Winder and Winder
[2009] FamCA 964
•17 September 2009
FAMILY COURT OF AUSTRALIA
| WINDER & WINDER | [2009] FamCA 964 |
| FAMILY LAW – PROPERTY SETTLEMENT – Contributions – Adjustment for other matters |
| Family Law Act 1975 (Cth) ss 75 & 79 |
In the Marriage of Hickey(2003) 30 Fam LR 355
Mallett v Mallett (1984) 9 Fam LR 449
In the Marriage of Ferraro (1992) 16 Fam LR 1
In the Marriage of Shewring (1987) l2 Fam LR 139
In the Marriage of Lenehan (1987) 11 Fam LR 615
In the Marriage of Norbis (1986) 10 Fam LR 819; FLC 91-712
In the Marriage of Zyk (1995) 19 Fam LR 797
In the Marriage of Coghlan (2004) 33 Fam LR 414
Nelson and Nelson (1995) 184 CLR 538
In the Marriage of Jordan (1996) 21 Fam LR 382
In the Marriage of Robb (1994)18 Fam LR 489
In the Marriage of Pierce (1999) 24 Fam LR 377; FLC 92-844
In the Marriage of Kowaliw (1981) FLC 91-092.
| APPLICANT: | Mr Winder |
| RESPONDENT: | Ms Winder |
| FILE NUMBER: | SYF | 2124 | Of | 2006 |
| DATE DELIVERED: | 17 September 2009 |
| PLACE DELIVERED: | Sydney |
PLACE HEARD: | Sydney |
| JUDGMENT OF: | Judicial Registrar Loughnan |
| HEARING DATES: | 15 & 16 June 2009 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr S. Stewart |
SOLICITOR FOR THE APPLICANT: | Watts McCray Lawyers |
| COUNSEL FOR THE RESPONDENT: | Mr R. Schonell |
SOLICITOR FOR THE RESPONDENT: | Tsolakis, Solicitors |
Orders
Within three months of the date of these orders the Husband shall do all such acts and things and sign all such documents as may be required to transfer to the Wife all of his right title and interest in the real property situate at and known as 3 … (‘the [F] property’) and being the whole of the land more particularly described in Certificate of Title Volume … Folio … on the following basis;
1.1The Wife shall indemnify the Husband against all payments and liability pursuant to the mortgage registered over the F property to the S Credit Union and all payments and all apportionable rates and taxes;
1.2Upon settlement of the transfer, the wife shall:
a)pay $300,000 to the husband; and
b)discharge the mortgage registered over the F property.
In the event that the wife does not comply with order 1, within seven (7) days of the date of default the Husband and the Wife shall do all acts and things and sign all documents necessary to effect a sale of the F property for the best price reasonably obtainable in the following manner:
2.1.List the F property for sale by private treaty for a period up to ten (10) weeks from listing with such agent as the parties may agree to appoint and in default of agreement as to agent within fourteen (14) days of the date of default with such agent as the President of the Real Estate Institute of New South Wales shall appoint ("the agent") the costs of and incidental to such appointment to be borne equally by the parties as and when same fall due;
2.2.In the event that contracts for sale have not been exchanged within ten (10) weeks of listing then the parties shall do all acts and things necessary to cause the F property to be sold by auction within a further two (2) months or such other time as the parties may agree with an auctioneer appointed by the parties and failing agreement on the appointment of an auctioneer then by an auctioneer appointed by the agent referred to in paragraph 2.1 herein;
2.3.The reserve price for the purpose of such auction shall be such price as may be agreed upon by the parties or, in the absence of agreement reached within fourteen (14) days of the date of the auction, shall be the price nominated as the fair market value thereof by a valuer appointed by the President for the time being of the Australian Property Institute Incorporated (NSW) Division ("the valuer") the costs of and incidental to such appointment and valuation to be borne equally by the parties as and when same fall due;
2.4.The valuer shall, if requested by either the Husband or the Wife at a date three (3) calendar months after the date upon which the F property is first listed pursuant to paragraph 2.1 herein and thereafter at three (3) calendar monthly intervals until the F property is sold, nominate a sale price other than the originally nominated sale price;
2.5.The parties shall each cooperate in every way with the agent including (without limiting the generality of the foregoing):
2.5.1. making the key available to the agent;
2.5.2.allowing inspection of the F property at all reasonable times requested by the agent;
2.5.3.doing or saying nothing to hinder or prevent a sale being effected;
2.5.4.ensuring the F property including the grounds are in a neat and clean condition at the time of inspection by the agent and prospective purchasers; and
2.5.5.signing all documents requested by the agents in relation to the listing for sale of the F property except a contract or agreement for sale which has not been authorised by the parties' solicitors.
2.6.In the event the bidding at the auction does not reach the reserve price the parties or such of them as attends the auction may negotiate with the highest bidders or any other interested person and effect a sale of the F property at a price which is not more than ten per cent (10%) below the reserve price, or at such other price as the parties agree upon in writing;
2.7.In the event the F property remains unsold, the parties shall do all acts and things and sign all documents necessary to continue to relist the F property for sale by public auction again at three (3) monthly intervals, and the provisions of paragraphs 2.1 and 2.5 herein shall apply successively until the F property has been sold so that at each successive auction the reserve price shall be ten per cent (10%) less than the reserve price at the immediately preceding auction unless otherwise agreed by the parties in writing;
2.8.The parties shall each execute a contract for sale in the form prepared by the solicitors having the conduct of the sale at the sale price;
2.9.The parties shall instruct such solicitor as they agree upon to have the conduct of the sale on behalf of both parties or, in the absence of agreement reached within fourteen (14) days shall instruct such solicitor as may be appointed by the President for the time being of the Law Society of New South Wales ("the solicitor") the costs of and incidental to such appointment to be borne equally by the parties as and when same fall due;
2.10.Neither party may confer on any agent without the consent of the other party any right to any sole or exclusive agency in respect of the F property or to any commission.
Disbursement Of Proceeds Of Sale Of The F Property
Upon the settlement of the sale of the F property the Husband and the Wife shall cause the proceeds of sale to be applied as follows:
3.1.In payment out of any agent's and legal expenses incurred in the said sale including any advertising costs;
3.2.In discharge of the mortgage to the S Credit Union registered on title to the F property;
3.3.In payment of 40.7% of the balance to the Husband; and
3.4.In payment of the balance then remaining to the Wife
Arrangements Pending Transfer or Sale of the F Property
Pending the sale of the F property each party shall be restrained from doing any act or thing to encumber, sell or otherwise dispose of their interest in the F property.
Pending the sale of the F property, as between the parties, the Wife shall have the sole and exclusive use of the said property.
Pending the transfer or sale of the F property, the Wife shall pay or otherwise cause to be paid as and when they fall due any outgoings, council rates or other utilities and the mortgage in respect of the F property.
Superannuation
Paragraphs 8-10 (inclusive) of these Orders are binding on S Superannuation Limited, the Trustee of the S Superannuation Plan (“the Fund”).
Pursuant to s 90MT(i)(a) of the Family Law Act 1975 (“the Act”) the Husband shall be entitled to be paid an amount calculated in accordance with Pt 6 of the Family Law (Superannuation) Regulations 2001 (“the Regulations”) using the base amount of $134,840 of the Wife’s total superannuation entitlements at the date of these orders and there shall be a corresponding reduction in the entitlement which the Wife would have had but for these Orders.
The operative time for the purposes of Order 8 of these Orders is four (4) business days after the date of service of these Orders upon the Trustee of the Fund.
The Wife shall within fourteen (14) days of becoming entitled to receive a Superannuation benefit from the S Superannuation Plan, provide to the Trustee all such forms as shall be necessary to enable it to determine the nature and quantum of the Superannuation entitlement and any other related information it may reasonably require.
Until such time as the Superannuation split to the Husband pursuant to these Orders can be rolled over onto a separate account for him:
11.1The Wife shall provide to the Husband no less than twenty-eight (28) days notice before such time as she elects to retire from and/or take voluntary retirement and/or for any reason accept or become entitled to access in whole or in part her entitlement in the Fund.
11.2The Wife shall direct and authorise the Trustee of the Fund to communicate with the Husband and/or any person authorised by him in writing:-
11.2.1To answer any reasonable inquiries as may be made by him or on his behalf from time to time in relation to his entitlement in the Fund, and
11.2.2To provide to the Husband and/or his authorised representative a copy of any notice of any application or request by the Wife which seeks release of entitlements in the Fund in so far as that release may effect the Husband’s entitlement in the Fund pursuant to these Orders.
11.2.3The Wife by herself, her servants and/or agents be and hereby are restrained from doing any act or thing which would prevent the Husband, his heirs, executors, administrators or nominees from receiving the benefits in the Fund to which he is entitled pursuant to these Orders.
In the event that the Superannuation split to the Husband pursuant to these Orders can be rolled over into a separate account for him, each of the parties hereto shall each do all such acts and things and execute all such documents as may be necessary to facilitate and to implement that rollover.
Money in trust
The parties shall forthwith do all things and sign all documents necessary to cause proceeds from the sale of any matrimonial assets held in trust on behalf of the Parties to be applied as follows:
14.1 to discharge the parties’ debt to Mr P; and
14.2 to pay the balance to the husband.
Other Property
Unless otherwise specified in these orders:
14.1Each part is solely entitled to the exclusion of the other to all other property and chattels of whatsoever nature and kind in the possession of such party as at the date of these orders and for this purpose bank accounts are deemed to be in the possession of a person whose name appears on the bank records thereof, any insurance policies are deemed to be in the possession of the beneficiary thereof and superannuation entitlement are deemed to be in the possession of the person whose named as the worker whose age or working future provides for the conditions for payment out of such entitlement;
14.2Each party shall be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these orders.
Procedural Orders
In the event that the Husband or the Wife refuses or neglects to execute a deed and/or instrument in compliance with the provisions of this order, the Registrar or Deputy Registrar of the Family Court of Australia at Goulburn St, Sydney is hereby appointed pursuant to section 106A of the Family Law Act 1975 to execute all deeds and/or instruments in the name of the husband or wife and do all acts and things to give validity and operation to the deeds and/or instruments.
Liberty to apply is granted to each party and the Trustee in relation to the form or implementation of these Orders.
IT IS NOTED that publication of this judgment under the pseudonym Winder & Winder is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)
| FAMILY COURT OF AUSTRALIA AT SYDNEY |
FILE NUMBER: SYF 2124 OF 2006
| MR WINDER |
Applicant
And
| MS WINDER |
Respondent
REASONS FOR JUDGMENT
After living together for about 7 years the parties cannot agree on a settlement of their property. The parties are divorced but for convenience I will refer to them as the husband and wife.
Applications
In what is increasing the trend in property trials, the orders sought only crystallised on the second day of the hearing.
The husband seeks orders in accordance with a minute of orders attached to his Case Outline document as follows:
Sale of Former Matrimonial Home
1. That within seven (7) days of the date of these Orders the Husband and the Wife shall do all acts and things and sign all documents necessary so as to effect a sale of the former matrimonial home at [F] in the State of New South Wales, being more particularly described in Folio Identifier […] (hereinafter referred to as "the [F] properly") for the best price reasonably obtainable in the following manner:
1.1.List the [F] property for sale by private treaty for a period up to ten (10) weeks from listing with such agent as the parties may agree to appoint and in default of agreement as to agent within fourteen (14) days of the date of these Orders with such agent as the President of the Real Estate Institute of New South Wales shall appoint ("the agent") the costs of and incidental to such appointment to be borne equally by the parties as and when same fall due;
1.2.That in the event that contracts for sale have not been exchanged within ten (10) weeks of listing then the parties shall do all acts and things necessary to cause the [F] property to be sold by auction within a further two (2) months or such other time as the parties may agree with an auctioneer appointed by the parties and failing agreement on the appointment of an auctioneer then by an auctioneer appointed by the agent referred to in paragraph 1.1 herein;
1.3.The reserve price for the purpose of such auction shall be such price as may be mutually agreed upon by the parties or, in the absence of agreement reached within fourteen (14) days of the date of the auction shall be the price nominated as the fair market value thereof by a valuer appointed by the President for the time being of the Australian Property Institute Incorporated (NSW) Division ("the valuer") the costs of and incidental to such appointment and valuation to be borne equally by the parties as and when same fall due;
1.4.The valuer shall, if requested by either the Husband or the Wife at a date three (3) calendar months after the date upon which the [F] property is first listed pursuant to paragraph 1.1 herein and thereafter at three (3) calendar monthly intervals until the [F] property is sold, nominate a sale price other than the originally nominated sale price;
1.5.The parties shall each cooperate in every way with the agent including (without limiting the generality of the foregoing):
1.5.1. making the key available to the agent;
1.5.2.allowing inspection of the [F] property at all reasonable times requested by the agent;
1.5.3.doing or saying nothing to hinder or prevent a sale being effected;
1.5.4.ensuring the [F] property including the grounds are in a neat and clean condition at the time of inspection by the agent and prospective purchasers; and
1.5.5.signing all documents requested by the agents in relation to the listing for sale of the [F] property except a contract or agreement for sale which has not been authorised by the parties' solicitors.
1.6.In the event the bidding at the auction does not reach the reserve price the parties or such of them as attends the auction may negotiate with the highest bidders or any other interested person and effect a sale of the [F] property at a price which is not more than ten per cent (10%) below the reserve price, or at such other price as the parties agree upon in writing;
1.7.In the event the [F] property remains unsold, the parties shall do all acts and things and sign all documents necessary to continue to relist the [F] property for sale by public auction again at three (3) monthly intervals, and the provisions of paragraphs 1.1 and 1.5 herein shall apply successively until the [F] property has been sold so that at each successive auction the reserve price shall be ten per cent (10%) less than the reserve price at the immediately preceding auction unless otherwise agreed by the parties in writing;
1.8.The parties shall each execute a contract for sale in the form prepared by the solicitors having the conduct of the sale at the sale price;
1.9.The parties shall instruct such solicitor as they agree upon to have the conduct of the sale on behalf of both parties or, in the absence of agreement reached within fourteen (14) days shall instruct such solicitor as may be appointed by the President for the time being of the Law Society of New South Wales ("the solicitor") the costs of and incidental to such appointment to be borne equally by the parties as and when same fall due;
1.10.Neither party may confer on any agent without the consent of the other party any right to any sole or exclusive agency in respect of the [F] property or to any commission.
Disbursement Of Proceeds Of Sale Of The [F] Property
2.That upon the settlement of the sale of the [F] property the proceeds of sale be applied as follows:
2.1.In payment out of any agent's and legal expenses incurred in the said sale including any advertising costs;
2.2.In discharge of the mortgage to [S] Credit Union registered on title to the [F] property;
2.3. $50,000 to the Wife; and
2.4. The balance then remaining to the Husband
Arrangements Pending Sale of the [F] Property
3.That pending the sale of the [F] property each party shall be restrained from doing any act or thing to encumber, sell or otherwise dispose of their interest in the [F] property.
4.That pending the sale of the [F] property that as between the parties the Wife shall have the sole and exclusive use of the said property
5.That the Wife shall, pending the sale of the [F] property, pay or otherwise cause to be paid as and when they fall due any outgoings, council rates or other utilities and the mortgage in respect of the [F] property.
Other
6.That the Husband retain 100% of the net proceeds of sale of the Yacht [Y Yacht]' currently held in a controlled monies account in the name of Watts McCray Lawyers.
7.That, as between the parties, the Husband shall be solely responsible for all credit card, charge card, and personal taxation liabilities in his sole name now and in the future, and the Husband shall indemnify and shall keep indemnified the Wife in relation to all such liabilities however and whenever arising.
8.That, as between the parties, the Wife shall be solely responsible for all credit card liabilities and personal taxation liabilities in her sole name, and the Wife shall indemnify and shall keep indemnified the Husband in relation to such liability however and whenever arising.
9.That, subject to any other provisions of this Order, each party shall otherwise retain sole legal and beneficial ownership of:
9.1.All personal property in his or her respective possession or control at the date of this Order;
9.2.All shares, debentures, units in unit trusts, accounts held in any bank, building society, credit union or financial institution standing in his or her sole name respectively at the date of this Order; and
9.3.Any interest in any life insurance policy or superannuation plan standing in his or her sole name respectively.
10.That each party shall do all things necessary, including providing all consents to give effect to this Order in the time periods prescribed by this Order.
11.It is hereby declared pursuant to Section 81 of the Family Law Act 1975 (Cth) that the parties intend this Order to finally determine all financial relations and issues between
12.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 paragraphs, then the Registrar of the Court shall be appointed pursuant to Section 106A of the Family Law Act 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.
13.That the Wife pay the Husband's costs of and incidental to these proceedings.
In accordance with a minute provided to my chambers prior to Court on 16 June 2009, the wife seeks the following orders:
Respondent Wife’s Proposed Short Minutes of Order
Matrimonial Home
1. That the husband shall within three months of the date of these orders do all such acts and things and sign all such documents as may be required to transfer to the wife all of his right title and interest in the real property situate at and known as [F property] (‘matrimonial property’) and being the whole of the land more particularly described in Certificate of Title Volume […] Folio […] on the following basis;
1.1 That the wife shall indemnify the husband against all payments and liability pursuant to the mortgage registered over the matrimonial property and all payments and all apportionable rates, taxes, and outgoings of or with respect to the real property including the debt owing to [Mr P];
1.2 That upon settlement of the transfer, the wife shall pay to the husband an amount equivalent to $110,000.
Superannuation
2. That paragraphs 4-6 (inclusive) of these Orders are binding on the Trustee of the [S] Superannuation Plan (“the Fund”).
3. That pursuant to s 90MT(i)(a) of the Family Law Act 1975 (“the Act”) the Husband shall be entitled to be paid an amount calculated in accordance with Pt 6 of the Family Law (Superannuation) Regulations 2001 (“the Regulations”) using the base amount of $150,000.00 * of the Wife’s total superannuation entitlements at the date of these orders and there be a corresponding reduction in the entitlement which the Wife would have had but for these Orders.
4. The operative time for the purposes of Order 3 of these Orders is four (4) business days after the date of service of these Orders upon the Trustee of the Fund.
5. The Wife shall within fourteen (14) days of becoming entitled to receive a Superannuation benefit from the [S] Superannuation Plan, provide to the Government Superannuation Office all such forms as shall be necessary to enable it to determine the nature and quantum of the Superannuation entitlement and any other related information it may reasonably require.
6. That there be liberty to apply to each party and the Trustee in relation to the implementation of the Orders affecting the Superannuation interest.
7. That until such time as the Superannuation split to the Wife pursuant to these Orders can be rolled over onto a separate account to the Husband:
7.12 The Wife shall provide to the Husband no less than twenty-eight (28) days notice before such time as he elects to retire from and/or take voluntary retirement and/or for any reason accept or become entitled to access in whole or in part his entitlement in the Fund.
7.13 The Wife shall direct and authorise the Trustee of the Fund to communicate with the Wife and/or any person authorised by her in writing:-
7.13.1 To answer any reasonable inquiries as may be made by her or on her behalf from time to time in relation to her entitlement in the Fund, and
7.13.2 To provide to the Husband and/or her authorised representative a copy of any notice of any application or request by the Wife which seeks release of entitlements in the Fund in so far as that release may effect the Husband’s entitlement in the Fund pursuant to these Orders.
7.13.3 The Wife by herself, her servants and/or agents be and hereby are restrained from doing any act or thing which would prevent the Husband, his heirs, executors, administrators or nominees from receiving the benefits in the Fund to which he is entitled pursuant to these Orders.
8. In the event that the Superannuation split to the Husband pursuant to these Orders can be rolled over into a separate account to the Husband each of the parties hereto shall each do all such acts and things and execute all such documents as may be necessary to facilitate and to implement that rollover.
Money in trust
9. That proceeds from the sale of any matrimonial assets held in trust on behalf of the Parties be retained by the husband.
Other Property
10. Unless otherwise specified in these orders:
10.1 Each part be solely entitled to the exclusion of the other to all other property and chattels of whatsoever nature and kind in the possession of such party as at the date of these orders and for this purpose bank accounts are deemed to be in the possession of a person whose name appears on the bank records thereof, any insurance policies are deemed to be in the possession of the beneficiary thereof and superannuation entitlement are deemed to be in the possession of the person whose named as the worker whose age or working future provides for the conditions for payment out of such entitlement;
10.2 Each party shall be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these orders.
Procedural Orders
11. In the event that the husband or wife refuses or neglects to execute a deed and/or instrument in compliance with the provisions of this order, the Registrar or Deputy Registrar of the Family Court of Australia at Goulburn St, Sydney is hereby appointed pursuant to section 106A of the Family Law Act 1975 to execute all deeds and/or instruments in the name of the husband or wife and do all acts and things to give validity and operation to the deeds and/or instruments.
12. That the Husband pay the Wife’s costs of these proceedings.
In the course of final submissions counsel for the wife said that in relation to proposed Order 3, the husband’s split of the wife’s superannuation should be based on a figure reflecting half of the current value, whatever that might be and not $150,000.
Affidavits
The sworn written evidence of the parties is:
Affidavit of the husband sworn filed 13 September 2007
Husband’s Financial Statement filed 1 June 2009
Affidavit of the wife filed 18 September 2007
Affidavit of the wife filed 10 June 2009
Affidavit of Mr M filed 10 June 2009
Wife’s Financial Statement filed 5 June 2009
Joint Experts
Affidavit of Dr R filed 14 August 2007
Affidavit of Dr A filed 12 June 2009
Affidavit of Mr O filed 11 April 2007
Affidavit of Mr O filed 11 June 2009
Affidavit of Mr D filed 13 September 2007
The parties belatedly submitted the following documents:
Report of Mr H of B Forensic Accountants dated 17 July 2009
Letter dated 17 July 2009 from S Superannuation Limited
The proceedings
The proceedings commenced in January 2006 and have taken an inordinate period of time to come to final hearing. I will set out the chronology:
4 April 2006 Registrar Lawson made directions for filing documents and appointed a Conciliation Conference;
21 June 2006 Registrar Lawson conducted a Conciliation Conference, the matter did not settle, directions were made for the filing of the evidence for the final hearing and a Pre Trial conference was appointed for 3 April 2007;
28 March 2007 A check revealed that the required evidence had not been filed by the parties, the Pre Trial conference was vacated and the case was listed in a defaulters list on 3 May 2007;
3 May 2007Registrar Campbell again ordered the filing of evidence for a final hearing and a new Pre Trial conference was appointed for 2 October 2007;
2 October 2007 Registrar Campbell conducted a Pre Trial conference, was told by the legal representatives that all directions had been complied with, save for an updating Financial Statement for the wife, and listed the matter on 14 December 2007 for the allocation of hearing dates;
14 December 2007 Justice Le Poer Trench allocated the matter to Justice Fowler for mention on 4 March 2008;
4 March 2008 Justice Fowler allocated the matter to my docket;
4 March 2008 I ordered the filing of an affidavit by the wife’s treating doctor and updating Financial Statements by 1 April 2008 and gave leave for the solicitors to advise my associate thereafter once they decided that no further evidence was sought to be filed, so that hearing dates could be allocated;
2 May 2008A registrar listed the matter for mention on 30 June 2008 on advice from the wife’s solicitors that she underwent surgery and would not be fit for 8 weeks;
30 June 2008 The matter was adjourned;
31 July 2008 A registrar adjourned the matter for mention on 1 December 2008 on advice from the Wife’s solicitor that the parties were in the process of obtaining a report from Dr R in relation to the wife’s health and that thereafter the matter would be ready for a hearing date;
10 December 2008 I ordered that the matter be fixed for hearing before me over three days on dates to be allocated and made directions for the Case Outline documents and updating material, including valuation evidence;
24 February 2009 My associate wrote to the parties advising them of a hearing over three days commencing 13 May 2009. Those dates were not suitable to both counsel and on 11 March 2009 the parties were allocated three days commencing 15 June 2009.
The hearing
The hearing was listed for three days. Prior to the hearing, counsel for the parties told my associate that the trial would be completed within two days. It became apparent in the course of final submissions on the second day, that there was no agreement between the parties in relation to the value of the wife’s superannuation interest. It was submitted for the husband that given there was no agreement about the value of the wife’s superannuation and no valuation undertaken in accordance with the Regulations, therefore there could be no splitting order. That came as a surprise to learned counsel for the wife. He tendered a March 2009 Member’s Statement for the wife’s interest and that was admitted over the objection of the husband’s counsel. There was no agreement to rely on the Member’s Statement and ultimately the wife’s counsel sought an adjournment for the purposes only of obtaining a formal valuation of the wife’s superannuation interest. The adjournment was opposed on behalf of the husband but for reasons I gave at the time, it was granted. I adjourned the hearing generally with liberty to the solicitor for the wife to restore the matter by arrangement with my associate on 48 hours notice to her and to the solicitor for the husband, for the purpose only of re-opening her case to tender a valuation of her superannuation interest.
It is difficult to understand how such a problem could arise in litigation on foot for more than 3 years. At all relevant times, both parties knew that there needed to be an agreement or evidence of the value of the wife’s superannuation. True it is that her final orders were only presented to me on the second day of the hearing but during the proceedings she has consistently sought a splitting order. Such an order was sought in the wife’s Response for an Application for Final Orders filed 17 March 2006. The Court record reveals that at the Pre-trial Conference held on 2 October 2007 Registrar Campbell was told by the parties’ solicitors that the matter was ready for trial and that no further documents were to be filed. It is not clear that the parties ever complied with a direction to file a joint balance sheet. If that had been done they would have identified the problem in a more timely way.
Learned counsel for the husband said that he envisaged that there would be no objection to the admission of a formal valuation into evidence and that there may be no need for a further attendance before the Court. I noted that and otherwise reserved judgment and excused the parties and their lawyers from attendance on delivery of judgment.
Under cover of a letter from the husband’s solicitors dated 4 September 2009, I received a report prepared on instructions from the solicitor for the wife as to the value of the wife’s superannuation and a copy of a letter from the trustee of that fund. The solicitor noted that the provision of those documents resolved all outstanding matters and that the matter could proceed to judgment.
Issues for determination
A number of issues were identified in the Case Outline document prepared on behalf of the husband. As the case unfolded some of those matters were resolved by tacit agreement and were not the subject of any significant cross-examination. It is my assessment that the relevant contentious issues are:
1.The extent of the husband’s initial contribution.
2.The impact, if any, on the injection of funds from the husband’s superannuation and compensation payments of extravagant and wasteful expenditure.
3.Whether that extravagant and wasteful expenditure was the responsibility of the husband alone.
4.The capacities of the parties for paid employment.
5.The impact on adjustments under section 75(2) of the husband’s receipt of income protection to age 60.
6.Whether there should be a splitting order in respect of the wife’s superannuation interest and if so, the appropriate base amount.
Short History
As at the date of the hearing the husband and wife were 50 and 48 years of age, respectively. They started living together in November 1997 or 1998, were married in February 1999 and separated on 16 July 2005. They are now divorced.
Children
There are no children of the marriage. The parties each have children from an earlier relationship. The husband has three children from his marriage to Ms L:
Kwho was born in 1982 and as at the date of the hearing is 27 years of age;
Twho was born in 1986 and as at the date of the hearing is 23 years of age;
Jwho was born in 1991 and as at the date of the hearing was 17 years of age.
The wife has two children from her marriage to Mr W:
Ewho was born in 1993 and as at the date of hearing was 16 years of age; and
Cwho was born in 1995 and as at the date of hearing was 13 years of age.
Background Facts
The parties met in London in May 1997.
They started living together in November 1997, with another couple, in rented premises in the north of Sydney. The husband moved a renovated vehicle to R Caravan Park to provide accommodation for his children’s visits. The vehicle was moved to the home of Mr P, a friend, at Christmas time and then back to the caravan park. At that time the husband worked for S Company earning about $90,000 per annum. The wife worked for S Company earning about $45,000 per annum.
The husband had the following assets:
Asset
Settlement from first wife
S Company shares
Toyota Supra motor vehicle
Yamaha TTR 250 motor cycle
Honda XR 80
Yamaha DT 175 motor cycle
Yamaha PW 50 motor cycle
Camero ski boat
Box trailer
Horse
Dingy & 6HP motor & trailer
Proceeds of sale of motor home
Items of furniture, household goods and sporting equipment
S Superannuation
The husband owed about $21,000 for credit card debts and unpaid tax.
The wife had the following:
Asset
Value
Property settlement from first marriage, including proceeds of sale of a property at H Street
$273,104.60
Jewellery
$20,000
S Company shares
$2,077
Bankers trust shares
$3,398
S Superannuation
$79,005.77
$377,585.37
In January 1998 the parties moved to another rented property in the north of Sydney In November 1998 the wife obtained a divorce from Mr W.
In January 1999 the husband obtained a divorce from Ms L.
The parties bought F property for $445,000. The parties negotiated a 5% deposit which was paid by the wife. Of that sum $20,000 came from a loan from the wife’s step father. The parties borrowed $365,000 from the S Staff Credit Union. The balance of the purchase price and purchase costs of $81,000 came from the wife’s property settlement. The parties repaid the wife’s step father in June 1999 in a transaction that involved the purchase of a motor vehicle. The parties moved into the property in January 1999, in the first instance, on a rental basis.
The parties were married in Sydney in February 1999.
In June 1999 the F property purchase was completed.
The wife’s children lived with the parties about 8 nights a fortnight, throughout the period of the parties’ cohabitation. They spent the other 6 nights with their father. It is the husband’s evidence that his daughter, T moved in with the parties in about January 1999 and stayed there for about 18 months to 2 years. The wife said it was about 4 years (1997 to 2001) but that is not what her counsel lead from the husband in cross-examination. I accept the husband’s version. The husband’s children, K and J, stayed with the parties 2-3 nights a fortnight. They did not live with the parties on a full-time basis until K moved in during 2004. She stayed until separation in July 2005. While K lived with the parties she visited her boyfriend from time to time.
The wife arranged her work roster so as to be available when her children were living with the parties. On the occasions she was not available the children were cared for by the wife’s mother or the husband.
On 25 June 1999 the husband was injured at work. In July 1999 he underwent a spinal fusion. He was in significant pain, was greatly restricted in movement, could not drive and required assistance with shaving and bathing. He returned to work in November 1999 until March 2000. He then took annual leave and travelled to the outback in April 2000 and has not returned to paid employment since. The husband commenced receiving workers compensation in June 2000. The wife says that prior to the finalisation of his workers compensation claim he worked on a training manual and occasionally tutored in Mathematics and Music.
Between July and October 1999 the wife took 3 weeks accrued sick leave and 4 weeks of long service leave to care for the husband.
From the time of the husband’s injury the parties retained cleaners to help with housework.
The parties bought a yacht called Y yacht. They paid about $190,000. $84,000 came from the wife’s property settlement, $90,000 came from the overdraft and the balance came from the proceeds of sale of the H Street property.
On 28 April 2001 the parties had their first trip to the outback. In June 2001 the husband commenced proceedings in the Supreme Court of NSW for damages arising out of the injury.
On 14 August 2002 the husband ceased work and received a payout for $515,452.
From 2002 to 2005 the parties commissioned renovations with the involvement of Mr P, a friend and builder. Walls were removed, awnings, windows, a staircase and a pool were installed. The parties had a new kitchen installed. The parties lent Mr P $21,000 and he repaid them by working on the house. The work he did exceeded that value and the parties still owe him $6,500. The husband and wife painted the whole of the inside of the house together.
In August 2002 the husband purchased a
5 September 2002 the husband received a S Super payout of $330,031. In March 2003 and April 2003 the husband received a compensation payout from litigation against S Company totalling $210,210.
In November 2003 the husband’s insurance payments stopped for 5 months pending a bank investigation.
The husband spent $12,000 on a telescope and had the roof of the F property modified to allow it to be used. He bought a satellite telephone for $500. He bought a campervan for $5,000 and later sold that. He bought a camera for $6,700.
In May 2004 the wife was admitted to V Clinic in Sydney.
In February or March 2005 the husband bought another campervan for $25,000. In May 2005 the husband commenced a two month trip to the outback. The four wheel drive vehicle broke down and on 23 June 2005 the husband replaced it with a Nissan vehicle at a cost of $58,750. He bought a GPS device for $1,900.
The parties separated on 16 July 2005. The husband had about $60,000 in his cheque account. There was about $26,500 in the joint cheque account. The husband paid out a number of debts and then froze the account. He was left with about $15,000 and the wife had no access to that sum.
The parties reduced the mortgage by a net $185,000 from the husband’s compensation and superannuation moneys.
On 25 January 2006 the husband filed an Application for Final Orders.
On 4 April 2006 an order was made by consent for the sale of the yacht and the husband’s vehicle. As at the date of the hearing the motor vehicle had yet to be sold.
In March 2007 the yacht was sold for $90,000 through a Yacht brokerage.
A divorce decree was granted in April 2007.
On 17 May 2007 the husband was examined by Dr R as Single Expert.
On 22 April 2008 the wife underwent a double spinal fusion by Dr I.
On 18 August 2008 the wife was examined by Dr R as Single Expert.
In December 2008 the wife was admitted to a treatment centre for alcohol abuse.
On 29 May 2009 the wife was examined by Dr A as Single Expert.
Credit and Submissions
The evidence of the witnesses
The only witnesses called for cross-examination were the parties. There are relevant factual disputes and therefore credit findings are appropriate.
The husband gave his answers in a direct fashion but he is not a reliable witness. He said he has a reasonable memory. Unfortunately, he was obliged to concede or assert that he had made false declarations in relation to a number of different income tax issues (including in relation to the number of dependants in the household and the period of ownership and the sale price of items subject to capital gains tax) and says that what he put to this Court about the quantum of the sale proceeds of a Toyota Supra motor vehicle in the course of the property settlement with his first wife, was wrong. After a while the husband’s responses in cross-examination to the repeated question, to the effect – “Are you sure that is true” became a forlorn statement to the effect “I thought so until now”. In several situations the husband put himself in the invidious position of having to elect which of two inconsistent representations was true – and which was false. Even then, I could not comfortably accept that in each instance, his election was correct. On his own case, the husband is not a reliable witness.
The wife too had shortcomings as a witness. She was pedantic on occasions and on occasions did not make a real effort to understand questions put to her. However, she was not seriously challenged in relation to the bulk of her evidence. She only grudgingly made concessions in favour of the husband and that suggests that her evidence on some matters and perhaps even her recollection, is coloured by her attitude to the husband or by a desire to support her case before the Court. On the important aspect of her case that the husband’s expenditure on vehicles etc was entirely a frolic of his own, the wife could not support that case. She conceded for example that she could not recall ever saying that he should not buy or should cancel the order for, the luxury vehicle. On several issues in the husband’s case, the wife was not challenged and I generally prefer her evidence over that of the husband.
Submissions
It is submitted on behalf of the wife that the contributions were equal and that there should be a 5% adjustment to the wife under section 75(2) leading to the orders sought which effect about a 55% distribution to the wife and 45% to the husband.
It is submitted for the wife that the husband has little or no credibility. That finding should arise from the differences between what the husband told the ATO and this Court and what he told this Court in the context of the property settlement from his first wife and what he contends before me. It is submitted that the list of assets and liabilities was agreed and in accordance with a document handed up. The parties have credit card debts and personal loans but all were post separation and it is agreed that they are not to be taken into account for the purposes of arriving at the net pool of assets.
As to contributions it is submitted that the wife was not challenged in relation to her evidence at paragraph 18 of her primary affidavit and I would find that she brought in about $415,000. On the other hand the husband brought in $11,000 in assets and about $20,000 in debts. The parties each applied their income to joint purposes. Between August 2002 and April 2003 the husband brought in $1,055,693. However, it is submitted that the husband’s concession in relation to extravagant expenditure and the fact that the expenditure was largely at his sole initiative means that not all of that contribution was effective. Learned counsel for the wife concedes the application of the following sums:
Expenditure
Amount
Payment off the overdraft
$87,000
Capital payment off the mortgage
$65,000
Net effect of payment off mortgage and new loan
$120,000
Family holiday
$10,000
Funds applied to renovations at the F home
$191,000
$473,000.00
On that basis it is submitted that the injections of the funds from the parties were of a similar order.
As to an adjustment, it is submitted that there should be an adjustment to the wife of 5% largely because of the husband’s right to receive income until he is 60 years of age. Otherwise the parties are in similar positions, of similar age, both with health issues, with dependant children and no significant earning capacity. In relation to health, in addition to physical conditions the wife has had a problem of excessive consumption of alcohol and a General Anxiety Disorder.
As to the form of the orders it is submitted that there should be a splitting order in relation to the wife’s superannuation interest of about 50% to the husband. It is submitted that it would be just and equitable that the parties each go forward with a similar mix of superannuation and non-superannuation assets.
It is submitted on behalf of the husband that the wife too was a poor witness. She was very reluctant to make concessions in favour of the husband, for example in relation to his contributions towards her children.
It was submitted for the husband that there is no agreement about the value of the wife’s superannuation and there being no valuation undertaken in accordance with the Regulations that therefore there can be no splitting order.
As to contribution it is submitted that the husband must be given credit for over $1M he brought into the marriage and the Court cannot ignore that contribution because of the use to which some of it was put. It is submitted that the wife had not made a case that the expenditure, for example on the luxury motor vehicles, was a frolic of his own. She had some use of the vehicles and did not insist that they not be bought. The calculations contained in the submissions made on behalf of the wife fail to credit the husband with the value of the remaining vehicle ($105,000) reflected in the agreed table of assets in the form of the personalty to be retained by the husband. Even accepting the wife’s case in relation to the value of the husband’s initial contribution the husband must be a long way ahead. His income during the marriage was greater than that of the wife. Finally it is submitted that after separation the husband made a contribution by allowing the wife to remain in the F property, which she could have rented out, paying only the minimum mortgage instalments, while he was required to rent.
It is submitted that to a 80:20 finding on contribution there should be an adjustment to the wife of 5% as to do so would be just and equitable. It is submitted that the parties are in similar circumstances and that despite the husband’s guarantee of income for the next 10 years, there should be no adjustment under section 75(2). It is submitted that a $50,000 payment would be just and equitable by way of adjustment to address the wife’s legal bills.
The primary submission of the husband is that there can be no superannuation split. If a split is possible, it is submitted that the Court should not order a superannuation split. Learned counsel for the husband notes that the value of the wife’s interest appears to have dropped over recent months and it would be unfair for his client to be exposed to a potential loss. It is submitted that it would be fair if the husband is left with the non-superannuation assets and the wife is left with her superannuation.
The approach in proceedings under section 79
The case law reveals that there is a permissible approach to the determination of an application brought pursuant to the provisions of s 79. That approach involves four inter-related steps. First, I am to make findings as to the identity and value of the property, liabilities and financial resources of the parties at the date of the hearing. Second, I should identify and assess the contributions of the parties within the meaning of s 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. Third, I should identify and assess the relevant matters referred to in s 79(4)(d), (e), (f) and (g), (the other factors) 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. Fourth, I should consider the effect of those findings and determination and resolve what order is just and equitable in all the circumstances of the case. [1]
[1] This summary of the effect of the authorities is paraphrased from the comments of the Full Court in In the Marriage of Hickey (2003) 30 Fam LR 355 at 370
The property of the parties at the date of the hearing
The Court is required to make a finding as to the property of the parties at the date of the hearing. Albeit that the parties’ arithmetic lead to a smaller total ($1,159,708), the non-superannuation assets are agreed. With the unchallenged valuation of the wife’s superannuation, the assets are as follows:
Assets
Value
F property
$850,000.00
Items of personal property in Husband’s possession according to Mr D’s valuation
$181,200
Proceeds of sale of yacht in trust - joint
$88,108
Proceeds of sale of horses - husband
$19,400
Items of personal property in Wife’s possession according to Mr D’s valuation
$22,000
Wife’s superannuation with S Superannuation Plan
$269,681.36
Total
$1,430,389.36
Liabilities:
The parties agreed to omit personal debts incurred after separation. On the basis of the parties’ agreement I find that the relevant liabilities of the parties as at the date of the hearing are as follows:
Liabilities
Amount
Mortgage on the F property
$111,968
Mr P
$6,500
$118,468.00
The net assets have a value of $1,311,921 ($1,430,389 – $118,468).
Financial Resources
Over the last 4 years the wife has had discussions with friends and relatives in relation to financial support. Discussions with her friend, Mr N could result in him offering to help the wife buy out the husband and refinance the home on the basis that he takes an interest in the property. Discussions with her Aunt could result in her offering to help the wife buy out the husband and refinance the home on the basis of an advance on a future inheritance by the wife from the Aunt’s estate.
The wife has one remaining S staff flight entitlement which would permit free return travel on one flight stage. The wife gave examples of the journey that would fall within that entitlement as trips to Melbourne, Perth or Noumea. The wife will not qualify for more entitlements while she remains on Special Leave Without Pay and would need to actively serve for another two or three years to qualify for another four stages.
Under an income replacement insurance policy the husband has the right to receive income supplement until he turns 60 years of age. The rate of income is indexed. In 2007 it was $66,000 per annum. As at the date of the hearing the rate is $1,553 per week or about $80,756 per annum.
Otherwise, there is no evidence of financial resources available to the parties.
Contributions
The obligations placed on the Court by s 79 call for an assessment of the respective contributions of the parties. The manner of assessing contributions has been the subject of previous decisions. The contributions of a parent and homemaker are to be assessed, not in any merely token way, but in terms of their true worth to the building up of the assets[2]. There are said to be risks in taking an overly technical approach to the assessment of the respective contributions of the parties in that the Court can become involved in questions of the quality of contributions which go far beyond the real world expectations of parties[3].
A separate pool for superannuation
[2] Mallett v Mallett (1984) 9 Fam LR 449; In the Marriage of Ferraro (1992) 16 Fam LR 1
[3] In the Marriage of Shewring (1987) l2 Fam LR 139
As to whether the Court should assess contributions asset by asset or globally, the authorities have it that the latter approach is preferred, in appropriate circumstances either approach is permissible and sometimes the asset by asset approach is best. See In the Marriage of Lenehan (1987) 11 Fam LR 615; In the Marriage of Norbis (1986) 10 Fam LR 819; FLC 91-712; In the Marriage of Zyk (1995) 19 Fam LR 797.
In the Marriage of Coghlan (2004) 33 Fam LR 414 the Full Court opined that it is preferable for contributions to superannuation to be assessed separately from those made to other assets. However the Court allowed that superannuation may be included in the list of property drawn up as “the first step” in the determination of proceedings under s 79, whether or not a splitting order is sought in those proceedings. The Full Court suggests that that:
“… approach could be adopted where the parties agree that it should be adopted, or where the court is satisfied that the superannuation interest is indeed property within the meaning of the definition of property contained in s 4(1), or if the interest is not within that definition, but is of relatively small value in the context of the value of the other assets in the case, or there are features about the interest which leads the court to conclude that this would be an appropriate approach.”
Here the parties have adopted a global approach to the assessment of contributions. On that basis, I too will employ a global approach.
Section 79(4)(a) Contributions
At the commencement of cohabitation the husband had:
Asset
Settlement from first wife
S Company shares
Toyota Supra motor vehicle
Yamaha TTR 250 motor cycle
Honda XR 80
Yamaha DT 175 motor cycle
Yamaha PW 50 motor cycle
Camero ski boat
Box trailer
Horse
Dingy & 6HP motor & trailer
Proceeds of sale of motor home
Items of furniture, household goods and sporting equipment
S Superannuation
The values the husband attributed to those assets did not survive the process of objections. In relation to the values, the wife concedes $11,000 from the husband’s property settlement. There is no documentary evidence in relation to this asset. I will include this item at $11,000 as the wife’s concession against interest.
In relation to the other items:
· There is no evidence in relation to the S Company shares.
· In relation to the Toyota Supra motor vehicle, it is the husband case that he traded the vehicle in on a Nissan patrol motor vehicle and was allowed $15,000 on the trade in. In final orders for settlement of property[4] made in terms agreed between the husband and his first wife the husband recorded a figure of $8,000 as the proceeds of sale sic of a Supra motor vehicle. Under a Certificate pursuant to Section 128 of the Evidence Act the husband says that the latter figure is wrong. In Nelson and Nelson (1995) 184 CLR 538 the High Court dealt with the proper approach for Courts faced with prior inconsistent representations made or said to have been made falsely and for the advantage of the person making the representation. Toohey J said[5]:
[4] Exhibit 6
[5] 184 CLR 597
“Although the public policy in discouraging unlawful acts and refusing them judicial approval is important, it is not the only relevant policy consideration. There is also the consideration of preventing injustice and the enrichment of one party at the expense of the other.”
Deane and Gummow JJ identified different levels of illegality. McHugh J discussed the dictum that ‘no court will lend its aid to a man who founds his cause of action upon an immoral or illegal act’ and said:
“The principle contained in this dictum applies both in law and equity. But it is subject to exceptions which allow relief to be granted despite the presence of illegality. “
McHugh J went on to describe limited circumstances where the court should refuse to enforce legal or equitable rights simply because they arose out of or were associated with an unlawful purpose. In In the Marriage of Jordan (1996) 21 Fam LR 382 Chisholm J discussed the authorities in relation to this issue and albeit without reference to Nelson, which was decided at a similar time, concluded that the relevant proposition arising from the authorities is:
"When a party has made representations of fact to third parties and has gained advantage from so doing, it is open to the court in subsequent proceedings under s 79 of the Family Law Act to decline to accept from that party evidence which contradicts those representations."
Here I will rely on that husband’s representation from 1998, in effect as an admission against interest. I can think of no obvious reason for the husband to record an inflated value in the 1998 consent terms.
· In relation to a Yamaha TTR 250 motor cycle it is the husband’s evidence in these proceedings that he sold the bike in December 1998 for $4,500. In his Year 1999 Income Tax Return he claimed depreciation for a Yamaha TTR 250 motor cycle for the entire year. In his own handwriting on a copy of that return the husband endorsed against that item in the depreciation schedule, the words and figures “sold 2174”. $2,174 is the written down figure given for the bike in the depreciation schedule in that return. Indeed the husband has written “sold” and a figure against most of the items in the schedule and in each case the figure is the written down value. It would be something of a coincidence if a sale of a number of items achieved the exact written down value of those items. On that basis I doubt that the bike sold for $2,174. However, in his Year 2000 Income Tax Return he told Australian Taxation Office that the disposal consideration for a Yamaha TTR 250 motor cycle sold on 1 July 1999 was $2,150. Under a Certificate pursuant to Section 128 of the Evidence Act the husband says that the latter figure is wrong and was an attempt to defraud the revenue. There is an argument for making no finding about the value of the motor cycle. It should not be left to the Court to pick through inconsistent representations, to struggle to make a finding to the advantage of a party who has made a false declaration and to the disadvantage of the other party. Minds might differ about this but I propose to adopt the figure contained in the 2000 return, in effect as an admission against interest. I can think of no obvious reason for the husband to record an inflated value in that return.
· In relation to a Yamaha DT 175 motor cycle the husband said in cross-examination that he sold it for less than he bought it for. He says he sold it for $3,500. In the depreciation schedule of his 1999 tax return he asserted that he bought it for $2,780. Presented with that fact in cross-examination the husband said that that he must have been wrong in saying that he sold it for less that he paid for it. That bike did not make it onto the 2000 return, either in the depreciation schedule or on the table of disposals. If the husband’s evidence before me is correct then I assume he would have been obliged to declare a capital gain on the sale. There is nothing to corroborate a sale price for the bike and therefore I can make no findings about its value at the start of the marriage.
· In relation to the horse, it is the husband’s evidence that he sold the horse for $25,000 in about late 1998 or early 1999. In his Year 1999 Income Tax Return he claimed depreciation for a horse for the entire year. In his own handwriting on a copy of that return the husband endorsed against that item in the depreciation schedule, the words and figures “sold 5618. I refer to the observations made in that regard about the Yamaha TTR 250 motor cycle. However, in his Year 2000 Income Tax Return he told Australian Taxation Office that the disposal consideration for a “[…] horse” sold on 1 July 1999 was $5,200. Under a Certificate pursuant to Section 128 of the Evidence Act the husband says that the latter figure is wrong. On the first day of the hearing the husband was asked about documents to which he might have had recourse in preparing his affidavit on this issue. On the morning of the second day he tendered documents that he says fell into that category. They comprise two sheets on which the husband contends are photocopies of a deposit stub for an account in the husband’s name with the Bank of Melbourne for $7,000 on 1 December 1998 and of two cheque stubs dated 9 & 10 December 1998 for $9,000 with the addressee noted as “[the husband] purchase of [horse]”. Someone has written on the top of the copy cheque stubs “Cheque to [the wife]”. The other document is a Statutory Declaration made by Ms F on 11 February 2007. The text of the Statutory Declaration is:
“In December 1998 my friend [Ms Z] and I purchased the [horse] from [the husband] for the sum of $25,000. Payment was made in three parts – “7,000 on 1/12/98 as a direct deposit into [the husband’s] bank account, and two cheques each for $9,000 (total $18,000) dated 9/12/98 & 10/12/98 these two cheques were made out to [the wife].
I have known [the husband] since he originally purchased [the horse] and I am more than happy to verify his ownership of her and any details relating to our purchase of her.”
Over the strong objection of learned counsel for the wife, I allowed those documents into evidence because they are said to be the documents to which the husband referred in preparing his affidavit. Beyond that non-hearsay purpose, there are problems with the documents. Although once a document is in evidence, it is in for all purposes, these are not probative documents. Even if they had been discovered by the husband, and I am not sure they were, they are far from the best evidence about the issue. Produced in this way, on the last day of the trial, there is simply no way for the wife to meet the documents. The other problem is that they are inconsistent with the husband’s 2000 Income Tax Return where he declared that he sold the horse on 1 July 1999 and for $5,200. I propose to adopt the figure contained in the 2000 return, in effect as an admission against interest. I can think of no obvious reason for the husband to record an inflated value in that return.
· In relation to the Camero ski boat (also described as the Camera ski boat) it is the husband’s evidence that he sold boat for $20,000 in about 2000. The husband was not able to produce any document to substantiate his evidence on this issue. The findings above demonstrate the unreliability of the husband’s uncorroborated testimony. There is nothing to corroborate a sale price for the boat and therefore I can make no findings about its value at the start of the marriage.
The result of those considerations is that at the commencement of cohabitation, the assets of the husband about which findings of value are possible, were:
Asset Value Settlement from first wife $11,000 Toyota Supra motor vehicle $8,000 Yamaha TTR 250 motor cycle $2,150 Horse $5,200 $26,350.00
In his affidavit the husband asserts that he had no liabilities at the commencement of the relationship. In cross-examination, the husband conceded that he may have had some debts at that time. He said that he possibly had a credit card debt that he paid off with a tax return (refund). The wife says that the husband told her he owed about $21,000. She says that she gave him $17,000 of which she borrowed $15,000 from the Credit Union to help the husband repay his debts. In cross-examination the husband denied that he had a debt of that order and denied the wife’s evidence of an advance of $17,000. I accept the wife on this point.
Thus the husband came to the relationship with assets. The assets to which I can attach a value had a total value of $26,350. He had $21,000 in debts.
At the commencement of cohabitation the wife had:
Asset Value Property settlement from first marriage, including proceeds of sale of a property at H Street $273,104.60 Jewellery $20,000 S Company shares $2,077 Bankers trust shares $3,398 S Superannuation $79,005.77 Total $377,585.37
Each of the parties had income from paid employment during the marriage. The following is an agreed schedule of earnings[6]:
[6] Exhibit 7
SCHEDULE OF EARNINGS
Year Taxable Income [wife] Taxable Income [husband] 98-99 $47,945 $68,883 99-00 $26.893 $52,550 00-01 $55,306 01-02 $31,015 $76,245 02-03 $230,316* 03-04 $37,054 $69,435 04-05 $69,920 $69,712 05-06 $74,938 $67,339 06-07 $67,951 $69,005 07-08 $71,562 $70,118 *includes eligible termination payment of $115,572
It is difficult to make sense of the table which shows no income for the wife for two years. That is frustrating given the unchallenged evidence of the husband[7] that the wife had a gross income of $50,582 in the 2001 income tax year and $49,865 in the 2003 income tax year. The permissible finding is that the husband earned more than the wife.
[7] paragraph 31 of the husband’s affidavit
On 14 August 2002 the husband received a payout for $515,452. 5 September 2002 the husband received a S Super payout of $330,031. In March 2003 and April 2003 the husband received a compensation payout from litigation against S Company totalling $210,210. Those injections of funds total $1,055,693.
Since separation the wife has lived in the F home and has paid the required mortgage instalments (or someone has paid them for her). The instalments are currently $173 per week. Meanwhile the husband did not have the use of the home and paid rent. The rent for his current accommodation is $330 per week.
The husband sought to make a case in relation to forgone rental on the F property. The wife concedes that over the time since separation she had several people stay in the home for periods in excess of a fortnight. She says that the adult visitors contributed to household expenses and that since her income stopped late last year, her friend Mr N has also paid the mortgage instalments. The wife had the use of the home since separation and met the outgoings including the mortgage payments. Given his superior income position, it seems to me that no particular allowance should be made in favour of the husband because of the wife’s occupation of the home.
Section 79(4)(b) contributions
Non-financial contributions were made by the parties. The husband made improvements to the yacht and F property. Together, the husband and wife painted the whole of the inside of the F house.
In relation to the yacht, the husband:
·Sealed the engine room with fire retardant material;
·Installed about 6-8 fire extinguishers;
·Rebuilt the bilge pump system and hoses;
·Made deal light covers for the windows;
·Updated the safety gear;
·Installed a toilet and toilet treatment system;
·Repaired parts of the fire fighting system.
There is no evidence whereby the significance of this work can be assessed.
The husband says that after his injury he began working to renovate the F home. He installed fences, did interior painting and preparation and some ‘gyprocking’, as his injury allowed. He says that for about 6-12 months after his injury he was only able to do limited physical work in the garden, including limited lawn mowing and washing vehicles but after that time he resumed responsibility for those tasks.
Section 79(4)(c) contributions
This provision deals with contributions to the family including contributions in the form of homemaker contributions and contributions to children of the marriage. Here there are no children who fall within the relevant definition. That is not the end of the matter. Contributions made by each of the parties to the child/ren of the other can be recognised and I will do that under section 75(2)(o). See In the Marriage of Robb.
The husband says that from the commencement of cohabitation to January 2002 the parties shared the daily household tasks of cleaning the house, vacuuming, cooking, washing dishes and doing the laundry. In addition he washed the motor vehicles, mowed the lawns and maintained the gardens and outside the house. The husband says that from January 2002 until separation he took on a greater role. He did most of the cleaning, vacuuming, cooking, washing dishes and laundry.
The wife says she was responsible for the cooking and cleaning while she was at home. She prepared meals for the household and froze them for the periods she was away with work. The wife says that after the husband’s injury the parties employed cleaners because she could not cope with work and all of the housework. In my view, that would not have been necessary if the husband had made no homemaker contributions prior to his injury.
I am satisfied that the parties shared the homemaker duties.
Conclusion on Contribution
This was a relatively short marriage and there are no children of the marriage. The focus necessarily turns to financial contributions.
It is submitted for the husband that contributions favoured him in the proportions 80% to 20% by the wife. The wife contends that contributions were equal.
It seems to me that there are two related issues – the significance of the different contributions and the issue of extravagant expenditure or waste. It is relevant to consider the purposes to which individual contributions were put. In the Marriage of Pierce (1999) 24 Fam LR 377; FLC 92-844 the Full Court said:
16.His Honour then considered the contributions of the parties and made findings as to the duration of cohabitation and the assets of each party at about the time of marriage. He found that the parties cohabited for a period of about three months in 1982 and then separated. He further found that the husband was injured in a motor vehicle accident in that year and that the parties resumed cohabitation in late 1986, cohabiting until they separated in June 1996. He made no findings as to the assets of either of the parties as at either 1982 or as at late 1986, other than as appears hereunder. He went on to say (Appeal Book p.53):-
“At about the time of the marriage, in August 1988, Leon had significant assets. They included about $150,000 invested with the National Australia Bank (Leon’s compensation arising from his accident), shares having a value he estimates at about $50,000, a car and some other assets: a total of something like $226,000. Elizabeth had a car but few other assets of value: Leon’s estimate is that she had about $11,500 in all”.
He subsequently found in the passage at Appeal Book 53, to which we have earlier referred, that by 1990 the compensation fund of the husband had increased to about $200,000 and that the wife had savings of about $5,000 at the commencement of cohabitation.
And later ….
28.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 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: See also Campo and Campo (unreported, Full Court (Ellis, Lindenmayer and Finn JJ), Sydney, delivered 19 May 1995 at pages 21 and 22 of the joint judgment) and Zahra and Zahra (unreported, Full Court Sydney, delivered 3 October 1996, per Ellis J. at page 10).
29.In the instant case, his Honour identified what he described as the greater initial financial contribution of the husband and his post separation contribution, but, in our view, he failed to properly assess such contributions. The period of cohabitation was ten years. At about the date of the marriage the husband had very significant assets. His Honour found that the husband had assets to the approximate value of $226,000. At the date of the trial, the parties had assets of a net value of $319,190 which included the matrimonial home valued at $260,000 to which the husband had contributed about $200,000 from moneys to which the wife had made no contribution.
30.There is an obligation on a trial judge not only to identify the relevant contributions but also to assess them. In this case his Honour failed to adequately, or at all, assess these contributions. In our view he failed to properly weigh the greater initial contribution of the husband, with all other relevant contributions, and seems not to have had regard to the use made by the parties of the husband’s greater initial contribution.
31. The finding and assessment that the contributions of the parties during cohabitation should be regarded as equal was, in our view, open to the trial judge. Given that assessment, we are of the view that in assessing the totality of the contributions of each of the parties as being 55% by the husband and 45% by the wife, his Honour, notwithstanding the observations of Stephen J in Gronow v Gronow (1979) 144 CLR 513 at 519, on the facts of this case, failed to attach sufficient weight to the greater initial financial contributions of the husband, and to his contributions post separation in caring for the children.
32.Accordingly, we are of the view that, in assessing the respective contributions of the parties from the commencement of cohabitation to the date of hearing as being 55% by the husband and 45% by the wife, the discretion vested in his Honour miscarried and the appeal should thus be allowed.
Other Grounds of Appeal
33.Having regard to the conclusion we have reached in relation to grounds 2, 3, 5 and 6, it is not necessary for us to consider the other grounds of appeal. We are however of the view that having regard to the facts as found by his Honour, none of which were challenged before us, the result embodied in the order was unreasonable and plainly unjust in the appellate sense.
Re-exercise of discretion
34.In our opinion there is sufficient material before us to enable us to exercise our own discretion in substitution for that of the trial judge as we were invited to do by counsel the husband. No submissions were made on behalf of the wife in opposition to this course if we concluded that the appeal should be allowed.
Assets
35.We have already referred in paragraphs 12, 13, 14 and 15 to the net value of the property of the parties and to their respective superannuation entitlements.
Contributions
36.The duration of cohabitation was about ten years. The husband had significant assets at about the date of the marriage. He made a significant financial contribution to the purchase of the matrimonial home in 1990, using funds that he had at about the time of the marriage, to the acquisition of which the wife had made little, if any, contribution.
37.During the period of cohabitation, the husband was continuously engaged in paid employment and utilised his earnings for the benefit of the family. In addition he made a non-financial contribution to the maintenance of the matrimonial home and a minor contribution as a parent.
38. The wife made a financial contribution to the purchase of the matrimonial home from savings which she had at the commencement of cohabitation. However this contribution was minimal compared to that of the husband. The wife was engaged in paid employment during the cohabitation but for a lesser period than the husband. She was primarily engaged in attending to domestic tasks and the care of the children. We are satisfied that this contribution was greater than that of the husband and we take it into account in a real and substantial way.
39.The supervening contributions, after the commencement of cohabitation, were the contributions which we have identified. These contributions were found by Chisholm J to be equal and we agree with that assessment. However there remains what the trial judge described as the husband’s greater initial financial contribution and the husband’s contribution in caring and supporting the children since the date of separation. But for the husband’s greater initial financial contribution the parties would not have been able to acquire the matrimonial home in 1990.
40.In our opinion the two additional matters of contribution, which we have identified, favour the husband. Weighing the initial contributions of the husband and his post separation contributions with all other relevant contributions by both the husband and the wife we would attach significant weight to the initial contribution and would assess the respective contributions of the parties within the meaning of paragraphs (a), (b) and (c) of s.79 (4), from the date of the marriage to the date of the hearing, expressed as a percentage of the net value of their assets, as at the date of the hearing, as being 70% by the husband and 30% by the wife.
In the case before me the wife’s initial contribution exceeded that of the husband by more than $370,000. From her initial contribution, the wife provided $81,000 towards the purchase of the F property. It is not possible to say whether that purchase would have been practicable without that contribution. By the same token, the mortgage on that property was later reduced by a net $185,000 from the husband’s compensation and superannuation moneys.
Thus both parties applied their capital to the acquisition of the home.
Similarly both applied their capital and income purposes that were not financially fruitful. For example:
· The parties bought a yacht called Y yacht for about $190,000. $84,000 came from the wife’s property settlement. $90,000 came from the overdraft and the balance came from the proceeds of sale of the wife’s H Street property. In March 2007 the yacht was sold for $90,000 through a yacht brokerage. It is clear that the wife cooperated in the purchase of the yacht.
· The husband alone and the parties together had a number of trips to the outback.
In August 2002 the husband purchased a case that had the husband’s expenditure on vehicles, entirely as a frolic of his own. She conceded in cross-examination, for example, that she could not recall ever saying that he should not buy or should cancel the order for, the vehicle.
· The husband spent $12,000 on a telescope and had the roof of the F property modified to allow it to be used. He bought a satellite telephone for $500. He bought a campervan for $5,000 and later sold that. He bought a camera for $6,700.
· In February or March 2005 the husband bought a campervan for $25,000. In May 2005 the husband commenced a two month trip to the outback. The four wheel drive vehicle broke down and on 23 June 2005 the husband replaced it with a Nissan vehicle at a cost of $58,750. He bought a GPS device for $1,900.
These represent significant disinvestments but are not such as can be laid solely at the feet of the husband.
In the of quoted passage from In the Marriage of Kowaliw (1981) FLC 91-092 Baker J said:
Marriage is for most couples an economic partnership. Married couples live together and work together with the ultimate object of purchasing a home, paying it off, acquiring other assets with the overall object of attaining a higher standard of living. The reported decisions in respect of applications for settlement of property under sec. 79 of the Act are unanimous that both parties should share the economic fruits of a marriage, having regard to the provisions of sec. 79(4) and sec. 75(2), although not necessarily equally.
Is not, however, the converse equally sustainable? In other words, should not financial losses incurred by parties to a marriage or either of them, whether incurred jointly or severally, be shared by them in the same manner as the financial gains?
As a statement of general principle. I am firmly of the view that financial losses incurred by parties or either of them in the course of a marriage whether such losses result from a joint or several liability, should be shared by them (although not necessarily equally) except in the following circumstances:
(a) where one of the parties has embarked upon a course of conduct designed to reduce or minimise the effective value or worth of matrimonial assets, or
(b) where one of the parties has acted recklessly, negligently or wantonly with matrimonial assets, the overall effect of which has reduced or minimised their value.
Conduct of the kind referred to in para. (a) and (b) above having economic consequences is clearly in my view relevant under sec. 75(2)(o) to applications for settlement of property instituted under the provisions of sec. 79.
Here there is no evidence that the husband embarked on a course of conduct designed to reduce or minimise the value of matrimonial assets. On the other hand the wife co-operated in and did not oppose key aspects of the extravagant expenditure.
That is not to say that there should be a dollar for dollar or even a proportional allowance for the respective contributions of the parties. There is the counsel from Pierce above as to the significance of the use to which funds were put and there is the fact that the parties injected far more money into their marriage than is represented in the current pool of assets.
The husband’s contributions exceeded those of the wife. He earned more than she did and he injected over $1,000,000 to the marriage, being more than twice the capital injections made through the wife. The non-financial contributions of the husband were not matched by similar contributions by the wife but they do not have great significance in this relatively short marriage. The parties each undertook homemaker duties. In my view the balance of contributions would be properly reflected in a finding they were made as to 60% by the husband and 40% by the wife. In the context of this case, that is an adjustment of over $130,000 and creates a difference between the parties of over $260,000. Any greater allowance to the husband would ignore the reality of the fate of much of his contribution. In effect, they each must bear part of the losses.
The other matters in Section 79
Dealing with the matters identified in the legislation:
Section 79(4) (d)
Pursuant to s 79(4)(d) I am required to take into account the effect of any proposed orders on the earning capacities of the parties. There is no evidence about this.
Section 79(4)(e) - Section 75(2) Factors
The relevant matters in Section 75(2) would seem to be paragraphs (a), (b), (d), (e), (f), (m) and (o).
(a) the age and state of health of each of the parties;
First, as to the age and state of health of each of the parties. The husband is 50 years of age and the wife is 48.
The husband suffers numbness and tingling in his fingers, particularly on his left hand. He has lost strength in the fingers of his left hand. He has heaviness and a constant ache in his arms. He suffers cervical pain on a daily basis passing to the right and left shoulders. The husband suffers severe headaches on a daily basis, associated with throbbing and nausea.
He suffered an injury at work and in July 1999 underwent a spinal fusion. In the opinion of the single expert, Dr R, the husband has a protrusion of cervical discs and suffers migraine headaches as a result. He has a lesion of the left ulnar nerve at the elbow and possibly lesions of the wrists. Possibly as a result of the earlier fusion, he has a compression of lumbar discs.
The wife suffers from cervical spondylosis. She has progressively increasing cervical pain, passing to the upper limbs, more markedly on her right side. A cervical fusion procedure was performed on 22 April 2008. In the opinion of the single expert, Dr R, the wife is unable to take part in activities requiring sustained attitude of neck flexion or the lifting of heavy objects. Her general mobility remains unimpaired but it is possible that the spondylosis will progress over time.
In September 2008 the wife was hospitalised with high blood pressure and haemorrhagic epistoxia.
Dr A saw the wife at the end of May 2009. He noted that she remains in constant pain despite spinal fusion surgery in April 2008 and is on a number of medications. He noted that she abused alcohol and was admitted to a clinic in December 2008 for a detoxification and rehabilitation program. At the clinic she was diagnosed with a generalised Anxiety Disorder and commenced further medication for that condition. In addition to the pain she suffers in her cervical spine and arms, the wife suffers headaches which radiate during each day. Once a fortnight she suffers photophobia, phonophobia and nausea. She experiences pain in the area of the thigh from which a bone graft was taken for the 2008 surgery. In Dr A’s opinion the wife has developed:
a)chronic neuropathic pain syndrome following earlier surgery;
b)cervicogenic headache with migrainous transformation;
c)probable bilateral carpel tunnel syndrome;
d)probable left lateral femoral cutaneous nerve palsy; and
e)generalised anxiety disorder
(b) the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment;
The husband is Medically retired and receives $1,553 per week by way of payments from a Loss of Income Insurance Policy through Metlife. He lives alone. The husband’s expenditure is as follows:
Expenditure
Amount
Income tax
$320.00
Rent – First National Berry
$330.00
Home insurance – NRMA
$14.00
Motor vehicle insurance – Shannons
$49.00
Motor vehicle registration – Nissan Patrol
$13.00
Motor vehicle registration – luxury vehicle
$13.00
S Staff Credit Union – personal loan
$136.00
Visa card payments – S Staff Credit Union
$0
Mastercard payments – Westpac
$120.00
Child Support – J
$80.00
All other expenditure
$550.00
Total
$1625.00
As to the husband’s earning capacity, Dr R says that the husband is unable to take part in duties requiring prolonged standing or sitting or stooping or the lifting of heavy objects. The husband conceded that since his surgery he has driven during long trips, including driving to Broome in 12 days. In that period he has driven his motor vehicle in car club events. He also worked on the yacht for some months including refurbishing the engine compartment which is a confined space. The terms of the husband’s insurance policy mean that he would lose a dollar of his insurance payout for every dollar he earns. The husband does not anticipate that he will look for paid employment until he turns 60 years of age. The policy entitlement terminates at that age and the husband expects that he will then (be obliged to) seek paid employment. In the medium term the husband is not completely pessimistic about being able to engage in a level of physical activity. He deposes that, if his injury allows he would like to run a small hobby farm, grazing beef cattle and keeping horses.
The wife was asked if she thought the husband is malingering and said that she does not know. In any event, the wife’s opinion on this issue would not be preferred over that of the medical expert.
The wife has no income. She is on full time special leave without pay from her work as with S Company. The wife lives her friend, Mr N. He earns $1,250 per week and pays $100 a week towards her food, $173 towards her mortgage and $50 for cleaners.
The wife’s expenses are as follows:
Expense
Amount
Mortgage to S Credit Union
$173.00
Rates
$17.00
Motor vehicle registration – Toyota Echo
$24.00
Loan repayments – S Credit Union
$117.00
Mastercard payments – Coles Myer Source
$120.00
American Express
$20.00
All other expenditure
$80.00
Total
$551.00
Of her expenses, the wife says that $80 is for the benefit of her daughter, E, and $95 for the benefit of her son C. Evidence about the wife’s assets and liabilities is set out earlier in these reasons.
Dr I is the wife’s surgeon. After her April 2008 operation he placed restrictions on her as a result of which he feels it is unlikely that she will be able to return to work as a Customer Service Manager for S Company. The joint expert, Dr A would propose more detailed restrictions than those imposed by Dr I. Dr A proposes:
a) no lifting over 10 kg;
b) no repetitive lifting over 5 kg;
c) no sustained or repetitive movements of the neck or upper limb; and
d) regular breaks to perform stretching and range of motion exercises every 30 minutes.
As to the likelihood that the wife will have paid employment in the future, Dr A thinks that a number of medical issues need to be addressed prior to a return, to try to optimise her medical and pain management:
· He proposes that she try more specific anti-neuropathic agents. If that is not successful then he suggests that the wife access a multi-disciplinary Pain Management Centre.
· He proposes more specific medication for her headaches.
· He proposes further investigation in relation to the numbness in the wife’s hands – perhaps arising from carpel tunnel syndrome.
· He suggests that there be an investigation to see if the wife suffers from lateral femoral cutaneous nerve palsy leading to the numbness in her left thigh.
· Her General Anxiety Disorder needs to be managed by a psychiatrist and appropriate medication.
Sadly, Dr A thinks that once those matters have been addressed, the wife will continue to experience symptoms into the long term, resulting in permanent impairment and disability. He says that she could potentially return to work – initially for 4 hours a day on 2 – 3 days a week and gradually increase her work hours to a level she can tolerate. In Dr A’s opinion, categories of work for which the wife has potential are:
a) clerical duties, such as filing;
b) answering telephones and ordering supplies;
c) dictating work instructions; and
d) giving verbal instructions to staff in a supervisory capacity.
The wife anticipates that at some point she may return to paid employment but does not know when she will be able to do that nor in what field of endeavour she might find work.
It is not suggested that the wife is not fully exercising her earning capacity.
(c) whether either party has the care or control of a child of the marriage who has not attained the age of 18 years;
There are no children of the marriage.
(d) commitments of each of the parties that are necessary to enable the party to support:
himself or herself; and
a child or another person that the party has a duty to maintain;
(e) the responsibilities of either party to support any other person;
I have set out the detail of those commitments above.
In relation to the wife’s obligations, E is 16 years of age and attends a private school in Sydney. C is 13 years of age and attends a private College in Sydney. As part of a child support arrangement with their father, the wife meets one half of the medical and educational costs for those children. The children live with the wife for part of the time and she estimates that of her expenditure, $80 per week relates to E and $95 per week relates to C.
J Winder is 17 years of age. The husband pays $350 per month in child support. According to his Financial Statement none of the husband’s other expenditure is applied for the benefit of J. I take it then that J does not live with him.
(f) subject to subsection (3), the eligibility of either party for a pension, allowance or benefit under:
any law of the Commonwealth, of a State or Territory or of another country; or
any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia,
and the rate of any such pension, allowance or benefit being paid to either party;
The husband’s superannuation has been paid out and is in part reflected in the pool of non-superannuation assets. The wife has a substantial interest with S Superannuation. She seeks and the husband opposes, a splitting order in relation to her superannuation interest.
(g) where the parties have separated or the marriage has been dissolved, a standard of living that in all the circumstances is reasonable;
The evidence suggests that the parties had a good standard of living.
(h) the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income;
This is not relevant.
(ha) the effect of any proposed order on the ability of a creditor of a party to recover the creditor’s debt, so far as that effect is relevant;
This is not relevant.
(j) the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party;
The wife arranged her work to fit in with the children. That allowed the husband to continue with his career. I gather the husband would say that contribution is diminished to the extent that his capacity to make use of his qualifications now is circumscribed by his health.
The wife undertook some studies during the marriage which assisted her with promotion within S Company. The husband says that he took on a larger role at home to support the wife. Given the wife’s current circumstances it is difficult to say that those qualifications have contributed to her current earning capacity.
(k) the duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration;
There is no indication that the marriage adversely affected the earning capacities of the parties.
(l) the need to protect a party who wishes to continue that party's role as a parent;
J Winder is 17 years of age. J does not live with the husband. There is no evidence of additional restrictions imposed on the husband in relation to paid employment because of his need to supervise J.
E is 16 years of age and attends a private school in Sydney. C is 13 years of age and attends a private school in Sydney. The children live with the wife for part of the time. There is no evidence of additional restrictions imposed on the wife in relation to paid employment because of her need to supervise the children.
(m) if either party is cohabiting with another person — the financial circumstances relating to the cohabitation;
The husband lives alone. The evidence about the wife’s cohabitation with Mr N is set out above.
(n) the terms of any order made or proposed to be made under section 79 in relation to the property of the parties;
(na) 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; and
There are no children of the marriage.
(o) any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account;
Contributions were made by the parties to their respective children. The Full Court considered the issue of contributions made to children who are not the children of both parties to a marriage. It has been held that contributions to such children cannot be recognised under section 79(4)(c). In the Marriage of Robb (1994)18 Fam LR 489 the Full Court dealt with that interpretation made by Mullane J at first instance. The Full Court said at p 500:
This construction is, in our view, placed beyond doubt by his Honour's opening statement in relation to ``Contributions To Property And To The Welfare of The Family'’ (Paras (a), (b) and (c) of subs 79(4) of the Family Law Act) where he said:
For the purposes of subs 79(4)(c) the family does not include the children K and B of the wife's previous marriage as they are not within the usual meaning of the expression, ``children of the marriage'’, used in that paragraph. (See the Full Court of the Family Court of Australia in In the Marriage of Mehmet (1986) 11 Fam LR 322 ; [1987] FLC 91-801 but cf Cohen J in In the Marriage of Molen (1992) 16 Fam LR 203 ; [1993] FLC 92/2-344 at Fam LR 205-6 FLC 76,649/2-50).
`Thus, we do not think that his Honour fell into the error of double counting in respect of the husband's contribution to the welfare of B and K and ground 8 is therefore not made out.
In relation to ground 4, just as the husband's contribution to the welfare (including the financial support) of the wife's children of her former marriage, for the reasons given by his Honour in the passage from his judgment last quoted (with which we agree), could not be taken into account as a contribution by him under s 79(4)(c), so too the wife's contribution to the welfare of those children could not be taken into account on that basis. However, as his Honour did (in our view correctly) take the husband's contribution to those children into account under s 75(2)(o), the question arises whether he should have taken the wife's contribution to the welfare of those children into account also, under that paragraph of s 75(2). This raises the question whether the fact that a party to a marriage contributes during that marriage to the welfare of his or her own children of a prior marriage is a fact or circumstance which the justice of the case requires to be taken into account in that party's favour, at least, in circumstances where the other party's contribution to that welfare has been taken into account as a fact or circumstance in that party's favour.
In considering whether the justice of a case requires some act done by a party to be taken into account under s 75(2)(o), the court should, we think, have regard primarily to the existence or otherwise of any legal obligations, as between the parties, in relation to the doing of that act, and also, perhaps, to ordinary notions of justice and equity between the parties.
In this case, the wife had a legal duty to maintain the children of her prior marriage, which duty had primacy over the duty of any other person, other than the children's father, to so maintain them: ss 66a and 66b of the Act. The husband, on the other hand, had no legal duty to maintain these children at any time during the marriage because, by s 66g, a step-parent has such a duty only if he or she is a guardian of the child, or has custody of the child by an order of a court, or a court having jurisdiction under Pt VII of the Act by order determines that it is proper for the step-parent to have that duty. None of those pre-conditions existed in this case.
Accordingly, in contributing to the support of these children the wife was merely honouring a legal obligation which she owed to the children, whilst the husband, in making his contribution, was acting essentially as a volunteer assisting the wife in the discharge of her legal obligations. Upon that basis, whilst we consider the justice of the case clearly required the husband's contribution to be taken into account under s 75(2)(o), the same cannot be said of the wife's contribution. In making that contribution the wife was in no way discharging or assisting to discharge any legal obligation of the husband.
Turning, then, to ordinary notions of justice and equity, we are of the view that such notions do not call for any allowance to be made in the wife's favour, in the property proceedings between the husband and wife, because she honoured her legal obligation to maintain her own children of a prior marriage. We believe that a failure to make such an allowance would not offend the ordinary reasonable man or woman's notions of justice.
In our view, therefore, his Honour did not err in failing to give any weight to the wife's contributions to the welfare of her own pre-marital children.
Thus the only relevant contributions made to the husband’s children are those of the wife. The only relevant contributions to the wife’s children are those of the husband.
T resided with the parties for at least 18 months – 2 years. The wife helped her with various hygiene problems and assisted with her study. The wife worked at her school canteen and drove her to and from school and sporting commitments. The wife looked after K from 2004 to separation in July 2005. She cooked, washed and cleaned for her and helped her through stress at exam times. She supported K in emotional situations. She gave her a 18th birthday party and did much of the cooking for her 21st. The wife tended to J’s medical and dental needs while he was in the parties’ care. The wife packed school lunches for all of the children and helped them with their homework. She cooked meals for the children and froze meals for them for the periods she was away with work.
Although expressed in the negative in his affidavit, the husband concedes that the wife played a role with his children. For example there is[8]:
I have never observed [the wife] being involved in the day to day management of my children’s needs, except when [T] was living with us and [the wife] and I both were responsible for her day to day needs.
[8] paragraph 48 of the husband’s affidavit
The husband says that from cohabitation to January 2002 he looked after the children on a daily basis when he was not working. When the wife was away he provided their care. He prepared meals for E and C, assisted them with homework. When they were younger he packed school lunches and organised them before and after school. He attended and was involved in activities and events at their school, including sporting carnivals, presentations, concerts and parent teacher occasions. With the wife he shared responsibility for their extracurricular activities, played with the children and went on outings with them.
He says that from January 2002 to separation he took a greater role with E and C. He primarily looked after the children on a daily basis, prepared their meals, prepared school lunches and organised them before and after school. He attended and was involved in activities and events at their schools. He helped with their homework and arranged and supervised their social activities. He attended to their health, medical and dental needs.
The wife says that when she was away her mother provided assistance to the children.
The evidence about these issues does not permit definitive findings. It is an agreed fact that each of the parties made contributions to the children of the other. Beyond that their evidence is inconsistent. Neither of the parties was cross-examined to any significant extent or effect in relation to their evidence on this point. The wife’s children spent more time with the parties than did the children of the husband. On the other hand, given the division of labour in the household, their different jobs and the physical restrictions on the husband from July 1999, it is likely that the husband was less available to assist children than was the wife.
(p) the terms of any financial agreement that is binding on the parties.
There was no binding agreement made between the parties.
Section 79(4)(f)
There are no relevant orders.
Section 79(4)(g)
There is no relevant child support assessment because there are no children of the marriage.
Conclusion
Both parties seek an adjustment of 5% to the wife but the submission on behalf of the husband is that the adjustment not be made under section 75(2) but as a matter that would be just and equitable. I confess I do not really understand the submission. The matters calling for an adjustment are:
·The distribution based on contribution alone will have the husband with significantly more assets than the wife;
·Under the order she proposes, the wife will retain disproportionately more superannuation than the husband;
·The wife lives with Mr N and he supports her;
·Although the capacities of both parties for paid employment are qualified, the husband has a guaranteed source of income (at a substantial rate and indexed) for nearly 10 years;
·The wife may have some assistance in retaining the F property and as such has financial resources of indeterminate value;
On balance the factors favour an adjustment to the wife. I will make a 5% adjustment to her.
Just and Equitable
Based on their contributions and the other matters in s 79 the appropriate division of property is 45% to the wife and 55% to the husband. I must consider whether it would be just and equitable within the context of s 79 if the net assets of the parties were divided in those proportions.
The wife seeks a splitting order in relation to her superannuation. The husband opposes such an order. In amending the Family Law Act 1975 to permit the splitting of superannuation payments the Parliament has indicated a preference for dealing with superannuation by splitting superannuation payments. Given that superannuation interests have different characteristics to non-superannuation assets, it is often unfair to require one party to retain a disproportionate amount of the superannuation interests and the other to retain a disproportionate amount of the non-superannuation assets. The different characteristics are both positive and negative. There are restrictions on accessing superannuation interests. In that regard it may be that the wife would qualify under a hardship provision to access her superannuation before reaching a specific age. Superannuation funds have suffered in the last 18 months due to the Global Financial Crisis. On the positive side superannuation receives favourable tax treatment.
In those circumstances I would not leave the wife with all of the remaining superannuation interest and the husband with non-superannuation assets. Submissions were made on a global basis save in relation to the form of orders. The wife’s written submissions on this point are:
“As to the form of the orders it is submitted that there should be a splitting order in relation to the wife’s superannuation interest of about 50% to the husband. It is submitted that it would be just and equitable that the parties each go forward with a similar mix of superannuation and non-superannuation assets.
On the wife’s case those are inconsistent propositions. She argues for a division overall that is 55% in her favour. If the splitting order is based on 50% of the wife’s superannuation then the parties would not go forward with a similar mix of superannuation and non-superannuation assets. The husband would have proportionately less of the non-superannuation assets and more of the superannuation interests. However, as I have recorded above, the matter was resolved in final submissions when learned counsel for the wife said that in relation to proposed Order 3, the husband’s split of the wife’s superannuation should be based on a figure reflecting half of the current value, whatever that might be, and not $150,000. In circumstances whereby the husband strongly opposes a splitting order it would be unfair to split the wife’s superannuation in a way that gives the husband any greater future share than the wife seeks he have.
On that basis I will make a splitting order based on 50% of the valuation.
The net assets have a value of $1,311,921 ($1,430,389 – $118,468). Of that sum $269,681.36 represents the wife’s superannuation. I will make a splitting order in favour of the husband using a base amount of $134,840.
If the net pool of assets, including superannuation, was divided in the proportions 45% to the wife and 55% to the husband they would receive about $590,364 and $721,557, respectively. Of that the wife would have $121,356 by way of superannuation interest and $469,008 in non-superannuation assets. As the wife seeks to retain about $134,840 in superannuation, she will take $13,484 more in superannuation interest, than a 45% calculation would give her. There should be a reduction in the non-superannuation assets she receives. The differences between superannuation and non-superannuation assets suggest that the adjustment should not be dollar for dollar. At this stage she expects that she will have to return to paid employment. That is likely to preclude easy access to her superannuation for many years. For those reasons I will reduce the wife’s non-superannuation entitlement by only $10,000. That will leave the wife with $459,008 in non-superannuation assets and the husband with $583,232.
The wife has and seeks to retain the following:
Assets
Value
F property
$850,000.00
Items of personal property in Wife’s possession according to Mr D’s valuation
$22,000
Mortgage on the F property
-$111,968
Total
$760,032.00
In order to achieve the settlement identified above the wife would need to refinance the mortgage and pay the husband $301,024. I will round that down to $300,000.
That would leave the husband with:
Assets
Value
Proceeds of sale of yacht in trust - joint
$88,108
Proceeds of sale of horses - husband
$19,400
Items of personal property in Husband’s possession according to Mr D’s valuation
$181,200
Payment from wife
$300,000
Mr P
-$6,500
Total
$582,208.00
The wife may not be able to fund such a payment. In the event that she does not pay the husband out and discharge the mortgage I will order that the F property be sold. From the net proceeds of sale the husband will receive the proportion that $301,024 bears to the agreed figure for the parties’ equity in the property. That is 300,000:738,032. I will round that fraction to 40.7%. The balance will go to the wife. In that way both parties will share in any profit or loss generated by a difference between the net proceeds of sale and the agreed equity.
Conclusion under Section 79
The parties’ marriage involved cohabitation for more than 7 years. They each brought capital injections to the marriage and contributed through paid employment, in non-financial ways and as homemakers. The husband’s contributions exceeded those of the wife. It is agreed that there should be an adjustment in her favour. The orders I propose are just and equitable. I will give the parties leave to relist the matter in relation to the drafting of the orders and any other machinery issues within 14 days.
I certify that the preceding one hundred and sixty nine (169) paragraphs are a true copy of the reasons for judgment of Judicial Registrar Ian Loughnan.
Associate:
Date: 17 September 2009
Key Legal Topics
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Family Law
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Property Law
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Equity & Trusts
Legal Concepts
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Remedies
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Injunction
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Procedural Fairness
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Jurisdiction
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Statutory Construction
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