of employment. 

94.The husband’s attempts to obtain employment are thus far from extensive.  It was put to him that he was deliberately not being assiduous about seeking work.

95.Directors of both recruitment agencies approached by the husband gave evidence that since the time of the husband’s retrenchment it has been difficult for people of his seniority and experience to obtain positions.  They said there were a number of people of similar positions and experience who were retrenched at about the time of the husband’s retrenchment who had not yet found employment.  … 

96.Mr C said that there is really nothing the husband can do other than wait or do something else entirely. 

97.The view was expressed that employment for the husband in areas suitable for him would be unlikely in the next few months but it is probable that he would gain employment in due course but that may take at least twelve months.

98.The husband last worked in a position entitled Managing Director.  The recruitment agencies have been looking for positions for him as managing director or in the lesser position of director.  Salaries payable for those positions have reduced since the husband was last in employment with managing directors now being employed in the range $300 000 to $400 000 per annum and directors $250 000 to $300 000 per annum.  Thus when, as is likely, in due course the husband obtains a position, it will be at a significantly lower income than he previously received and one where bonuses of the order that he previously received will not be paid. 

99.In those circumstances, whilst it could be said that there is more that the husband could have done to look for work, the reality is that the positions were not available to him to find and that his unemployment is not simply due to a want of looking on his part. 

100.In summary then, the husband has a capacity to earn a significantly higher income than the wife albeit not as high as he previously received.  Whilst he is not able to exercise that capacity at present it is likely that in a year or so he will be in that position. 

101.The wife has a Bachelor Degree.  Her qualification is that of a professional.  Other than for the few months of part-time work in early 2000 she has not been employed since she obtained her qualification.  She thus lacks practical skills and experience in her professional.  She will obviously need to undergo some retraining to be employed and would be commencing a career from the beginning.  It is most unlikely that her earning capacity will ever be anywhere as high as the husband’s.

102.She too is presently unemployed.  There is no evidence as to when she might become employed or undergo any retraining.

103.The husband was critical of the wife for not seeking employment.  Throughout the marriage the parties conducted the relationship on the basis that the husband would work and the wife would not.  It is therefore, not surprising that the wife has maintained that role.  She does, however, have the capacity for employment which she is likely to pursue, particularly as the children get older.

104.The capacity of the husband for gainful employment and for earning is much greater than that of the wife and requires an adjustment in her favour.

105.The orders will have no effect on the earning capacity of either of the parties

Whether either party has the care or control of a child of the marriage

106.The youngest child of the marriage is nine so the wife will have the care of the children or at least some of them for a considerable period of time in the future.  Whilst the children spend time with the husband every second weekend the primary burden of the care and control of the children will continue to fall on the wife. 

107.The husband submits that as the children will grow older they will spend more time with him.  There is no evidence to suggest that this is likely in the near future.

108.This factor requires a significant adjustment in favour of the wife.

The commitments of the parties

109.Pursuant to the orders that were made in this case each party should be able to live in an appropriate dwelling free of a mortgage.  There are no other significant commitments of either of the parties that need to be taken into account.

The standard of living of the parties

110.The parties have enjoyed a very high standard of living throughout the marriage.  Until the time of the husband’s retrenchment he was able to maintain a very high standard of living.  He was able to support the wife and the children including all four children attending private schools.

111.It is appropriate therefore that any order reflect standard of living to which the parties are accustomed and to enable both of them to continue a high standard of living as best as possible, in the circumstances. 

The duration of the marriage and the extent to which it has affected the wife’s earning capacity

112.The period of cohabitation was approximately 13 years which is a significant time.  At that time the husband had an established career and the wife was a student.  Whilst the wife completed her degree she never took up permanent employment.  Their first child was born some 18 months after cohabitation commenced and approximately seven months later the parties moved to the United States.  The husband had a Green Card which enabled him to work there but the wife did not.  They did not return to Australia until August 1999.  There have been frequent changes of residence and country in which the parties have resided.  On each occasion the husband has had a position awaiting him in the new place of residence. 

113.These factors together with the parties’ desire for the wife to be a full-time mother and homemaker meant that the wife did not have the opportunity to develop a career of her own.  That significantly affected the earning capacity of the wife whose degree is now some 16 years old.  She lacks any practical experience.  It would be difficult for her to obtain employment in her profession without some form of re-training and, in any event, she would be starting anew.

114.This is a factor which requires an adjustment in favour of the wife. 

The need to protect a party who wishes to continue a party’s role as a parent

115.The arrangement of the parties throughout this marriage was that the wife would be a full-time homemaker and parent.  She wishes to continue in that role and that is an appropriate factor to take into account in her favour. 

Any other fact or circumstance which, in the opinion of the court, the justice of the case requires to take into account

116.The wife asserts that the husband has failed to comply with consent orders for him to pay to the wife $5 000 per month on 10 December 2010. The husband accepts that he made payments directly to the wife of $3 200 per month but that the balance of the $5 000 ordered to be paid was made up by other payments made by him for the wife’s benefit or for the children’s benefit. 

117.The evidence does not enable the court to determine whether that is in fact so or, if it is not so, what is the quantum of the maintenance that remains unpaid.  Accordingly, no adjustment can be made for this factor.

118.It is appropriate, having regard to the division of property, that upon the division taking place, those orders be discharged.  They shall remain in place until then.

119.The husband has the benefit of the Company E uninvested restricted share units which will probably vest in him in 2015.  Their present value is $187 397.  These are available to him and not the wife and are not being taken into account as property.  This further justifies the adjustment being made in this case.

The Appropriate Adjustment

120.Taking all these matters into account an adjustment of 10 per cent in favour of the wife is appropriate. 

121.Ten per cent of the parties’ net assets is $711 444.  This is a substantial sum.  It, however, reflects the adjustments that are required to be made in favour of the wife because of the significantly greater earning capacity of the husband, the fact that she has the primary care of the children who will live with her for the majority of the time and the extent to which the nature of the relationship has adversely affected the earning capacity of the wife.  I take into account the financial resource available to the husband which is not included in the parties’ assets being divided.  I take into account that both parties are likely to be unemployed for some time and that the husband will be required to support himself from capital.  Whilst the husband’s superannuation has been taken into account at present value, it is not presently available to him (although, of course, it is likely to increase in value over time).

Section 79 (1) of the Act

122.Taking all of the above matters into account I am satisfied that the orders I propose to make are appropriate, that is to say, just and equitable taking into account all the matters I have discussed under the heading ss 79 (4) and 75 (2) of the Act as set out above. The orders meet the obligation under s 81 to finally determine the financial relationship between the parties and avoid further proceedings between them to the extent possible.

Form of Orders

123.The wife sought orders that the husband transfer to her his interest in the L property, discharge the mortgage over the M property and transfer his interest to the wife and discharge the mortgage over the F property transferring his interest to the wife.

124.The husband sought orders that the F and L properties be sold and the proceeds from those sales discharge the mortgage over the M property and the husband transfer his interest in the M property to the wife.  The husband sought that he receive 78 per cent of what remained from the proceeds of sale of the F and L properties, his motor vehicles and the BB property.

125.The primary position of each of the parties was that they wished to retain their present residence.  That will be done and each will have to assume liability for the mortgage.  Having regard to the amount of property available to the parties this means that the L property and the F property will need to be sold to pay the joint liabilities of the parties and the husband’s tax liability and to effect to the above distribution.

126.Each of the parties will otherwise retain the assets in their possession.  Neither party sought a superannuation splitting order so each of the parties will retain their present entitlements to superannuation.

127.The wife will thus receive the following assets:

M Property  $2 850 000

Household contents (M and F)  $10 000

Monies held in her name in bank accounts  $1 469

U motor vehicle  $50 000

Wife’s legal costs   $152 699

Wife’s Superannuation  $2 515

Total:$3 066 683

128.The wife will be responsible for the following liabilities:

Mortgage on M Property  $702 796

Personal Loan to wife’s parents  $108 460

Her credit cards  $12 138

Payment due to the Independent Children’s Lawyer                 $2 135

Total:$825 529

129.The wife’s net assets retained are $2 241 154.

130.The husband will retain the following assets:

The BB property  $2 700 000

Westpac account number …94  $39 806

Westpac …00  $1 480

A motor vehicle  $193 000

J motor vehicle  $25 000

BB household contents  $40 000

Watch and two horses  $45 000

D Bank portfolio account  $718 670

Legal costs paid  $134 237

Interactive trading account  $41 666

BBY account   $49 895

Superannuation  $678 246

Total:$4 667 000

131.The husband will be responsible for the following liabilities:

BB mortgage  $1 722 117

Independent Children’s Lawyer   $2 135

Credit cards   $13 738

Income tax$374 843

Total:$2 112 833

132.The husband’s net assets retained will be $2 554 167.

133.The L and F properties are to be sold and after payment of any mortgage or other security, costs of sale and the payment of any capital gains tax, if applicable, the proceeds are to be disbursed by:

(a)first paying the joint Westpac Visa account $14 226

(b)S School fees $19 871

(c)The balance thereafter is to be divided between the parties so having regard to the values as set out in this Judgment the wife is to receive 60 per cent of the total net assets and the husband 40 per cent. 

134.The properties being sold are the L and F properties.  Taking them at the above values and having regard to the liabilities to be paid from them (ignoring the costs of sale and any capital gains tax) the position is as follows:

L Property$2 000 000

F Property$  825 000

Total$2 825 000

Less

F mortgage$   471 892

Westpac Visa  $     14 226

S School$    19 871

Total$  505 989

________________________________

Net$2 319 011

135.In order to receive 60 per cent of the total net assets of $7 114 442, namely $4 268 665, having regard to the net assets retained by her of $2 241 154, the wife needs a payment of $2 027 511.  That is 87.43 per cent of the net value of the assets being sold.  If the husband receives 12.57 per cent of the net assets being sold being $291 500 and the assets being retained by him of $2 554 167 he will receive $2 845 667.  This equates to 40 per cent of the net assets (strictly 40 per cent is $2 845 777).

136.These will not, of course be the final figures as the sale price, the costs of sale and any capital gains tax, are not yet known.  Therefore, although it will not give exact expression to the percentage determined above, the order will be that the net proceeds of the L and F properties be divided as to 87.5 per cent to the wife and 12.5 per cent to the husband. This will enable the burden or benefit of the variations to the above values to be borne by the parties in the determined proportion.

Child Support Departure Orders

137.In the light of the husband’s unemployment and lack of income the orders that were sought pursuant to the Child Support (Assessment) Act 1989 (Cth) were not pressed and the claims for them will be dismissed.

Spousal Maintenance

138.The wife sought an order for spousal maintenance.  The wife’s present source of income is spousal maintenance received from the husband.  Unless a further order is made that will cease upon the property settlement pursuant to these orders taking effect.

139.As set out earlier it will take the wife some time to be in a position to earn income.  Pursuant to these orders the orders made in this matter the wife will receive the M property free of a mortgage plus a considerable sum which she can invest. 

140.The first step is to determine whether the wife unable to support herself adequately (s 72(1)).  A court can only make an order for spousal maintenance pursuant to s 74 if the party claiming the maintenance is unable to support herself or himself adequately.  Adequately is a relative concept which varies from case to case and in relation to which the standard of living which the parties enjoyed prior to separation is relevant (Bevan & Bevan (1995) FLC 92-600; Mitchell & Mitchell (1995) FLC 92-601).

141.Pursuant to the orders to be made in this matter the wife will have net assets of the order of $4 268 665.  It is not known how she will deal with those assets or what income, if any, they might generate.  For that reason the evidence does presently establish that, once the orders are complied with, she will be able adequately support herself.

142.Until that time, she will have the benefit of the existing spousal maintenance orders.

143.Thus the application for spousal maintenance must fail.

I certify that the preceding one hundred and forty-three (143) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Aldridge delivered on 29 November 2013.

Legal Associate:

Date: 29 November 2013