Wilson and Wilson
[2008] FMCAfam 714
•10 July 2008
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| WILSON & WILSON | [2008] FMCAfam 714 |
| FAMILY LAW – Property settlement – credit – interest free loan from employer – agreed asset pool – husband’s greater initial contributions – equal contributions during cohabitation – wife’s greater post-separation contributions – section 75(2) factors – just and equitable. |
| Family Law Act 1975 (Cth) ss.79, 75 Evidence Act 1995 (Cth) s.140 Federal Magistrates Act 1999 (Cth) Pt. 6, Div. 5 Federal Magistrates Court Rules 2001 (Cth) r.21.02(1)(b) |
| Lee Steere and Lee Steere (1985) FLC 91-626 Ferraro and Ferraro (1993) FLC 92-335 Clauson and Clauson (1995) FLC 92-595 Russell v Russell (1999) FLC 92-877 Briginshaw v Briginshaw (1938) 60 CLR 336 Coghlan (2005) FLC 93-220 Kowaliw (1981) FLC 91-092 |
| Applicant: | MR WILSON |
| Respondent: | MRS WILSON |
| File Number: | PAM 4370 of 2006 |
| Judgment of: | Roberts FM |
| Hearing date: | 1 February 2008 |
| Date of Last Submission: | 26 March 2008 |
| Delivered at: | Launceston |
| Delivered on: | 10 July 2008 |
REPRESENTATION
| Counsel for the Applicant: | Mr P. Schroder |
| Solicitors for the Applicant: | Smythe & Wozniak |
| Counsel for the Respondent: | Mr D. Maddox |
| Solicitors for the Respondent: | John J. Puleo & Company |
ORDERS
That within 90 days of today MR WILSON (“the Husband”) must pay to MRS WILSON (“the Wife”) the sum of one hundred and sixty two thousand dollars ($162,000.00).
That contemporaneously with the payment referred to in Order no.1 hereof the Wife must do all such things and sign all documents as may be necessary to transfer to the Husband all her right title and interest in the property known as and situate at Property S in New South Wales being more fully described in Certificate of Title Folio Identifier [X] (“the property”).
The Husband must indemnify the Wife and keep her indemnified in relation to all rates, taxes and liabilities arising from or associated with the property.
That in the event that the Husband fails, omits or neglects to comply with Order No. 1 hereof, then the parties are to do all acts and things and sign all documents necessary so as to effect a sale of the property for the best price reasonably obtainable (“the sale”).
That the parties have liberty to apply in the event that they are unable to agree upon the terms and conditions of the sale.
That upon settlement the proceeds of sale are to be paid in the following manner and priority:
(a)all costs and expenses of sale including legal costs and disbursements and agents’ commissions (including repayment of any such expenses that have been paid by either of the parties);
(b)the amounts required to pay all municipal and water rates outstanding with respect to the property;
(c)the balance then remaining shall be divided as follows:
(i)the sum of one hundred and sixty two thousand dollars ($162,000.00) to the Wife together with interest thereon under the Family Law Rules from the date of default until the date of payment; and
(ii)the balance to the Husband.
That the Husband is to retain the business known as “[W] Electrical” and all vehicles, tools and equipment associated with that business free from any claim by the Wife.
The Wife is to retain her property situate at and known as Property N in New South Wales free from any claim by the Husband.
That the parties are to otherwise retain their property, chattels and superannuation interests free from any claim by the other.
That for the purposes of section 81 of the Family Law Act 1975 these Orders are intended to finally determine the financial relationships between the Husband and the Wife.
IT IS NOTED that publication of this judgment under the pseudonym Wilson & Wilson is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT PARRAMATTA |
PAM 4370 of 2006
| MR WILSON |
Applicant
And
| MRS WILSON |
Respondent
REASONS FOR JUDGMENT
MR WILSON (“the Husband”) and MRS WILSON (“the Wife”) have been unable to agree upon a division of their property between themselves, so the Court must decide the issue for them.
The Husband filed an Application on 18 September 2006. In that Application he was seeking Orders that can be summarised as follows:
a)That he pay to the Wife the sum of $100,000 within 60 days.
b)That the Wife transfer her interest in the former matrimonial home to him, and he take that property subject to its liabilities.
c)That he be declared the sole owner of an automotive electrical business.
d)That the Wife retain a property purchased by her.
e)That the parties otherwise each retain any property or superannuation in their respective possession or control free from any claim from the other party.
The Wife filed a Response on 8 December 2006. The Orders sought by her can be summarised as follows:
a)That the Husband pay to her the sum of $250,000 within sixty days in return for a transfer of her interest in the former matrimonial home.
b)That household furniture be divided equally between the parties.
c)That the Husband return to the Wife all her clothing and items of personal property.
When the matter came on for hearing before me on 1 February 2008, the parties had changed their positions.
Essentially, the Husband had increased the sum of money that he should pay the Wife to $131,443, but he sought that the time for that payment be within three months. He also sought an additional order that in the event that that sum is not paid (presumably within the period of three months) then the former matrimonial home should be sold and the Wife should be paid 36.5% of the net proceeds of that sale.
At the start of the hearing the Wife was seeking a payment of $200,000 (i.e. not $250,000). However, in his written closing submissions her counsel sought orders for a payment to her of $238,422 in return for a transfer of her interest in the former matrimonial home and that the parties otherwise retain the assets and liabilities in their respective control.
Consequently, the difference between the parties’ positions is in excess of $100,000.
Because of time restrictions on Friday 1 February 2008, and the fact that I would be returning to Tasmania after the hearing of the evidence, directions were made for written closing submissions.
Background
The Husband is 47 years old and the Wife is 45 years old. They commenced cohabitation on the date of their marriage in March 1983 and they separated in August 2006.
They have two children. Their daughter is aged 22 years and is self-supporting. Their son, who is 18 years old, lives with the Wife and is in his final year at school. He hopes to join the RAAF when he has finished school.
The Husband’s parents had died some years before the parties’ marriage. He inherited $50,000, which was invested in his sole name before the parties’ relationship commenced. After they became engaged in June 1982, they purchased a vacant block of land in S, NSW in joint names but the purchase price of $16,500 and associated costs were all paid from the inherited funds that the Husband had invested.
The parties then entered into a contract for the construction of a home on the vacant block of land for approximately $40,000. In order to fund that construction the parties borrowed $21,000 from a bank and the balance was funded from the Husband’s savings. When the parties were married they moved into that home in S. It was the matrimonial home throughout the period of cohabitation and the Husband continues to reside in it.
The parties are agreed that at the start of cohabitation the Husband also owned an EH Holden racing car and a 1968 Holden Monaro motor vehicle. Neither vehicle was the subject of any liability.
At that time, the Wife owned a Toyota Corolla motor vehicle which she estimates was worth $1,800.
Approximately 3 months before the parties separated in 2006, the Wife received $100,000 from the estate of her late father. She used some of that money as a deposit for the purchase of a unit in N. She also borrowed funds to assist with that purchase.
Subsequently, the Wife’s employer advanced a sum of $120,000 to her and she has paid that off the mortgage liability in relation to her unit. There is dispute between the parties over whether that advance from her employer was a loan or a gift and I will refer to that in greater detail below.
The Husband is self-employed as an electrician and the Wife is in paid employment as an office manager.
Relevant Law
Section 79 of the Family Law Act 1975 (“the Act”) sets out the matters that the court must take into account when considering what orders should be made for the alteration of the property interests of parties. They include:
i)the financial and non-financial contributions made directly or indirectly by or on behalf of each party or by a child to the acquisition, conservation or improvement of any property of the parties;
ii)the contribution made by a party to the welfare of the family including any contribution made in the capacity of homemaker or parent;
iii)the effect of any proposed order upon the earning capacity of either party; and
iv)the matters referred to in sub-section 75(2) as far as they are relevant.
The general approach to the determination of a property settlement application has been well established by authority.[1] It is essentially a multi-step process. The first step is to identify the property, liabilities and financial resources of the parties at the time of the hearing. The second is to evaluate the contributions made by the parties as defined in section 79(4) of the Act. The third step is to consider those matters contained in section 75(2) that are relevant.
[1] See Lee Steere and Lee Steere (1985) FLC 91-626; Ferraro and Ferraro (1993) FLC 92-335; Clauson and Clauson (1995) FLC 92-595.
In Ferraro and Ferraro the Full Court said[2]:
A now well established line of authority in this Court indicates the approach normally to be taken to the exercise of the discretion in s79 proceedings. That approach is firstly to ascertain the property of the parties at the time of the hearing, then to consider the “contributions” of the parties within paras (a) to (c) of s79(4), and then to consider the matters in paras (d) to (g), more especially para (e) which takes up by reference the provisions of s75(2) and which are generally referred to as the “section 75(2) factors”.
[2] At page 79,560
In determining what order the court should make under section 79, the court must be satisfied in all the circumstances that it is just and equitable to do so. Sub-section 79(2) provides that the court shall not make an order unless it is satisfied that, in all the circumstances, it is just and equitable to so. It is the justice and equity of the actual orders that the court must consider. This has been referred to as “the fourth step”.
In Russell v Russell[3], the Full court said[4]:
Furthermore, it must be remembered in this regard that under s79(2) of the Act, the Court is required to be satisfied that it is the order to be made which is just and equitable, not just the underlying percentage division of the net value of the parties' assets. Indeed we take the opportunity to emphasise that in what his Honour has termed ''the fourth stage'', that is, the consideration of whether the result is just and equitable, it is the justice and equity of the actual orders not of the percentage distribution which must be considered.
[3] (1999) FLC 92-877
[4] At page 86,439
Since 28 December 2002 courts have been required to treat superannuation interests as property for the purposes of paragraph (ca) of the definition of “matrimonial cause” in section 4 of the Act.[5]
[5] See section 90MC of the Act.
Credit
Through the submissions of counsel, each party calls the credit of the other into question.
In his written closing submissions, counsel for the Husband says that the Wife gave her evidence in an evasive manner, particularly in relation to her inheritance which was not disclosed initially. He added:
It would seem she feared the husband would attack same. There is a duty of disclosure notwithstanding these fears which ultimately were unfounded.
The Husband’s counsel further stated that the evidence of the Wife and of her employer was most unsatisfactory in relation to the loan made to the Wife by her employer. He stated that her employer had failed to properly answer the subpoena to produce documents when called and he said the following:
He is a successful and prudent businessman and his reason for non-production was most unsatisfactory. He was sent to get his documents.
The Husband’s counsel submitted further that there was a conflict in the evidence concerning the loan from the Wife’s employer. He says that:
a)the Wife gave evidence that she received a loan from her employer and attached a letter to her affidavit dated 13 March 2007 from her employer’s company to prove that loan;
b)she said that she had typed the letter on [B] Pty Ltd letterhead on 13 March 2007; and
c)when cross-examined regarding an increase in earnings, she gave evidence that she was working for [G] Pty Ltd up until April 2007, at which time she changed employment to become office manager at [B] Pty Ltd.
The Husband’s counsel submitted that it followed that she could not therefore have typed up the letter on 13 March 2007 because she was not working for [B] Pty Ltd at that time.
In his written submissions, the Husband’s counsel also stated:
Further, Mr B’s evidence was that the loan was a personal loan and the document was typed by his daughter. The credibility of both the wife and Mr B concerning the loan was significantly damaged by these conflicts in their evidence.
Later in his submissions, counsel for the Husband went so far as to say that the letter of 13 March 2007 “was clearly forged for the purpose of these proceedings”.
Having heard the evidence of the Wife and Mr B, I am satisfied that on or about 13 March 2007 Mr B knew that the Wife was having difficulty meeting her mortgage payments and he made an offer to lend her $120,000 interest free, to be repaid when the Wife was to receive her property entitlement as a result of these proceedings. I am also satisfied that the Wife was initially reluctant to borrow the money but Mr B was reasonably insistent.
I am also satisfied that, shortly prior to making that loan, Mr B had sold a business for a substantial sum of money. It was his evidence that he wished to reward loyal employees and he had distributed approximately one million dollars between a number of employees whose employment with him had averaged approximately twenty years. Although the Wife had not worked for him for anywhere near that period of time, he considered her to be a loyal employee so he granted her an interest free loan. That loan was a loan that he made personally from a joint account with his wife. It was documented in a letter on [B] Pty Ltd letterhead which read as follows:
Dear [Mrs Wilson],
Please find enclosed a cheque totalling $120,000.00 to be paid on your mortgage to assist you with a more affordable mortgage repayment until property settlement is finalized.
This is a loan with no interest but to be repaid once your settlement is received.
Best regards
Mr B
Managing Director
Underneath that the Wife signed an acknowledgement in the following terms:
I fully understand the conditions of this interest free loan and agree to repay the money back in full once I have received the property settlement.
At the request of the Husband’s solicitors, a subpoena was issued to
[B] Pty Ltd which required that company to produce documents evidencing any loan made to the Wife including “source documents for the money such as bank statements or cheque butts showing drawing of the money by the company for the loan”.
Mr B appeared at Court at the start of the hearing and indicated that there were no such documents that could be produced by the company because the loan was a personal loan by him and not a loan by the company. When he was asked whether he was able to produce his personal bank statements and cheque butts in relation to that, he indicated that he could, but that he would need to go home to get them. When I asked him to do that, he complied, and later in the day he produced a statement of his joint account with his wife which showed that a cheque for $120,000 was cleared through that account on
15 March 2007.
I therefore do not accept the submission that Mr B failed to properly answer the subpoena. Indeed, he went further than was required by the subpoena in that he made a special trip home to obtain personal documents that supported his evidence in relation to the loan to the Wife. In this regard his affidavit evidence was:
2. Mrs Wilson is employed by [B] Pty Ltd. (formerly called [G] Pty Ltd) as the company’s office manager. Mrs Wilson has been employed since April, 2004.
3. On 13 March, 2007 I advanced an interest free loan of $120,000.00 to Mrs Wilson. This was to assist her with managing her loan repayments. Annexed hereto and marked with the letter “A” is a true copy of the acknowledgment of debt.
4. It has been agreed that the loan is to be repaid at the conclusion of these proceedings.
It seems to me that that evidence is consistent with the loan being a personal loan and not a loan from the company because Mr B states “…I advanced an interest free loan…”.
In my view, nothing much turns upon the fact that the Wife did not commence employment with [B] Pty Ltd until April 2007. The only evidence I have is that Mr B sold the business of [G] Pty Ltd at the beginning of March 2007 and he continued to run at least two other businesses, being [B] Pty Ltd. and [E] Pty Ltd, after he sold that business.
It is correct that the Wife and Mr B gave conflicting evidence about who typed the letter acknowledging the loan. The Wife said she typed it whereas Mr B said that his daughter had typed it. However, it is my view that one of them is confused about that, probably Mr B. I find that it is likely that he was not paying much attention to who typed the letter and therefore was unable to be accurate about that almost one year later.
It was suggested to Mr B that the letter was in a pristine condition, which he accepted. However, his explanation was that he had put that letter straight into the safe and had not taken it out of the safe until his affidavit was prepared. I accept his evidence in relation to that.
It follows from the above that I reject the submission that Mr B was involved in any “forgery”.
I do not come to the conclusion that “the wife gave her evidence in an evasive manner particularly concerning the inheritance which was not initially disclosed” as submitted by the Husband’s counsel. In this regard, the Wife admitted that she had not immediately notified the Husband of her inheritance at a time when she was looking to purchase a property and separate from the Husband. She said that she had decided to buy a property and didn’t want her Husband to know because she thought he would make a claim. She had made the decision to separate and was aware that it would be costly.
I note from annexure “A” to her affidavit filed 11 January 2008 that the Wife discloses that she paid a deposit on her unit approximately one month prior to separation. Further, I note that in re-examination the Wife indicated that there had been a conference at a solicitor’s office before she separated from the Husband and her inheritance was discussed in the presence of the Husband at that time.
I also note that both parties refer to the Wife’s inheritance in their affidavits and it is quite clear to me that there has been no failure on the part of the Wife in relation to her duty of disclosure.
The Wife’s counsel submits that the Husband has been less than frank and he refers to two examples.
The first example is that the Husband failed to disclose in any of the documentation filed with the Court that he has the use of a friend’s 1987 Nissan Skyline for his private purposes. It was only in cross-examination that he revealed that a friend allows him to use that vehicle, and that he has the use of it for as long as he likes, until he “gets back on his feet”.
I do not find his failure to disclose that use of vehicle to be very significant. My reasons for that are:
a)Firstly, that he does not own the vehicle so it is quite likely that he did not see it as an asset that he needed to mention in any of his documents; and
b)Secondly, a 21 year old Nissan Skyline is unlikely to be a very valuable vehicle in any event.
The second example referred to by Wife’s counsel was that in his first Financial Statement the Husband had failed to disclose that he had a Holden Monaro and that it had only been disclosed when its existence had been pointed out by the Wife. That vehicle has an agreed value of $26,500.
When he was questioned about that, the Husband indicated that he had owned the Holden Monaro for 22 years and his reason for not including it in his first Financial Statement was because he had arranged to “swap it for parts”. However, he had later retrieved the vehicle. Frankly, I found his evidence in relation to that vehicle to be somewhat confusing. However, on the standard of proof required, I do not find that he was being deliberately dishonest or trying to hide an asset from the Wife or the Court. [6]
[6] See s. 140 of the Evidence Act 1995 and Briginshaw v Briginshaw (1938) 60 CLR 336.
It is my view that both parties (and Mr B) gave their evidence in a generally honest manner. It is also my view that differences between the parties’ evidence were more of perception than anything else.
The Asset Pool
When this matter first came on for hearing I was informed that the parties had differing valuations of the Husband’s auto-electrical business. I was told that, although there was a significant disparity between those valuations, the valuers had conferred and the parties’ counsel were confident that an agreement would be reached as to its value. Consequently, the matter was stood down to enable discussions to take place. When the hearing resumed, I was informed that the agreed asset pool was in accordance with the list in the Husband’s opening case outline, save that the value of the Husband’s business was agreed at a figure $696 higher than was shown in that list.
The agreed list of assets is therefore as follows:
Former matrimonial home (joint)
$359,950
Husband’s auto-electrical business
$27,696
Husband’s AXA shares
$5,049
Husband’s Holden Monaro
$26,500
Husband’s furniture
$3,909
Husband’s superannuation
$39,735
Wife’s IAG shares
$1,024
Wife’s Westpac Life Investment
$3,456
Wife’s Holden Commodore
$5,000
Wife’s superannuation
$29,437
Total Assets
$501,756
The parties adopted a pragmatic approach to the treatment of the Wife’s residential unit for the purpose of these proceedings. They agreed that it should not be included in the asset pool, nor should any liabilities in relation to that property. That was primarily because its purchase was settled just after the parties separated and the Husband was not involved in that purchase. Similarly, any remaining balance of the Wife’s inheritance was not to be included in the asset pool.
It was not until I received the written submissions on behalf of the Wife that it became apparent that her counsel was suggesting that I should take into account certain credit card liabilities and a tax debt which were not referred to in either the opening case outline or the closing submissions on behalf of the Husband.
Having considered the matter, I propose to exclude those liabilities when determining the value of the asset pool. My reasons are:
a)I was not told at the time of the hearing that those should be deducted from the value of the agreed assets;
b)Neither party appears to have been particularly concerned about those liabilities in the affidavits that they filed;[7] and
c)The difference between the liabilities of the Husband and those of the Wife is not so significant that it will make much difference to the outcome of this matter.
[7] See paragraph 36 of the Husband’s affidavit filed 17 January 2008 and paragraph 10 of the Wife’s affidavit filed 13 November 2006.
Consequently, I propose to consider only the assets set out in the table above.
It appears to me that both counsel accept that I can include superannuation in the same asset pool as the other assets. I propose to do that because neither party’s superannuation interest is of very great value. That accords with the majority decision in Coghlan[8]
[8] (2005) FLC 93-220
During the hearing there was some cross-examination of the Wife and Mr B about a sum $6,456 held by the Wife in a bank account in her name, which she claimed was being held on trust for one of Mr B’s companies. That money had come from sales of hot water systems through Ebay on the internet by her son at the request of Mr B.
I accept the evidence of both the Wife and Mr B in relation to that, and because it is not mentioned in the closing submissions on behalf of the Husband, I draw the inference that the Husband now accepts that evidence as well.
Contributions
It is clear that the Husband contributed significantly more than the Wife did at the start of their relationship. It is also clear from her affidavit and oral evidence that the Wife acknowledges that greater contribution.
Although it is not possible to perform a strict mathematical calculation of the value of his contribution, I note that the Husband contributed approximately two thirds of the value of the home from his invested inherited funds at the time of the land purchase and the home construction, and a joint mortgage loan provided the remaining one third. Consequently, if a snapshot could have been taken at that time, and the parties are given equal credit for discharging the mortgage, it would suggest that the Husband contributed approximately five sixths of the total value of the former matrimonial home.
In the Full Court decision of Money and Money[9], the dissenting Judge (Fogarty J) had said:
……an initial substantial contribution by one party may be ‘eroded’ to a greater or lesser extent by the later contributions of the other party even though those later contributions do not necessarily at any particular point outstrip those of the other party.[10]
[9] Money (1994) FLC 92-485
[10] Money at page 81,054
In Bremner and Bremner[11] a differently constituted agreed with the approach taken by Fogarty J in Money.
[11] Bremner and Bremner (1995) FLC 92-560
In Pierce v Pierce[12] the Full Court said:
In our opinion it is not so much a matter of erosion of contribution but a question of what weight is to be attached, in all the circumstances, to the initial contribution. It is necessary to weigh the initial contributions by a party with all the 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. In the present case that use was a substantial contribution to the purchase price of the matrimonial home ...[13]
[12] Pierce v Pierce (1999) FLC 92-844
[13] Pierce at page 85,881
In this case too, the husband has made “a substantial contribution to the purchase price of the matrimonial home” and that matrimonial home is the same home that now accounts for approximately 70% of the total value of the agreed asset pool.
In addition to the initial monetary contributions that the Husband made towards the purchase of land and construction of the home, he also had two unencumbered motor vehicles which he subsequently sold.
However, it is clear that the assessment of contributions in relation to Family Law property settlements is not an exercise of precise mathematical calculation. In Hayne and Hayne[14], Pawley J said:
In matters such as this one cannot approach the problem with an eye for meticulous detail. It should rather be dealt with broadly so that the end result can be said to be just and equitable.
[14] (1977) FLC 90-265 at p. 76,415
In Bremner referred to above, Nicholson CJ said[15]:
I would also add that when one considers cases of this sort, it should be remembered that they are not decided upon a pure mathematical basis……
[15] At page 81,589
In paragraph 11 of her affidavit filed 13 November 2006 the Wife sets out her non-financial contributions during the marriage. In his closing submissions, her counsel refers to that paragraph and states that:
…the wife alleges that she made virtually all of the non-financial contributions as homemaker and parent. While there is some dispute as to just how much of this work the husband did, there is no doubt that the overwhelming majority of non-financial contributions were made by the wife.
The Husband’s evidence was that he made the following non-financial contributions:
a)He was responsible for all outside chores in relation to maintenance, landscaping and gardening and the like and attended to painting and repairs inside the home.
b)He assisted in the care of the children when he was not working.
c)Up until 2005 he assisted with domestic chores and thereafter “was almost totally responsible for all chores in relation to the home both inside and outside the home, with the assistance from (their daughter)”.
When he was cross-examined, the Husband conceded that the Wife had a serious back problem in 2006, so I infer that it was not possible at that time for her to continue with domestic chores as she had done in the past.
When she was cross-examined, the Wife conceded that the Husband did some domestic chores.
When I consider that the parties were involved in two auto-electrical businesses, the Wife had outside employment and they each contributed to the raising of two children, I would find it hard to do otherwise than assess their contributions throughout the period of cohabitation as being equal. Although they each see their individual contributions as greater than the contributions of the other, it seems clear to me that the difference in their positions is one of different perspectives.
The Husband had suggested in his affidavit, and his counsel stated in his opening case outline, that the Wife had been “syphoning” funds to support her gambling and social activities. However, I note that in his written closing submissions the Husband’s counsel states:
It is submitted that neither party was able to establish on balance Kowaliw (1981) FLC 91-092 type of negative contributions.
Given the evidence, that is an appropriate concession to make on the Husband’s behalf. However, I comment that I did not get the impression that the Wife was trying to establish that type of “negative” contribution on the part of the Husband.
Since the time of separation, it is clear that the Wife has made greater contributions towards the welfare of the family, in that she has been primarily responsible for the support of the parties’ son. She has met the majority of his expenses, including school fees, with limited contributions and child support from the Husband. In this regard, the Husband has paid some school expenses, but it is clear that the majority have been met by the Wife. In addition, the Husband was for a time paying child support that amounted to less than a fair share of their son’s expenses. That was because his child support payments were assessed on the basis of an earlier reduced partnership income.
Although I am of the view that the Husband’s greater significant initial financial contribution entitles him to an adjustment in his favour, it is clear that that adjustment must be reduced to a small extent by the greater post-separation contributions by the Wife. I assess the adjustment in favour of the Husband for his initial contributions at 12.5% and the adjustment in favour of the Wife for her greater post-separation contributions at 2.5%. Taking that into account, on contributions alone, an overall adjustment in favour of the Husband should be 10%.
However, it is quite clear from Section 79 that such matters are not determined on contributions alone.
Section 75 (2) Factors
The parties are both in their forties and appear to be in good health.
Both have the necessary physical and mental capacity for appropriate gainful employment. Although the Wife earns more than the Husband, that appears to be for two main reasons; she works at two jobs and the Husband appears not to work to his full capacity. In this regard, he earns less than $40,000 per annum in his own business, but he conceded that even as an employed auto-electrician he could earn $51,000 per annum.
The Wife will continue to have the care and control of the parties’ son for the balance of this year. However, she conceded that she would not expect him to be living at home after he finishes school.
Although the Wife has a male friend, I accept her evidence that they do not live together and he provides her with no financial support.
The Wife has been fortunate to have a generous employer who has assisted her with an interest free loan. However, it is clear that even on the Husband’s own case, the Wife will receive more from these proceedings than the total of that loan. Consequently, if the parties had been able to settle this matter at an earlier stage, that loan might not have been needed. I am therefore of the view that, while it is true that the loan is in itself a financial resource that could be taken into account under Section 75(2) of the Act, I do not believe that I should make any adjustment for that in the circumstances.
When I consider all these factors, I conclude that there should be no adjustment under sub-section 75(2) in favour of either party.
Conclusions
Given what I have said above, I am of the view that there ought to be a 10% adjustment in favour of the Husband, so the asset pool should be divided between the parties on the basis of 60% to the Husband and 40% to the Wife.
Of the assets shown in the table at paragraph 52 above, the Wife will retain her shares, her Westpac Life investment, the Commodore and her superannuation worth a total of $38,917. In order to receive 40% of the total of $501,756, the Wife needs to receive a total of $200,702. This means that she should receive a further $161,785 in order to receive 40% of the total.
Consequently, if the Husband is to retain the former matrimonial home, it is my view that he should pay the rounded sum of $162,000 to the Wife.
Clearly, the Husband does not have $162,000 readily available and he will probably need to borrow that by putting the former matrimonial home up as security. That sum of $162,000 is approximately 45% of the agreed unencumbered value of $359,950, so I believe that there is a reasonable chance that the Husband will be able to secure such a loan. However, there must be a possibility that he may not be able, or may decide that he does not wish to do so. Consequently, I will make an order for the sale of the former matrimonial home and for the payment of that sum to the Wife if he does not pay those funds within 90 days. In my view, 90 days should be sufficient time to enable him to make a decision and secure a loan against the title to the former matrimonial home.
I will make Orders to give effect to the matters set out in these Reasons, which I consider are just and equitable for the purposes of section 79(2).
Procedure
I heard this matter in Parramatta but I will be delivering this decision in Tasmania. I will therefore make arrangements for copies of my Reasons and the Orders to be provided to the legal representatives of the parties.
If any costs application is to be made, it should be made within 28 days in accordance with Rule 21.02(1)(b) of the Federal Magistrates Court Rules 2001. That can be done by contacting my Associate to arrange for a listing of the matter, to be heard by telephone or video link in accordance with Division 5 of Part 6 of the Federal Magistrates Act 1999.
I certify that the preceding ninety (90) paragraphs are a true copy of the reasons for judgment of Roberts FM
Associate:
Date:
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