Willman and Willman

[2010] FamCA 424

FAMILY COURT OF AUSTRALIA

WILLMAN & WILLMAN [2010] FamCA 424

FAMILY LAW – PROPERTY – Settlement in relation to marriage – Initial contributions

Family Law Act 1975 (Cth) ss 75(2), 79

Lee Steere and Lee Steere (1985) FLC 91-626
Ferraro and Ferraro (1993) FLC 92-335
Hickey and Hickey (2003) FLC 93-143; 30 Fam LR 355
Coghlan and Coghlan (2005) FLC 93-220; 32 Fam LR 414
Clauson and Clauson (1995) FLC 92-595; 18 Fam LR 693
Crawford and Crawford (1979) FLC 90-647
White and White (1982)FLC 91-246
Money and Money (1994) FLC 92-485
Pierce and Pierce (1999) FLC 92-844
Cabbell and Cabbell [2009] FamCAFC 205

APPLICANT: Ms Willman

RESPONDENT: Mr Willman

FILE NUMBER: SYC 2247 of 2009

DATE DELIVERED: 16 April 2010

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Johnston JR

HEARING DATE: 30 & 31 March 2010

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Kearney

SOLICITOR FOR THE APPLICANT: Dimocks Family Lawyers

COUNSEL FOR THE RESPONDENT: Mr Livingstone

SOLICITOR FOR THE RESPONDENT: Bull Son & Schmidt

Orders

1. That the husband and wife do all things and sign all documents necessary to divide the funds currently held on trust for the parties in a controlled money account as follows:

   -76.732% to the wife;

   -The balance then remaining to the husband.

2. That within 14 days of the date of these orders, the husband shall do all things and sign all documents necessary to:

   -transfer the registration of the 2007 Toyota Yaris motor vehicle into the sole name of the wife; and

   -transfer to the wife all interest in the accounts in the joint names of the parties with each of TSB Permanent, AMP Bank and ANZ Bank.

3. That the husband shall be entitled, as between the parties, to all monies due in respect of the loan by the husband and wife to the husband’s mother.

4. That the parties divide the contents of the storage unit and the contents currently in storage in the garage belonging to the husband’s mother and located at L between them equally by agreement and failing agreement within 14 days of the date of these orders then:

   -The wife shall prepare two lists of the said items and provide same to the husband;

   -Within seven days of receipt of the lists, the husband shall select one of the lists provided and thereafter be entitled to the items set out on such list, provided that in the event that the husband fails to advise the wife of his election then the wife shall be entitled to select the list of items that she wishes to retain; otherwise the wife shall be entitled to the items set out on the list not selected by the husband;

   -The wife shall be entitled to take possession of the items on the list selected by her;

   and the husband shall do all things necessary to ensure that the wife is provided with access to the said garage for the purpose of removing the items to which she is entitled pursuant to this order.

5. That other than as provided above, the wife as against the husband be entitled to retain as sole and beneficial owner, and the husband has no entitlement in, the following:

   -all bank accounts held in the sole name of the wife;

   -all shares held in the sole name of the wife;

   -all superannuation entitlements held in the sole name of the wife;

   -her interest in her late aunt’s estate; and

   -all furniture, household contents and personal effects currently in the wife’s possession or control.

6. That other than as provided above, the husband as against the wife be entitled to retain as sole and beneficial owner, and the wife have no entitlement in, the following:

   -the 2008 Saab motor vehicle registered in the sole name of the husband;

   -all bank accounts held in the sole name of the husband;

   -the IGA shares held in the sole name of the husband;

   -all superannuation entitlements held in the sole name of the husband;

   -his one-quarter share in the property located at D; and

   -all household contents, furniture and personal effects in his possession or control.

7. That otherwise than as provided for herein, the husband and the wife shall each be entitled to retain as sole and beneficial owner all personalty and financial resources including superannuation, leave entitlements and life insurance policies presently within their respective names, possession and/or control or to which they are each entitled.

8. That the husband and the wife shall each otherwise be and remain liable for any debts in their own name as at the date of these orders, and in this respect, shall indemnify and keep indemnified the other from any liability in relation thereto.

9. That in the event either party refuses or neglects to execute any deed, document or instrument necessary to give effect to all or any of these orders, then a Registrar of the Court shall be appointed pursuant to s 106A of the Family Law Act 1975 (Cth) to execute such deed, document or instrument in the name of the said party and do all acts and things necessary to give validity and operation to the deed, document or instrument upon the Registrar being provided with verification of such refusal or failure by way of affidavit.

10. That the wife shall ensure that she complies with her obligations pursuant to the lease to which the rental bond paid by the husband relates.

11. That both parties have leave to re-list these proceedings on seven days notice in relation to the implementation of these orders.

12. That the above orders not commence operation until 4 May 2010.

13. That both parties have leave to re-list these proceedings for further submissions in relation to the form of the orders only at any time not later than 3 May 2010.

14. That all exhibits be released.

IT IS NOTED that publication of this judgment under the pseudonym Willman & Willman is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYC 2247 of 2009

MS WILLMAN

Applicant

And

MR WILLMAN

Respondent

REASONS FOR JUDGMENT

Introduction and Applications

1. These are defended property proceedings.  The parties are Ms Willman and Mr Willman.  For convenience I shall refer to them as “the wife” and “the husband” respectively.

2. The wife seeks orders to the following effect:

   ·That the funds in the controlled monies account be paid 100 percent to the wife;

   ·That the husband transfer the registration of the 2007 Toyota Yaris motor vehicle into the sole name of the wife;

   ·That the husband transfer to the wife his interest in all joint accounts of the parties with TSB Permanent, AMP Bank and ANZ Bank;

   ·That the husband be entitled, as between the parties, to all monies due in respect of the loan by the husband and wife to the husband’s mother;

   ·That the parties divide their personal property and household contents held in the storage unit and in the garage equally by agreement and failing agreement by the “pick a pile” method;

   ·That otherwise the parties be declared the sole owners respectively of all other property in their possession and / or control;

   ·That the husband and the wife each indemnify the other in respect of their personal liabilities;

   ·That the wife shall ensure that she complies with her obligations pursuant to the lease to which the rental bond paid by the husband relates; and

   ·An enforcement order.

3. On the other hand, the husband seeks orders to the following effect:

   ·That out of the controlled monies account the wife be paid the sum of $174 000 and the balance be paid to the husband;

   ·That the husband transfer the registration of the 2007 Toyota Yaris motor vehicle to the sole name of the wife;

   ·That the parties otherwise be declared to be the sole owners respectively of all other property in their possession and / or control; and

   ·That the husband and wife each indemnify the other in respect of any personal liabilities.

Background

1. The husband was born in 1966 and he is therefore 43 years of age.  The wife was born in 1967 and she is therefore 43 years of age.  The parties commenced cohabiting on 11 January 1994.  They married in Sydney in 1994 and separated on or about 24 February 2009.

2. There are two children of the marriage, a daughter who was born in October 2001 and a son who was born in November 2004.  The children are therefore 8 years and 5 years of age respectively.

3. At the time the parties commenced cohabiting the husband’s property consisted of the following:

   ·equity in his home unit at N, New South Wales which was the place where the parties commenced cohabiting;

   ·a one half interest in a rural property at W, New South Wales which he had inherited from his late father;

   ·a one quarter interest in the property at D, New South Wales;

   ·some modest savings;

   ·a Nissan motor vehicle and

   ·some furniture.

4. The husband also had an interest in Host Plus superannuation.

5. The husband was working full time with C Company as a dispatch and sales person.

6. The husband had purchased his N home unit in late 1991 for $142 000 assisted by a loan on mortgage of $80 000.  At the time that the parties commenced cohabiting the unit had an agreed value of $165 000 and the outstanding mortgage balance was approximately $80 000.  But I am satisfied that within months the parties had borrowed a further $10 000 to fund their trip to Ireland for their religious wedding ceremony.

7. At the time the parties commenced cohabiting the wife did not own any property of significant value. She was working full time as a personal assistant at G Company.

8. Upon their marriage the parties established a joint account into which they deposited their respective incomes and from which were paid mortgage repayments on the N unit as well as outgoings and living expenses.

9. In August 1994 the parties travelled to Ireland and participated in a religious wedding ceremony there.  The wife’s parents paid for the reception.

10. In 1996 the husband resigned from his position with C Company and commenced working a Sales Manager with R Company.

11. The parties subsequently decided that they would purchase a home.  In anticipation of this they undertook some renovations to the N unit during 1997.

12. On 24 December 1997 they purchased the property at M for $360 000.  This was funded by bank loans secured over both the M and N properties of $220 000 and $230 000 respectively.  Upon moving into their M home the parties rented out the N home unit.  The parties subsequently undertook renovations to their M property.

13. In early 1998 the parties had an overseas holiday for 4 weeks including visiting the wife’s family in Ireland for part of the time.

14. In early 1999 the wife was made redundant from G Company.  She received a payment of approximately $35 000.  The wife used approximately $5000 to pay for the expenses involved in a holiday to visit her family in Ireland.  The balance was paid to reduce the outstanding mortgage balance on the M property.  The wife then worked in temporary positions including as from June 2000 with a bank.

15. In approximately 2000 the husband sold his farm at W for $86 000 and paid the net proceeds of approximately $70 000 to reduce the mortgage on the M property.

16. As indicated above the parties’ elder child was born in October 2001.  The wife took 12 months maternity leave from the Bank.

17. In approximately July 2002 the wife took the parties’ daughter to Ireland for approximately six weeks.  During this period the husband continued to work on the renovations.

18. In November 2002, having completed her maternity leave, the wife resumed employment at the Bank. But she worked four days per week.  The parties had arranged for the husband’s mother to move to Sydney to assist them with their daughter’s care.  The husband’s mother cared for the child two days each week and the child went into child care for the remaining two days.  To assist the husband’s mother to purchase a home in Sydney the parties loaned her $30 000.  There is an issue about the advancement of these funds and I shall refer to this matter again below.

19. As also indicated above, the parties’ son was born in November 2004.  Again the wife took 12 months maternity leave.

20. In June 2005 the wife went on a holiday to Ireland with the two children for approximately eight weeks.

21. In November 2005 the wife returned to work at the Bank for 4 days per week.  By this time the wife had become quite homesick.  She informed the husband that she would like to return to Ireland to live.  The husband agreed to endeavour to achieve such a move within a couple of years.  The parties also agreed that they would sell both the N and M properties.

22. In January 2007 sadly the wife’s father died.  The wife went to Ireland for 4 weeks and the husband cared for the children.

23. Later in 2007 the husband undertook some further painting of the N unit for the purposes of enhancing its presentation for sale.

24. In August the family visited Ireland and inspected numerous properties for sale.

25. The N property was sold in September 2007 for $415 000.  After discharging the mortgage the net proceeds of sale of $150 000 were paid to the M property mortgage.

26. The parties had also commenced some substantial renovation work to their M home.  This involved kitchen, laundry and carport work.  A licensed builder was retained to undertake much of the work.  Other work was done mainly by the husband.

27. In June 2008 the wife’s aunt died and the wife became entitled to an inheritance.

28. In mid 2008 the parties sent some of their household goods and their Saab motor vehicle to Ireland.

29. In August 2008 the wife resigned from her employment with the Bank and moved to Ireland with the children.  The husband remained in Sydney for approximately six weeks to endeavour to sell the M home.  But the husband went to Ireland on 5 October 2008 and after a few weeks commenced employment as a sales representative with X Company, Ireland.

30. The wife also commenced employment in Ireland with a business called H Company five days per week.

31. In November 2008 the M property was sold for $915 000.

32. The husband returned to Sydney in late December 2008 to pack the parties’ remaining furniture.  He returned to Ireland approximately three weeks later.

33. The net proceeds of sale of the M property of $674 500 became available in February 2009.  These funds were deposited to the parties’ joint ANZ Bank account.

34. As indicated above, the parties separated on 24 February 2009.  The husband left Ireland that day informing the wife that he proposed to withdraw $500 000 from the joint account.  In fact he did this on 9 March 2009.

35. The wife then transferred the balance of the account to an account in her sole name.

36. Upon his return to Sydney the husband arranged to rent a home in Y which the wife and children would be able to occupy upon their return.  They returned on 2 April 2009 and commenced occupying this home.

37. The husband obtained employment in Darwin with T Company as a sales manager.  He commenced working there on 14 April 2009.

38. On 17 April 2009 the wife commenced these proceedings.  On 28 April 2009 this Court made orders ex parte to protect the $500 000 including an order restraining the husband from dealing with these funds.  On 12 May 2009 further orders were made by consent including orders to ensure that the parties pay a total of $500 000 into a controlled monies account in the names of their solicitors pending further order, which they did.

39. The parties agree that the husband has had the benefit of $100 000 from the net proceeds of sale of M property and that the wife has had the benefit of $107 000 therefrom.  I shall refer to these monies again below.

Credit

The husband

1. Unfortunately I have to regard the husband as a poor witness.  He conceded during the course of his cross-examination that he had not disclosed relevant financial matters to the wife.  The first of those was the fact that in September 2009 he advanced approximately $48 000 to Ms SR with whom he was in an intimate relationship at the time to facilitate her purchase of a home.  Secondly, he failed to disclose to the wife that he was a co-borrower and mortgagor with Ms SR of funds for this purchase and that he held a 1 percent legal interest in the relevant property.  The husband conceded that he had lied about these matters.

2. The husband also failed to indicate in his financial statement that he had a joint account with Ms SR which they had opened in April 2009.

3. The husband also made no mention in his evidence of having loaned Ms SR $24 000 in cash in early September 2009.  I was unsure whether the husband said that Ms SR repaid him in cash or by giving him furniture.  But in any event during her cross-examination Ms SR denied that the husband had advanced $24 000 to her.

4. In these circumstances, generally I have a poor view about the husband’s credit and have serious reservations about accepting his evidence on matters in issue unless corroborated by other material.

Ms SR

1. I have reservations about aspects of her evidence and have doubts that she and the husband have been truthful about the current status of their relationship which the husband described as “flatmates”.  I shall refer to this further below.

The wife

1. The wife was forthright in giving her evidence.  She also demonstrated reasonable recollection of financial events and she was the party who generally attended to financial matters during the marriage.

2. In relation to most of the controversial areas I have no hesitation in accepting her evidence, certainly as against that of the husband.

Issues

1. The first issue is how the Court would consider the advance of $30 000 by the parties to the husband’s mother in 2002.

2. The wife said that in late 2002 the husband informed her that his mother had asked whether they could help her to fund the purchase of a home unit.  In fact the wife had suggested to the husband the availability of the particular unit which the husband’s mother purchased.  The husband said that his mother had asked both the husband and the husband’s brother, if they would lend her $30 000 each. 

3. It is clear that the wife subsequently arranged for $30 000 to be paid from the parties’ funds on behalf of the husband’s mother towards the costs of the home unit which she had decided to purchase.  It is also clear that the husband’s brother made a loan to their mother of $30 000.  However the husband did not concede that the advance of $30 000 by the parties was a loan.  He said that it was a gift. 

4. After the monies had been made available the husband’s brother had a document prepared as evidence of the loan between himself and his mother which he asked his mother to sign but she declined.  The wife said that on a number of occasions she had informed the husband that she would like something in writing from the husband’s mother as evidence of the loan.  The husband denied this.

5. The husband’s mother filed an affidavit and was cross-examined on her evidence.  She indicated that her sister asked for the monies from the parties on her behalf.  She said that she did not receive the money personally but that it was paid on her behalf in the context of acquiring her home unit.  The husband’s mother said that her other son had loaned her $30 000 but the $30 000 advancement from the husband was a gift for all the babysitting she had done for the parties.  She said that the husband informed her that he was giving the $30 000 to her as a gift.  The husband’s mother said that it would be very hard for her to repay the money because she is on the pension.  She said that the husband and his brother would get more than the $30 000 each out of her estate. 

6. There is no question that $30 000 was advanced by the husband and the wife to the husband’s mother for the above purpose.  It might be that the intentions of the husband and the wife in advancing the funds in fact differed.  But I must say I have some doubt about the assertions by the husband and his mother that the $30 000 was a gift for baby-sitting by her.  After all, at the time the money was advanced, there had been little need for baby-sitting because the wife had been on maternity leave.  Whatever the husband’s intention, and he says that he intended the advancement as a gift to his mother, I accept the wife’s assertion that she always intended the money to be a loan to the husband’s mother and expected that it would be repaid.  I accept that she suggested to the husband that he should obtain something in writing from his mother as evidence of the loan. 

1. I also accept that there is little likelihood of the husband’s mother being able to repay the $30 000 to the parties and that the parties would not take any legal steps to endeavour to recover the funds.

2. In any event, it is clear that the husband’s mother intends that the husband will inherit something in excess of the $30 000 from her estate.  In my view, although one cannot be certain, it is more probable than not that the husband would be repaid from his mother’s estate.  But this will not provide any satisfaction to the wife.  In all the circumstances in my view it is appropriate to take this matter into account as a relevant s 75(2) matter. 

3. There was another issue, this being whether at the time that the parties commenced their cohabitation the mortgage in respect of the husband’s N home unit was $80 000 as asserted by the husband or $100 000 as asserted by the wife.  The wife said in her affidavit that she recalled that when the parties were married there was a mortgage of approximately $100 000 in respect of this property.  The wife said that she remembered that after the parties returned from their wedding in Ireland they had a discussion in which they spoke about having a mortgage of $100 000 and a $10 000 loan.

4. The husband said that he started with a mortgage of $80 000 and that the mortgage was $80 000 at the commencement of cohabitation.  It is clear that when the husband re-financed the loan secured over his N home unit to facilitate the purchase of M property the payout on the original loan was $59 834.  This was in December 1997. 

5. If the mortgage had been approximately $100 000 in August 1994 when the parties returned from their wedding in Ireland they would have had to have reduced it by approximately $40 000 by December 1997 for it to have been $59 834 in December 1997.  On the wife’s account they would also have had to service a $10 000 personal loan.  In my view this would have been very difficult.

6. While generally I have a considerably more favourable view of the wife as a witness than I do of the husband I prefer the husband’s evidence about this matter.  Having said this, I accept the wife’s evidence that the parties borrowed $10 000 to fund their trip to Ireland for their wedding.  Accordingly, their indebtedness on return to Australia would have been at least $90 000. 

The Applicable Law

1. Sub-section 79(1) of the Act provides that in property settlement proceedings, the Court may make such order as it considers appropriate.

2. Sub-section 79(2) provides that the Court shall not make an order under the above sub-section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.

3. There is a long-standing preferred approach to the determination of an application brought pursuant to the provisions of s 79.  This involves four inter-related steps.  Firstly, the Court should make findings about the identity and value of the property, liabilities and financial resources of the parties at the date of the hearing.  Secondly, the Court should identify and assess the contributions of the parties within the meaning of ss 79(4)(a), (b) and (c) and determine the contribution based entitlements of the parties expressed as a percentage of the net value of the property of the parties.  Thirdly, the Court should identify and assess the relevant matters referred to in ss 79(4)(d), (e), (f) and (g), including, because of s 79(4)(e), the matters referred to in s 75(2) so far as they are relevant and determine the adjustment (if any) that should be made to the contribution based entitlements of the parties established at step two.  Fourthly, the Court should consider the effect of those findings and determination and resolve what order is just and equitable in all the circumstances of the case. 

4. This approach has been confirmed in numerous cases in this Court including for example Lee Steere and Lee Steere (1985) FLC 91-626; Ferraro and Ferraro (1993) FLC 92-335; Hickey and Hickey (2003) FLC 93-143; 30 Fam LR 355; Coghlan and Coghlan (2005) FLC 93-220; 32 Fam LR 414 and Clauson and Clauson (1995) FLC 92-595; 18 Fam LR 693.

Property available for division

1. There are a number of issues concerning the pool of property available for division between the parties.  As indicated above the parties have a different view about how the Court should regard the $30 000 advanced by the parties to the husband’s mother.  As indicated above, I do not propose to include this as a debt payable to the parties by the husband’s mother and propose to consider it pursuant to s 75(2) of the Act.

2. There was also an issue about how the Court should regard the wife’s inheritance. The evidence in respect of this matter is really quite unsatisfactory.  The wife has been in the best position to put an appropriate valuation before the Court.  Yet she has failed to do so.  The wife’s aunt died in June 2008 and the wife became aware that she was the beneficiary.  The wife said that her late aunt’s estate comprised a house in Ireland.  The wife said that there have been difficulties in selling this property so that she is far from clear when it is likely that she will receive her inheritance.  The wife estimated that her interest in the estate has a value of $54 954 being a one quarter interest in the estate.  This value was arrived at on the following basis.  The house is on the market for 150 000 Euros.  A one quarter interest in this is 37 500 Euros and the wife converted this to Australian dollars. 

3. On the other hand it was submitted on behalf of the husband that the Court should regard this asset as having a value of $65 000.  This is on the basis that in August 2009 the solicitor for the estate informed the wife that her share in the estate would be approximately 44 000 Euros.  Counsel for the husband submitted that converting this to Australian currency would result in approximately $65 000 and this is the basis of the estimate on behalf of the husband.  In response to this suggested value the wife said that the property had been on the market in August 2009 for 180 000 Euros and did not sell. 

4. I propose to bring this asset into the pool of available property at the higher estimate.  After all, there has been opportunity available to the wife to provide a proper valuation of this asset and she has not done so. 

5. The next item about which observation ought to be made is the rental bond of $1720.  This was paid by the husband and is in his name and it is repayable to him upon cessation of the tenancy by the wife and children of the rented property.  I propose to include an order to facilitate the return of this to the husband.

6. The other major area of controversy was in relation to submitted add backs.  The first of these was the submission on behalf of the husband that there should be added back to the pool of available property as against the wife $110 000.  In fact the amount which was advanced to the wife from the net proceeds of sale of the M property was $107 000.  But in any event I do not propose to add this back.  This is because the wife has given an account of how she expended this money.  Some of this was spent on household and living costs in respect of the wife and children.  But there will be added back to the pool the wife’s legal fees paid of $38 782.  There is also included in the pool of available property the wife’s bank accounts in the amount of $55 614.  I am satisfied that these items and the expenditure that I have just referred to account for the $107 000.  So to add back any other amount on the basis that the wife has had the use of $107 000 would be most unfair to the wife.

7. On the other hand it was submitted on behalf of the wife that there should be added back to the pool of available property as against the husband the $100 000 received by him as partial property settlement from the net proceeds of sale of M property.  I accept this submission.  It was also submitted on behalf of the wife that in addition to this amount there should be added back the sum of $18 158 for the husband’s legal fees paid.  It was further submitted that included in the pool of available property should be a loan by the husband to Ms SR of $48 010.  Despite the vigorous submissions about these latter two items I do not propose to include them in the list of available property.  To do so would, in my view, be an unfairness to the husband.  This is because I have the view that such would more likely than not involve a doubling up of add backs against him.  I was urged to do this by learned counsel for the wife on the basis that the Court could have no confidence that the husband has made a full and frank disclosure.  While I accept that there is some thrust to this I am not persuaded that such a finding would justify the course suggested by learned counsel for the wife.  In all the circumstances I do not propose to include the two items. 

8. To the extent that these items might not reflect the entirety of the expenditure by the husband of the $100 000 in my view, the husband has had ample opportunity to put appropriate material before the Court.  In fact the wife has been seeking details of such expenditure now over a very considerable time.  The husband has failed to provide a full explanation of the disposition of these funds. 

9. There is some uncertainty about whether the husband has an entitlement to a property in Darwin owned by Ms SR with whom he has been in an intimate relationship.  As indicated above, in September 2009 the husband advanced $48 010 to Ms SR as the deposit for the purchase by her of a property in the Northern Territory.  The husband has a 1 percent legal interest in such property yet he and Ms SR deny that he has any interest in the property.  In addition the husband signed a mortgage in respect of borrowed funds applied to the purchase of the said property.  The husband’s evidence was most unsatisfactory in respect of this matter.  Much of the detail had to be extracted from him under cross-examination.  His evidence about lending Ms SR in addition to the $48 010 another amount of $24 000 was quite inconsistent with Ms SR’s denials that he had ever loaned her such an amount. 

10. Accordingly, the property and superannuation available for division between the parties consists of the following:-

$
1.        Sale proceeds of M property in controlled monies account	513,912
2.        TSB Permanent joint account	431
3.        AMP joint bank account	644
4.        ANZ joint bank account 115	69
5.        Wife’s ANZ Bank account	29,515
6.        Wife’s TSB Permanent account	1,492
7.        Wife’s Wexford Credit Union account	70
8.        Wife’s A/B account	1,817
9.        Wife’s AMP Credit Union account	1,828
10.      Wife’s ANZ Cheque account	868
11.      Wife’s BankWest account	26,099
12.      Wife’s Macquarie Group shares	22,410
13.      Wife’s Vodafone shares	636
14.      Wife’s AMP superannuation	61,000
15.      Wife’s household contents	10,000
16.      Wife’s jewellery	3,805
17.      Wife’s inheritance	65,000
18.      Wife’s 2007 Toyota	12,000
19.      Wife’s legal fees (add back)	38,782
20.      Husband’s interest in D property	250,000
21.      Husband’s preliminary payment (add back)	100,000
22.      Husband’s ANZ Bank accounts 592 and 115	43,076
23.      Husband’s ANZ Bank account	1,622
24.      Husband’s IGA shares	3,500
25.      Husbands IAG shares	3,943
26.      Husband’s 2007 Saab	31,500
27.      Husband’s household contents	10,000
28.      Husband’s rental bond	1,720
29.      Husband’s BT Business superannuation	12,507
30.      Husband’s AMP Custom superannuation	7,166
31.      Husband’s Tower superannuation	34,589
_____________
$1,290,001

Liabilities

1. Although the wife has an ANZ credit card liability of $1330 I do not propose to subtract this from the pool of property and superannuation available for division.

2. Accordingly, I find that the property and superannuation available for division between the parties has a total value of $1 290 001.

Contributions

1. How the Court should assess the parties’ contributions was an area of major issue between them.

2. On the one hand, it was submitted on behalf of the husband that there was a very significant imbalance between the asset positions of the parties at the time they commenced cohabiting.  It was submitted that this “extremely disparate” position in relation to initial contributions must inevitably lead the Court to a finding about overall contributions very significantly in favour of the husband.

3. On the other hand, it was submitted on behalf of the wife that the Court should make a finding of equality of contributions overall.  This was on the basis that there could be no question that during the period following the parties’ initial contributions and up to the time of separation their contributions have been equal.  It was submitted that true it is that the husband’s initial contribution in the form of the assets he then owned was greater than that of the wife at that point but the wife made a much greater contribution than the husband following separation, particularly because she assumed almost the entirety of the care of the children and a greater share of their cost than the husband did. It was submitted that when the Court considers all contributions it would be satisfied that overall the contributions have been equal.

4. With respect to learned counsel for the wife I am not persuaded to approach the Court’s assessment of contributions in the manner suggested by him.  One difficulty I have with this submission is that such an approach would not involve the analysis and consideration of weight to be afforded to all contributions which relevant authorities indicate the Court must take.

5. How the Court is to take account of initial contributions has been the subject of much consideration over many years.  Examples of some relevant authorities are Crawford and Crawford (1979) FLC 90-647, White and White (1982)FLC 91-246, Money and Money (1994) FLC 92-485, Pierce and Pierce (1999) FLC 92-844 and the more recent case of Cabbell and Cabbell [2009] FamCAFC 205.

6. The relevant principles have been conveniently set out in the following passage from Cabbell (above) at pages 10 and 11:

   (iv)How has the Court’s jurisprudence in respect of initial contributions developed?

   As the wife’s senior counsel appropriately and candidly conceded before us, there is no formula, nor could there be, given the wide discretion exercised under s 79, which prescribes how a court should deal with initial contributions in cases of property adjustment.

   The principles enunciated in decisions prior to 1999 are conveniently reviewed in Pierce & Pierce (1999) FLC 92-844 at paragraphs 25 - 27 of that judgment. In those paragraphs the Full Court (Ellis, Baker and O’Ryan JJ) referred to the cases which discussed the concept of an initial contribution being “eroded” or offset to a greater or lesser extent by later contributions during the marriage, and the qualification to or expansion of this concept by Fogarty J in Money & Money (1994) FLC 92-485 at 81,054, namely that later contributions over a long marriage did not need to be greater, but rather those contributions (sometimes referred to as the myriad of other contributions) “offset” the significance which might be placed on greater initial contributions. Their Honours then, at paragraph 28, explained that in assessing contribution (including initial contributions) rather than considering if an initial contribution had been “eroded”, what was relevant was the “weight to be attached, in all the circumstances, to the initial contribution”. Their Honours then explained the initial contribution should be weighed with all other contributions, and in paragraph 30 stressed the need for a trial Judge “not only to identify the relevant contributions, but also to assess them”. That latter statement of principle is consistent with the discussion in Mallet v Mallet (1984) 156 CLR 605 where Mason J said in discussing s 79:

   The section contemplates that an order will not be made unless the court is satisfied that it is just and equitable to make the order (s. 79(2)), after taking into account the factors mentioned in (a) to (e) of s. 79(4). The requirement that the court “shall take into account” these factors imposes a duty on the court to evaluate them.  Thus, the court must in a given case evaluate the respective contributions of husband and wife under pars. (a) and (b) of sub-s. (4), difficult though that may be in some cases.

   In Williams & Williams [2007] FamCA 313 the Full Court (Kay, Coleman and Stevenson JJ), after discussing conflicting cases determined in the New South Wales Court of Appeal under the Property (Relationships) Act1984 (NSW) which involved discussion of how initial contributions should be assessed in a property adjustment case under that legislation, said at paragraph 26:

   We think that 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 towards 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 or the time it was realised rather than simply pay attention to its initial value at the time of commencement of cohabitation.  But in so doing 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. 

7. As indicated above, at the time the parties commenced cohabiting the husband owned assets with a significant value.  He owned equity in his N home unit, his interest in the farm at W, his one quarter interest in the D property, a motor vehicle, some modest savings, some furniture and a modest interest in superannuation.  At this time the wife did not own any assets of significant value.

8. At commencement of cohabitation the husband owned equity of approximately $85 000 in his N home unit which then had an agreed value of $165 000.  But as indicated above the parties took on a further $10 000 loan within months to assist them to fund the costs of going to Ireland and celebrating their religious wedding there. 

9. The N home unit was sold in 2007 for $415 000 as I have said and the net proceeds of sale of $150 000 were paid to reduce the outstanding mortgage on M property.  But it had been renovated by the parties on a couple of occasions.  So there was cost and physical effort contributed by the parties in this regard.  Considerable marital funds were expended on the mortgage and outgoings over the years.

10. W property has also been sold as also indicated above and the net proceeds paid towards the M property mortgage.  Contributions to this property during the marriage can only have been modest.

11. The husband retains his interest in the D property.  Some apparently modest contributions have been made towards the maintenance and conservation of this property during the marriage because the husband said that he had arranged payment of some land tax and insurance.  But the quantum remains far from clear to me.

12. It should not be overlooked that in respect of both the W and D properties the parties have made welfare contributions.

13. The wife will have her inheritance although it is not clear when she will receive the funds.  This interest has come about almost at the end of the marriage so that relevant contributions would be regarded as having come almost entirely from the wife’s side of the ledger as it were.

1. I have referred to the employment histories of the parties.  Each of them has worked hard during the course of their marriage applying their various capacities, skills and experiences in a joint effort to endeavour to achieve their best for their family.  This has been the case in relation to the financial contributions which each of them have made and to their non-financial contributions.

2. I have referred to the work undertaken in relation to renovations.  The major work was undertaken by the husband but the wife also undertook this work to the extent that her capacity, skills and opportunity away from the demands of being primary parent to the children have permitted.

3. Both the husband and the wife have made significant contributions to the welfare of their family and as homemakers and as parents.  Each of the parties have been heavily involved in the domestic duties, the husband undertaking the bulk of the food shopping and both being involved in maintenance and cleaning inside the home.  The husband has attended to most of the maintenance of the exterior and garden.

4. Following their separation in February 2009 the parties have continued to make relevant contributions.  The wife and children have had the benefit of living in the Y home which the husband arranged for them to occupy.  But the wife has been paying the rent.  The wife has also had to meet the school fees and associated costs for the parties’ daughter, the day care costs for their son and their living expenses.  The husband has been paying child support in accordance with the assessments.  But for much of the time since separation this has been at a rate lower than that which should have been assessed if the husband had kept the Child Support Registrar informed of his proper level of income.  Accordingly, the wife has had to assume a higher level of financial support of the children than she ought to have had in the event that the husband had paid a proper level of support.  The wife has also assumed almost the entirety of the physical care of the children since separation, the husband having moved to Darwin.

5. In my view there can be no question that up to the time of separation the contributions by the husband have been greater than those by the wife.  This is because of the disparity between their contributions at the outset of their cohabitation.  But this by no means results in the level of that initial disparity continuing to the time of separation.  Such a conclusion would be unfair to the wife because it would fall short of recognising the totality of her contributions since that initial disparity.

6. In my view significant weight must be given to the husband’s initial contribution despite all the subsequent contributions made by the parties over approximately 16 years.  The husband’s interest in the D property remains apparently in unchanged form.  As I have said, the wife inherited the interest in her late Aunt’s estate.  Contributions after separation favour the wife.

7. In my view an assessment of contributions by the parties overall favours a finding that the husband’s contributions have been greater than those of the wife because of the weight that it is appropriate to give to his significant initial contributions.  In my view the assessment should be greater than 55 percent, but less than 60 percent in the husband’s favour.  I assess his contributions as having been 58 percent and those of the wife 42 percent.

s 75(2) matters

1. The husband is 43 years of age and he is in good health.  As indicated above he is working in Darwin as a sales manager earning $60 000 per annum including superannuation.  I am satisfied that the husband will be able to earn income at least at his present level for the foreseeable future.

2. The wife is also 43 years of age and she is in good health.  As indicated above she is working at a Bank. Her income is approximately $57 000 per annum for 4 days work per week.  On all indications to date the wife should be able to continue to earn income at least at her present level.

3. The wife has had most of the care of the children since separation.  Despite the fact that the husband has indicated that he does not propose to reside permanently in Darwin, in my view, it is more likely than not that the wife will continue to have the major care of the children for the foreseeable future.

4. What the status of the relationship between the husband and Ms SR is, is unclear.  They commenced a relationship in January 2009 which continued until late April 2009.  They say they have not been involved in a personal relationship since then and that they are flatmates only.  The husband said that he could not say that he has no expectation that their personal relationship will not be resumed at some point in the future but said he did not expect it to resume at present.  Ms SR shed little light on her expectations about the likelihood of her and the husband resuming their personal relationship.  Yet they have been living under the same roof for approximately one year, their financial circumstances have been enmeshed in the sense that they have been operating a joint account, they have advanced money to one another, the husband advanced to Ms SR sufficient funds to pay the deposit on a home, that home is owned 99 percent by Ms SR and 1 percent by the husband and they are joint mortgagors.

5. As indicated above I regard each of them as being poor witnesses.  I must say in all these circumstances it is difficult to accept their relationship is no more serious than “flatmates”.  In any event, I take into account the circumstances of their financial relationship as a relevant s 75(2) matter.  Clearly the husband has an interest in Ms SR’s home the value of which is unclear.

6. I also take into account the loan by the parties to the husband’s mother of $30 000 and the expressed intention by the husband’s mother to make appropriate provision for the husband in her will to take account of this.

7. There was a strong submission on behalf of the wife that proper consideration of the relevant s 75(2) matters would satisfy the Court that an adjustment of available property and superannuation in favour of the wife of 15 percent would be appropriate.  This would involve a differential between their positions in the amount of $387 000.  In my view such an adjustment would be too high. 

8. On the other hand, the Court was urged by learned counsel for the husband “not to go too wild” with any s 75(2) adjustment, particularly because the husband proposes to leave Darwin so that he can be more involved in parenting the children.

9. In relation to this last aspect of the submission, no doubt time will tell whether in fact the husband moves closer to the children and involves himself more than in recent times with their parenting.  Perhaps to some extent this might depend on the future of his relationship with Ms SR.

10. The husband has been paying child support in the amount of $556.67 per month.  I would expect this to be adjusted to approximately $590 per month.

11. I also take into account the fact that the husband’s mother cared for the children two days each week over many years and was paid between $30 and $50 per week for this assistance by the parties.

12. Taking account of all these relevant matters in my view to achieve a just and equitable order there should be a set-off of available property and superannuation in favour of the wife of 10 percent.  This would be a differential of approximately $258 000.

Conclusion and fourth step

1. The wife is to have 52 percent of the property and superannuation available for division between the parties.  This is property and superannuation with a value of $670 800 (52 percent of $1 290 001 = $670 800).

2. The wife has the following:

$
1.        ANZ Bank account	29,515
2.        TSB Permanent account	1,492
3.        Wexford Credit Union account	70
4.        A/B account	1,817
5.        AMP Credit Union account	1,828
6.        ANZ Cheque account	868
7.        BankWest account	26,099
8.        Macquarie Group shares	22,410
9.        Vodafone shares	636
10.      AMP superannuation	61,000
11.      Household contents	10,000
12.      Jewellery	3,805
13.      Inheritance	65,000
14.      2007 Toyota motor vehicle	12,000
15.      Legal fees (add back)	38,782
_____________
$275,322

1. The husband will be required to transfer to the wife his interest in each of the TSB Permanent, AMP and ANZ joint accounts.  This will be $1144.

2. Then the wife would have property and superannuation with a value of $276 466 ($275 322 + $1144 = $276 466).

3. To achieve property and superannuation with a value of $670 800 the wife will require a payment of $394 334 ($670 800 - $276 466 = $394 334).  Such a payment will come from the monies in the controlled monies account.  This would be 76.732 percent thereof.

4. On the other hand the husband is to have 48 percent of the available property and superannuation.  This would have a value of $619 200 (48 percent of $1 290 001 = $619 200).

5. The husband has the following:

$
1.        Interest in D property	250,000
2.        Preliminary payment (add back)	100,000
3.        ANZ Bank accounts 592 and 115	43,076
4.        ANZ Bank account	1,622
5.        IGA shares	3,500
6.        IAG shares	3,943
7.        2007 Saab	31,500
8.        Household contents	10,000
9.        Rental bond	1,720
10.      BT Business superannuation	12,507
11.      AMP Custom superannuation	7,166
12.      Tower superannuation	34,589
_____________
$499,623

1. To achieve property and superannuation with a value of $619 200 the husband will require a payment of $119 577 ($619 200 - $499 623 = $119 577).  This will be paid from the controlled monies account.  It will be 23.268 percent of the monies in the account.

2. The orders I propose will not affect the income-earning capacity of either party.

3. Under the orders the wife will have the property and superannuation referred to above, including at some point her inheritance.  In addition she will receive payment of approximately $394 334 from the controlled monies account.  This will enable her to pay a substantial deposit towards the purchase of a home for herself and the children.

4. On the other hand, the husband will have the property and superannuation referred to above and a payment of approximately $119 577 from the controlled monies account.  Of course a major item of his property is the $250 000 interest in the D property.  There was some suggestion that because this property had been in the husband’s family for many years it would be difficult for the husband to convert his interest in this to cash.  That is entirely a matter for the husband.  In my view, with some rearrangement of his assets, the husband would also be able to fund a significant deposit towards purchase of a suitable home for himself and the children.

5. In all the circumstances in my view the orders I propose will reflect a just and equitable outcome for both parties.

I certify that the preceding one hundred and twenty-one (121) paragraphs are a true copy of the Reasons for Judgment of Judicial Registrar W P Johnston.

Associate:     

Date:              16 April 2010