Wiggins & Hutchins
[2009] FMCAfam 490
•21 May 2009
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| WIGGINS & HUTCHINS | [2009] FMCAfam 490 |
| FAMILY LAW – Property – contribution – question of when parties separated finances – credit of parties. |
| Family Law Act 1975, ss.75(2), 79 |
| Ferraro (1993) FLC 92-335 Hickey & Hickey & Attorney-General of the Commonwealth of Australia (Intervener) (2003) FLC 93-143 Mallett & Mallett (1984) 156 CLR 605 Norbis v Norbis (1986) 161 CLR 513 Pierce v Pierce (1998) FLC 92-844 Shewring (1987) 12 Fam LR 139 |
| Applicant: | MS WIGGINS |
| Respondent: | MR HUTCHINS |
| File Number: | SYC 4084 of 2007 |
| Judgment of: | Altobelli FM |
| Hearing dates: | 15 & 16 December 2008, 9 April 2009 |
| Date of Last Submission: | 9 April 2009 |
| Delivered at: | Sydney |
| Delivered on: | 21 May 2009 |
REPRESENTATION
| Counsel for the Applicant: | Mr Gersbach |
| Solicitors for the Applicant: | Newnhams Solicitors |
| Counsel for the Respondent: | Mr Campton |
| Solicitors for the Respondent: | Whitehead Cooper Williams |
ORDERS
Within twenty-one (21) days the solicitors for the husband and the wife are to jointly submit to my Associate a minute of order implementing these Reasons for Judgment. If they are unable to submit a joint minute, they must nonetheless submit one document which clearly sets out the points of difference.
The parties have leave to relist this matter before me on seven days notice as regards the implementation of these orders.
IT IS NOTED that publication of this judgment under the pseudonym Wiggins & Hutchins is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
SYC 4084 of 2007
| MS WIGGINS |
Applicant
And
| MR HUTCHINS |
Respondent
REASONS FOR JUDGMENT
Introduction
In this case, the husband does not deny that the wife made contributions, but he does assert that those contributions were very different to his both in a quantitative and qualitative sense. He says he made a much greater financial contribution and that what contributions the wife did make had no nexus with certain substantial assets which, whilst accumulated during the marriage, were the product of his education, training, qualification and experience, all of which were accrued prior to the marriage. He contends that there was no economic or emotional common purpose between the wife and himself, even though they were together for 14 years.
Whilst the husband does not describe it in these terms, in effect, his case is that his contributions, and his wife's contributions, were like apples and oranges. Their contribution was qualitatively and quantitatively different. Their contribution looked different, tasted different to each other, and was applied to entirely different purposes. From the husband's perspective, therefore, the assessment of contribution must significantly favour him.
Whilst the wife does not describe her case in these terms, in effect her case was that whilst their contributions might at times have been as different as apples and oranges, at the end of their marriage the product of their labours was just fruit. When it comes to assessing their contributions, therefore, the fruits of their combined labours should be shared equally.
Background
The wife is the applicant in these proceedings. She is 44 years old and until recently had a senior position in a media company. The respondent is her husband, now aged 50 years, and who is a company director. The parties first met in 1991 when they were both working as [omitted] in Sydney. They were engaged in August 1991. The husband left his employment to join a major bank in a [occupation omitted] capacity and then in early 1992 took up a very senior and prestigious position as a [omitted] in Canberra. He moved to Canberra early in 1992 and a few months later the wife joined him after she had resigned from her position in Sydney. The parties married in May 1992 but, according to the husband, they commenced cohabitation in Canberra as early as February 1992.
The husband's position in Canberra ended in December 1993 and he took some time off. By this time, the wife had been working in various capacities, again in the media industry, in Canberra. Earlier in 1994 the husband and the wife became shareholders and directors of the company known as [H] Pty Ltd which, from that point onwards, was used as the vehicle for the husband's work as a [occupation omitted]. They returned to Sydney in 1994 after the wife resigned from her employment in Canberra. In December 1994 they purchased the former matrimonial home at 12 [X] Road, [M]. The husband was then working through [H] Pty Ltd whilst the wife was also working on a freelance and part‑time basis. In February 1997 she commenced full‑time work with a major Australian television network.
In May 1998 the husband and wife purchased together unit 2 at 12 [X] Road, [M], and they then renovated the property. Throughout this period the husband and wife had been trying to start a family, without success. They tried the IVF program as well as seeking to improve their lifestyle by taking time off work and travelling. In September 2000 the husband established or became involved in a company called [G] Australia Pty Ltd (henceforth called [G] Pty Ltd), a [omitted] firm. That continues to be the major vehicle for his business and personal income with [H] Pty Ltd becoming much less significant in this regard. By this time, both the husband and wife were working and their combined incomes were quite considerable, thus allowing them to enjoy a comfortable lifestyle, although, tragically, not being able to start a family. They acquired paintings, a quarter-interest in a yacht, new motor vehicles, travelled extensively, and renovated the former matrimonial home. Both the husband and the wife prospered in terms of their respective careers, though there is little doubt from the evidence that the husband was, for the most part, earning more than the wife was.
The husband and the wife separated in either July or August 2006. It seems as if the marriage was under considerable stress at various times from 2001, with most of the stress attributable to the pain and frustration of not being able to start a family, as well as the rigours and stress of participating in the IVF program. Nonetheless, they persisted though, according to the husband, the relationship changed substantially in the period 2003‑2005. He asserts that during this period they commenced living separate lives. The wife disputes this.
At the commencement of their relationship both the husband and the wife had their own assets, and one of the issues in this case is to ascertain precisely what those assets were and to then assess whether and if so to what extent the assets brought into the relationship has an impact on the assessment of contribution.
There are a number of issues that arise in relation to the constitution of the pool of assets, resources and liabilities, and I will need to make findings in that regard.
An issue arises between the parties about how, precisely, contributions should be assessed at the conclusion of their relationship, having regard to what, at least according to the husband, were the very different types of contribution that each made before, and during the marriage. There are factual issues that I need to determine about how funds were used.
There is an issue between the parties about whether, and if so to what extent, there should be a s.75(2) adjustment in favour of the husband, or the wife. And then having regard to all of the above matters, I will need to decide what the just and equitable order to make in the circumstances of this case is.
Indeed, before I make findings about any of the issues preferred to above, both Counsel for the husband and the wife have invited me to make findings as to credit. The evidence of the husband and the wife about contentious issues is very divergent and thus I agree that I will need to make findings about whose evidence I prefer, when their evidence conflicts.
The position of the parties changed during the hearing, as compared to the respective application and response that they each filed. Indeed, the positions of the parties changed during the course of the four‑day hearing, mainly in response to the evidence that came out. In any event by the final day of the hearing, 9 April 2009, the wife invited the Court to make an order transferring to her the former matrimonial home on the basis that she would take over the mortgage and keep the husband indemnified in respect of the same. She also sought an order for the transfer to her of jointly owned Woolworths share, and the sale of the property at 2/128 [X] Road with her receiving 52.5 per cent of the net sale proceeds. She also sought orders that the husband make available for her collection a number of items of personal property including paintings or, in the alternative, that she receive a cash adjustment in respect of the same. The husband would otherwise be left with all other property in his possession or control. In the closing submissions of the wife's Counsel he submitted that the effect of making these orders would be to give to the wife about 52.5 per cent of the pool of assets comprising 50 percent for contribution and 2.5 percent for s.75(2) considerations. It was part of the wife's case that the Court should adopt a global approach to assessing contribution.
From the husband's perspective, by 9 April 2009 he sought orders for sale of all of the real estate owned by the parties ‑ namely, the former matrimonial home, and units 1 and 2/128 [X] Road. In relation to the proceeds of sale of the [X] Road units, he proposed that the wife receive one half of the net sale proceeds. In relation to the sale of the former matrimonial home he proposed that she receive an amount which, together with the moneys from the sale proceeds of [X] Road, and together with her own assets and resources, would equate to 30 per cent of the entire pool of assets. He was also prepared to transfer his interest in the joint Woolworths shares to the wife. There is a fundamentally different methodology adopted by the husband. He submitted that an asset‑by‑asset approach would be just and equitable in this case and applied towards assets which, he asserts, he alone had made contribution to and not the wife and, likewise, such approach would also be adopted to assets which the wife alone had made contribution to, to the exclusion of the husband. In relation to the balance, he submitted that contribution should be assessed at 60 per cent in his favour and that the result of this approach was that he would receive an overall settlement of 70 per cent in his favour based on contribution. On behalf of the husband it was asserted that there were no s.75(2) adjustments except as regards taking into account unquantified but otherwise certain liabilities, for example, capital gains tax.
Issues
Having regard to the matters set out above, and to the evidence as I heard it, the issues in this case are as follows:
(1) Issues as to credit, i.e., where the evidence of the husband and the wife directly conflict, whose evidence should be preferred?
(2) What is the pool of assets, resources and liabilities in this case?
(3) What assets were held by each party at cohabitation, and what is the impact on the assessment of contribution arising out of these assets?
(4) How should contribution of the parties up until the date of separation and trial be assessed?
(5) Are there any s.75(2) adjustments that are appropriate in this case and if so how should they be assessed?
(6) What is the just and equitable order to make in the circumstances of this case?
Applicable law
This is an application that is governed by s.79 of the Family Law Act. Pursuant to s.79(1) the Court is required to make an order as it considers appropriate altering the interests of the parties to the marriage in property. Section 79(2) requires such an order to be just and equitable. The matters that need to be taken into account are set out in s.79(4):
(4) In considering what order (if any) should be made under this section in property settlement proceedings, the court shall take into account:
(a) the financial contribution made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last‑mentioned property, whether or not that last‑mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(b) the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last‑mentioned property, whether or not that last‑mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(c) the contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage and any children of the marriage, including any contribution made in the capacity of homemaker or parent; and
(d) the effect of any proposed order upon the earning capacity of either party to the marriage; and
(e) the matters referred to in subsection 75(2) so far as they are relevant; and
(f) any other order made under this Act affecting a party to the marriage or a child of the marriage; and
(g) 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.
Thus it can be seen that s.79(4) is both retrospective and prospective in its scope and operation. Paragraphs (a), (b) and (c) are retrospective in the sense that a historical assessment of contribution is required. Paragraphs (d), (e), (f) and (g) are prospective in the sense of requiring a consideration of how an order takes into account the future.
Section 79(4) requires the court to consider contribution in the broadest sense: financial, non-financial, made to the welfare of the family, direct, indirect, and directed to acquisition, conservation and improvement of property.
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.
One of the legal issues that arises is whether I should adopt a global or asset-by-asset approach to contribution. The authority in this regard is, the High Court’s decision in Norbis v Norbis (1986) 161 CLR 513 per Wilson and Dawson JJ at 534-5. It is clear from this statement of the law that either approach is available to me, in part or in whole. My discretion in this regard should be exercised having regard to the facts of this case.
Another issue in this case is how, precisely, I should weigh and assess the initial contribution made by the parties. In this regard, I need to consider the decision of the Full Court in Pierce v Pierce (1998) FLC 92-844. A useful recent decision of the Full Court examines its earlier decision in Pierce v Pierce together with a later case. In Williams & Williams [2007] FamCA 313 the Full Court states as follows at paragraphs 26, 27, 28, 29 and 32:
26. We think there is force in the proposition that a reference to the value of an item as at the date of the commencement of cohabitation without reference to its value to the parties at the time it was realised or its value to the parties at the time of trial, if still intact, may not give adequate recognition to the importance of its contribution to the pool of assets ultimately available for distribution between the parties Thus where the pool of assets available for distribution between the parties consists of say an investment portfolio or a block of land or a painting that has risen significantly in value as a result of market forces, it is appropriate to give recognition to its value at the time of hearing of the time it was realised rather than simply pay attention to its initial value at the time of commencement of cohabitation. But in doing so it is equally as important to give recognition to the myriad of other contributions that each of the parties has made during the course of their relationship.
27. In Pierce v Pierce when speaking of the relevance to be paid to initial contributions the Full Court (Ellis, Baker and O’Ryan JJ) referred to Fogarty J in Money v Money (1994) FLC 92-485 at 81,054; (1994) 17 Fam LR 814 at 816:
…respective contributions of the parties over a long period of marriage “offset” the significance which might otherwise be attached to a greater initial contribution by one party…ultimately, when it comes to the trial such a contribution is one of a number of factors to be considered. The longer the marriage the more likely it is that there will be latter factors of significance and in the ultimate the exercise is to weigh the original contribution with all other, later, factors and those later factors, whether equal or not, may in the circumstances of the individual case reduce the significance of the original contribution.
28. The Full Court (Ellis, Baker and O’Ryan JJ) then said at [28]:
In our opinion it is … a question of what weight is to be attached, in all the circumstances, to the initial contributions. It is necessary to weigh the initial contributions by a party with all other relevant contributions of both the husband and the wife. In considering the weight to be attached to the initial contribution, in this case of the husband, regard must be had to the use made by the parties of that contribution.
29. Pierce v Pierce was a case in which the husband brought in $200,000 cash into the relationship. He applied that money towards the purchase of a matrimonial home. He was employed throughout the marriage and supported the wife who, whilst in some paid employment primarily attended to domestic tasks and taking care of the children. The Full Court assessed the parties’ respective contributions to a pool of $320,000 as 70 per cent in favour of the husband and 30 per cent in favour of the wife at the end of a 10 year relationship.
32. In Hunt v Zuryn (2005) FLC 93-226; (2005) 34 Fam LR 169 the Full Court (Kay, May and Boland JJ) allowed an appeal in a property case where a pool of assets of $1.12million had been assessed for contribution purposes as 75 per cent in favour of the husband and 25 per cent in favour of the wife. The Court in allowing the appeal indicated that an assessment of 75:25 fell outside the realms of an acceptable range saying at 79,730; 170:
Such an assessment ought adequately recognise that much of the parties’ wealth can be attributed to the capital growth in the assets introduced by the husband at the commencement of the marriage but at the same time bringing into consideration a myriad of other contributions each made in the course of their relationship.
Accordingly, I must not only identify the contributions of each party, but also assess the weight to be attributed to these contributions having regard to many factors including what has occurred afterwards.
Contribution is assessed as at the date of the hearing and not at some time in the past. The property referred to in s.79 is not only property presently owned, either jointly or individually, but also property owned in the past but no longer owned. There is no requirement under s.79 that a party make a contribution to a particular property before an order can be made in that regard. Thus contribution is assessed in a holistic all-encompassing manner – the totality of contribution to the totality of past and present property. Indeed there is no requirement for contribution under s.79(4) to produce a positive result.
Findings as to credit
I find that where the evidence of the husband and the wife conflicts the evidence of the wife is to be preferred. I make this finding for the following reasons:
a)The wife was robustly cross-examined by the husband’s counsel, Mr Campton. He was, as usual, thorough and often forceful. Notwithstanding this the wife remained confident, firm and convincing in her evidence. I do not accept Mr Campton’s submission that she was defensive, self-serving or unwilling to make sensible concessions. In one respect only the wife’s evidence lacked clarity, and that was in relation to the precise nature of her legal and equitable interest in the [Q] property. The arrangement that the wife had with her mother and sisters relating to that property seems complex and unclear. But on the critical issues i.e. what money she received on its sale and how it was applied, the wife’s evidence was clear and consistent.
b)The husband was also thoroughly cross-examined by Mr Gersbach, counsel for the wife. In short the husband himself conceded to several errors in his evidence, some minor, some major. For example he agreed his evidence at paragraph 9 of his affidavit about leaving his employment with [omitted] shortly after marriage was wrong. His affidavit asserts that the value of his equity in 1/128 [X] Road was $30,000 even though it had clearly been agreed between the parties through their solicitors that it was in fact $20,000 before the affidavit was sworn. The husband described this as a “discrepancy”. Despite his affidavit evidence about his shareholdings at cohabitation and marriage, his evidence in cross-examination was far from convincing, and quite inconsistent with evidence from other sources. He could not produce any documents to support his assertions either as to the identity of the shares or their value. Eventually the husband conceded that he had shares but was unable to say which ones or what value they had. Likewise his evidence about superannuation at cohabitation was quite imprecise. Even though his affidavit says $50,000 in cross-examination he conceded that he now thought it was $8,000 but he could not present documents to verify this. He asserted that “it could be anywhere between $8,000 to $50,000”.
c)The husband’s evidence about his knowledge of the sale of the [Q] property by the wife was unsatisfactory. He clearly sought to minimise his knowledge about it. In his affidavit at paragraph 36 he asserts that the wife received net proceeds well in excess of $100,000. In cross-examination however this became evidence that he “vaguely” was aware of money coming in. In reality he signed the Transfer as witness to the wife’s signature and he was the dummy under-bidder at the auction. I do not accept his evidence that he did not know about, and in any event denied, the wife’s evidence that money from the sale proceeds were applied to reduce the joint mortgage account. I will discuss this evidence in more detail below.
d)The husband’s evidence about the value of his Clemenger shares, and the liabilities attached to these shares, was most unsatisfactory. He agreed that he had overlooked disclosing the liability in one sworn financial statement, even though it had been disclosed in an earlier one. He initially asserted he owned 25,000 Clemenger shares until he was confronted with documentary evidence that he in fact owned 50,000 shares. His response in cross-examination was that this was “news to me” and that he “takes no interest” in these matters was very hard to believe. The significance and impact of this evidence is demonstrated by comparing the value attributed to these shares in the joint schedule of assets and liabilities dated 17 December 2008 ($25,000) to the value that the husband’s own counsel conceded in closing submissions on 9 April 2009 ($165,000).
e)I do not accept the husband’s evidence about the change in the marriage that he said occurred from late in 2001 (paragraphs 51-61 of his affidavit sworn 17 November 2008). In particular the husband asserts that through 2003, 2004 and 2005 they lived together under the same roof, though leading separate lives. For one thing the husband’s evidence is internally inconsistent and quite frankly lacks plausibility. The evidence indicates that during the relevant period they travelled together, had family holidays together, renovated the former matrimonial home together and rented accommodation together. Moreover in his Application for Divorce the husband asserted that the date of separation was 12 July 2006, but that between 15 August and 2 February 2007 they were separated though living under the same roof. The significance of the husband’s assertion of living separate lives in the period 2003-2005 must be understood in the broader context of how his case was presented to the court. In essence the husband’s case was that finances in the marriage were kept separate, that he made a significantly greater financial contribution, and that there was no nexus between any contribution that the wife made and the acquisition, conservation and improvement of the husband’s assets and specifically his interest in [G] Pty Ltd, the Clemenger shares and 1/128 [X] Road. A key stepping-stone in the husband’s case was to establish that he and the wife had been living separate lives and keeping separate finances (a matter I will deal with elsewhere). His evidence about the former is inconsistent, implausible and probably disingenuous. I have little doubt that the marriage suffered strain, particularly as a result of the inability of the wife to fall pregnant, and their participation in the IVF program. They did not, however, commence leading separate lives till 12 July 2006 at the earliest.
f)In cross-examination the husband was again forced to concede omissions in his evidence about his shareholdings and investments particularly as regards Platinum Trust and shares, and Woolworths. He agreed that his approach to disclosure about shares in his evidence varied from disclosing values but not shareholdings, to disclosing shareholdings but not values. As a general rule I find that the husband’s total approach to disclosing the nature and value of his shareholdings and investments to be sloppy and indifferent.
For the reasons set out above, as well as the further matters I refer to elsewhere in my reasons, where the evidence of the husband and the wife conflict I prefer the evidence of the wife.
What is the pool of assets, resources and liabilities?
For the reasons I set out below, I find the pool of assets, liabilities and financial resources to be as follows:
| Description | Ownership | Value | |
| 1 | Former Matrimonial Home Property M | Joint | $2,100,000 |
| 2 | 1/128 [X] Rd | H | $500,000 |
| 3 | 2/128 [X] Rd | Joint | $490,000 |
| 4 | Savings | H | $1,500 |
| 5 | Shares and managed funds including Clemenger | H | $334,528 |
| 6 | Subaru vehicle | H | $35,000 |
| 7 | Honda vehicle | W | $18,350 |
| 8 | [G] Pty Ltd shares | H | $642,235 |
| 9 | NAB account | Joint | $1,150 |
| 10 | Macquarie Fusion Fund | H | $400,000 |
| 11 | 25 percent share in yacht ‘[Z]’ | H | $37,500 |
| 12 | Savings (NAB) | W | $87,655 |
| 13 | Shares and managed funds | W | $39,807 |
| 14 | Woolworths Shares | Joint | $34,050 |
| 15 | Furniture & artworks | H | $50,000 |
| 16 | Furniture & artworks | W | $10,000 |
| 17 | Savings (BankWest) | W | $8,938 |
| Total non-superannuation assets | $4,709,713 | ||
| 18 | Asteron Superannuation | W | $95,150 |
| 19 | AMP Superannuation | H | $249, 233 |
| Total superannuation assets | $344,383 | ||
| TOTAL ASSETS | $5,135,096 | ||
| Liabilities | |||
| 20 | Mortgage over former matrimonial home | Joint | $458,000 |
| 21 | Mortgage over 1/128 [X] Rd | H | $167,000 |
| 22 | Mortgage over 2/127 [X] Rd | Joint | $350,000 |
| 23 | Macquarie Fusion Fund Loan | H | $400,000 |
| 24 | Clemenger Communications Loan | H | $25,000 |
| Total Liabilities | $1,400,000 | ||
| Total Assets & Resources | $5,135,096 | ||
| Total Liabilities | $1,400,000 | ||
| Net Assets & Resources | $3,735,096 |
In making the following findings I relied on the evidence but was greatly assisted by the schedules of assets etc. provided to me by each counsel in closing submissions.
Items 1, 2, 3, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 18 and 19 are either agreed values, or values I have allocated in circumstances where the differences alleged by each party are insignificant having regard to the value of the pool of assets and the issues before the court.
In relation to item 4, the husband’s savings, I find this to be $1,500 as at the date of the hearing as that is the latest evidence he puts before the Court in his financial statement, and it was unchallenged in cross-examination. I acknowledge the agreed figure as at 17 December 2008, but I accept the submission by counsel for the wife that movements in a party’s bank account are reasonable in the circumstances of this case.
In relation to item 5, the husband’s shares and merged funds including the Clemenger shares, in closing submissions the wife’s counsel submitted this should be $343,085 but provided no breakdown of this figure. It is difficult to discern how this figure was arrived at on the evidence. The figure asserted by the husband, $334,528 is comprised of Clemenger shares totalling $165,500 together with other shares and managed funds of $169,028. This is more consistent with the evidence and I therefore prefer this figure.
There is a dispute about item 16, furniture and artworks retained by the wife. She asserts they are valued at $10,000 but he asserts they are valued at $34,000. I had no specific evidence in relation to this, but the difference in asserted values could be attributable to the allegation that was a part of the husband’s case that she had removed (or caused to be removed) items of personalty, including a painting or paintings, from the former matrimonial home contrary to his wishes. As I discuss below, the husband has not established this on the balance of probabilities. I therefore accept the wife’s evidence that the furniture and artworks in her possession have a value of $10,000.
Item 17, the wife’s savings, is an admission against interest and so is included in the list. This means the wife’s totally savings are $96,593. The husband’s counsel submitted I should find her savings to be not less than $87,233. Very late in the hearing I received evidence to indicate that the wife had been made redundant from her employment as at 2nd February 2009 and had received a net termination payment of $103,430. The husband’s counsel submitted that I should add that amount to the pool but I decline to do so because it would be to count this money twice, i.e. to double-dip. On 17 December 2008 it was the parties’ joint position that the wife’s savings were $24,250. By 9 April 2009, the final day of the hearing, her savings had increased to $96,593. The only evidence before me to indicate why the savings increased so dramatically is the evidence about the redundancy payment. I therefore find that, for the most part, the redundancy payment is in her bank account. It is possible that some of it has been spent. As I indicated above, it is not unreasonable for parties’ savings to fluctuate during the course of proceedings, particularly part-heard cases such as this one. The husband has received the benefit of this principle in my determination about his savings (item 4). It is appropriate to record here that the husband’s counsel submitted, and the wife’s counsel agreed, that the proceeds of the redundancy payment should be added to the pool of assets, despite it coming in so late after separation. Indeed the husband’s counsel submitted the husband had contributed to it. Counsel for the husband is unquestionably correct, even if his submission creates a significant inconsistency with the thrust of the husband’s case which was that these parties led separate lives financially and that there was no nexus between the wife’s contribution and the acquisition of assets by the husband. What’s good for the gander is good for the goose.
I decline to add back paid legal fees. The evidence tends to indicate legal fees were paid out of post-separation income. The amount spent by each party was broadly equivalent in any event.
The wife’s final position reflected in her counsel’s submissions was that the husband’s equity in [H] Pty Ltd should not be included on the asset pool even though as 17 December 2008 she had asserted it had a value of $180,805. Whilst the husband did not cavil with this, he asserted that the taxation consequences of the company’s loan to the husband should be included as a liability. I decline to do so as there was no evidence in admissible form establishing what that liability would be. I will need to consider this as a s.75(2) factor operating in favour of the husband the quantification of which I will discuss below.
Items 20, 21 and 22 are agreed figures. I note however that in the schedule provided to me by the husband’s counsel in closing submissions it suggests that the liability attaching to 1/128 [X] Rd is $350,000 and to 2/128 [X] Rd is $167,000. The evidence tends to indicate that the reverse is true. For example the husband gives evidence that the parties jointly borrowed $350,000 to purchase 2/128 [X] Rd.
I find the liability attaching to the Macquarie Fusion Fund investment to be $400,000, not the higher figure suggested on behalf of the husband. He gave evidence that the investment was capital guaranteed, and his evidence about the debt was most unclear. Even his counsel conceded this in closing submissions. There is no evidence to indicate that the liability is in excess of the capital amount.
I find the liability arising out of the Clemenger Communication shares to be $25,000 and no the $86,875 asserted by the husband. I note that on 17 December 2008 the agreed liability was $25,000. Evidence of a higher figure, but not $86,875, was given by the husband in re-examination on 9 April 2009 but there is no evidence either to support the figure, or to explain why it changed from 17 December 2008.
The husband asserted that capital gains tax would be payable, and disposal costs would be incurred, on the sale of 1/128 and 2/128 [X] Rd, and his shares. There was no evidence in admissible form about any of these potential liabilities. The wife contends that there is no evidence of any intention by the husband to liquidate his share holdings. I agree and hence any claimed potential liabilities are speculative. She concedes, however, that he may wish to sell 1/128 [X] Rd, and that the liabilities and expenses arising out of the sale should be treated as a minor s.75(2) factor operating in favour of the husband. In relation to the sale of 2/128 [X] Rd she contends, and I agree, that any liabilities and expenses will be dealt with in the course of and as a consequence of the sale. Counsel for the husband submits that I cannot ignore the capital gains tax liabilities. I certainly agree insofar as there is evidence of intention to dispose of an asset.
Assets at cohabitation
In her evidence the applicant wife asserts that at cohabitation she had an interest in a home unit at [F], an interest in a home unit at [Q], $7,000 in a bank account and a Ford Laser motor vehicle. There was no significant challenge to the wife's evidence in this regard and, accordingly, I accept the same and make findings in these terms. I will deal below with how these assets were applied during the course of the marriage.
In the husband's evidence he asserts that at the time of marriage he had a Subaru motor vehicle with a value of about $8000, the equity in his home unit at 1/128 [X] Road in the sum of $30,000, his superannuation entitlements in the sum of $50,000 and a share portfolio with an approximate value of about $40,000. The husband was challenged in cross‑examination about this evidence and some of my findings are discussed in the previous section on findings as to credit. As it turns out, the parties prior to the hearing had agreed that his equity in the home unit at [M] had a value of $20,000. In cross‑examination he conceded that his superannuation entitlement could have been as low as $8,000 or as high as $50,000 but he could not, in any event, present documents to verify this. Under the circumstances, and also taking into account the concerns I have about the husband's credit, I find that he had superannuation of $8,000 at the time of cohabitation. His evidence about his share portfolio and the value thereof is highly problematic. At the end of the day, the husband's evidence was that he had shares but he was unable to say which ones or what value they had. I am prepared to give the husband the benefit of the doubt in this regard and I therefore find that his share portfolio had a value of about $40,000. It is apparent from the subsequent course of dealings between the husband and the wife that they either individually or jointly invested in shares and other investments. The value of these shares and investments at the end of the marriage is quite considerable. All of this inclines me to accept that the husband probably had shares to the value of $40,000. I deal below with the subsequent use and application of the assets held at cohabitation by the husband.
I am prepared to accept that whatever cash, motor vehicles and share holdings either the husband or wife had at the time of cohabitation were used subsequently for joint purposes whether that be for the acquisition, conservation or improvement of any of their property, or for living expenses.
The evidence the wife gives about the use of the [F] property is contained at paragraph 12 of her affidavit sworn 17 November 2008. The [F] unit was sold in July 1993, the year after cohabitation and marriage and the sale proceeds amounted to $64,395. She used $17,500 to discharge her mortgage indebtedness secured over the other property she had, the [Q] property. She discharged a student loan and purchased jointly with the husband 1000 Woolworths shares. She invested $40,000 with Bankers Trust and purchased artwork. There was no serious challenge to this evidence of the wife, in cross‑examination, and accordingly I accept the same. I am satisfied that the moneys were used for the stated purpose and that at least so far as the Woolworths shares, artwork, and investment with Bankers Trust, those assets went into and are possibly still represented in the pool of assets and resources available to both the husband and the wife.
The wife's evidence about the sale and application of proceeds relating the [Q] property is much more controversial. Her evidence is contained in paragraph 24 of her affidavit. The [Q] property was sold for $330,000, and her share of that property amounted to $129,512.16. She asserts that out of that amount $110,000 was paid into the principal mortgage account to reduce the mortgage liability in respect of the former matrimonial home that had been acquired at auction in December 1994. By way of background, the former matrimonial home had been acquired for $500,000 using a loan of $400,000 from the National Australia Bank.
There was a direct and forceful challenge in cross‑examination to the wife's evidence about the application of the sale proceeds of the [Q] property. Firstly, the wife was cross‑examined at length about precisely what was the nature and extent of her interest in the [Q] property, whether her mother had an interest, and whether the legal title reflected the underlying equitable interest in the property. Whilst this cross‑examination was interesting it did nothing to undermine my confidence in the wife's evidence and it was, in any event, irrelevant to the germane issue before the Court. The evidence clearly indicates that the wife received $129,512.16 (exhibit W2, the correspondence from the solicitor and agent on the sale). Nonetheless, the husband persisted in cross‑examination in attempting to establish that the wife, in fact, received nothing from the sale proceeds. There may well have been some confusion about precisely what the wife's interest in the property was but there can be no doubt about the fact that she received the sum that she refers to. The germane issue for the Court is whether the money, i.e. $110,000, was applied to reduce the mortgage, as the wife asserts. There is no documentary evidence to confirm or corroborate the wife's assertion about the payment of $110,000. For example, the bank records for the relevant period are missing. In addition, there were what I consider to be minor inconsistencies in her evidence about which of the three cheques representing the sale proceeds in fact constituted the deposit of $110,000 that the wife asserts. I find that nothing turns on this and that the wife's explanation that one cheque went directly into the mortgage principal account, and the other went into the mortgage offset account, is a plausible explanation in this regard. I record the fact that the wife was forcefully and meticulously cross‑examined about her evidence by very capable junior Counsel and yet her evidence remained quite firm and clear. I would accept the wife's evidence about the deposit of $110,000 even if there were no other evidence that would lead to the same conclusion. As it is, however, there is other evidence that leads me to safely find that the wife used $110,000 from the $129,512 she received from the sale of [Q], to reduce the mortgage over the former matrimonial home.
The husband's cross‑examination in relation to the sale of the [Q] property, and subsequent application of the sale proceeds assists me in reaching the conclusion that I have come to above. I find that he was minimising the extent of his knowledge about the sale of the [Q] property. As I discussed above, in my findings as to credit, his role and knowledge was far more than he asserted in his affidavit. Specifically, I have two concerns about the husband's evidence.
In cross‑examination the husband agreed that he kept the records of payments made into the mortgage account. The records consisted of bank deposit books which, he agreed, had been in his possession since the date of separation and, indeed long beforehand. The three books in question comprised exhibit W4 and consist of three National Australia Bank deposit books. He agreed in cross‑examination that the flagged entries recorded payments made in the name of the wife, either herself or through [H] Pty Ltd. He agreed, on being shown exhibit 4, that all of the entries appeared to be in his handwriting. In cross‑examination it was put to the husband that there appeared to be a gap between payments in the third book, namely between 23 January 1997 and 11 July 1997. It was put to him that the record of payments both before and after these dates were quite regular and he was asked whether there was in fact another deposit book. The husband indicated there was not.
A close examination of the three deposit books consisting of exhibit W4 reveal the following. The three books are nearly identical, but of course cover different periods. For all practical and relevant purposes the book consists of four pages of deposit records with what appears to be either five, or six stubs between each page. It is apparent that the deposit record pages are not perforated but all other pages are perforated. In the second and third deposit books, but not the first deposit books, the pages are actually numbered. The numbering of the pages in fact confirms that, with one exception, there are five stubs between each of the deposit record pages. I infer that the stubs are what is left after a perforated deposit slip has been removed from the book, presumably at the time of deposit. The one exception to the general rule that there are five stubs between each of the deposit record pages is that there is a page where there is a change of address form, and this is apparent, for example, from book 3 where the change of address form appears at page 1937.
In each of books 1 and 2, there are four pages of deposit records, but in book 3 there are only three pages of deposit records. Book 3 covers the period 25 September 1996 to 23 September 1997 and it is during this period that the wife asserts she made the payment of the $110,000. A close examination of book no. 3 indicates that one page of deposit records, page 1925, is missing. Thus, not only was the bank statement on the mortgage account for the relevant period not available, but neither was the deposit record. The husband was asked to explain the gap in the records. He explained that it might coincide with a period of overseas travel that was undertaken by the husband and the wife, and that during that period they'd asked the bank to suspend the mortgage payments. The difficulty with the husband's explanation is that both his evidence (paragraph 23 of his affidavit) and the wife's evidence (paragraphs 29 and 30 of her affidavit) confirms that the extended period of overseas travel watt between 1999 and 2000 and not in 1997. It was put to the husband that he had, in fact, removed the relevant deposit record page. He denied this. He could not explain why it was missing but indicated that he had not seen the receipt book since 1997 and that once it was completed he put it in a box. The husband would not even accept that the relevant page was missing, even though the physical evidence clearly confirms this.
I am left with a real doubt about the veracity of the husband's evidence about the bank deposit records. On the one hand, the absence of the relevant deposit record could be a huge coincidence as could be the inability of either party to obtain a copy of the bank statement that would either prove, or disprove the payment in question. Nonetheless, it is strange that what is possibly the single most important document in this case, which the husband agrees was at all times in his possession and control, is missing. Whilst I have already found that I prefer the evidence of the wife over that of the husband where their evidence conflicts, and whilst I have a lingering doubt in my mind about whether the husband was involved in removing the relevant deposit record, I am not prepared to make a finding to that effect.
The second relevant evidence that emanated from the husband about the application of the $110,000 is his evidence about draw downs on the loan account with [H] Strategies, and representations that had been made to the National Bank. In June 1998 the husband and wife had purchased 2/128 [X] Road for $333,000 financed by a mortgage advance of $350,000 from NAB. In the course of their loan application to NAB the parties represented to the bank that between March 1995 and mid‑1997 they had repaid almost $115,000 of the original $400,000 loan borrowed on the security of the former matrimonial home. There is no dispute that the $115,000 was in fact repaid during this period. The wife asserts that this was, in part, because of her contribution of $110,000 from the sale of [Q]. The husband asserts that it was because of drawings on his loan account with [H] Strategies.
The husband's evidence about the use of his loan account with [H] Strategies is found at paragraph 32 of his affidavit. The effect of his evidence is that the equity in the former matrimonial home was contributed either from his savings, or by way of cash accessed through the company via his loan account. The annexure D to the husband's affidavit sets out figures provided by his accountant by way of email dated 12 October 2007 as setting out movements in the loan account. This evidence is consistent with the assertion by the husband about the use of the loan account for the purpose he states. However, the husband also gave evidence that the loan account was used for other purposes including the parties' living expenses. In any event, by 30 June 1995 the shareholder loan balance was $112,315 most of which would have had to have been used as the equity in the purchase of the former matrimonial home. By 30 June 1997, according to exhibit H8 the [H] Strategies financial reports, the shareholders loan balance was $166, 686. This is a difference of $54,371 over the two‑year period in question, with no evidence of repayments made in the meanwhile.
Given the husband's representation to the bank that he had paid the loan in advance by $115,000 in a relatively short period of time, the drawings on the shareholder loan account with [H] Strategies cannot provide the explanation for how these repayments were made. In these circumstances, the wife's evidence provides the most plausible explanation for how the loan was repaid as quickly as it was.
Having regard to all of the above matters, I find that the wife did in fact apply $110,000 from the sale proceeds of [Q] towards the repayment of principal on the home loan that was obtained in order to acquire the former matrimonial home.
Referring now back to the assets that the husband had at cohabitation and focusing on the equity in his home unit at 1/128 [X] Road, it is common ground between the parties that the unit was valued at $180,000 at the time of cohabitation, and that there was a mortgage of $160,000 at that time, meaning the husband had an equity of $20,000. The parties agreed that the current market value of the said unit is $500,000, and that the amount owing on the mortgage is, curiously, $167,000. The property has, unsurprisingly, appreciated considerably, but what is perhaps surprising is that the mortgage has actually gone up, rather than going down. The husband's case was that all financial matters pertaining to 1/128 [X] Road were kept separate from the marriage. I was referred to no evidence that might explain why the mortgage balance went up, rather than down, notwithstanding payments over what is now 16 years. In the wife's cross‑examination she agreed that the same tenant had been in that property for at least 12 years. When it was put to her that the property and its tenancy was part of the husband's separate finances and had nothing to do with her she gave evidence that the tenant would often drop rent off to the home and that the rates came out of the joint matrimonial finances. She agreed, however, that the rates were physically paid out of the husband's account, and not a joint account. It was put to her that in the same way as she had kept her BT investments separate, the husband's investment at 1/128 [X] Road was completely separate. Her response was to the effect that the property was part of "our asset pool".
The fact is that, for all practical purposes, this is the only asset of either the husband and the wife which either had at the time of cohabitation and which is still intact. The husband submits that the wife made no contribution, financial or otherwise, towards this property. Certainly, she made no contribution to its acquisition. The evidence indicates that the property was negatively geared, ie, the annual deductible expenses relating to the property and its borrowings exceeded the assessable income derived from the property. I will discuss in further detail below the husband's submission about separate finances and separate lives during the marriage but, unless I accept that submission, a finding that the wife made no contribution towards 1/128 [X] Road merely because the shortfall between income and expenses was paid out of the husband's account is not a finding I could accept. I am prepared to accept that the wife's contribution towards the acquisition, conservation and improvement of this property was substantially less than that of the husband's. I accept that this is an asset that was in existence at the date of cohabitation and which remains intact today. I further accept that the value to the husband of this asset cannot be measured simply by reference to the equity he had at the time, but must also factor in the value to him today, ie, at the current equity of $333,000. These are clearly matters I need to take into account in the overall assessment of contribution that each of the husband and the wife have made.
Assessment of contribution during the marriage
In this section I discuss and make findings about assessment of contribution during the marriage not referable to assets which either of the husband and the wife had at the time of cohabitation.
During the course of the marriage both the husband and the wife worked (either part time or full time) and had periods of unemployment. They were both clearly working at the time of cohabitation and at the time of their engagement. When the husband moved to Canberra to take up a senior position in 1992 the wife left her employment in order to join him in Canberra. Shortly after I accept her evidence that she found some part‑time work, and then full‑time work in Canberra in the media industry. After the end of the husband's employment in Canberra he himself gives evidence about taking three months recreation leave without income for part of the time and also undertook work at no cost for some clients before obtaining his first paid consultancy as a lobbyist. In March 1994 the fledgling business of the husband conducted through [H] Pty Ltd evolved and grew and during this period the wife was in full‑time employment. She left her job in August 1994 and later that year the parties returned to Sydney and purchased the former matrimonial home. I accept that 1994 was a profitable year for the husband, even though it was, technically, the first year of operation of [H] Pty Ltd. This must be the case otherwise there would not have been funds within the company to lend to the husband to apply towards the equity in the former matrimonial home. However, I also accept the wife's evidence that during the early years of the marriage she drew down some of her funds in Bankers Trust and applied them for their joint benefit. Whilst she was cross‑examined about this, her evidence was not shaken.
Early in 1995 the parties moved into the former matrimonial home and the wife resumed part‑time work again in the media industry. By February 1997 she was working full time in the position from which she was recently made redundant. The evidence indicates, and in this regard was not challenged by the husband, that her income increased considerably during the period 1997 to the date of separation. Towards the end of 1999 the husband and the wife travelled and sought to improve their lifestyle. Neither was working during this period and I accept that they were both drawing on funds that had been accumulated during the marriage ‑ indeed, the funds could not have been accumulated at any other time, based on the evidence before me. The husband was off work for a period of as much as six months. His evidence in this regard is at paragraph 42 of his affidavit and he explains that $65,000 of accumulated savings was earmarked for living expenses for the period in the expectation that little or no work would be undertaken. Be that as it may, the evidence indicates that whilst he wasn't working, the wife was after they had returned from their travels.
By September 2000 the husband had become involved in [G] and thereafter remained involved in full‑time employment through that entity.
It is also the case that the wife took some time off in the sense of switching from full‑time work to part‑time work in the hope that this would facilitate her falling pregnant. By January 2003 she returned to full‑time work.
If one puts aside, for the time being, the husband's contention that they had separate lives and separate finances, the evidence clearly indicates that both worked either part time and full time and both had periods of unemployment, and both contributed what they had towards living expenses and the acquisition, conservation or improvement of their property whether it be real estate or personal property. There is no doubt that, measured in dollars and cents, the husband earned more than the wife. It is important to recognise this but, unless I accept the husband's submission about separate lives and separate finances, I would conclude that even though their financial contribution in quantitative and perhaps even qualitative terms was different, the ultimate assessment thereof needs to take into account both direct and indirect financial and non‑financial contributions.
By December 1994 the husband and the wife had been married for two years. I accept that in December 1994 they purchased the former matrimonial home and that most of the equity in this property probably came from funds that had been accumulated as a result of his employment through [H] Pty Ltd. But that does not mean that this contribution was his financial contribution. It would be artificial in the extreme to isolate his earnings and attribute them towards the equity in the former matrimonial home but to ignore the wife's earnings and the joint expenses that they must have incurred in the business of living normal but busy lives as a married but childless professional couple. Not even the husband asserts, for example, that his income, and only his income, and his assets, and only his assets, financed both the acquisition of assets and their living expenses. Of course he does not make this submission because it would be artificial in the extreme to suggest this.
The husband asserts that in November 1998 he renovated his property at 1/128 [X] Road, [M], at a total cost of $22,000, which was sourced from his funds. His assertion that this was funded "from my own funds alone" (paragraph 39 husband's affidavit) is once again problematic and unacceptable. It might be technically correct that moneys from an account in his name were in fact applied for the stated purpose. But, by November 1998 the husband and the wife had been married for over six years and, unless I accept the husband's submission to the contrary, their personal and financial lives had become so intermingled, as to render artificial in the extreme his assertion that it was his funds used for the purpose. It must be remembered by November 1998 that the wife had contributed the sale proceeds of her unit at [F](as I have discussed above), she had applied some of her Bankers Trust investments for the benefit of the parties, they had jointly purchased the former matrimonial home and jointly borrowed $400,000, the wife had received the proceeds of the sale of the [Q] property and applied the same in the manner that I have found above, and the parties had also purchased together 2/128 [X] Road using jointly borrowed funds. To the extent that the husband asserts that his funds financed the renovations at 1/128 [X] Road it is a gross over simplification of what actually took place. Whatever funds he had, had been accumulated during the course of a marriage that was well and truly established in terms of commitment to a joint endeavour.
By September 2000 the husband became involved in [G] Pty Ltd, the lobbying firm. The cost of $225,000 did not involve any outlay by him and was in fact paid over three years by deduction from his income from the business. The husband asserts that the wife made no contribution to this asset which, it must be acknowledged, is a major one for the parties. It is hard to understand the husband's submission in this regard. By September 2000 the parties had been married for well over eight years and had engaged in numerous joint endeavours which involved the sharing of risks as well as opportunities and windfalls and the pooling of income and expenses. On the husband's behalf, it is asserted that it was the skills and attributes and experience that the husband had at the time of cohabitation, ie, that he bought into the marriage, that resulted in his involvement in [G] Pty Ltd. Even if that were the case as a matter of jurisprudential principle or law, it is clearly not established by reference to the facts. At the commencement of cohabitation the husband, who had previously been a [occupations omitted[; had just taken up a position as a [omitted]. His role in [G] is as a [omitted]. He has failed to demonstrate that, on the balance of probabilities, it was the skills, attributes and experience that he possessed at the date of cohabitation and/or marriage that form the nexus for the [G] Pty Ltd opportunity. Indeed, the evidence indicates quite to the contrary. Probably the most significant career opportunity for the husband was his appointment as a [omitted] in Canberra. The husband and wife were engaged and indeed according to the husband cohabited from January 1992 (see husband's affidavit at paragraphs 10 and 11) from early 1992 at the same time as he commenced this new position. There is simply no evidence to support the husband's contention that he, and he alone, was responsible for the [G] Pty Ltd opportunity. And to suggest that the wife made no contribution to this is, once again, artificial in the extreme given the record of joint endeavour that I have referred to above.
In short, the evidence relating to the financial contribution towards acquisition, conservation or improvement of assets points towards the conclusion that whilst the contribution that the husband and wife may have made was different, in the final result they each contributed from the basis of a joint endeavour.
It is time now to put to rest the husband's assertion of separate finances and separate lives. Up until the date of separation the parties did not lead separate lives and nor did they have separate finances except to the extent that it was financially prudent and convenient to do so. The assertion of separate finances and separate lives is, quite frankly, plainly inconsistent with the husband's own evidence, let alone the evidence of the wife. I have already made findings about the wife's contribution of the sale proceeds of [F] and [Q], as well as the Bankers Trust investments in her name. They purchased the former matrimonial home together. She was a director and shareholder of [H] Pty Ltd. She left her employment in Sydney to move to Canberra, and then in Canberra to move to Sydney, in each case to be with the husband and to support the advancement of his career (an inference available to me from the evidence). They travelled together. They purchased 2/128 [X] Road together. The joint home loan was used to fund the acquisition of the husband's interest in his yacht. Motor vehicles were purchased for both the husband and the wife using funds received from the husband's employment. A substantial collection of paintings was acquired during the marriage, which is presently in the husband's possession and control. The husband realised part of his equity in [G] and applied the same towards reducing the home loan as well as purchasing shares and other investments. The parties jointly renovated the former matrimonial home using joint borrowings. All of the above is plainly inconsistent with the husband's assertion, and his Counsel's submission, that the parties kept their finances separate. All of the above is plainly inconsistent with an assertion that the husband's interest in [G] Pty Ltd and his Clemenger shares were the result of the execution of a separate finances/separate lives policy.
The husband's contention the parties have effectively lived separately and apart from late 2001 is not only inconsistent with his own evidence, but plainly inconsistent with the findings I have made above.
A number of other minor issues arise in relation to contribution during the marriage. There was an issue between the parties about the purchase of an engagement ring by the husband for the benefit of his then fiancée, particularly as regards the cost. The evidence does not allow me to make any findings, and, quite frankly, the acquisition of an engagement ring over 17 years ago at a cost which is infinitesimally small compared to the current value of these parties' assets, leaves me to conclude that any finding I would make would be irrelevant and unhelpful.
There was further an issue between the parties about moneys that the wife has paid for the benefit of her mother during the marriage. I accept the wife's evidence about this, in preference to that of the husband. The amounts of support are so small that it does not warrant any adjustment in this matter.
There was a further issue between the parties about supposedly missing paintings or artwork. The husband's case was conducted on the basis that the wife had taken possession of these items, but, curiously, in cross‑examination he insisted that he was not asserting that the wife had taken anything, but was merely asserting that he could not find the items in question. The totality of the evidence present by the husband, the wife, and the wife's brother in law in relation to this issue leads me to find that the wife has not removed any artwork from the former matrimonial home and that, on balance, it is all presently there or at least in the possession and control of the husband. In any event, compared to the overall asset pool, the values in question are negligible.
Conclusion about contribution
I conclude that contribution should be assessed as between the husband and wife as to 52.5 per cent to the husband and 47.5 per cent to the wife. The difference in contribution is, in my opinion, expressly referable to the equity in the property at 1/128 [X] Road. The equity in this property represents just under 10 per cent of the net pool of assets and resources available to the husband and the wife. I am not, however, prepared to allow the full amount in favour of the husband in the circumstances of this case. It could not be said, for example, that the wife made no contribution to the conservation and improvement of this property, having regard to the findings I have made above. In addition, this initial contribution by the husband does need to be offset against the initial contributions made by the wife, and the myriad contributions that each has made over the course of a 14 year marriage.
I must comment and record that I found the husband's submissions about contribution to be fundamentally flawed. If one puts aside those submissions about contribution generally that depended on findings that favoured the husband, but did not in the end result, the court is left with a number of propositions that are clearly incorrect as a matter of law. For example it was submitted that the wife made no contribution towards the acquisition of the husband’s interest in [G], and that this asset is, in effect, “a representation of the husband’s future income stream from his personal efforts and labours”. I have already found that, as a matter of fact, this is plainly incorrect. But even if it were a submission supported by the facts, it is not a conclusion available under s.79 of the Act which emphasises assessment having regard to the totality of the assets, except in those cases where a strict asset-by-asset approach is warranted. It is impossible, and indeed highly artificial, on the facts of this case to try to isolate “the husband’s future income stream from his personal efforts and labours” and somehow concentrate the same into one valuable asset and conclude that the wife made no contribution to the same. It would be to elevate one type of contribution under s.79(4) over other types of contribution referred to in that sub-section.
For the husband it was also submitted that, in effect, the court was quite entitled to assess the quality of any contribution made, and that there was no justification for excluding from consideration the product of such contribution in the assessment process. Moreover it was submitted that a “presumption of ‘proprietorial gain’ akin to some partnership concept has no application as a starting point by reference to the raft of well-known authorities or to the circumstances of this case.” Despite the reference to authorities, none are actually cited. If the submission means that there is no presumption of equality of contribution simple because of a marriage, then that is undoubtedly correct: Mallet & Mallet (1984) 156 CLR 605. The High Court has clearly rejected any notion of the “equality is equity” principle in s.79: Mallet per Gibbs CJ at 610. The High Court was not, however, saying that equality could never be equity, it was saying that there was no room for a presumption of equality. Moreover the High Court was not seeking to minimize the significance of other types of contribution that might be made under s.79(4).
Insofar as the submission relied on the comments of Wilson J in Mallett at p.636 as establishing the proposition that different contributions of the parties are to be treated as equal if the quality of their respective contributions is equal, one must also have regard to the Full Court’s decision in Ferraro (1993) FLC 92-335 at its acceptance of the criticism made by Nygh J in Shewring (1987) 12 Fam LR 139 at 141. The Full Court concludes that the assessment of the quality of contribution should be based on the principle that each party should make such a contribution as can be reasonably expected having regard to their capacity, ability, and expectations of the spouses. In this case neither spouse criticises the other by reference to this. A qualitative assessment of contribution has no application in this case. It follows that there can be no isolation of the products of such contribution.
Assessing s.75(2) considerations
The husband asserted that the only s.75(2) considerations arose out of the uncertainties attributable to realisation costs and capital gains tax. I have recognised this elsewhere. He says that there are otherwise no s.75(2) considerations favouring the wife. The wife asserts she should be entitled to a s.75(2) adjustment of 2.5 per cent principally on the basis that the husband's earning capacity is significantly greater than that of the wife, and he is in secure employment whilst she is not.
I find there to be no factors under s.75(2) which would justify an adjustment in the wife's favour. Neither her age, nor state of health is a relevant consideration. If the wife receives 47.5 per cent of the net matrimonial pool of assets, she will receive $1,774,170, which will provide her with sufficient income, property and financial resources both in the short and long term. Her history of employment throughout the marriage indicates that she has the physical and mental capacity to gain appropriate employment and even though she has recently been made redundant, her employment history during the marriage demonstrates that she is a highly regarded employee within her industry. The wife does not have the responsibility for the care of a child nor is she responsible to meet the needs of another person. There are no issues about the standard of living that in all the circumstances is reasonable and the evidence does not lead me to conclude that the duration of the marriage has affected the earning capacity of the wife. In all the circumstances, and based on the evidence, no s.75(2) adjustment in favour of the wife is called for.
Should a s.75(2)(o) adjustment be made in favour of the husband to reflect unspecified realisation costs and capital gains tax liabilities arising out of the orders that he invites me to make. I discussed this in my judgment above under the heading of the asset pool. There was no evidence in admissible form about any liabilities for capital gains tax or disposal costs that would arise in the event of the sale of real estate and/or other investments. I have found that there is no evidence of any intention by the husband to liquidate his shareholders and thus no liabilities arise in that regard. The wife concedes that the husband may wish to sell 1/128 [X] Rd, and indeed she concedes that the liabilities and expenses arising out of the sale should be treated as a minor s.75(2) factor operating in favour of the husband. I agree, and I allow a s.75(2)(o) adjustment in favour of the husband of 1 per cent of the net asset pool in this regard. I make no further adjustment, however, and whilst I accept that 2/128 [X] Road will be sold, any realisation costs and capital gains tax can be dealt with in the course of and as a consequence of that sale.
Having regard to the matters set out above the s.75(2)(o) adjustment will be in favour of the husband to the extent of 1 percent.
Just and equitable order
The result of my assessment of contribution and s.75(2) considerations will be that the husband receive 53.5 per cent of the net pool of assets as I have found it, or a total value of $1,998,276.
The wife seeks an order that the former matrimonial home be transferred to her, and the husband through his Counsel indicated that he has no problem, in principle, with this taking place subject to her receiving her entitlement pursuant to these orders. The wife seeks an order for sale of 2/128 [X] Road, as does the husband, and the husband seeks an order for sale of 1/128 [X] Road which, according to the wife's Counsel, is not opposed by her. It seems as if neither party wants the jointly owned Woolworths shares and accordingly, unless they otherwise agree, they should be sold and the net sale proceeds distributed in accordance with this judgment.
The wife seeks an order for the transfer to her of a number of specific items that are referred to in her amended minute of order as at 9 April 2009, in consideration of payment to him of $30,000. The difficulty for the wife is that there is no evidence before me that would allow me to make any findings as to the value of the items referred to at Order 6. Thus, unless the parties otherwise agree, they will each otherwise retain items in their possession or control.
There is a joint NAB account, item 9 in the asset pool referred to above. Unless the parties otherwise agree this account should be closed and the proceeds divided in accordance with this judgment.
I am not asked to make a splitting order in relation to superannuation, so this resource will remain where it currently stands.
I am not clear as to whether the wife remains a director and shareholder in [H] Pty Ltd, but it may well be that the husband will want the wife's involvement in the said company to cease, and I am prepared to consider orders in this regard.
Having regard to the variables that potentially arise in implementing the alteration of property interests foreshadowed in these reasons for judgment I think it is preferable for the husband and wife to seek advice from their respective solicitors who should then jointly submit a minute of order reflecting my findings and conclusions as set out in this judgment. Such minute of order should be submitted to my associate within 21 days. If there is any difference of opinion between the parties' legal advisers about the form of the minute of order, one document should nonetheless be submitted which clearly indicated the points of difference. I grant the parties leave to relist on seven days notice as regards the implementation of the above.
In my consideration of whether this order is just and equitable I need to deal with a matter raised in the closing submissions made by Counsel for the husband. He submitted that the wife's approach to property settlement was disingenuous in that she would retain the jewel in the crown, namely, the former matrimonial home, but the husband would obtain that which he already had. Implicit in this submission is the idea that if the wife's application were granted (she sought 52.5 per cent) he would simply be left with the interest in his business, the share interests connected to that business together with the property he had before the marriage. I reject that submission. As I have indicated above the husband will leave this marriage with net assets just under $2 million. He came into the marriage with under $100,000. Indeed, it is disingenuous for the husband to submit through his Counsel that the outcome of any alteration of property interests is that he retains the business and shares together with the property he had prior to the marriage. He certainly has the opportunity to retain 1/128 [X] Road, should he so desire, but he seeks orders for its sale for reasons which I do not understand but which the wife is prepared to accept. His interest in [G] Pty Ltd, together with the Clemenger shares that seem to go with that were created long after the marriage commenced and are in no way referable, on the evidence, to anything that the husband bought into the marriage. Having regard to the order that the husband asked me to make which would have given him 70 per cent instead of the 53.5 per cent I have order, he may well feel aggrieved by the outcome of this case. According to the husband's own evidence, however, he currently earns over $5,000 per week as a result of his personal exertion, and that does not include rents or dividends received. His capacity to earn income increased dramatically during the marriage. His present capacity for employment is significantly greater than what it was at the commencement of cohabitation. It is his capacity to derive an income from personal exertion that is, perhaps, the parties' "jewel in the crown" to pick up the metaphor used by his Counsel. Not only does the husband still retain this, but it is not even valued for the purposes of inclusion in an asset pool for Family Law Act purposes.
Under the circumstances and based on the evidence I believe the order proposed is just and equitable.
I certify that the preceding eighty-eight (88) paragraphs are a true copy of the reasons for judgment of Altobelli FM
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